Our entire repository of COVID charts is HERE.
South Africa’s National Institute for Communicable Diseases released a study concluding people are 80% less likely to be hospitalized from Omicron. It’s unknown whether this is because Omicron is less dangerous or prior immunity and vaccinations are having an effect (or a combination thereof), but it doesn’t matter. The net result is less people are hospitalized per Omicron case than per Delta case. Researchers in Scotland suggest Omicron’s hospitalization risk is 2/3 less. Official severity data from the UK is expected within the next few days. We will be watching for that. And last week, Denmark released a study suggesting the hospitalization rate was 60% less. The South African, Scotland, and Danish estimates of hospital admissions are applied to 4x transmissibility and same length of stay as Delta to get the hospitalization estimates charted below. The below is not meant to imply false precision. Rather, it serves to illustrate that the wide range of hospitalization outcomes is narrowing as the worst case scenarios are taken off the table.
That will provide relief for Cyclicals, Reopening stocks, and 10yr yields. Our Reopening Portfolio is outperforming again today, up +1% absolute. 10yr yields are up a bp. The 10yr term premium has increased +11bps in the last 10 days. The term premium is still extremely low – we expect it to increase as Omicron uncertainty unwinds.
Adding to good news about severity, the U.S. expects to get 4 million courses of Covid treatments by end-January, including Pfizer and Merck pills. The FDA granted Paxlovid, Pfizer’s pill, emergency use authorization today. Paxlovid is nearly 90% protective against hospitalization and deaths. Even if vaccines are less effective, new therapeutics like Paxlovid can help keep severity low. And concerning vaccine efficacy, a UK study found adding a booster dose helps dramatically, blocking an estimated 55% to 80% of symptomatic cases. The booster campaign in the US is progressing. Although the total percentage of the population boosted is low (only 19%), 50% of those 65+ are boosted, which should help reduce hospitalizations to some extent.
Case growth in the UK is decelerating (but still trending higher). The ratio of deaths to cases is now as of 11/30, which is not reflective of the severity of Omicron. Omicron is likely almost all the case growth in the UK (based on a polynomial regression of Omicron incidence data). Case growth rates have jumped up age demographics, but are still low, for now, for 60+. That’s significant as hospitalizations, as of December 11, were concentrated in those 60+ nonetheless.
Case growth in the U.S. is accelerating. Case growth is worst in the Midwest and Northeast, but increasing almost everywhere (third chart). The outbreak is currently worst in New York. Case growth jumped and hospitalizations, which don’t currently capture the recent acceleration, have been increasing.
Charts for every state and country we have data for are HERE.
