Our entire repository of COVID charts is HERE.
More studies are confirming that Omicron is less severe, even for the unvaccinated and those without prior infections. That’s good and indicative of some relief in hospitalizations, but doesn’t much matter given the US is realizing its Omicron wave now; current hospitalizations in the US are high and headlines about staffing shortages need to clear. It is still worth noting that COVID patients in the hospital are less likely to be in critical condition, so deaths will be lower. Looking forward though, supply chain disruptions are the primary concern. Low severity headlines are welcome but less meaningful to markets now.
The news is pushing images of empty Chinese cities. Supply chain sentiment is dropping. Omicron poses to supply chains through COVID-zero in China, difficult-to-predict policy responses under potential Omicron waves elsewhere in Asia, and labor shortages. Supply chain constraints could delay goods deflation at an inopportune time. Rent inflation is hard to predict but should trend persistently higher soon. And, as we have been writing in our Strategy Daily reports, the Fed is committed to curtailing inflation by tightening financial conditions. It would be convenient if goods deflation kicked in while rent inflation increased, but supply chain trouble threatens that.
Retail sales missed meaningfully today (as predicted by the Chicago Feds CARTS index). Per Gerard MacDonell, 22V’s economist, “Q1 is shaping up so far to be a weak quarter, for reasons of both statistical momentum and what we all assume will be a transitory hit from the Omicron wave. This is not enough to knock the Fed off a March tightening, given other considerations affecting their decision making, including the premise that this soft spot will be brief and that the labor market will continue to tighten.”
Germany notched another day of record case growth. It, like the US, will probably track a pattern similar to the UK, although German ministers are concerned about the large number of unvaccinated elderly people. Encouragingly, case growth has peaked in the UK while deaths have stayed low.
Case growth in the US is accelerating outside of the Northeast (which is improving).
Case growth is rapidly accelerating in California. Hospitalizations are beginning to follow. And California has an acute hospital staffing crisis. But ICU admissions are lagging, as appears to be the trend with Omicron.
Charts for every state and country we have data for are HERE.
