Our entire repository of COVID charts is HERE.
Airlines have been and still are under intense pressure. TSA crossings are near a post-pandemic high, but investors need some assurance that Omicron won’t lead to travel restrictions or a reduction in demand without restrictions. TSA crossings give us a sense of demand but aren’t the full picture. We haven’t found good, timely data for air international air traffic, even in the UK and EU.
We have been talking a lot about severity and the implications for hospitalizations under different assumptions of severity. News about vaccines and prior infections has been poor, but don’t forget about new therapeutics. Per Eric Topol’s substack, “Until now in the pandemic, our prevention and early treatment of Covid has relied upon our immune system: vaccines and monoclonal antibodies. Our immune response has been substantially evaded by Omicron. Along comes Paxlovid, a pill that could be readily administered which does not rely on our immune response. Omicron doesn’t evade this drug’s effect.” Paxlovid is nearly 90% protective against hospitalization and deaths. The FDA may authorize the drug by year-end. Several health experts think the immediate authorization will only be for people at high risk, but that is still meaningful considering most people who are hospitalized have comorbidities (CDC list here). The only sticking point may be supply; Pfizer can treat 180k people this year, but 21 million or more by the end of June 2022.
Uncertainty will remain elevated, affecting yields and market internals, until we have cleaner data. There is an incredibly wide range of hospitalizations under different estimates of transmissibility, hospital admission rates, and lengths of stay (check out more HERE), all of which we cannot currently estimate with any reliability. This is why the term premium has dropped, 10yr yields have fallen, and our Recovery Portfolio has underperformed. As a reminder, the UK is a more useful comp for the US than South Africa.
Omicron is likely already the dominant strain in the UK based on a conservative polynomial regression of Omicron’s incidence rate in the UK (actual incidence data lags by about a week). That’s been echoed by health officials. Based on the trendline and current case growth numbers, there are likely over 30k daily Omicron cases.
We will be monitoring numbers and rates of case growth, hospitalizations, and deaths. The ratio of deaths to cases stayed low throughout the Delta wave. Treatments like Paxlovid that don’t rely on an immune response to Omicron should help the ratio stay very low, in turn limiting the economic impact. There are helpful demographic breakdowns as well. As of right now, case growth is moving up age cohorts (0-14 to 15-29). Net hospitalizations have turned positive.
Case growth in the US is volatile but stagnant. Hospitalizations and ICU admissions are both higher. Case growth is highest in the Midwest, Northeast, and parts of the Southwest. Growth rates are now worse on the West Coast, Southeast, and Northeast.
A small study of vaccine efficacy in the UK found a booster dose provides ~70-75% protection against symptomatic infection. Boosters are important; rollout in the U.S. is progressing. 47% of those 65+ have received a booster.
Case growth for every state and country we have data for is HERE.
