Coronavirus Pandemic – How the Pandemic has Impacted the Two Hemispheres

(Source: Wikipedia/Click to enlarge)

Earth is split between two hemispheres known as Northern Hemisphere and Southern Hemisphere. 

However, the Northern Hemisphere contains almost 90% of the world's population, as it includes the three most populous continents: Asia (except Indonesia), Europe, and North America. Conversely, most South America, the southern half of Africa, and Australia comprise the Southern Hemisphere.

The advent of the seasons in two hemispheres is opposite; for instance, now it's summer in the north and winter in the south. Since the general flu epidemic -- now a pandemic -- is highly seasonal, public health officials are closely monitoring the nature of the outbreak in both hemispheres, meaning if it is asymmetric. The current epicenters of the south (Brazil and South Africa) and the north (India and the US) remain the primary focal points. 

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The above table shows the hardest-hit 15 countries in the Northern Hemisphere currently account for 14.3M confirmed cases, including 519K deaths. Unfortunately, the internal distribution is very skewed: Despite lower than the average death rates, the top two countries -- the US and India -- account for 66% of the total cases and 47% of all deaths. Of course, due to the initial jolt, the three hardest-hit European countries -- France, Italy, and the UK -- have double-digit death rates. Mexico has been enduring a similar fatality. 

The absence of a vaccine continues to make the positivity rate a somewhat leading indicator, projecting what is expected shortly. The high positivity rates of Mexico and Asia are still problematic. Russia, Spain, the UK, and the US have better testing credentials than the rest, though Italy, Germany, and Saudi Arabia have been picking up momentum. The developing countries like Bangladesh, Pakistan, and Mexico have been laggards.

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Though the Southern Hemisphere comprises only 10% of the world's population, these 15 hard-hit countries currently account for a disproportionately high 6.8M cases and 217K deaths. Unfortunately, the worst-hit Brazil alone accounts for 55% of all such cases and deaths. 

Most South American countries have much higher death rates than their African counterparts. Bolivia, Ecuador, Peru, and Indonesia have been registering above-average death rates, while Australia and South Africa have managed better thus far. 

Of course, South America's positivity rates have been alarming. Even Argentina, with a low death rate, has a positivity rate of 32%. Other than Australia, the rest of the hemisphere has low-to-moderate testing credentials. Lately, Peru and Chile have been picking up some speed. Surprisingly, South Africa has been a laggard. 

Let's hope, come winter, India and the US do not face Brazil's fate and vice versa.

Stay safe!

Data Source: 

https://en.wikipedia.org/wiki/Northern_Hemisphere

-Sid Som

homequant@gmail.com

Coronavirus Pandemic – How the Pandemic has Impacted the US Housing Market

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1. The above Case-Shiller Composite-10 (the ten largest housing markets) table shows that the composite grew 2.3% in 2019, followed by a growth of 0.9% in the first half of 2020. San Diego has been the frontrunner in both periods. Though Boston performed very well in 2019, its growth retraced a bit this year. While Denver has been a consistent performer throughout these 18 months, Miami has also picked up some momentum this year. On the other hand, the growth rates of Chicago and New York have been anemic, while lately, San Francisco has been flatlining.

2. The Composite-20, which additionally includes major markets like Atlanta, Dallas, Phoenix, and Seattle, produced slightly better growth rates than the Composite-10. The Composite-20 grew at 2.7% in 2019 but has moderated to 1.2% this year. Phoenix has been the standout winner in both time segments, with 6.1% and 4.1% growth rates, followed by Tampa, Charlotte, Cleveland, and Seattle. Overall, the slopes of the curves are very similar, meaning they have moved sideways this year, especially in Q2.

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3. The regression (7/19 thru 6/20) between the strongest and the weakest markets is quite impressive. After moving from 200 to 204 in the second half of 2019, New York flatlined around 205 in the first half of 2020; in contrast, San Diego steadily moved up from 261 to 272 during these 12 months, contributing significantly to indices' growth. The asymmetric growth rates have lowered the r-squared values. 

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4. Though Phoenix outperformed San Diego 8.5% vs. 4.5%, these two markets have been the hottest between 7/19 and 6/20. Therefore, the regression between them is also more telling, perhaps more apparent. They not only share a near-perfect linear trendline, with a high r-squared value of 0.98, but have also much helped the two composites remain positive this year. 

In a nutshell, contrary to the heaps of market reports praising the monthly growth of the housing market, the Case-Shiller indices, which serve as the de facto data standards of the US housing markets, paint a very different growth picture -- one that is anemic at best, save a few pockets here and there.

Stay safe!

Data Source: Case Shiller Housing Indices

Sid Som

homequant@gmail.com

Link to the Book

Coronavirus Pandemic – AR, LA, MS & TN have Tapered but Death Toll remains Elevated

After rapidly surging in June and July, these four contiguous states -- Arkansas, Louisiana, Mississippi, and Tennessee -- have collectively tapered, but the death tolls have yet to do so. 

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1. The graph shows how the cases rapidly surged between 6/25 and 7/25, followed by a quick peak and a steady taper. The states, individually, have also been exhibiting the same trend (not shown here). While tapering, some occasional upswings are there, but the moving average trendline reveals the smoothed out spikes.

    

2. Since there is a lag between the open cases and deaths, the death toll graph shows an upswing rather than the taper. The collective toll has yet to peak. In June, the trend was sideways, producing a false peak as the trend abruptly reversed in July and continued into August. Since the cases have significantly tapered, this lagging trend will follow suit in the coming months.

3. The outer end of data trend remains above the exponential regression trendline, proving that the cases have tapered, but the death toll continues to buck the trend. The death trend is a lagging indicator, so it has to conform to its origin -- just a matter of time, perhaps in the coming weeks.

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4. While Louisiana's death rate has been slightly above the national average, the other three states have maintained below-average rates. In line with Louisiana's high case totals and death toll relative to its population size, its population rates remain very high. Unfortunately, while the on-going surges for the other three states are initial, Louisiana has resurgence as it had encountered the initial surge in March-April.

5. Of course, there is an emerging silver lining for Louisiana: its testing record has picked up significant momentum, exceeding its neighbors' and national rates. At this current rate, it should be able to test its entire vulnerable population. Mississippi's positivity rate has been registering far above the national rate. 

Stay safe!

Data Sources:
https://www.worldometers.info/coronavirus/
https://en.wikipedia.org/wiki/COVID-19_pandemic_in_Louisiana (and others)

-Sid Som
homequant@gmail.com

Coronavirus Pandemic – How the Continents have Fared So Far

While North America has been hit with the highest number of cases at 6.7M, Africa has the lowest at 1.2M. Between the highest and lowest cases, Asia, South America, and Europe have so far accounted for 5.9M, 5.5M, and 3.2M, respectively. Likewise, North America and Africa share the highest and lowest death tolls at 252K and 27K, respectively. 

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Africa -- The above table shows the hardest-hit ten countries in Africa. Unfortunately, South Africa alone accounts for 52% of the cases and 47% of all deaths on the continent. Though South Africa's death rate remains low, its positivity rate has been high. Egypt has an astronomically high positivity rate of 72%. While South Africa and Morocco have been intensifying testing, the other countries' credentials have been appallingly poor.

Asia -- India has been the epicenter on this continent for a while, with 48% and 43% of all cases and deaths. Though India's death rate and population relativity ratio have been low, its testing record has been dreadful. Iran has been another sad story in Asia. It not only has the highest death rate but also owns a high positivity rate. Today, it has surged past the 20K death mark. Qatar, Bangladesh, Iraq, and Pakistan are also encountering high positivity rates.

Europe -- Russia has been the frontrunner for a while, with nearly 30% on the continent's cases. Of course, the four hardest-hit countries when the pandemic first broke out in Europe -- France, Italy, Spain, and the UK -- still account for some of the highest death tolls on the continent. Their death rates remain high as they did not face any resurgence. Sweden has the highest positivity rate as it opted to experiment with herd immunity. Ukraine has the most inadequate testing record on the list.

North America -- The North American story has been the tale of two countries -- the US and Mexico. The US accounts for 85% of all cases and 70% of all deaths on the continent. Lately, the Sunbelt in the US has been going through a massive resurgence. Sadly, Mexico's story has been unique: Though it accounts for only 8% of the cases, it owns 23% of all deaths, paving the way for a high death rate. Canada also has a high death rate. Other than the US and Canada, the testing records for the rest have been woefully inadequate. 

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South America -- Unlike North America, where the US accounts for the lion's share, the five worst-hit countries own 95% of all cases and deaths, although Brazil has been the biggest victim of the lot, with 63% of the cases and 61% of the deaths. Brazil continues to be the epicenter on the continent, with over 800 daily deaths. The positivity rates in South America remain the highest in the world. Chile is the only country on the continent to have crossed the 100K mark in population-testing ratio.

Stay Safe!

Data Source: https://www.worldometers.info/coronavirus/

-Sid Som

homequant@gmail.com

Coronavirus Pandemic – How Amazon beat the Broader Market during the Pandemic

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During the pandemic, Amazon stock has been one of the biggest winners, returning a stunning 79% YTD and staying well ahead of the other major indices, ETFs, and bellwether stocks.  

1. In Q1-2020, the Amazon stock returned a mere 2%. Then, as the pandemic anchored and the lockdowns started, it broke loose, setting new highs every month and even establishing momentum not only for the FAANG complex but also for the market as a whole. In Q2 alone, it returned an awe-inspiring 52%, followed by another 10% in the current quarter. The exponential slope of the trendline tells the 2020 story for the Amazon stock.

2. By contrast, the S&P 500 index -- a.k.a. the broader market -- plummeted 23% (from 3,235 to 2,489) in Q1-20, which included the historic fall of 1,075 points between 2/10 and 3/16. Then the index made a stunning reversal in Q2, returning an awesome 26%. Yet that was still 1/2 of the return that Amazon generated in Q2. The index moved up another 8% thus far in this quarter.

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3. The regression scatter shows how Amazon and S&P 500 diverged and remained uncorrelated during this period. Generally, the leading stocks move in tandem with the index they belong to, but Amazon bucked that norm and charted its growth course. When the broader market plunged in March, Amazon did drop 15%, but made a steep V-shaped recovery in the next six weeks, from 1,785 to 2,410.

Now that the Amazon stock has hit 3,200 and the momentum remains strong, it is expected to cross 3,400 in the next couple of months.

While the pandemic has been disastrous for the brick-and-mortar departmental retail, Amazon has been stealing their business left and right. 

Stay safe!

Data Source: Yahoo Finance

-Sid Som

homequant@gmail.com 

Coronavirus Pandemic – Canada has Tapered but Testing Credentials are Subpar

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1. The above graph shows how the daily cases in Canada have completely tapered in July/August. It averaged at the peak in May at 1,196, plunged to 442 in June and further moved sideways to 384 in July/August. The absence of any upside momentum, as evidenced by the 7-day moving average, bodes quite well for the near future, meaning no resurgence is on the horizon.

2. After averaging 130 daily deaths in May, the toll nicely plummeted to 43 in June and a mere 9 in July/August. The 7-day moving average emphatically depicts the collapsing and flattening of the curve.

3. The regression reveals that the death rate curve has flattened since hitting 100K cases. While the total cases climbed from 100K to 122K in July/August, the death toll barely moved from 8,500 to 9,000. A non-linear trendline, therefore, shows the near-perfect fit with the resulting r-squared value.

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4. Unfortunately, among the countries with similar caseloads (100K to 200K), Canada has the highest death rate at 7.4%, more than twice the worldwide average of 3.5%. The reason is straightforward: Among all of the advanced and wealthy countries in the world, Canada's testing credentials remain at the bottom quartile; case in point: The US and the UK have been registering at 216K (per million population), while Canada has been bouncing around at 126K. 

Of course, the silver lining has been Canada's meager positivity rate, which is expected to move up as the testing gets intensified. Nonetheless, Canada has thus far been very fortunate to have such a low positivity rate. 

Stay safe!

Data Sources:

https://www.worldometers.info/coronavirus/

2020 Coronavirus Pandemic in Canada - Wikipedia

-Sid Som

homequant@gmail.com

Coronavirus Pandemic – India Endures Two Grim Milestones: 2.5M Cases and 50K Deaths

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1. The above graph shows how surging daily cases have been tormenting India. Between 6/19 and 7/15, the daily cases averaged 21,083, skyrocketing to 51,291 since then -- a whopping 143% jump in mere a month. Even the 7-day moving average has been trending at over the perfectly-linear 45-degree.

2. The daily death toll also kept pace, moving in tandem with the cases. During the periods described above, the death toll average jumped nearly 80%, from 447 to 798. While the moving average trendline has remained linear, it is slightly below the perfect-45. Unfortunately, the average has further jumped to 918 in the last ten days.

3. Since the above two graphs demonstrated linear trends during the same period, the regression between the two datasets is expectedly linear, as evidenced by the high r-squared value of 0.872. 

Hey Applied Econ students -- Here is the power of outliers: Without one outlier data point on 7/23, the r-squared jumps to 0.93.

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4. Given the large population of India, it has one of the smallest population (per million) death rates among the hardest-hit countries in the world. Since it opted for a series of lockdowns initially, instead of intensifying testing, its testing credentials are woefully weak. Its positivity rate has been inching up too.

Happy Independence Day, India!

Stay safe!

Data Sources: 

https://www.worldometers.info/coronavirus/

https://en.wikipedia.org/wiki/COVID-19_pandemic_in_India

-Sid Som

homequant@gmail.com

Coronavirus Pandemic – Death Toll in the Sunbelt keeps Surging

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1. The combined picture above shows how a massive surge in death toll has taken over the Sunbelt since the beginning of July, with the average daily toll moving up by almost 100 deaths every week. While the daily average death toll in June was 171, it jumped to 440 in July and rocketed to 618 in August, proving the horrific nature of the surge. The 7-day moving average confirms the surge. One must understand these are actual deaths and not just confirmed cases.

2. The Florida and Texas graphs demonstrate the almost uniform contributions of the states to the overall picture. While the daily average of Florida in June was 35, it escalated to 108 in July and 159 in August. The Texas case has been even worse. The daily average in June was a mere 25, increasing to 132 in July and 227 in August. In other words, the surge between June and August has already exceeded a whopping 800%.

3. The above regression of daily death counts between California and Florida shows a positive linear relationship. When a handful of outliers are removed from the scatter, the r-squared value improves significantly, proving that inter-state movements have been in lockstep. 

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4. Fortunately, the death rates have remained in line with the national average. Unfortunately, Arizona and Florida's positivity rates have remained very high, while Georgia and Texas are catching up. Alongside, Louisiana, Alabama, South Carolina, and Nevada are also surging. Alabama and South Carolina have been registering double-digit positivity rates as well. 

Given these high death tolls -- not just confirmed cases or hospitalizations -- state governors must keep mitigation measures, including mandatory use of masks in all public places until the current situation drastically improves.

Stay safe!

Data Source: https://www.worldometers.info/coronavirus/

https://en.wikipedia.org/wiki/COVID-19_pandemic_in_Arizona (and others)

-Sid Som
homequant@gmail.com

Coronavirus Pandemic – The World Faces Two Grim Milestones – 20M Cases and 750K Deaths

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This week, as the world faced two grim milestones -- 20M cases and 750K deaths -- the critics and non-believers of the pandemic have been silenced by the gravity of the horror it has brought to the world. 

The only reason the current death toll of 750K is not comparable to that of the Spanish Flu, which occurred about a hundred years ago, is the enormous growth in the medical science and technology over the years.

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The top table shows the stats of the hardest-hit ten countries in the world in terms of the number of confirmed cases. While the US has remained the front-runner since it became the epicenter in April, Brazil and India have seen a massive rise in caseloads in the last three months, accounting for 53% of the world's total cases. Russia, South Africa, and Mexico have also faced a significant rise in the number of cases. These ten countries now account for 70% of all cases.

The bottom table summarizes the stats of the hardest-hit ten countries in the world by death toll. Other than the fact that the US and Brazil still occupy the top two positions, the rest of the line-up is quite different; for example, the original European victims like the UK, Italy, and France show up on this list, while the South American names are missing. The top five countries on this list account for 56% of all deaths, while the top-10 accounts for 74%.

Mexico has one of the highest death rates at 11%, but it also has a sky-high positivity rate of 44%. The death rates of the three original European victims -- France, Italy, and the UK -- remain high because their numbers (both cases and deaths) have not grown much since the taper.

Stay safe!

Data Source: https://www.worldometers.info/coronavirus/

-Sid Som
homequant@gmail.com

Link to Sid's Books

Coronavirus Pandemic – How Nasdaq has Outperformed the Dow during the Pandemic

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Highlights...

1. The top graph demonstrates that after bottoming out on 3/23 at a closing price of 8,592, the Dow Jones Industrial Average (Dow) made an unexpectedly momentous reversal. While its growth started to taper between 6/10 and 7/10, it resumed its upward movement gradually. But it has yet to re-test its prior high of 29,551 set on 2/12. Nonetheless, the Dow has jumped 50% between 3/23 and 8/10.

2. The bottom graph shows that Nasdaq also hit bottom on 3/23 at a closing price of 6,861. However, unlike the Dow, it continued its majestic run, even far exceeding its prior all-time high of 9,817 set on 2/19 and recently eclipsing a short zenith of 11K. The trend has been a near-perfect 45-degree linear -- an impressive performance indeed. Between 3/23 and 8/10, Nasdaq has skyrocketed 60%, an even better feat than the Dow.

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3. The above scatter plot shows that Nasdaq had outperformed the Dow after the two indices started forking in mid-June when the Dow and Nasdaq were roughly 24,600 and 8,900, respectively. After the fork, the Dow began to taper while Nasdaq continued its eye-popping journey.

4. Generally, these two indices more or less move in tandem, but this fork -- resulting in two different slopes --was significant, leading to the low r-squared value. The slope of the Nasdaq index became exponential, while the Dow fell into a logarithmic model, slowly tilting down.

The market reversal after the historic fall in March was just terrific.

Stay safe!

Data Source: Yahoo Finance

-Sid Som
homequant@gmail.com

Link to Sid's Books

Coronavirus Pandemic – Front-running Market Players in Race to Develop Covid-19 Vaccine

While there are many players in the market mix to develop the Covid-19 vaccine, seven players have emerged as the frontline contenders. Of the seven, five are well-known pharmaceutical conglomerates: AstraZeneca (AZN), Johnson & Johnson (JNJ), Gilead Sciences (GILD), GlaxoSmithKline (GSK), and Pfizer (PFE). Despite having frontline status, their year-to-date growth rates have been quite subdued, ranging between -13% and +10%.

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On the other hand, until the recent breakout of the coronavirus pandemic, Moderna (MRNA) and Novavax (NVAX) were more or less unknown names. The reason these two stocks have become household names is their meteoric rise in such a short period. While the year-to-date growth of Moderna has been an impressive 285%, Novavax has seen an astronomical growth of 3,693% (the stock price went from a mere $4.50 on 1/2/20 to $170.29 on 8/7/20).

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The above correlations matrix demonstrates how the market perceives their inter-relations. As expected, Novavax has a high correlation with Moderna, but negative-to-moderate correlations with the other five. 

Novavax has a moderately high correlation with AstraZeneca as the latter has returned 10% growth during this period. Conversely, Novavax has a negative correlation with Glaxo, as the latter has produced -13%, but has remained uncorrelated with Gilead, J&J, and Pfizer as these three name-brand stocks have flatlined.  

Moderna, being the other growth stock, has very similar correlations with its competitors.

An aggressive growth fund, therefore, will choose both Moderna and Novavax, a balanced fund will stick to two-to-three from the name brand five, and a value fund will perhaps prefer the three dogs from the mix.

Stay safe!

Data Source: Yahoo Finance

Disclaimer - The author is not advocating any of the stocks listed here. Consult your Registered Rep, RIA or Financial Planner for an appropriate asset allocation model and the suitability of stocks and other holdings for you.

-Sid Som

homequant@gmail.com

Link to Sid's Books

Coronavirus Pandemic – The On-going Rapid Surge in the Midwest

To keep this blog post short and simple, the Midwest here comprises only five states: Illinois (IL), Indiana (IN), Michigan (MI), Minnesota (MN), and Wisconsin (WI). 

While some of the Midwest states (IN, MN and WI) are surging, others (IL and MI) are resurging. Even the states that are left out have been participating in the current surge.

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1. The current surge resumed in mid-June and has been escalating rapidly. The daily cases averaged 2,093 in June but jumped 78% in July to a whopping 3,716. MI, which encountered a massive surge in April, has been spearheading the current surge with 165% jump, month-over-month, followed by WI (129%), IN (79%), IL (50%) and MN (35%).

2. The above correlation matrix reveals that the combined MidWest has the highest and lowest correlations expectedly with MI and MN, respectively, in line with their contributions to the current surge. Likewise, MI has the highest and lowest correlations with WI and MN, respectively. Since multi-collinearity has been disregarded here, it has paved the way for some minor distortions.

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3. The residual impact of the prior surge has contributed to MI's inflated death rate, resulting in the entire MidWest's higher death rate. While MI and IL have been registering higher death and population mortality rates, WI and MN are on a better course. On the other hand, the positivity rates of IL and IN have remained relatively high. IN's testing credentials have also fallen behind its regional counterparts.

Stay safe!

Data Sources:

https://www.worldometers.info/coronavirus/

https://en.wikipedia.org/wiki/COVID-19_pandemic_in_the_United_States

-Sid Som

homequant@gmail.com

                  Link to Sid's Books