Coronavirus Pandemic – How the US Reached 300K Death Toll

(Click on the image to enlarge)

At the outset of the onslaught, when the White House Task Force projected a high death toll of 65K, the people worldwide woke up in fear and awe. Fast forward nine months: Yesterday, the widely-followed Johns Hopkins' Coronavirus Resource site flashed that the pandemic-related confirmed death toll in the US had crossed 300K. 

Of course, we have much to cheer on today as a couple of vaccines are ready (or being readied) for mass distribution, starting with the population's high-risk segments.

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

 

Unfortunately, the actual death toll eclipsed the dire predictions in no time, hitting 100K on May 22, i.e., within three months from the first fatality, forcing the public health researchers to revert to the drawing board to tweak their vastly-flawed models that under-predicted, to say the least. New York and New Jersey collectively contributed roughly 43% of the overall death toll.

  

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

The rate of growth in the death toll slightly eased while reaching 200K on September 15, thanks to the newly-approved treatment drugs like Gilead's Remdesivir and Regeneron's Regn-Cov2, replacing the malaria drug Hydrochloroqueen that was initially used by many hospitals to treat Covid patients. During this phase, while the Northeast had eased, the Sunbelt caught on with a fury.

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

The above graphs demonstrate how the death rate lately has been accelerating, with a backward-bending tilt. Like the way we reached the first 100K deaths in just three months, we achieved the same distinction during the recent phase as we reached the 300K mark, despite all of the advancements in treatments and logistics.   

Now that the vaccines are here, hopefully the next milestone will be unremarkable.

Stay safe!

Data Sources:

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

https://coronavirus.jhu.edu/map.html

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

-Sid Som

homequant@gmail.com

Coronavirus Pandemic – The Second Wave in Germany Worsens by the Day

While the initial outbreak in Germany was not as dreadful as the other hardest-hit countries in Europe, such as Italy, France, Spain, or the UK, the ongoing second wave has been awful, both in terms of the number of cases and death tolls. 

During the mid-summer month of July, when the pandemic was in remission, the daily cases averaged a meager 466. With the advent of fall, the pandemic returned in full fury as the averages started rising: 1,561 in September and 7,404 in October. Then, November (though 12/5) turned more horrific, and the average rocketed to 18,137, a whopping 39-fold increase from dormant July. The cases exceeded 20K in each of the recent three days. 

Likewise, the daily deaths averaged a mere five in July, rising to 31 in October, and soaring to 230 thus far in Nov-Dec. The fact that the daily tolls have consistently exceeded 400 in recent days and new weekly highs are being recorded perhaps points to a bleak winter until the vaccines are widely available and accepted. The 7-day moving average trendline also confirms the rapidly rising trend, despite the weekend reporting anomalies. 

The regression graph shows that the death rate subsided in the summer, falling significantly below the linear trendline. Unfortunately, as the fall arrived, it promptly turned into an exponential trend, meaning the death rate has been far surpassing the growth in cases. The exponential trend's r-squared value is 0.971 (not shown), which handily beats the r-squared value of the linear trend.

Though Germany has registered over 1.2M confirmed cases, it's still number eleven on the chart, well below the five worst-hit European countries, both in cases and deaths. Moreover, it has one of the lowest death rates globally, coupled with a low positivity rate. Despite the surge, its active status has been well-managed at 27%, while France records at 90%. Surprisingly, its population testing credentials have been lagging behind those of its neighbors.  

Given the surging wave, Germany needs to authorize the emergency use of the available vaccines from Pfizer and Moderna. 

Data Sources:

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

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

Stay safe!

-Sid Som

homequant@gmail.com

Coronavirus Pandemic – The US faces a Massive Second Wave

The ongoing second wave of the pandemic has been fast and furious. Case in point: At the initial stages of the onslaught, the scientific community had projected the death toll to be around 65K; today, it stands at 276K. Similarly, at the tail-end of the initial surge in June, there were roughly 2.5M cases, exploding to over 14M as of today.

After a remission of the initial surge between July and September, the second wave hit the US. It initially hit the Sunbelt, extending into the middle corridor and on to the Northeast in recent weeks. While the daily cases averaged 38.959 in September, it escalated to 58,743 in October, rocketing to 139,702 in November. The 7-day moving average trendline amply confirms the explosion.  

Though the daily death toll has steadily risen during the second wave, the growth rate has been significantly lower than the initial encounter. For instance, the daily deaths averaged 761 in September, flat-lining in October to 746, and escalating to 1,176 in November. While the recent jump is significant, it is 1.5 times the September toll, compared to 3.6 times in case surge.

The above regression graph makes a case for the tapering death rate. Since the case surge has been outpacing the death rate, the line of best fit has been logarithmic with an r-squared value of 0.981, exceeding the r-squared value of 0.962 from the linear fit. The slope also demonstrates that the death toll has started falling after the intersection point of 10M cases and 205K deaths, forming the logarithmic (curvilinear) tilt.

(Click on the image to enlarge)

Though the US owns 22% of the world's cases and the highest population-case rate in the western world, it has a lower death rate than the worldwide average. Despite a higher positivity rate than most of Europe, it has one of the world's best testing credentials. Due to the on-going second wave in Europe and the US, the active rates continue to climb, whereas the Latin American countries have experienced significant drops.

(Click on the image to enlarge)

In the US, Texas, California, and Florida have been the three hardest-hit states, followed by Illinois and New York. The severity of the initial jolt keeps New York in the top five, with the highest death rate in the country. Lately, Wisconsin has seen a big jump in positivity rate, though Texas, Georgia, and Pennsylvania are also rising fast. Pennsylvania has one of the worst testing records as well.

Today, the US recorded the highest daily death toll of 2,611. Hopefully, Pfizer and Moderna will receive the Emergency Use Authorization (EUA) later in the week so the vaccination could start.

Stay safe!

Data Sources:

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

Wikipedia -- COVID-19 pandemic in the United States

-Sid Som

homequant@gmail.com

Coronavirus Pandemic – As New Frontrunners Emerge in Covid-19 Vaccine

 

(Click on the image to enlarge)

Though over two dozen companies are developing the Covid-19 vaccine, only ten companies are considered the frontrunners as they are already conducting the Phase-3, or at the very least, the Phase-2 trials.  

Among the ten, seven are well-established American and European multi-national corporations (MNCs). At the same time, the other three -- BioNTech (BNTX), Moderna (MRNA), and Novavax (NVAX) -- are mostly momentum companies, gaining significant notoriety in recent months for success in initial trials leading to this vaccine. To put the comparison in a proper perspective, let's compare the annual revenues: Johnson and Johnson's (JNJ) $80B vs. Novavax's $19M, Pfizer's (PFE) $51B vs. Moderna's (MRNA) $60M, and Merck's $47B vs. BioNTech's (BNTX) $122M. 

The only reason the momentum trio has been cited alongside the seven MNCs is their recent ascendence in the Covid-19 vaccine trials. Of course, BioNTech has been partnering with Pfizer, perhaps making it a much safer momentum player. 

As expected, the above correlation matrix shows how the trio shares high correlations among them but low to negative correlations with MNCs depending on the annual performance; for instance, while the trio has negative correlations with Glaxo and Eli Lilly, it has moderately high correlations with the better-performing MNCs like AstraZeneca, Pfizer, and Sanofi. 

(Click on the image to enlarge)

The momentum trio has registered significant gains this year: Novavax 589%, Moderna 201%, and BioNTech 100%. Among the MNCs, AstraZeneca's (AZN) 31% return is the highest, followed by Pfizer's 22% and Sanofi's (SNY) 19%. Glaxo's (GSK) 3% and Eli Lilly's (LLY) 4% are at the bottom. Most of the MNC gains have come in November as the investors are now betting on better-than-expected Phase-3 data.

(Click on the image to enlarge)

In the last two months (since 09/15), BioNTech (58%) and Moderna (34%) remain the two standout winners, while Novavax collapsed (-12%), leading to a negative correlation between Moderna and Novavax. MNCs have generated low to negative (+/-5%) returns, so their correlations remain elevated. Surprisingly, AstraZeneca's prior 0.23 correlation with Glaxo has now jumped to 0.90.

On the heels of last Monday's (11/9) great news from Pfizer, i.e., 90% effectiveness on Phase-3 trial, the market may see a new flight to quality, as investors rotate capital from the high-flying momentum stocks to the MNCs. 

Stay safe!

Data Source: Yahoo Finance and Macrotrends

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

Coronavirus Pandemic – A Nightmarish Second Wave Torments France

The following scenario will summarize how France has reverted to a renewed nightmare, with a massive second wave.

On 5/27/20, France occupied the seventh position worldwide with 182,913 cases, rapidly falling to sixteenth on 6/28/20, gradually swinging back to eleventh on 9/27/20, and rocketing to fourth with 1.8M cases on 11/09/20. 

Despite effective treatment and testing advancements in recent months, the death toll has also climbed from 28,596 on 5/27 to 40,987 on 11/09.

(Click on the image to enlarge)

After the initial outbreak was brought under control in May, the daily cases nosedived in June but modestly resurfaced in July with 1,110 on average. However, the average cases rose to 3,724 in August, rapidly trending up to 9,417 in September, then sharply soaring to 25,938 in October, and almost doubling to 48,873 thus far in November. A nightmarish public health scenario indeed.

(Click on the image to enlarge)

France has also been rising rapidly on the chart in total death tolls, recently eclipsing Iran and Spain. The fact that France has lost over 12K lives between June and November is worrying. In terms of daily deaths, the July average was 21, falling to 15 in August, but reversing rapidly to 45 in September, escalating to 156 in October, and tripling to 467 thus far in November. This fast-rising death trend is ominous.

The regression between total cases and total deaths depicts a much smoother trend than the daily event, as the latter is more prone to adjustments and weekend reporting anomalies.  

The total regression graph (top) is quite telling. The overall relationship remained linear until the intersection of 1.5M cases and 37K deaths, past which the death toll has taken an exponential upswing, staying consistently above the linear trendline. Due to the exponential upswing at the outer end of the curve, the exponential trendline (not shown) returns a higher r-squared value of 0.988 than the linear trend's r-squared value of 0.978.  

Though the daily relationship is noisy, a linear trend is nonetheless in the offing.

(Click on the image to enlarge)

Despite France's escalating death tolls, its death rate remains in line with the worldwide average. Unfortunately, it lags behind other hard-hit European countries in testing credentials, resulting in a high positivity rate. The on-going second wave has also bumped up its active rate to an appalling 91%, potentially causing hospitalization issues all over again.  

Today, Pfizer has announced an awe-inspiring 90% efficacy rate on its Phase-3, so others (AstraZeneca, Glaxo, J & J, Moderna, and Merck) are not far behind. If the production goes smoothly, the mass delivery could start as early as Q2-2021. Meanwhile, France has to keep its fingers crossed for a safe winter.

Stay safe!

Data Sources: 

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

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

-Sid Som

homequant@gmail.com

Coronavirus Pandemic – Using Vaccine ETF as an Investment Vehicle

 

(Click on the image to enlarge)

An Exchange Traded Fund (ETF) is an excellent investment vehicle for those who are risk-averse to individual stocks and are uncomfortable with mutual funds' restrictions.  

In 2020, as the pandemic became frightening, many Bio/Pharma ETFs changed their primary holding to focus on the pandemic. In the process, broadly, two distinct groups emerged, wherein one focused on the development of vaccines, while the other concentrated on the treatment and administration. While they are not mutually exclusive, their primary holdings, however, are reasonably different. For example, the PPH ETF comprises the major vaccine development companies like AstraZeneca, Pfizer, J & J, Eli Lilly, Merck, Sanofi, etc. primarily, while the BBH ETF focuses on treatment providers and momentum stocks like Amgen, Biogen, Gilead, Regeneron, Moderna, etc. 

Since vaccine development is a medium-to-long-term venture, the development ETFs hardly took off this year, whereas the treatment and momentum ETFs produced some standout returns. The above two graphs representing the two sub-sectors convincingly prove the point: PTH has returned 52% while PPH has been hovering on the negative-return zone.

(Click on the image to enlarge)

Due to the similarity of primary holdings, the development ETFs share high positive correlations among themselves but much lesser correlations with the treatment and momentum ETFs. Conversely, the treatment and momentum ETFs share a high degree of correlations among themselves, while much lesser correlations with the development sub-group. 

BBH, a treatment and momentum ETF, shares very high correlations of 0.9873, 0.9031, and 0.9474, respectively, with the other three ETFs in the same sub-group, namely IBB, PTH, and XB, but significantly lower correlations with the development ETFs. On the other hand, XPH, a development ETF, shares very high correlations with its counterparts in the sub-group and much lower correlations with the other sub-group.

Therefore, one needs to pick a complementary combination of ETFs to play the Covid-19 vaccine arena effectively.

Data Source: Yahoo Finance

Disclaimer: The author is not advocating any of the ETFs/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.

Stay safe!

-Sid Som

homequant@gmail.com

  

Coronavirus Pandemic – Frontrunners 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)
• Pfizer (PFE)

Despite having frontline status, their year-to-date (YTD) growth rates have been relatively subdued, ranging between -20% and +8%.

(CLick on the image to enlarge)

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 Moderna's YTD growth has been an impressive 274%, Novavax has seen an astronomical increase of 2,354% (the stock price went from a mere 4.49 on 1/2/20 to 178.51 on 8/10/20), pulling back to 110 on 10/5/20.

(Click on the image to enlarge)

The above correlations matrix demonstrates how the market perceives their inter-relations. Since Novavax and Moderna have performed in lockstep, they share the highest correlation between them. They also have a relatively high correlation with AstraZeneca as the latter has returned a positive 8% growth YTD, but negative-to-low positive correlations with the other four stocks.

Conversely, Moderna and Novavax have negative correlations with Glaxo, as the latter has produced -20%, but have remained slightly negative to uncorrelated with Gilead, J&J, and Pfizer as these three name-brand stocks have more or less flatlined.  

Therefore, an aggressive growth fund 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