“The pandemic’s economic damage will likely long outlast the end of rapid community spread.”
“The spread of the B.1.1.7. variant is not inconsistent with an overall decline of Covid and an end of the pandemic in Q2 due to vaccination, natural immunity, seasonality, and other factors,” Kolanovic wrote on Friday. “…While the dataset is still small, statistical analysis of current vaccination data is consistent with a strong decline (i.e. effective end) of the pandemic within ~40-70 days.”
That range means somewhere between the end of March and the end of April—in other words, just around the corner.
They also noted that cases in Denmark during the same period rose even faster than in the U.K. and the U.S. And since then, cases in Denmark have been declining more quickly despite the U.K. variant becoming more prevalent in the country at the same time. Likewise, new coronavirus cases in Florida and California have come off their January peak faster than the national average, despite those two states having a higher rate of U.K. variant cases than the U.S. overall.
“This is another example that an increase of B.1.1.7. prevalence can be consistent with a decline in overall cases (e.g., due to seasonality, vaccination, or natural immunity),” Kolanovic wrote.
The J.P. Morgan analysts also looked at the global vaccine rollout. They found that on average, for every 10% increase in vaccines administered, new Covid-19 cases have declined at a rate of 117 per million people. That compares with a median spread of 230 Covid-19 cases per million people in the analysts’ sample of about 25 countries.
The pandemic’s economic damage will likely long outlast the end of rapid community spread. But, unsurprisingly, the J.P. Morgan analysts’ calculations have them bullish on the companies and assets most sensitive to a post-pandemic recovery. They advise using any near-term pessimism as an opportunity to buy the dip.
“Any weakness in reflation and cyclical assets should be used as an opportunity to increase exposure to the reopening theme, in our view,” Kolanovic wrote.
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