US is crushing the virus

The University of Washington IHME Covid-19 model estimates that daily Covid-19infections in the US peaked on December 23rdaround 340,000 and have since declined about 18%. In three months they estimate infections 70% off the peak, in line with the post-Labor Day low. That the number of infections peaked in December makes sense as we have observed the number of people hospitalized with Covid-19–a lagged indicator-peaked on January 5th. Meanwhile daily Covid-19vaccinations averaged above 1.5million the past four days. We continue think that the rapid approach to normalcy by the summer provides a tailwind for credit spreads–driven by cyclicals and Covid-impaired names.

Covid-19 hospitalizations are plunging. The number of people hospitalized with Covid-19 in the US has declined dramatically to95,013, or 37,461 off the peak which occurred on January 5th(Figure2)-a rapid turn inthe crisis (Figure3). The decrease is broad-based (48 states+DC, except for New Mexico,Vermont and North Dakota which saw44, 17 and 1-person increases, respectively). The weekly percentage change in US Covid-19 hospitalized is consistent with the largest declines seen during the Coronavirus crisis (Figure 4). Moreover the 7-day test positivity rate has declined to 8.1% from the 13.7% peak on January 8th (Figure5). Since hospitalizations are lagged relative to time of infection the US Corona outbreaks peaked back in mid-December. Finally, the vaccine rollout continues in the US at a rapid pace of around 1.5mn doses per day and a cumulative 31.1mn doses administered throughJanuary31st (Figure 6, Figure 7).