Last Updated: Feb. 13, 2021 at 6:01 p.m. ETFirst Published: Feb. 12, 2021 at 3:59 p.m. ET By Nicholas Jasinski JPM +1.42% A man walks down a street in Brooklyn. SPENCER PLATT/GETTY IMAGES The current trajectory of Covid-19 cases and vaccinations implies that the global pandemic could be as good as over in just a couple of months, a team of J.P. Morgan analysts that includes global head of quantitative and derivatives strategy Marko Kolanovic said on Friday. That’s a much faster timeline than the market and most economists are working with. The J.P. Morgan analysts aren’t concerned about the potentially more contagious U.K. coronavirus variant, referred to as B.1.1.7., which has been discovered in dozens of countries and more than 30 U.S. states. Last month, the Centers for Disease Control and Prevention warned that the U.K. variant could become the dominant strain in the U.S. by March. “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. The J.P. Morgan quants analyzed the impact of vaccination rollouts on Covid-19 cases and the rate of spread in areas where the U.K. variant was and was not widely circulating. They found that the post-holidays spike in cases in both the U.S. and the U.K. were “almost identical,” despite the U.K. variant not being detected in the U.S. yet. 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. Just using those two figures and assuming that the current pace of vaccinations remains constant—and that social distancing and other preventive measures remain in place—gets the quants to their 40-to-70-day estimate. The team’s analysis comes with a disclaimer: The calculation assumes no hiccups with the rollout or supply of vaccines, and ignores regional differences in geography, demographics, and the uneven distribution of vaccines. But the current round of vaccinations targets the lowest-hanging fruit: People over 65 have accounted for about half of hospitalizations and some 85% of deaths since the pandemic began. Vaccinating that group will likely have a much larger incremental impact on beating back Covid-19 than the next group of younger and less susceptible people. 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. The market, however, isn’t pricing in an end to the pandemic that soon. If consensus expectations come around to J.P. Morgan’s view, expect stocks in sectors like energy and financials to shoot higher. Commodity prices would continue to climb, as forecasted demand would increase. Treasuries would sell off, and rates would jump—which could be problematic for high-multiple growth and technology stocks. An effective end to the Covid-19 pandemic before the summer is not the consensus view on Wall Street, and a lot could still go wrong. But given current trends, the math works.
What they conveniently omit is any risk that current and future strains are potentially immune to the vaccines. Typical Wallstreet bullshit : "the market currently does not price in such early recovery hence you as our client should position yourself early and buy buy buy". Lol.
Do you now where they are selling to stuff that JP Morgan is smoking- cause it sounds like it give you a great buzz to escape from reality........
Pretty sure the more contagious bla bla bla is utter BS, to cover up for the increased deaths caused by the vaccines, mainly the Oxford Vaccine, I know of loads of deaths 3 to 4 days after all going down as Covid deaths ofcourse, few nurses have leaked it I know for a fact there on a gagging order, you leak you never work as a nurse again, but as it's only killing people in there 80s and 90's ie Covid's age group so as lethal if not more so than Covid, nobody cares people!!! Interesting how the deaths started shooting up 7days after the Vaccines started rolling out aswell.
You know if you focused your posts a bit more often on the content than constantly on the messengers then your posts would be a much more enjoyable and insightful read.
I did exactly that, but in my own unique way, which you should be used to by now. Because the JPM guys are smoking some truly fantastic stuff to claim that the pandemic is "effectively over" in just a couple of months. Their advice is horrible, and taking into account a golden scenario where everything works perfectly from here on out. Yes, I see their caveats mentioned, but to leave it to quants to suggest such a thing in the first place is silly. They keep forgetting the one variable that is inviolably unpredictable, the human element. This economy is not going to get back to anywhere near normal until people can get back to work, and that ain't happening in "just a couple of months".
I can't believe I have to agree with JPM, but yes, at least in the USA, by mid-spring it will be business as usual in most places. The 7 day average death this weak will be around 10K, that is a 60% drop from the peak. In 4 weeks the winter is over, better weather, more people outside, vaccination is already over 2 MM/day. Adding to it the current very cold weather naturally separating people and we are being on the downward trend of the wave anyway, I only see good news coming. Unless a super-duper deadly variant develops, but we can't predict that. Now they are talking globally, I am not so sure about that (130 countries aren't even vaccinating right now), but the US is in a fairly good shape as the future outlook goes. Well, not counting the 500K dead. So maybe it is time to buy airline and hotel stocks, because there is going to be a mad rush to go on vacation and forget about this pandemic.
I wonder whether it is scientifically confirmed whether the UK strain is handled by the current vaccines or not? And what guarantees that there won't be other strains that cant be battled by the current vaccines? The more I think about it the more I can't just explain away the release of the virus in China as extremely lucky timing for China, economically speaking and also politically how it coincided with the uprisings in Hong Kong and how now every gathering, regardless how small, in HK is prohibited due it "covid reasons"... Why I mention this is because if there was the slightest intent behind the release then there must be other aces up China's sleeve, aces that the current vaccines won't be capable of handling. I was absolutely convinced that the next world War will be fought on ethernet and Fibre optics lines but the more I think about it the more I get the impression that there is a much darker side to all this covid stuff. And I thought of myself as being the last man standing that resorts to conspiracy theories.
The virus will be around for another 6-7 years with the current rate of vaccination. And if we take into account the emerging of new variants and effectiveness of the vaccines, it could be longer.