Covid-19 Update for May 26

Al Brooks, MD breaks down the latest on the Coronavirus pandemic as we get a clearer picture of how the pandemic is affecting us.

The Coronavirus pandemic is going to affect all financial markets for at least another year. I continue to think that the press and the TV pundits are doing a poor job reporting the story. Also, both political parties in Washington are doing a terrible job managing it.

As the CDC gets more data, they get a clearer picture of how the pandemic is affecting us. Last week, they announced that 35% of infected people have no symptoms, but that they are as infectious as those with symptoms; 40%of all transmission comes from someone who does not yet feel sick.

A symptom is something that you tell the doctor, like you feel sick. This is different from a sign, which is something your doctor tells you, based on his examination of you. For example, a heart murmur is a sign.

Of those Covid-19 patients with symptoms, 0.4% die. However, it is 1.3% for those over 65 years old and 0.05% (1 in 2,000) for those 49 years old and younger.

But percentages are misleading when the number of patients is huge. If 100 million Americans get infected, which is likely, 0.05% is 50,000 people. That’s almost as many who died in the Vietnam War.
For people who feel sick, 3.4% get hospitalized. It is 7.4% for people over 65 years old. All of these data are based on an average person in an average life situation. If a person has other medical or socioeconomic problems, the math can be much worse.

Remdesivir Study has Good Results

The New England Journal of Medicine published the summary of a double-blind, study of 1,063 patients on Remdesivir’s use as a treatment for Covid-19. It did not report the data. What they published was preliminary, but they believed it was important enough to report.

As I explained a few weeks ago, a double-blind study is the single most reliable way to evaluate a treatment. Double-blind means that neither the patient nor the doctor knows which patients are receiving the drug and which ones are getting a placebo.

All patients were hospitalized, which means they were very ill. The treatment was for 10 days. I believe that Remdesivir is only available as an intravenous medicine.

The study found that Remdesivir-treated patients recovered in 11 days compared to 15 days for patients receiving the placebo. Patients who needed oxygen appeared to benefit the most.

There are many other studies underway using Remdesivir combined with other drugs. Remember, this is a treatment of patients already infected. It has nothing to do with preventing the infection, which is the purpose of a vaccine.

Moderna executives dump stock

An SEC filing showed that Moderna Inc.’s (MRNA) CFO and chief medical officer sold $30 million in shares this week as the public was buying the news. Last week, Moderna touted the results of its vaccine trial. This caused a sharp rally. Now we discover that insiders immediately sold.

Is it because they exaggerated the news to pump up the stock price? Were they looking to dump stock at a brief, great price? Too early to tell, but unlikely.

Stock purchases by insiders are more reliable indicators of how well a company will do. You only buy because you believe the stock will go up.

There are many reasons to sell other than believing the stock will collapse. Consequently, it is a mistake to read too much into their stock sale. The Securities and Exchange Commission (SEC) will probably investigate.

Since it is too easy to connect the dots, the executives would have to be fools if there were pumping and dumping. I bet they were just buying mansions or paying off a divorce.

Direct contact accounts for 99% of infections

Most experts believe that 99% of infections come from being in contact with a contagious person. For example, talking with them or having them cough near you. Furthermore, most of the spread happens indoors.

They are also saying that fomite spread accounts for less than 1% of infections. A fomite is an object that was touched by an infected person, like a door handle.

I am disappointed that so many people are unwilling to do what is right. The media should be talking about the consequences of our decisions. Instead, they are only interested in what took place today or what someone said today.

It is also newsworthy and more important to talk about how long the pandemic will likely last, what the economic consequences will be, and how many people will die. But presumably they are reporting in a way that maximizes their advertising dollars, and I cannot fault them for that.

Likewise, both parties in Washington are more interested in the November election than the lives of the American people. It’s hard to fault them either, given that our Constitution makes that their main responsibility.

It is very disappointing that no one with a platform is giving enough of a voice to the American people, who are the victims of the pandemic. Is the news of 100,000 dead Americans getting the attention it deserves? If a car crash kills six people, it makes national news. When 2,000 people every day die from this infection, it’s just mentioned in passing.

During the pandemic, it is better to only look ahead

It is in the best interest of Americans to have Washington only think about saving lives and the economy. Once the dangers are behind us, then we need to look back to see what we could have done better. There are going to be other pandemics and we need to do much better the next time around.

Since we are doing much worse than so many countries, it is clear that there are many things we could have done better. But blaming people who are responsible for solving the crisis will only upset and distract them. We need them to be completely focused on solving the many problems. The lack of blaming of one another in Washington is the one thing that both parties are currently doing right.

54,000 people died needlessly because of our delayed response

I’m not in Washington and therefore do not have political constraints. Also, I am always interested in math. Dr. Anthony Fauci a few weeks ago said the obvious, that there would have been fewer deaths had we started social distancing earlier. But just like President Trump, New York Mayor Bill de Blasio was opposed to social distancing in February. Both are at fault, and so are many others in both parties.

Columbia University released a study last week that concluded we would have had 54,000 fewer deaths as of May 21 had we began only two weeks earlier; 54,000 people died needlessly. It’s incredible that no one cares. Like Stalin said, small numbers are tragic, but big numbers are just statistics.

118 firms making vaccines

The World Health Organization (WHO) says that 118 firms around the world are working on a vaccine. Each company sees this as their lottery ticket. Who will get a contract to make a billion doses of vaccine?

The important point is that researchers believe that there will be a safe, effective vaccine. While unlikely, maybe dozens of vaccines. The news that Moderna released last week was good but intentionally self-serving and misleading. They spun it in a way to help get a billion dollars in funding.

However, it was useful to hear that their small sample of patients developed antibodies. We don’t know if those antibodies will prevent an infection or if they will last more than a few weeks, but it is clearly better news than hearing them say that no patient developed antibodies after being vaccinated.

Why no vaccine in 2020?

President Trump has said that he is going to make sure that there will be a vaccine before the end of the year. In other words, “I deserve to be re-elected because I am doing it so much faster than what the experts say is possible. Trust me, you will get it right after you re-elect me!”

But will you rush out and get vaccinated. Nope. Why not? Because before you and 7 billion other people get vaccinated, everyone wants to know about long-term complications in addition to immediate side effects.

No one died right after getting vaccinated six weeks ago. Good. No significant short-term complications.

But what happens if we discover that 1% of vaccinated patients get Guillain Barre paralysis six months out? Or some other nerve degeneration, or aplastic anemia, or a different permanent debilitating side effect? Don’t you want to know that before you have your kids get vaccinated? The CDC is not going to approve of a vaccine until they are certain it is safe.

Why the long wait?

Better safe than sorry. How much time do you need to be confident of no late developing side-effects? One month? For most people, it would be many months, and for some, six to 12 months.

We don’t even know if the vaccine will prevent infections. Researches might discover that you need a booster shot two months later. All that’s involved with creating a safe and effective vaccine makes it unlikely to have one ready for wide release by December.

We want to see 1,000 people vaccinated and be sure that 90% did not get infected in the next three to six months. That means we need that to be confident that the vaccine is effective. And we want to make sure that a bunch of them did not die several months out so that we will believe it is safe.

Do the math. No company has begun testing 1,000 patients yet (Phase 3). The testing will take many months. I doubt that any vaccine will be approved this year. While unlikely, it might even take two years.

How will that effect the wait affect the economy?

Many people will continue to curtail a lot of activities until there is a safe and effective vaccine. Activities cost money. Restaurants, travel, malls, shows, baseball games, concerts, movies, you name it.
That means reduced consumer spending. This will result in a continuation of the unemployment of many millions of people for the next year, and a lower profitability of American companies.

Less profit, then less E (earnings) in the P/E ratio. Therefore, the P (price) has to get smaller to keep the ratio within its historical range. If the price of stocks has to be less, the stock market will have a difficult time getting far above the current all-time high for at least a year.

The current trading range will then be about four years old. Remember, I have been saying since 2017 that the stock market will probably be in a range for about 10 years. This pandemic will get us to about half-way there.

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