Wednesday Briefs – 22 July 2020

A weekly commentary on current events. Follow populyst to receive notification.

This week: US coronavirus deaths; Out of China and into Africa?; Tesla rocket.

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US coronavirus deaths

US deaths from Covid-19 are rising with a three week lag after confirmed cases. After bottoming near 500 at the beginning of July, the seven-day average has climbed to 830, an alarming increase even if the total remains well below the dark days of April (see chart).

Screen Shot 2020-07-22 at 9.39.05 AM

Based on the latest figures for cases, the seven-day average will rise to at least 1,200-1,400 by August 11th, and subsequently higher if daily cases resume their growth. One encouraging turn may be in Arizona where cases appear to have peaked on June 6th and are now fading.

Further the ratio of new deaths to 3-week-ago cases continues to fall and is now at 2% (shown below) significantly less than at the height of the pandemic. This ratio is not the same as the infection fatality rate (IFR) because many infected people are undiagnosed. The IFR lies between 0.5% and 1% according to the latest from experts.Screen Shot 2020-07-22 at 9.39.14 AM

Out of China and into Africa?

US-China relations are deteriorating in many places, rendering phase 2 of the trade deal unattainable, and the full implementation of phase 1 questionable, before the US presidential election. Regardless of how they evolve in the future, the signal to corporate leaders is unmistakable that they should decrease their reliance on China manufacturing and diversify their sourcing back to the US or to other emerging economies.

The likely beneficiaries include Vietnam, as well as Kenya and other sub-Saharan countries. The potential for Africa’s development is very significant. Africa is seeing a demographic boom and needs the investments that could create hundreds of millions of new jobs.

Tesla rocket

We published a piece on Tesla at National Review. The object of the article was to provide a balanced overview between the bullish view and the more skeptical. Like the tech giants, Tesla stock is currently benefiting from the large amounts of stimulus pumped into the economy by the Federal government, via fiscal and monetary measures. This could go on for a while but the stock is vulnerable to any bit of bad news.  Read it at National Review.

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