None of us are likely to ever forget the coronavirus pandemic. Not only has it claimed almost 3 million lives, but it sent the stock market plunging 34% in a month.
Of course, record stimulus and incredible scientific heroism that delivered a vaccine faster than anyone thought possible, are why the S&P 500 hit record highs just five months after bottoming in March 2020.
But now the worst pandemic in over 100 years, shows signs of one final effort to kick our portfolios in the balls.
So here’s what investors need to know to avoid making costly mistakes during the potential final 4th wave of the virus.
Fact 1: The Threat Of The Virus Is Still Very Real
(Source: NYT)
There hasn’t really been a clear series of waves for this pandemic. More like a never-ending tide of death. One that appears to be heating again.
The good news is that IHME doesn’t expect us to break new records for global daily cases.
(Source: IHME)
However, due to just 3% of the world being infected so far (up to 36% counting non-reported cases), the global pandemic could still get much worse. IHME estimates as many as 5.7 million daily infections by July 1st in a worst-case scenario base-case shows daily cases will likely stabilize around 400K to 500K per day for several months.
15 million monthly cases is still a very severe amount of human misery and economic damage.
(Source: IHME)
The good news is that even in the worst-case scenario, IHME’s latest modest doesn’t expect us to approach the 16K daily death record we set in late January. That’s because treatments have become a lot more effective, and of course vaccinations all but eliminate very severe cases in those that have had the shots.
What about the US? Unfortunately, 21 states have rising transmission rates.
(Source: epiforcasts.io)
So far, the US national transmission rate has remained under 1, which is why cases have spent months falling. However, states have been very aggressive at the reopening, as much of America gets “channel fever”.
In the short-term channel fever or what the global psychiatric community has named PSTE, is a major threat to our portfolios and health.
Many in the Navy will recognize this by another name, “channel fever.”
- within sight of land, “in the channel” but still several hours from disembarking
- anxiety can become almost overwhelming for some the closer you get to the end of a stressful experience
- channel fever can lead to stupid decisions, both health-related and financial
- do not fumble the football at the 1-yard line during the Super Bowl
Fact 2: When The Pandemic Will Finally End
The good news is that the numbers surrounding the global vaccination effort are astounding.
(Source: Bloomberg)
- Globally 133 countries have begun vaccinations (up from 114 two weeks ago)
- 447 million doses so far (up from 304 million doses two weeks ago)
- 11,001,093 doses 7-day rolling average up from 7,927,674 doses 7-day rolling average two weeks ago
- at this rate, 85% global herd immunity will be achieved on April 24th, 2024
- If the rate of accelerating daily vaccines could be sustained we could achieve global herd immunity by 11/21/2022 (if we peaked at 40.0 million daily doses)
- this assumes we can get the 14 billion we need by then (far from certain)
- plus boosters for new variants
- JNJ says through the end of 2022 it can make 3 billion total doses
In less than four months we went from giving zero shots to over 11 million per day.
Just 14 months ago there was no pandemic, and no one working on a vaccine at all. Now we have nine effective vaccines in development or already approved. By July 1st at the present rate, we’ll likely have administered close to billion doses.
However, the miracle of science that these vaccines are, can’t overcome basic math.
(Source: Bloomberg)
Almost 500 million doses were administered in less than four months. Absolutely incredible. But it amounts to just 2.9% of the planet.
This year an estimated 3 billion doses might be delivered. A feat of medical logistics has never been dreamed of by man. It’s enough to vaccinate 2 billion people, in a single year.
However, there are 8 billion people on earth and an estimated 6.5 billion at least would need to be immune for this pandemic to end. The current rate of vaccination leaves the pandemic going to the end of 2024.
Acceleration in vaccinations, specifically the roughly 85 countries representing 2 billion people who haven’t even begun vaccinations, means that we’ll likely end the pandemic in 2023.
What about the US?
(Source: Bloomberg)
At the current rate of vaccination, the US would reach herd immunity on June 21st. If we keep ramping up delivery rates, we could finish in early June or even late May.
- 73 million kids will have to wait until the Fall since vaccines are only approved for 16+-year-olds right now
However, just because the US epidemic is a few months away from ending doesn’t necessarily mean that it’s all-clear for stocks. In part two of this series, I’ll explain the most important final two facts about the potential 4th wave of the virus, including what it means for the stock market, your portfolio, and your retirement dreams.
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SPY shares were trading at $391.05 per share on Wednesday afternoon, up $1.55 (+0.40%). Year-to-date, SPY has gained 4.94%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Adam Galas
Adam has spent years as a writer for The Motley Fool, Simply Safe Dividends, Seeking Alpha, and Dividend Sensei. His goal is to help people learn how to harness the power of dividend growth investing. Learn more about Adam’s background, along with links to his most recent articles. More...
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