24 March 2020

ISA Risk Alert: The Coronavirus Crisis (23rd of March)

Daily Summary

The number of known cases of the coronavirus (Covid-19) rose to more than 350,000 globally, while the number of deaths attributed to this outbreak has risen to more than 15,300.  These increases were exactly as our models had predicted and we will see even larger increases in both figures in the days ahead.

As expected, the number of new cases of the coronavirus in the United States rose sharply in recent days, particularly in and around New York City, which remains the location of nearly half of the cases in the US.  Interestingly, the average age of those hospitalized with Covid-19 in the US is lower than that of Europe or China, for reasons that remain unknown.

Europe remained the center of the current crisis, as the number of new cases in that region continued to rise sharply, despite the implementation of even more restrictions on movement and public gatherings.  In some areas, the rate of increase of new cases slowed slightly, but in others, the rate accelerated in recent days.

A number of banks and research institutions released new economic growth forecasts in recent days, some which garnered a good deal of attention due to the fact that they called for double-digit contractions in the second quarter of this year for major economies in Europe, North America and other parts of the world.  


Key Developments

The Struggle to Enforce Social DistancingIn recent days, it has become apparent that enforcing social distancing regulations is becoming increasingly difficult, particularly among younger people in Europe and North America, but also in countries where the outbreak has yet to reach its full scale.

The Olympics in JeopardyCanada and Australia announced that they would not send athletes to the Summer Olympic Games that are scheduled to begin in Tokyo in July 2020, all but ensuring that these games will be postponed until next year.


Trend to Watch

While the federal government in the United States was relatively late to react to the threat of the coronavirus, there are signs that the US is about to throw its weight into combatting the spread of this outbreak, much as China has done.


The Coming Days

There are growing fears in Asia that the region is about to be hit by a second wave of the coronavirus.  While the number of domestically-transmitted cases in the region has fallen sharply, the number of cases imported from Europe and elsewhere is rising.