Where We Are in The Life Cycle of COVID-19

Where We Are in The Life Cycle of COVID-19

Last month we provided a framework for how we believed the COVID-19 life cycle would play out considering current available data and past virus outbreaks keeping in mind different countries progress at different paces.

At that time, we felt the United States was in stage 3, preparing to move to stage 4 of the virus’s life as local transmission began to take hold and sustained government action was taking place. Since then we have seen unprecedented government lockdowns across the country, social distancing/mask requirements, increased urgency on the part of the government to develop nationwide testing, and pharmaceutical companies rushing to find a potential vaccine.

Today we believe we are in the mid-to-latter part of stage 4 where our healthcare system has absorbed the shock from the wave of new virus patients and cases continue to grow. New daily cases remain below their April 4th peak as nationwide social distancing hopefully yields results but more significant drop of daily cases would certainly be preferred before we could begin to feel confident that we are near a light at the end of the tunnel.

The next step is seeing a more dramatic drop in new cases and the beginning of reopening the economy. Pockets of the nation along with other countries have outlined plans to lift restrictions soon but a wide-spread initial opening of the economy still appears to be weeks off. We also need to be prepared for the possibility of second waves of the virus popping up in ‘hot spots’ across the country as parts gradually reopen. Comprehensive, convenient, efficient testing, and ultimately a vaccine will be needed to fully reopen the economy.

Disclaimer: The information contained in this commentary has been compiled by Covington Investment Advisors, Inc. from sources believed to be reliable, but no representation or warranty, express or implied, is made by Covington Investment Advisors, Inc., its affiliates or any other person as to its accuracy, completeness or correctness. 

 Under no circumstance is the information contained within this correspondence to be used or considered as an offer to buy or sell or a solicitation of an offer to buy or sell any particular security.  Nothing in this correspondence constitutes legal, accounting, or tax advice or individually tailored investment advice, or research. This material is prepared for general circulation to clients, and does not have regard to the particular circumstances or needs of any specific person who may read it.  The recipient of this correspondence must make his or her own independent investment decisions regarding any securities or financial instruments mentioned herein. Past performance is not indicative of future results. 

To the full extent permitted by law neither Covington Investment Advisors, Inc. nor any of its affiliates, nor any other person, accepts any liability whatsoever for any direct, indirect or consequential loss arising from any use of this market commentary or the information contained herein. This correspondence may not be reproduced, forwarded or copied by any means without the prior consent of Covington Investment Advisors, Inc.

Investors should review this correspondence knowing that any comments and opinions made in this correspondence are subject to change and positions held by the authors may be sold.