COVID-19: Beyond The Light At The End Of The Tunnel

We continue to see some encouraging trends in case counts and deaths in continental Europe (especially Italy and Spain) and in NY State in the US (which is probably 1-2 weeks ahead of the national peak). For the US, modelers are generally revising their estimates downward for peak case counts, medical infrastructure demand, and deaths to bring them in line with the actual experience that has been reported to date. While NYC is approaching the limits of its hospitalization capacity (which has been vastly increased via the construction of new facilities over the past few weeks), there is hope that the actual limit may not be breached, thus avoiding the kind of triage/rationing that has been necessary in Italy and Spain. Other states/cities will still have to weather peaks over the coming weeks. 

Most observers interpret the recent data to indicate that strictly enforced social distancing tactics are working and driving us closer to what would have been a “best-case” scenario for outcomes from ~two-three weeks ago. If current trends persist in the US, for instance, total deaths might be held at or somewhat below ~100K, which is still a huge number, but is on the order 2x a bad flu season. Of course, the numbers for the US and elsewhere would have been much worse without the stay-at-home lockdown orders and attendant shuttering of national economies.  

Markets are generally reacting well to data that seem to show some light at the end of the lockdown tunnel. I wonder, though, to what extent markets have internalized/priced in what a realistic “post-peak” world will look like. One thing that is becoming clear is that our situation will not be anything like what we would have recognized as “normal” in December or February.

John Colas from Oliver Wyman shared with me yesterday a Morgan Stanley report, which I found very useful. The report runs to 12 pages, but the gist is that pre-crisis conditions are really only going to be restored once we have a reliable and widely available vaccine, i.e., perhaps in 12 to 18 months. From today, we can expect tentative reopening of the economy beginning in ~June, ongoing preventive measures, constant vigilance for subsequent outbreaks, and targeted quarantines to contain future flare-ups, including a potential second wave of infections the Q4 2020/Q1 2021 flu season. We will learn – we are already learning – to cope with this new reality: educating our societies on the basics of avoidance of infection, the rollout of mass testing and contact tracing, hardening our medical infrastructure, scaling up our ability to test and research into therapeutics and vaccines. 

And God-willing, we will soon be through the worst of the death. But we are nowhere near putting the COVID pandemic completely behind us.  

All of which brings to mind the famous quote from Churchill’s speech after the Second Battle of El Alamein:  

"Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."

He delivered that speech on November 10, 1942. 

VE day was two and a half years away. 

About this article

Like everyone, I am trying to make sense of the current situation. For the past month, I've been writing daily reflections to help myself and my colleagues make sense of an enormous amount of information and think beyond the day’s headlines. I now offer these thoughts to you in a series of articles aimed to provide perspective and help you navigate the rapidly evolving COVID-19 situation. I hope you find them useful and welcome your thoughts and comments. 

About me

Current President of Marsh Client Advisory Services. Former Oliver Wyman Partner. Avid writer and reader. Husband and father of three.