What we’ve read about the coronavirus impact on markets: “False negatives”

Eric Lascelles, chief economist at RBC Global Asset Management, warns about the efficacy of testing and transmission between humans and animals.

One source of concern is that Covid-19 tests are alleged to give a false negative rate of around 30%. This means that nearly one in three infected persons is told they are disease-free. As an aside, this further argues that the true number of infected is higher than official reports. Conversely, the false positive rate – healthy people who are told they are infected – is thought to be near zero.

Several tigers at the Bronx Zoo were recently infected by Covid-19. This is notable. Setting aside the question of how scarce tests were found for zoo animals, it emphasizes that to the extent the virus initially leaped from animals into humans, it is certainly possible for it to reverse course. Several dogs in Hong Kong were also reportedly infected. While it is impractical to quarantine squirrels or vaccinate pigeons, such animals do not regularly interact with humans at a distance of less than two metres. Dog walkers should perhaps be alert to the possibility of canine-to-canine transmission?

Relative to China and Europe, the North American quarantine seems quite loose. People are still out and about, ordering coffee, picking up takeout and walking their dogs. This could prevent North America from achieving the same success as elsewhere.

Real-time economic indicators suggest the economic damage may be even greater than initially assumed given massive jobless claims, a sharp decline in credit card usage and data from a host of other technology-enabled indicators.

Prominent epidemiologists continue to predict 100,000-plus deaths in the US and argue that many months of quarantine will prove necessary.

© 2020 funds europe

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