Over the past few weeks, multiple countries including India, Brazil, and the US have seen a spike in new COVID-19 cases. In fact, on June 21st, the World Health Organization recorded the largest daily increase in new COVID-19 cases since the beginning of the pandemic, totaling a staggering 183,000. Among the most affected were countries in North America, South America, and South Asia.
The rising number of cases
The number of new coronavirus cases in Brazil spiked 54,000 in just 24 hours, making Brazil the second country to reach one million cases. Similarly, the US saw a 36.5% spike in daily cases on June 9th, the highest percentage change to date. In fact, fourteen states have hit new weekly average highs of new infections, with cases continuing to rise across the country. This rise has also been the case in India, where the number of COVID infections increased by 12,881 on the 18th of June.
Following this uptick in cases, the economy has taken a hit once more. Since June 11, the Dow Jones stock market plummeted more than 1,800 points, posting the worst day for US stocks in 12 weeks. This hasn’t been the only significant drop in the stock market since the pandemic began spreading in the US. Rather, there have been large fluctuations since the stock market crashed on March 9th.
On that day, which is now labeled Black Monday 2020, the Dow fell 2013.76 points. This was, at the time, the index’s worst single-day point drop in history, worse than those of the 2007-2008 financial crisis. On March 12th the Dow fell 2352.60 points, and on March 16th, the index again fell 2997.10 points, becoming the largest point drop to this day.
The stock market has been teetering since March, and with the COVID-19 pandemic becoming progressively worse and no vaccine available, there may be devastating effects ahead. All 30 stocks in the Dow dropped March 11, and the top 5 were among a bunch of different categories like Boeing, United Technology, Cisco, Amex, etc.
A looming second wave
This global spike in coronavirus cases and accompanying economic responses convey an important message – that COVID-19 isn’t going away anytime soon. According to Albert Ko, an epidemiologist at Yale and co-chair of the Reopen Connecticut Advisory Group, COVID-19 will likely be around for years to come.
The coronavirus can be transmitted regardless of whether people are showing symptoms, making it very difficult to contain. Not knowing they have been infected, people may go about their daily lives, resulting in the rapid spread of the virus. This is especially evident in the US, where the recent George Floyd protests and rapid reopenings have resulted in thousands going out unmasked and unprotected, ignoring social distancing measures.
Researchers estimate that in order to slow the spread of the novel coronavirus, herd immunity must be achieved, meaning that at least 50% to 60% of the population must be immune. However, the world is still far from this number, and there is little known about how COVID-19 immunity works or for how long possessing coronavirus antibodies can protect people from reinfection. Although a group of Harvard researchers attempted to model herd immunity in the US assuming current medical capabilities, they ultimately concluded that forms of social distancing might be necessary until 2022.
Many have also been looking at past pandemics in comparison to COVID-19. A recent report from the Center of Infectious Disease Research and Policy noted that seven of the eight major pandemics in the last 300 years have had a substantial second wave. Although many of those past pandemics were flu, the coronavirus has a substantially longer incubation period as well as a higher rate of asymptomatic cases, meaning that COVID-19 has an even greater spreading ability. In fact, considering that it takes two weeks for symptoms to show on a patient, it is safe to say that the number of cases known will lag in number.
There are no vivid signs of the first wave letting up. On the contrary, recent upticks have shown that the pandemic is in fact accelerating in speed, peaking in large numbers around big countries all at the same time. Topping 9 million total infections the past Monday, it’s evident that the current wave (and another looming one) will continue. As this goes, the stock market will persistently teeter, which is a sign that retailers need to be wary of the months ahead.
The long road ahead: projecting recovery
Upon releasing our free COVID-19 Retail Tracker two months ago, we explored when countries could realistically start recovering. Integrating our predictive machine learning models with other sources of data (one of which being pandemic data), we leveraged our data science team’s experience in tracking previous pandemics and sought to provide retail-focused insights and projections to help businesses plan for the upcoming quarters.
Currently, our projection of the suppression phase start date is in the range of October 12th and December 5th, 2020. Additionally, our recently updated stock market model shows a V curve rebound, indicating the stock performance of major companies.
Due to the long incubation period, rapid transmission rate, and low population immunity against the virus, it is evident that COVID-19 will be around for a while. With the recent resurgence of cases in the US, retailers need should not expect things to return to normal in the coming months. While it’s hard to stomach this reality, with the current climate and lack of widespread compliance to social distancing measures, we remain strong on our projections and don’t see our predictions changing anytime soon.
In fact, according to a report by UBS, they can expect more than triple the retailers to close doors over the course of the next five years compared to those shut down during the last recession. As a UBS analyst, Jay Sole stated,
Going back over the last 20 years, the worst year for closures was 2009 when 2% of stores closed. Our forecast calls for 2% of stores to close every year into 2025.
Looking at our predictions and the other analysts’ forecasts of what’s to come, retailers may expect to see a lot more hurdles coming along. To prepare for these upcoming difficult quarters, the smarter brands are turning to data to help navigate their decisions more accurately. Adopting a more data-driven approach will help to strengthen their place in what may be a hard-hitting economic recession to come.