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Tuesday, April 28, 2020

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COVID testing is finally starting to pick up. Will it stall out again?

Testing. Testing. Testing.

The U.S. needs more of it.

And the U.S. appeared to be turning the corner. But the path towards a steady stream of more coronavirus tests still appears tedious and winding.

Over several days last week, the number of COVID-19 tests being done each day in the U.S. increased to around 200,000 from 150,000. Monday, however, was a bad day. And a reminder that we’re both not close to offering a test to everyone who wants one nor doing enough testing to get a full view of the coronavirus outbreak.

But any positive steps are welcome, as a continued ramp up in testing capacity is an essential part of any plan to safely re-open the economy. The increase in tests being performed continues to lurch higher in uneven steps. And higher tests performed resulted in lower positive readings, a clear signal that more tests provide a fuller picture of how far and wide the coronavirus has spread in the U.S.

Coronavirus testing moved higher last week but as evidenced by Monday’s drop off, the process is still highly uneven and a challenge for any plan to re-open the economy. (Source: Calculated Risk)

“The proportion of positive tests is falling rapidly, confirming that the underlying case growth is slowing,” said Shepherdson at Pantheon Macro in a note published Monday. “Wider testing is not finding large numbers of previously unknown cases.”

Shepherdson noted that testing per million in the U.S. is currently around 16,500 and trending towards Germany’s ~25,000 tests per million, a level Shepherdson sees as indicating a more robust picture of the disease’s spread.

He also notes that antibody studies in California, New York, and Massachusetts suggest cases with zero or mild symptoms are “much more widespread than indicated by current confirmed data.”

On Monday, New York Governor Andrew Cuomo highlighted new data that indicates some 14.9% of New Yorkers tested in the state’s expanding antibody testing program had been exposed to the coronavirus with 24.7% of residents in New York City testing positive.

As of Monday, just over 288,000 cases of coronavirus had been confirmed in the state; this antibody test suggests the number of infected New Yorkers is likely much higher.

Analysts at Goldman Sachs note that the U.S. right now falls in the middle of the range for tests per population among major developed economies, though the firm notes “these data should be treated with caution due to significant reporting differences across countries.”

U.S. COVID tests per capita are still lagging many developed economy peers like Italy, Germany, and Canada. (Source: Goldman Sachs)

And the reason testing is such a central piece of the economic story in the months ahead is because it offers consumers what they don’t have right now — confidence.

As we highlighted last week, consumers have seen their confidence in the economy taken away not by any specific economic event but the dangers of the novel coronavirus.

“The first glimmer of the restoration in confidence will not be due to an improving economy, but when consumers become convinced the spread of COVID-19 has been effectively contained,” said Richard Curtin, director of the University of Michigan’s consumer sentiment survey.

And confidence that the virus has indeed stopped spreading can only be gained through a testing program broader and wider than we’re undertaking right now.

By Myles Udland, reporter and co-anchor of The Final Round. Follow him at @MylesUdland

What to watch today


  • 9 a.m. ET: S&P CoreLogic CS home price index 20-City MoM SA, February (estimated 0.3%, 0.3% in January). S&P CoreLogic CS 20- City YoY NSA February, (estimated 3.19%, 3.08% in January). S&P CoreLogic CS US HPI YoY NSA February, (estimated 4.1%, 3.92% in January)

  • 10 a.m. ET: Wholesale Inventories month-on-month, March preliminary (-0.7% in February)

  • 10 a.m. ET: Conference Board Consumer Confidence, April (87.8 expected, 120.0 in March)

  • 10 a.m. ET: Richmond Fed Manufacturing Index, April (-38 expected, 2 in March)



  • 6:25 a.m. ET: PepsiCo (PEP) is expected to report earnings of $1.02 per share on $13.24 billion in revenue

  • 6:30 a.m. ET: Caterpillar (CAT) is expected to report earnings of $1.77 per share on $11.23 billion in revenue

  • 6:30 a.m. ET: 3M (MMM) is expected to report earnings of $2.02 per share on $8.23 billion in revenue

  • 6:30 a.m. ET: Southwest Airlines (LUV) is expected to report a loss of 48 cents per share on $5.01 billion in revenue

  • 7 a.m. ET: UPS (UPS) is expected to report earnings of $1.23 per share on $18.04 billion in revenue

  • Other notable reports: D.R. Horton (DHI), Harley-Davidson (HOG), Pfizer (PFE)


  • 4:05 p.m. ET: Alphabet (GOOGL) is expected to report adjusted earnings of $13.97 per share on $32.56 billion in revenue

  • 4:05 p.m. ET: Starbucks (SBUX) is estimated to report adjusted earnings of 34 cents per share on $5.90 billion in revenue

  • 4:15 p.m. ET: Advanced Micro Devices (AMD) is expected to report adjusted earnings of 18 cents per share on $1.79 billion in revenue

  • Other notable reports: Mondelez (MDLZ), Ford (F)


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Novartis sales, profits rise in first quarter on COVID-19 buying rush [Reuters]

Fed extends municipal liquidity facility beyond largest cities [Yahoo Finance]

Alphabet Q1 2020 earnings to give a preview of the coronavirus’ economic damage [Yahoo Finance]


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