Covid-19 Statistical Review – April 20, 2020 – Stats from yesterday, April 20, 2020

Our Daily Update on the Data and the Trends

Background:  This is another in a series of statistical reviews of the emerging data on the Covid-19 virus.  Note that our conclusions are limited to what the existing data says about the shape and severity of this crisis.  Our aim is to place the U.S. contagion in the context of the patterns revealed by the more mature Covid-19 contagions in Asia and Western Europe.  Note that the data in the report comes from the day before publication, hence the difference between the title of the delivering email and the report itself.

Another good Sunday with reductions in most countries and regions.  The U.K. and Mexico are notable exceptions.  Mexico, a relatively young host of the bug, is not a surprise.  The U.K., at 46 days since the beginning of major new case daily counts, is more troubling. 

The reduction of deaths in the U.S. and elsewhere was heartening.  U.S. deaths are now down almost 40% from the peak day.  In addition, new research provides an interesting perspective on U.S. metrics.  Even as our testing rate keeps increasing, positive results stay stubbornly at about 20%.  Experts expected the rate to slow, since we know that early testing was limited mainly to people with symptoms.  The data suggests two things:  First, the number of infections is bigger than supposed, perhaps 20% of the full population.  That would be devastating news for the proponents of sequestration.  The results suggest that it hasn’t worked.  Everybody eventually gets exposed, and 20%, or 66 million of us, pick up the bug.  The second conclusion is positive.  The deaths per day are falling more rapidly than new cases per day, suggesting that the mortality rate will also decline over time.  We are currently at 40.5 thousand deaths and on the downslope.  It looks like we will total 100 thousand, conservatively.  100,000 divided by 66,000,000 cases if the 20% share holds, equals a mortality rate of .15%, a number well within the range of ‘normal’ flu casualties. 

Many people are talking about a ‘new normal’ for American life.  That may occur as a result of the unprecedented economic interruption we have imposed on our fearful selves.  A new normal is not indicated by the COVID-19 statistics.  All flu bugs spread rapidly and kill a portion of our vulnerable people.  Then they disappear until a new strain comes the next year.  Every ten years or so, sicknesses and death jump, and we give that year’s bug a name.  This one we call COVID-19.  Let’s hope that the economic event is not sufficiently bad to earn its memorable title. 

Industrials Research Analysis
Noel Perry, Managing Director

Donald Broughton, Managing Partner

Exhibit 1.

Please treat these numbers cautiously because they could be influenced by low Sunday accounting. That said, this was a very promising day with decreases in new cases for almost everybody, even the U.S. As a result the Western Europe and World totals were down as well. (Shown in the table for the first time.) Among the countries I track, only Denmark and Australia went the wrong way, but Australia has a suspicious Sunday count (or is it Monday there already?) Should these overall numbers repeat for a few days, the contagion has probably turned a corner, at least among the countries that have been suffering for a while.
Not importantly that reaching inflection only means that the problem is roughly half through. It is a necessary precondition to the departure of the bug, but there would be two to three weeks of significant contagion thereafter before the problem is weakened enough to prod governments into removing embargoes.
We can, however, be encouraged by the Swedish example, a government that has chosen to make the majority of its restrictions voluntary. So far, they have not had a worse problem than their Western European counterparts, all of whom have made serious mandatory restrictions. That experiment bears watching. Should it continue to produce similar results, the experience may encourage other governments to relax some restrictions bringing welcome reliefs to their economies.

Source:, Transport Futures

Important Disclosures

Broughton Capital, LLC is an independent, privately held, deep-data driven quantimental economics balanced with fundamental equity research, firm. Headquartered in St. Louis, with personnel in Boston, Dallas, Chicago, Nashville and Philadelphia, we travel the globe to meet with companies, their customers and vendors, and clients, as we strive to be the single best resource for transportation data and understanding the trends driving the future of the commercial transportation of goods. The material contained herein is based upon sources we believe to be reliable but is not guaranteed to be accurate or complete.  It is published for informational purposes only and should not be construed as an offer, or the solicitation of an offer to buy or sell any security.  Opinions expressed are solely those of the author and subject to change as new data becomes available.

We are “The Independent Variable.”  Why? Two reasons:

  1. As is true in a mathematical equation, the independent variable drives the value, changes the value of the dependent variables.  Knowing the independent variable, allows you to solve for the value of not only the dependent variables but the value of the overall equation.  We know that through good fundamental research, high quality data, and years of industry experience, we can literally change the value of an equity, a company’s access to capital (debt and equity), ability to merge or acquire, and even a management team or their behavior.  We know that if we do our job well, we become the ‘Independent Variable’ in a company’s future.
  2. We are Independent.  We do not work for a large commercial bank.  We are not beholden to lending relationships, or our firm’s investment holdings, or even worse – our firm’s investment bankers.  While we pride ourselves on being independent from emotion and influence, we are aware of, and guarded against falling victim to, the cognitive biases inherent in the human brain.  We are dependent on math and the power of back tested multivariable analysis, especially when balanced with wisdom of experience from those who have made decades of mistakes.  We are Variable.  Over the last several decades, we have been everything from strongly positive about to strongly negative about almost every single equity in the transportation universe.  We have built our reputation upon having an opinion, and being clear about that opinion (i.e., no one ever finishes a conversation with us and says, “I wonder what they really think?”).  We know that our opinions and outlooks may be everything from slightly flawed to completely wrong.  As a result, we consider it our professional duty to change our opinions and outlooks as the statistics, data, or evidence warrant.

Transportation stocks have the reputation for predicting the overall market because the underlying goods flow is heartbeat of the economy.  That goods flow becomes increased (or decreased) levels of asset utilization for asset intensive transportation companies, which becomes increased (or decreased) levels of financial returns, which becomes stock price.  We believe that the stock price performance of transportation companies is only symptomatic of the underlying goods flow.