Covid update: The worst of the surge could still be ahead of us

The latest Covid headlines come through.

The Japanese PM, Yoshihide Suga, mulls emergency for the Tokyo area and the UK military has been called in to assist in COVID response.

Meanwhile, the nation hit the hardest, the US, has reported a shocking seven-day average for new cases at 205,093, according to John Hopkins University.

That figure is up 8% week-over-week, though testing and reporting has tended to be inconsistent during holiday seasons.

The US is also averaging more than 2,600 deaths per day attributed to the virus, according to Johns Hopkins.

Enough vaccine to the rescue?

Markets are relying on success in the global vaccination programme. 

For the US, health officials are aiming to inject 20 million Americans with a vaccine by the end of the year.

However, only about 4.2 million had received shots as of Jan. 2, according to the Centers for Disease Control and Prevention, and this is not going to keep up with new cases. 

A surge in holiday borne cases could be the straw that breaks the camels back, and if Wall Street is banking on immunizations to halt the virus, it could be in for a rough surprise.

The IBD/TIPP Poll found that just 52% of Americans are likely to get a Covid-19 vaccine. An additional 41% say they'll refuse, and more than a third are sceptical of the vaccines.

Meanwhile, the head of the federal government’s Covid-19 vaccine program said Sunday, as reported by CNBC, that health officials are exploring the idea of giving a major group of Americans half volume doses of one vaccine to accelerate the rollout.

''Moncef Slaoui, the head of Operation Warp Speed, said on CBS’ “Face the Nation” that one way to speed up immunizations against Covid-19 was to give two half-volume doses of the Moderna vaccine to some individuals.''

''We know that for the Moderna vaccine giving half the dose for people between the ages of 18 to 55,  two doses, half the dose, which means exactly achieving the objective of immunizing double the number of people with the doses we have. We know it induces an identical immune response to the 100 microgram dose' Slaoui said.''

“And therefore, we are in discussions with Moderna and with the FDA, of course ultimately it will be an FDA decision,  to accelerate injecting half the volume,” he added.

World Health Organization experts have warned that even though the coronavirus pandemic has been very severe, it is “not necessarily the big one”, and that the world will have to learn to live with Covid-19.

The “destiny” of the virus is to become endemic, even as vaccines begin to be rolled out in the US and UK, says Professor David Heymann, the chair of the WHO’s strategic and technical advisory group for infectious hazards.

“The world has hoped for herd immunity, that somehow transmission would be decreased if enough persons were immune,” he told the WHO’s final media briefing for 2020.

The WHO director-general, Tedros Adhanom Ghebreyesus, explained the end of the year was a time to reflect on the toll the pandemic had taken, but also the progress made. He said the year ahead would see new setbacks and new challenges.

“For example, new variants of Covid-19, and helping people who are tired of the pandemic continue to combat it,” he said.

“New ground has been broken, not least with the extraordinary cooperation between the private and public sector in this pandemic. And in recent weeks, safe and effective vaccine rollout has started in a number countries, which is an incredible scientific achievement.''

“This is fantastic, but WHO will not rest until those in need everywhere have access to the new vaccines and are protected.”

Market implications

If history is anything to go by, ''vaccines aren’t perfect and in the coming weeks and months, we can expect to read about people who were immunized and got sick anyway,'' the NYT wrote.

This won’t mean that the vaccine is a failure; it will simply show that the shots are not 100% effective. However, markets may not like such a reality.

Moreover, the worst of the surge could still be ahead of us.

The new year starts with the global population emerging from the first holiday period in which the new, more transmissible variant of the virus, first found in Britain, was known to be also circulating in the United States.

“It’s terrible, it’s unfortunate, but it was predictable,” Dr. Anthony S. Fauci, the nation’s top infectious disease expert, said on “Meet the Press.”

“Things are bad enough as they are right now,” Dr. Fauci said, “but they could get worse in the next couple of weeks.”

In such a scenario, this could all point to a combination of strict lockdowns and that would be optimal for tech/online stocks and perhaps even drive in a safe haven bid for the US dollar once again.