November 8, 2020

Trend Watch and New This Week

On the data tracker matrix (slide 2), we downgraded hotel occupancy and OpenTableRestaurant Bookings, which have slumped of late.

More importantly, we are increasingly concerned about the surge in COVID-19 infections throughout the US. New cases hit 100,000 this past Wednesday, which has pushed the 7-day average to nearly 90,000 per day and is well above the July peak (slide 3). As we have noted, a sizable chunk of the new cases are on college campuses, with nearly 38,000 in the past two weeks. Hospitalizations, which lag new cases by roughly 10-14 days, have also turned higher. We highlight states with the fastest pace of new hospitalizations (slide 5). Death rates, though, have ticked up modestly, which is likely the result of quicker identification (testing) along with better treatment and therapeutics.

We highlight public transit, which remains greatly impacted (slide 6). However, ridership spiked during October in Dallas, which hosted part of the Major League Baseball playoffs and World Series. This suggests that public transit may remain impacted due to work-from-home and the a lack of large-scale events, such as sporting events and concerts, which typically drive ridership. Air passenger throughput also remains impacted and has been erratic in the past few months (slide 7).

Lastly, we continue to monitor the number of new business applications (slide 8), which we previously had on the data tracker matrix. Requests during the third quarter 2020 soared 82% compared to 2019.

Bottom Line

The surge in infections both in the US and abroad are problematic. Several European countries and the United Kingdom have reinstated lockdowns following huge spikes in cases and hospitalizations. While we do not expect similar widespread lockdowns in the US based on current trends, the backtracking of virus trends will likely push back further reopenings.

Additionally, as we anticipated, Hurricane Zeta is cycling through some of the weekly activity-based data, particularly in the Gulf Coast and southeastern US. While this is temporary, it obscures an already cloudy view for decision makers.

We maintain our general optimism about the US recovery path. The US economic recovery remains in the early innings. Still, within the US, the recovery will continue to be uneven—both by industry and region.