April Will Bring Peak Virus Panic, Analysts Say

Here’s some bad news and good news for investors.

First the bad news.

This month is going to look bleak when it comes to news about the killer virus COVID-19, experts say.

“We have been commenting for months that the month of April would be the key month where the virus panic would likely peak,” states a recent report from financial firm Hackett Financial LLC.

Hackett isn’t alone in that view. Swiss banking giant UBS projects a similar scenario in a recent research paper.

“Europe should see its pandemic peaking in early April, while the U.S. should follow by mid-April,” the UBS report states. 

Worse to Come for the U.S.?

What that means in practical terms is that the worst of the pandemic soon could be over for much of mainland Europe such as France, Italy, and Spain. It also means that for the U.S. and the United Kingdom, things will likely deteriorate over the next two weeks, but then start to improve.

In both cases, Europe and the U.S./U.K., the near-constant barrage of adverse news reports will likely continue as the death toll rises. That will be a psychologically draining time for many people, and we should all pray for fast recoveries for anyone afflicted.

While the mortality statistics will likely grow, they are a lagging indicator of the progress of the pandemic. Deaths, when they occur, tend to happen two weeks after an infection, and about 7-10 days after the case is confirmed, the report states.

So that means it would not be unreasonable to expect the number of reported deaths to rise even while the infection rate is falling. Falling infections eventually mean lower mortality.

While Europe may be past the infection peak, the U.K. and U.S. have a little longer to go, the UBS report states:

• “[W]e may be close, or even already past, the peak of daily new cases in many European countries. The U.S. is still at an earlier stage of the outbreak process and needs probably until mid-April to peak.”

Other indicators, such as the rate of hospitalizations, confirm this idea, the UBS report states. Fewer people at the hospital is a good sign, and sadly, that isn’t the case yet in New York City.

News that things will look bad for the next couple of weeks is never up-lifting. However, the trends seem to indicate that a return to normality, both socially and economically, maybe closer than many think.

Good News Soon?

After the pandemic peaks and then falls, then governments can seriously start to consider lifting movement restrictions and getting their economies going again.

That likely means the severest restrictions on people will get lifted starting in May, the UBS report states. Don’t expect a complete return to normal immediately, and there’s a likelihood that some rules get reintroduced at a future date.

However, the initial changes will likely be enough to get economies going again and people back to work.

Investors may already be forecasting that back-to-work greenlight and the stock market may be at or near its bottom.

“Multiple metrics indicate that the S&P 500 Index has likely seen its lows,” states a recent report from the financial newsletter Bullseye Brief. “Stocks are already fully discounting [a] recession.”

The newsletter continues:

• “[Record government stimulus spending] ensures that most businesses will have the means to survive. I think this is why stocks snapped back last week, especially since we can see China and South Korea already beginning to normalize.”

In other words, get ready for a market rebound in anticipation that people can get on with their lives again in relatively short order.