Cases and deaths in the U.S. and Canada continue to drop as businesses continue to reopen, underpinning recent risk-on sentiment. Yet fears of second waves remain strong, especially as protests escalate. There is, however, encouraging evidence that suggests any second wave could be relatively contained and, more importantly, not lead to nationwide shutdowns. Social distancing has worked to bend the curve while fatality rates are well below previous estimates. Estimates on infection fatality rate, as opposed to case fatalities, could be as low as 0.25% in the U.S. according to the CDC, or even lower as antibody testing ramps up because of the high share of symptom-free cases.
Finally, positivity rates, or the share of positive tests out of total tested, have fallen below 4% in Canada and to 5% in the U.S., reaching the WHO-recommended target threshold. What’s more, the U.S. hotspots of New York and New Jersey are even lower at 3-4%. Outside of those regions, it cannot be overlooked that the virus was relatively contained (beds and ICUs were well below capacity). Overall, second waves, should they materialize, may not lead to widespread shutdowns, not least because of the costly disruption for businesses and local governments. The virus may not be as deadly as previously thought, and is highly concentrated geographically and demographically, allowing policymakers to give greater weight to the economic costs of shutdowns.