A Morgan Stanley official warns that a sustained resurgence in coronavirus infections should emerge this fall as flu season begins, sparking yet another wave of economic lockdowns.
The brokerage’s biotechnology analyst Matthew Harrison wrote that his base case scenario projects a “second wave” in the fall with daily new cases summing between 40,000 and 50,000 nationwide, CNBC reported.
Investors are wary amid concerns over a record surge in new COVID-19 infections in the United States.
There were at least 39,818 new coronavirus cases across the United States on Thursday, the largest one-day increase yet. The governor of Texas temporarily halted the state’s reopening as infections and hospitalizations surged, Reuters explained.
“We expect to see some additional lockdowns potentially as early as this summer for certain hot spots, but most likely in the fall when flu season ramps and hospital capacity falls,” Harrison predicted.
“We do not expect to see state-wide or U.S.-wide lockdowns. We would expect targeted regional or county-wide lockdowns in hard-hit areas where hospital capacity is reaching crisis levels,” wrote Harrison, admired by investors for his success in pandemic predictions this year.
White House officials are also optimistic the economy will withstand the ongoing pandemic.
U.S. Commerce Secretary Wilbur Ross said the U.S. economy is still on track for a strong rebound in the second half of the year, despite Texas’ decision to scale back its reopening as cases of the novel coronavirus spike.
“It’s natural there will be some little interruptions as we come back out of the pandemic, but the key thing in my view is consumer spending will continue to lead the recovery,” he told Fox Business Network, citing high consumer saving rates.
“Maybe at most there will be a little slippage from Q3 to Q4, but at the end of the day the important thing is the direction is a good direction,” he added. “The direction is a strong upward direction.”
Elsewhere, White House National Economic Council Director Larry Kudlow said Thursday there will likely be “some shutdowns” in some places and with certain stores as coronavirus spikes continue to grow, but that will be a different scenario than country-wide closures.
“We are keeping a very close eye on this,” Kudlow told Fox Business’ Maria Bartiromo. “Even with these hotspots now, you are talking Texas, Floria, Arizona, the Carolinas, some difficult points. I must say we are going to have to live with this from time to time, but that is a different matter than the whole country.”
But while case rates are rising, fatality rates are going down in several states, he added.
“The health experts are not telling us there is a second wave,” said Kudlow. “We have the tools to deal with this much more expeditiously than we had two or three months ago.”