US Delta Variant Situation 'Likely To Remain Tenuous' Through September, Analyst Says

An estimated 62.4% of the U.S. population has received at least one dose of a COVID-19 vaccine at this point, but the nationwide outbreak of the delta variant is an ongoing concern for investors.

On Tuesday, Bank of America economist Aditya Bhave said the delta variant will likely continue to be a drag on the economy through at least the month of September.

Latest Numbers: Bhave said the weekly U.S. COVID case growth has dropped to around 5%, which is a positive sign that a turning point may be just around the corner. In addition, hospital occupancy rates are running slightly below Bank of America’s optimistic scenario, and Bhave said U.S. vaccination rates have accelerated faster than he anticipated.

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Unfortunately, the end-of-summer travel season and the reopening of schools will likely increase underlying transmission rates, Bhave said.

“Cases appear to be at or close to the peak in some states — most notably Florida — that were hit the earliest and the hardest by the Delta wave. Yet we think the situation is likely to remain tenuous until end-September,” he said.

Market Impact: Rates of hospitalization and deaths are lagging case rates, but Bhave said deaths and hospitalizations are larger potential drivers of consumer sentiment and macroeconomic recovery.

So far, investors haven’t seemed particularly concerned about the impact of the delta variant on the booming stock market. The SPDR S&P 500 ETF Trust (NYSE: SPY) is on track to finish the month of August up another 3%, its seventh straight month of gains.

Benzinga’s Take: The more people get vaccinated, as well as more people contract COVID-19, it becomes harder for the delta variant to spread.

Centers for Disease Control scientist Dr. Sara Oliver said this week that vaccines have between a 39% and 84% effectiveness in preventing delta variant infection, and a recent study from Israel found that people who have previously been infected with COVID-19 have between six and 13 times more resistance to delta variant infection than individuals who have been vaccinated.

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