Topley’s Top Ten – February 27, 2020

Author

Matt Topley
February 27, 2020

1.Market Reactions to Virus Emergencies.

BrianWestbury-First Trust Economics Blog

Muchof the pessimism surrounding the virus focuses on the Chinese under-countingthe number of infected to save face. However, it’s important to note that ashortage of specialized test kits has caused health officials in many countriesto rely on observable symptoms for diagnoses, and because coronavirus mimicsthe flu and pneumonia in its early stages, it’s also possible that authoritiesmay be over-counting as well. Instead of looking at it from a total confirmed case perspective, we think thenumber of total active cases provides a better look into what is happening.This measure takes total confirmed cases and subtracts deaths and recoveries.This gives the total amount of people who have the potential to spread thevirus further.According to Worldometer, whichaggregates statistics from health agencies across the world, total active casespeaked about a week ago at 58,747 and have since been declining. Even with allthe new cases we are seeing in South Korea, Italy and Iran (where data issuspect). There have been 30,597 cases with an outcome (2,699 deaths and 27,898recovered). In other words, the total active cases now stand at 49,923, a dropof 15% from the peak on February 17th.One death is too many, but to put that number into a little bit of perspective,according to the World Health Organization, in the United States alone for the2019-2020 season, there have been at least 15 million flu illnesses, 140,000hospitalizations and 8,200 deaths. Imagine if everyone with an internetconnection followed the spread of this annual flu, case by case, hour by hour.It’s true that the death rate from Coronavirus appears to be around 2% inChina, which is much higher than the death rate from the normal flu, but likethe flu increases with age. However, outside of China the death rate is farless than inside China, roughly 1%. And, there is already a drug that willcombat COVID-19 moving toward first phase clinical trials. It took three monthsfor this to happen in 2020, versus 20 months for SARS back in 2002/03 – atestament to advances in drug technology. From a macro-economic point of view, the real question is how will this impactthe US economy over the coming year. In short, our view has not changed. The USwe believe is relatively insulated, with a fantastic health system. The USstarted the year with solid economic data and so far, nothing has changed. Infact, with all the data we already have on hand, we are expecting around 2%growth in Q1. Most of the impact to the US from the corona virus will come inQ2. Capital goods exports to China along with imports from China are sure to bedepressed given the struggles to reopen factories abroad. Most Chinesefactories are still only operating at about 50-60% of capacity. Shipping giantMaersk has already said it has cancelled more than 50 trips to and from Asia.With China being home to seven of the world’s busiest container ports there isbound to be some impact. Inventories in the US will be depleted more rapidly,but once the virus subsides, expect faster accumulation of inventories in thesecond half of the year.Revenues and earnings from companies that are highly exposed to China willdefinitely be affected. China being shut down for a month will have a globalimpact. But lower earnings in the first half of the year should be made up by astrong rebound in the second half of the year with payback from lost months.Demand remains strong and there has been no visible impact yet on the job marketas shown by initial unemployment claims. Supply disruption is the issue. Wesuggest looking through any earnings weakness as we expect it to be transitory.One small nugget of good news is that many companies had already been shiftingsupply chains from China due to the Trump Tariffs. If they weren’t consideringit before they will be now as they realize the importance of diversification.Expect this trend to accelerate moving forward. The US consumer is on solid footing and will continue to be one of the keydrivers to US economic growth in the year to come. We believe, just like allthe other viruses we have seen over the past decades that have dissipated, theCoronavirus will be no different. Some have suggested that the 1918 SpanishFlu, which killed hundreds of thousands in the US could happen again. No oneknows, but 2020, is not 1918. Technology and news move much faster and the USrebounded from the Spanish Flu when all was a said and done. We suspect thatany drop in earnings or economic activity will be short lived, and more thanmade up for in the year to come. Don’t panic, stay invested.Brian S. Wesbury – Chief Economist Robert Stein, CFA – DeputyChief Economist   https://www.ftportfolios.com/retail/blogs/economics/index.aspx

2.Top Chinese Tech Companies Holding Up Well

BABA Alibaba Holdings

Tencent Holdings

3.Copper Stockpiles Surge to New Highs

Copper did break below 2018-2019 lows

4.Corporate Issuance Halts.

Wall Streetbanks recorded their third straight day without any high-grade bondofferings, an unheard of event 

As Bloomberg puts it, “it has been aremarkable turn of events for a market where investors had been snapping upalmost anything on offer amid a global dash for yield. Europe hadbeen enjoying its strongest ever start to a year for issuance, andsales of U.S. junk bonds have been on the busiest pace in at least a decade.With so many borrowers having postponed their issuance plans, a

, a calming in global markets could kickstartdebt sales again.”

“Coronavirus Paralyzes GlobalCredit Market As New Issuance Crashes To Zero by Tyler Durden 

5.U.S. Small Cap Russell 2000 6th Time in History This Oversold.

The small-cap Russell 2000 has generally underperformed large-caps for much of the past two years (it still has not gotten back up to its summer 2018 all time highs), and this recent weakness leaves it much more dramatically oversold than other major indices.  As of yesterday’s close, the Russell sat over 4 standard deviations below its 50-DMA.  That compares to the prior day when it was just over 2 standard deviations below and the day before when it was within one standard deviation of its 50-DMA.  This is only the sixth day in the index’s history that it had gotten this oversold.  The last time this happened was in August 2011.  Prior to that there was one occurrence in August 1990 and another cluster of three days in during the October 1987 crash.  Performance following these prior instances have been very mixed.  While the 1987 and 1990 instances were followed by severe declines in the Russell 2000 over the next few months, more recently in 2011 performance was very strong over the next year. Join Bespoke Premium to access Bespoke’s most actionable stock market research and analysis.  Start a two-week free trial now!

6.One of My Favorite Charts That I Throw in a Few Times a Year.

7.The top 5 technologies that will change health care over the next decade

 Dr. Bertalan Mesko, aka The Medical Futurist,says with advancements in exoskeleton technology, AI’s ever-increasingimportance in health care, and technologies like 5G and quantum computing soongoing mainstream, there’s much to be excited about

Illustration by Doug Chayka

ByDR.BERTALAN MESKO

The past decade wasabout the rise of digital health technology and patient empowerment. The nextdecade will be about artificial intelligence, the use of health sensors and theso-called Internet of Healthy Things and how it could improve millions of lives.

The culturaltransformation of health care we call digital health has been changing thehierarchy in care into an equal-level partnership between patients andphysicians as 21st century technologies have started breaking down the ivorytower of medicine. But these milestones are nothing compared with what is aboutto become reality.

With advancements inexoskeleton technology, AI’s ever-increasing importance in health care, andtechnologies like 5G and quantum computing soon going mainstream, there’s muchto be excited about.

Here are the fivebiggest themes for health and medicine for the next 10 years.

Artificial intelligence in medicine

Developments inartificial intelligence will dominate the next decade. Machine learning is amethod for creating artificial narrow intelligence — narrow refers to doing onetask extremely well — and a field of computer science that enables computers tolearn without being explicitly programmed, building on top of computationalstatistics and data mining. The field has different types: it could besupervised, unsupervised, semi-supervised or reinforcement learning, among

If we consider howAlphaGo, the AI developed by Google’s DeepMind lab, beat world champion LeeSedol at the classic Chinese game Go by coming up with inventive moves thattook experts by surprise, we can get a glimpse at what AI can hold for healthcare. Such moves were made possible by the combination of neural networks andreinforcement learning that this AI uses. This enabled the software to operatewithout the restrictions of human cognitive limitations, devise its ownstrategy and output decisions that baffled experts.

We can expect to seethe same surprises in medical settings. Imagine new drugs designed by suchalgorithms; high-level analysis of tens of millions of studies for a diagnosis;or drug combinations nobody has thought of before. When applied to medicine, analgorithm trained via reinforcement learning could discover treatments andcures for conditions when human medical professionals could not. Cracking thereasoning behind such unconventional and novel approaches will herald the trueera of art in medicine.

In global health, forexample, an algorithm can provide a reliable map of future measles outbreak hotspots. It uses statistics on measles vaccination rates and disease outbreaksfrom the Centers for Disease Control and Prevention, as well as non-traditionalhealth data, including social media and a huge range of medical records. That’sjust one example, but the field is already buzzing with smart algorithms thatcan facilitate the search for new drug targets; improve the speed of clinicaltrials or spot tumors on computed tomography (CT) scans.

However, while expertsbelieve that AI will not replace medical professionals, it also seems true thatmedical professionals who use AI will replace those who don’t.

A myriad of health sensors

Medical technology wentthrough an amazing development in the 2010s, and there’s now no single squarecentimeter of the human body without quantifiable data. For example, AliveCor’sKardia and Apple Watch measure electrocardiogram and detect atrial fibrillationwith high sensitivity. The EKO Core digital stethoscope records heart and lungsounds as a digital stethoscope, while blood pressure is monitored with theOmron Blood Pressure Smartwatch, the MOCAcare pocket sensor, and blood pressurecuff, the iHealth Clear, the Skeeper, a pocket cardiologist, or the WithingsBlood Pressure Monitor, and of course, dozens of traditional blood pressurecuffs.

There are dozens ofhealth trackers for respiration, sleep, and, of course, movement. And whileresearchers can’t decipher your dreams yet — they are working on it, alongsidefiguring out all kinds of brain activity. For example, through EEG. That’s amethod that records electrical activity in the brain using electrodes attachedexternally to the scalp. The NeuroSky biosensor and the Muse headband use it tounderstand the mind better and in the latter case allow for more effectivemeditation. As you see, there’s not much left unmeasured in your body — and itwill even intensify in the future. For example, we expect digital tattoos tobecome commercially available within five years, which will not only measurethe majority of the above-mentioned vital signs, but they will do socontinuously. These tiny sensors will notify us when something is about to gowrong and we will need medical advice or intervention.

Moreover, withdevelopments in 3-D printing as well as circuit-printing technologies, flexibleelectronics and materials, applying so-called digital tattoos or electronictattoos on the skin for some days or even weeks became possible.

Made of flexible, waterproofmaterials impervious to stretching and twisting coupled with tiny electrodes,digital tattoos are able to record and transmit information about the wearer tosmartphones or other connected devices. While these are only in use in researchprojects, they could allow health-care experts to monitor and diagnose criticalhealth conditions such as heart arrhythmia, heart activities of prematurebabies, sleep disorders and brain activities noninvasively. Moreover, bytracking vital signs 24 hours a day, without the need for a charger, it isespecially suited for following patients with high risk of stroke, for example.Although we are not there yet, there are certain promising solutions on themarket such as MC10’s BioStampRC Sensor.

Quantum computing puts medical decision-makingon a new level

In 2019, Google claimed“quantum supremacy” and made the cover of Nature magazine. One example of howthis technology will have a major impact on the health-care sector is quantumcomputing taking medical decision-making to a whole new level and evenaugmenting it with special skills. What if such computers could offer perfectdecision support for doctors? They could skim through all the studies at once,they could find correlations and causations that the human eye would neverfind, and they might stumble upon diagnoses or treatment options that doctorscould have never figured out by themselves.

At the very endpoint ofthis development, quantum computers could create an elevated version of PubMed,where information would reside in the system but not in the traditional writtenform — it would reside in qubits of data as no one except the computer would “read”the studies anymore.

In addition, theapplications of quantum computing to health care are manifold, ranging frommuch faster drug design to quicker and cheaper DNA sequencing and analysis toreinforced security over personal medical data. While the technology does holdsuch promises, we still have to be patient before practical solutions can beimplemented in medicine. However, with continued progress in this area, eventhough quantum computing has been something from a science fiction novel, thisdecade will see the first such computer used in the clinical practice too.

Chatbots as the first line of care

Symptom checkers thatfunction on the same principle as chatbots are already available, free ofcharge. However, these rely on the user inputting symptoms and complaintsmanually. We yearn for one that can make predictions and suggestions based on auser’s data, like sleep tracking, heart rate and activity collected viawearables. With such features, those bots can help users make healthier choiceswithout having to drag themselves to their doctor.

There was a “BlackMirror” episode titled “Rachel, Jack, and Ashley Too” that featured anincredibly smart and emotional chatbot that had human-like conversations withthe character. Think about having a similar personalized chatbot that’saccessible via your smart device and with additional health and lifestylefeatures. This chatty virtual being can wake you up at the appropriate timebased on your sleep pattern and advise you to take your antihistamines as thepollen concentration is particularly high during your commute that day, beforeyou even get out of bed. It can even recommend what you should consume for eachmeal based on your nutrigenomic profile. It could find the best words for youto motivate you to go to the gym. It could find the best jokes that help youget into a good mood. But would you rather bend to the rules of an AI,essentially forgoing your freedom of choice, than experience life based more onyour own will?

5G serving the whole ecosystem of digitalhealth

5G networks will enabledata to be downloaded at more than 1 gigabit per second, allowing for downloads10 to 100 times faster than the currently available 4G services. 4G networkscan only serve around a thousand devices within a square kilometer, while 5Gcan serve a million. It will make the era of the Internet of Things (IoT)possible by connecting a huge amount of health trackers with laptops,smartphones and many more digital devices. There will be no connection issuesor latency, as the trackers will be able to work in harmony while getting themost out of our data.

Such a boost will allowfor more reliable communication, which is a must in areas like telesurgery,remote consultation and remote monitoring. With bigger bandwidth and fasterconnection, there might be a boost in wearables as health IoT networks becomemore stable and reliable, and further help with patient engagement in relationto their health.

Major applications of5G are expected to be apparent starting in 2021.

Dr. Bertalan Mesko, Ph.D., is The Medical Futurist and directorof The Medical Futurist Institute,analyzing how science fiction technologies can become reality in medicine andhealthcare. As a geek physician with a Ph.D. in genomics, he is a keynotespeaker and an Amazon Top-100 author.

8.Curiosity Is the Secret to a Happy Life

Engaging with the unfamiliar cankeep mind and body fit. So how to pump up one’s levels of curiosityAnyonewho has spent time around kids knows that their young minds are powered bycuriosity. The average child probably asks more questions in 10 minutes thanthe average adult does in 10 days. Kids are curiosity personified.

But as people age, theirreservoirs of curiosity tend to dry up. Studies have found that, on average, aperson’s openness to new experiences and new sensations declinessteadily with age. At the same time, apathy increases. While plenty of older adults buck these trends,there’s some truth to the cliché of the narrow-minded, novelty-averse fogey whorigidly adheres to his time-worn routines and opinions.

For years, mental healthresearchers have noted this age-related dip in curiosity. They’ve also noticedthat high levels of curiosity often correlate with many different measures ofmental health and vigor. One 2018 paper from the journal Neuroscience& Biobehavioral Reviews found evidence that maintaining curiosityin old age is protective against cognitive and physical decline. Compared tothe incurious, older adults who score high in curiosity tend to perform betteron tests of memory and general cognitive functioning. The authors ofthat study point out that curiosity activates brain areas that are involved inother high-level cognitive processes, and over time this increased activationcould help explain some of curiosity’s brain benefits.

And in people both young andold, research has found that high and consistent levels ofcuriosity correlate with mental well-being and life satisfaction. Curious people alsoseem protected from depression.

The more that experts examinecuriosity, the more they find evidence to suggest that it’s the secret sauce ina happy, fulfilling life. “If you take the fundamental things that people tendto want out of life — strong social relationships and happiness andaccomplishing things — all of these are highly linked to curiosity,” says ToddKashdan, a professor of psychology at George Mason University and authorof Curious?

What exactly does it mean tobe curious? “If you go by the typical dictionary definition, curiosity issimply a desire to seek out new knowledge or experiences,” Kashdan says. Whilethis definition is a useful starting point, he says curiosity also involves awillingness to engage with complex, unfamiliar, and challenging concepts orendeavors.

Kashdan has helped developtwo widely used scientific models for measuring curiosity. The newer of thesemodels breaks curiosity down into five different categories or“dimensions.” He terms the first of these “joyous exploration,” and it hewsclosely to the dictionary definition of curiosity. The second and thirddimensions have to do with a person’s level of focus and commitment whenconfronted with the uncertainties that newness breeds. “When you explore newterrain” — whether it’s an exercise class you’ve never attended or a dinnerdate with a new friend — “you’ll probably be exposed to feelings of stress andanxiety,” he says. While these states tend to be thought of as negative, hesays curious people are not easily deterred by them. In other words, theydisplay resilience or “grit” (to use the buzzword du jour) when exploring newconcepts or scenarios.

The more that expertsexamine curiosity, the more they find evidence to suggest that it’s the secretsauce in a happy, fulfilling life.

“The fourth dimension isthrill-seeking, which is a willingness to take financial or social or personalrisks in pursuit of new experiences,” he explains. He says thrill-seeking couldtake the form of extreme sports, experimenting with psychedelics, or starting anew business venture. The fifth and final dimension is “social curiosity,” hesays, which is taking an interest in other people’s views and opinions.

People who score high onsome or all of these five measures of curiosity almost transcend questions ofhappiness or fulfillment. “When you lose yourself in the exploration of thingsthat are new and that you find interesting, you’re not stopping to ask yourselfif you’re happy or depressed,” Kashdan says.

That said, there’s someevidence that the relationship between curiosity and happiness isbidirectional, meaning one fuels the other. A 2019 study in the Journal of Personality foundthat on days when people experience positive emotions like happiness, they alsotend to display more curiosity than on days when they aren’t happy. These sortsof findings have led some researchers to hypothesize that positive emotions mayexist in part to help encourage curiosity and the fruitful exploration itencourages.

“There’s the ‘broaden andbuild’ theory that says positive emotions have a lot of function, and one ofthem is to get us to engage in things we wouldn’t normally do,” says DavidLydon-Staley, first author of that study and a postdoctoral researcher in thedepartment of bioengineering at the University of Pennsylvania. Curiosity canlead to new relationships, new skills, or new areas of knowledge that enrich a person’slife at many levels, he explains.

But is it possible to pumpup one’s levels of curiosity? Lydon-Staley’s research found that exercise seemsto promote curiosity — perhaps by improving a person’s mood. (Themood-elevating effects of exercise are well established.)

Kashdan says having strongpersonal relationships also seems to feed curiosity. “Having secure attachmentsis like having a home base in a game of tag,” he says. “They allow people thefreedom to be less inhibited and to explore.”

But by far the best way tofeed curiosity is to engage with new people, new places, and new points ofview. Kashdan says an aversion to the unfamiliar — or what he calls “prematureclosure” — stifles curiosity. But novelty, even if uncomfortable or scary atfirst, acts like curiosity fertilizer. “The more you interact with newexperiences or information, the more you realize you don’t know, which makesfurther exploration more attractive,” he says. At the same time, engaging withsomething new tends to drain it of its power to cause anxiety. “The highestlevel of anxiety you feel is always during the anticipation of something new,”he says. “Stick it out, and you see that the anxiety is manageable and can evenbe enjoyable.”

There may be safety andsecurity in the familiar. But there’s evidence that curiosity and the novelexperiences that nourish it may pave the way toward a more meaningful andfulfilling life.

Your life, sourced by science. Anew Medium publication about health and wellness.