Latin America ‘to lose 20 years of progress’ in poverty reduction

Pandemic set to plunge over 50m people back into hardship, World Bank official says

Michael Stott, Latin America editor

A man in a mask passes in front of graffiti calling for “no more repression” during the national lockdown to prevent the spread of coronavirus in Valparaiso, Chile.
A man in a mask passes in front of graffiti calling for “no more repression” during the national lockdown to prevent the spread of coronavirus in Valparaiso, Chile. © Miguel Moya/Agencia Uno/dpa


Two decades of work in reducing poverty risk being lost in Latin America this year as more than 50m people plunge back into hardship, worsening the inequality which has already fuelled a wave of social protest, according to the World Bank’s new vice-president for the region.

Carlos Felipe Jaramillo said that Latin America was facing “its worst crisis since [modern] record-keeping began, at least 120 years or so ago”. The heavily urbanised region has become the global epicentre of the coronavirus pandemic, accounting for 52 per cent of global deaths in the last week, as its inadequate health systems struggle to cope.

“I am very worried about what this means for Latin America in terms of poverty, poverty numbers, employment, incomes and inequality, which has always been a problem in the region,” Mr Jaramillo told the Financial Times in an interview. “I think inequality is likely to rise in this period.”

The World Bank predicts that 53m Latin Americans will this year see their incomes fall below the regional poverty line of $5.50 per day “and it could be much worse under a downside scenario”, according to Mr Jaramillo, a Colombian economist and former government official who has been at the World Bank since 2002, most recently as director for four east African countries.

Heavily dependent on exports of oil and agricultural commodities, Latin America was struggling to grow even before the pandemic. Its economies were the world’s worst-performing last year and per capita growth has barely averaged 0.5 per cent a year over the past 10 years.

The IMF predicted last week that the economies of Latin America and the Caribbean would contract by 9.4 per cent this year, a far worse performance than Africa, the Middle East or Asia. Next year the region is forecast to recover only slowly, growing by 3.7 per cent.

Bar chart of forecast change in GDP in 2020 (%) showing Virus hits Latin America hardest


In his new role Mr Jaramillo will manage a $32bn portfolio of World Bank projects, grants and technical assistance. He said Latin American governments needed to use the crisis to “rebuild better” and learn from the innovation in more dynamic parts of the world, such as east Asia and Africa.

M-Pesa, Kenya’s revolutionary mobile money transfer service which gave millions access to financial services for the first time, was an example of what Latin America “should have adopted a long time ago”, he said.

“Latin America really needs to get serious about fostering innovation and entrepreneurship and competition to address low productivity,” Mr Jaramillo added. “This is a critical watershed.”

Carlos Felipe Jaramillo of the World Bank
Carlos Felipe Jaramillo of the World Bank © World Bank


Last year a wave of protest swept the region, fuelled by anger over poor-quality public services, precarious employment and stagnant living standards. Even Chile, long seen as a standard-bearer for good government and steady economic growth, was gripped by weeks of riots as protesters demanded better pensions, education and healthcare and greater equality of opportunity.

Mr Jaramillo cited three priorities for governments in the region: improving access to digital broadband services, which currently reach only about half of Latin Americans, upgrading health and education via internet technology and developing more dynamic businesses.

“Latin America really needs to get serious about fostering innovation and entrepreneurship and competition to address low productivity,” said the World Bank official. “Latin American countries have not been part of dynamic global value chains . . . there will be big changes coming up in how they are structured and that will be [a] big opportunity for Latin American countries.”

But Mr Jaramillo acknowledged that the immediate priority for governments in the region was to get through their worst-ever economic crisis and to preserve as many jobs as possible to prevent an explosion of civil unrest.

Although some economists and politicians have called for universal basic income schemes to be adopted as a tool to fight poverty, he said that discussion would have to wait.

“I do see some debates going on across the globe [about] fantastic things to do when the crisis is over and maybe this is one of those things, but while the crisis is going on, I think it’s really about making sure the patient survives,” he said.


The Dow Just Had Its Best Quarter Since 1987. We Might Be Witnessing the Start of a New Bull Market.

By Ben Levisohn


Everything is going up! Or at least it feels that way.

The Dow Jones Industrial Average,for instance, finished up “just” 217.08 points, or 0.9%, at 25,812.88, still a long way away from an all-time high. But the S&P 500is close after rising 1.5% to 3,100.29, and the Nasdaq Compositeis even closer after climbing 1.9% to 10,058.77. Just 82 of the stocks in the S&P 500 finished lower today.

Stocks hitting new all-time highs were prevalent. Tesla(TSLA) rose 6.9% to close at a record $1,079.81; Microsoft(MSFT) advanced 2.5% to $203.48 to finish that day at a record $203.61; Shopify(SHOP) closed up 2.9% at $949.20. You’ll notice something about those names--they all trade on the Nasdaq, which helps to explain why tech-heavy index outperformed again.

And it wasn’t just today. The Nasdaq finished the quarter up 30.6%, trouncing the S&P 500’s 20% rise, and the Dow’s 17.8% rise.

The Dow’s gain was the best since the first quarter of 1987, but if you really wanted to enjoy the rally, you have to own tech, even if it’s tech that is no longer in tech (Here’s looking at you Amazon.com(AMZN), Facebook(FB), Netflix(NFLX) and Alphabet(GOOGL)).

You would think that the amazing market comeback would have strategists feeling good about what’s to come. They’re not.

They’re not even sure what is to come: The difference between strategist targets is now the largest since 2009, according to Sundial Capital Research. But as a group, they don’t see the market heading much higher. The average strategist target for the S&P 500 is 2998, 3.3% below Tuesday’s close.

That’s good news for investors, notes Sundial’s Jason Goepfert, because strategist-sentiment makes a solid contrarian indicator. When strategists had pessimistic targets at midyear, the S&P 500 usually went up over the next six months.

“ “Wall Street has never been more confused, or apprehensive,” Goepfert writes.

“And when strategists gave the S&P 500 the least credit this far into the year, it had a strong and consistent tendency to defy those expectations by rallying into year-end.”

And that fits with history.

Keith Lerner, chief market strategist at SunTrust Advisory Services, notes that the market has followed each of the 10 previous best quarters going back to 1950 with a positive quarter. Gains have been small--as little as 2% during the second quarter of 2003--and large--as much as 14% during the first quarter of 1975—but the S&P 500 has always gone up.

“[The] weight of the evidence in our work still suggests that we are in a bull market—a bull market that has further to go but became stretched to the upside on a short-term basis in early June,” Lerner writes.

“While the fits and starts in the economy and other factors will likely lead to periodic market setbacks, our work suggests this bull market continues to earn the benefit of the doubt.”

Of course, Wall Street never had to deal with a novel coronavirus before, and that has the potential to make history irrelevant.

Investors Need To Pay Attention As We Approach Seasonal Patterns In The Stock Market

by: Altitrade Partners



 
Summary
 
- Historically, the Autumn months have been especially dangerous for the stock market, with October 1929 & 1987 being seared in the minds of many older investors.

- One month before the all-important 2020 Presidential election, and with the arrival of cooler weather, investors need to be prepared for a couple of possible worst-case scenarios.

- Worst case #1 - President Trump fails to win re-election.

- Worst case #2 - A second wave of COVID-19 overwhelms the country.

- If, in fact, either of these events were to materialize, we believe that the stock market could face another crash of epic proportions.
 
 
Mark Twain is once quoted as saying:

October. This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February. 
Source: Goodreads

Looking at history and the seasonal patterns of the stock market, we would have to conclude that October is, in fact, a very dangerous month for stock market investors.
 
 
Source: BXB Blog
 
 
 
We have authored several articles on Seeking Alpha, since April 24, 2020; approximately one month after the major market averages hit their bottom.
 
The commentary from SA readers on these articles has been mixed, with some subscribing to the idea that we have seen the absolute bottom in stock prices and that we have now entered an era of a brand new bull market.
 
The biggest number of comments by SA readers, who believe in this narrative of a new bull market, generally fall into two major camps.
 
1. Don't fight the Fed, or to put it another way, the Fed has the stock market's back.
 
2. The economy will come back stronger than ever once the Coronavirus disappears.
 
Comment number one's understanding is straightforward and needs no explanation.
The second one, however, shows that many investors have been falsely led to believe that prior to the COVID-19 pandemic, the economy was in remarkably great shape.
 
We can reference all the charts and graphs that are out there to produce a counterargument to this point, but rather than do that, we would like to ask investors just one question.
 
If the economy was in such great shape, prior to the onset of the COVID-19 pandemic, why was the Federal Reserve slashing interest rates at just about every conceivable opportunity, after raising them in 2018.
 
The Federal Reserve raised rates in 2018 attempting to "normalize" interest rates.
 
Their attempt failed miserably.
 
A healthy economy can easily withstand an increase in the cost of borrowing, yet the Fed was forced to cut interest rates three times in 2019. This all happened before the appearance of the Coronavirus.
 
Was this a sign of a strong robust economy? We think not.
 
In fact, the U.S. economy was showing signs of recession long before the Coronavirus hit U.S. shores.
 
So, if the U.S. economy were already showing signs of slipping into a recession, and now is at depression level economic activity, what would a return to pre-COVID-19 economic activity mean?
 
Another recession? Is that a good backdrop for increasing equity prices?
 
Furthermore, if we were already seeing signs of an economic slowdown, would not the stock market have eventually fallen from the lofty levels it achieved in early 2020? How far would stock prices have to fall to discount a recessionary economy?
 
It is almost as if investors are convinced that the economy will recover to its former glory days, but those glory days were already in jeopardy before COVID-19 even came along.
 
This is the mindset that is driving today's stock market, and for those of us who can see beyond the next bend, we know what is coming.
 
It is not going to be pretty. That is for sure.
 
Investors are living in a fantasyland, expecting that no ill could possibly befall the stock market while the Federal Reserve keeps pumping money into an already overblown bubble.

That is a rather shortsighted view of how markets work, when left to their own devices, and is void of any fundamental analysis.
 
It is obvious, to us, that all understanding and acknowledgement of economic fundamentals, and their impact on stock prices, have been replaced with a myopic and dangerous view of the equity markets as a financial game parlor where you place your bets and hope for the best.
 
The Robinhood phenomenon is a perfect example of how the masses can be led to believe that investing in the stock market is so easy that even a baby can do it.
 
Source: YouTube (click to watch video)
 
 
Many of you may remember this E-Trade commercial when it first appeared on television. If you haven't seen it, we encourage you to watch it, and if you have seen it before it is still worth watching again.
 
This seems very apropos to the circumstances we find ourselves in again today with Millennial's day trading activity, through the Robinhood, platform in focus.
 
Leon Cooperman, in a CNBC interview, weighed in on the Robinhood situation and offered the following perspective.
 
"They are just doing stupid things, and in my opinion, this will end in tears," Cooperman said on Monday on CNBC's "Halftime Report," referring to a flood of new retail investors into brokers especially the millennial-favored Robinhood.
Source: CNBC
 
 
There are two particularly important factors whose outcomes have the potential to dramatically affect stock prices as we move into the Autumn months.
 
The first is a defeat of President Donald Trump at the polls in the November 2020 election. The second is a resurgence of the COVID-19 pandemic, causing potentially devastating health and economic effects.
 
While no one can accurately predict events like these with such a variable outcome, it does make sense for investors to factor in the possibilities for these two scenarios when assessing the investment landscape going forward.

President Trump has recently been losing ground in some of the larger polling venues that are viewed as important to gauging the political landscape.

In modern political history, an incumbent's job approval has been the single best measure of his re-election prospects. If this holds true in 2020, the current outlook for President Trump is bleak, and his ability to turn around his situation will steadily decline as election day nears. 
Against this backdrop, President Trump is in big trouble. After peaking in April between 45.8% and 47.4%, his job approval has fallen by 5 points to just 42.6% (Real Clear Politics average) or 41.0% (FiveThirtyEight adjusted average). 
There are reasons for this. Although the president continues to receive good ratings for economic management, only 43% of Americans approve of his handling of the COVID-19 pandemic. His handling of the protests sparked by the killing of George Floyd does even worse, with only 35% of Americans registering their approval. 
It will not be easy for President Trump to reverse this tide. There's just one recorded instance of a president moving his job approval from a level suggesting defeat to one pointing to victory during the final months of his first term. In June 2012, President Obama's job approval stood at 46%. By the day before the election, it had risen to 52%.  
He ended up with 51.1% of the popular vote. Remarkably, all of Obama's gains occurred in September and October.
 
 
Regarding the resurgence of the COVID-19 pandemic, as we enter the cooler weather days of September and October, there are conflicting thoughts as to the likelihood of the virus returning, and what the impact will be on social behavior.
 
Whether you subscribe to the view that the worst is over for this pandemic, or that the worst may yet lay ahead, there can be no question as to potential impact either outcome will have on financial markets.
 
 
 
Looking at the progress that has been made by countries that were especially hard hit by COVID-19, we see that Italy, Germany and Spain are experiencing a down-slope; showing that they have done a good job at arresting the spread of the pandemic.
 
Here in the United States, we have not done nearly enough to achieve the same kind of results.
 
At best we have plateaued, but with some states now seeing a spike in Coronavirus cases, we could soon see another rise in the number of reported cases through the summer and into the high-risk colder months of the Fall and Winter.
 
The latest news which has us scratching our heads is that President Trump wants to hold political rallies with upwards of 60,000 supporters in attendance, with no requirement to wear a mask or practice social distancing.
 
Attendees, must however, sign a waiver that if they contract the Coronavirus at a Trump political rally, they will be unable to file a lawsuit of any kind for damages or restitution.
.
Source: Zero Hedge
 
 
Any evidence of a second wave could create the kind of uncertainty that markets despise. The important point to emphasize is that it is not so much whether the country could be forced to enter a second period of mandated stay-at-home orders.
 
What matters is how people will react emotionally to a second wave occurring.
 
If the confidence in our ability to contain a second wave should fail, it will not really matter what policies federal and state politicians will choose to implement, if any.
 
People are already behaving in accordance with their own priorities and beliefs, irrespective of what public health officials tell us. We see it every day, and it makes us question how seriously the public is taking this deadly pathogen.
We heard a story the other day about a woman who was shopping at Costco and spotted another shopper walking around with his mask dangling around his neck. When she asked him if he would mind placing his mask over his nose and mouth, he told her that Costco only said that he had to wear a mask; they did not say that he had to wear it a certain way.
 
It is these types of situations that show a total disregard and indifference to the health and safety of others. Wearing a mask is not so important for your own protection, but it is for the protection of others.
 
The rather cavalier attitude among young people is especially distressing.
 
Much of what we have heard has been about how the COVID-19 virus affects older people, but it has also exacted a very heavy toll on a number of very healthy people who you would never think could be impacted this way.
 
 
If individuals are not confident in their own safety, they will likely pull back from engaging in normal social activities; opting instead to stay home of their own free will and volition. People like the person in the story above only fan the flames of fear because we all must trust each other to do the right thing.
 
In many of our past articles we have expressed our concerns over a second wave appearing in the Autumn months. This is not simply an off-the-cuff opinion. We have spoken with others in the field of virology and epidemiology, and base our view on their professional opinions, along with our own observations of how people are behaving.
 
Source: BXB Blog
 
 
We believe that we are entering a period of high volatility in the stock market, and we expect to see that volatility continue as headline news will now take front and center stage throughout the rest of the summer months.

The confluence of two of the most important factors, which will ultimately determine the direction of stock prices, is only months away.
 
Investors need to prepare for either eventuality; perhaps by raising cash or hedging out a long exposure to equities.
 
Investing in the stock market is all about managing risks.
 
Now is NOT the time to place huge bets either way, but a time to think about scaling into and out of positions as market conditions warrant.
 
When we look at the approach that some investors, like the Robinhood crowd, are taking, we almost sense that risk is a four-letter obscenity to them.
 
As students of past market history, we are convinced that we are in a massive bubble, which will end as all bubbles do; very badly.
 
It is up to each individual investor to assess their own tolerance for risk and to build a portfolio, accordingly, especially as we approach what is typically a weak seasonal period for stock prices.
 
 
 
 
Remember that September is a quad-witching month and October options expire on the 16th of that month, just one day after the Ides of October.
 
Stay safe, be well and invest wisely.

Housing Recovery Is Still on the Drafting Board

The sharp rebound in building permits, and the disappointing one in housing starts, underscores the difference between planning to build something and building it

By Justin Lahart


The number of permits authorizing residential construction rose at a faster pace than economists expected last month. / Photo: Jim Thompson/Zuma Press .


Planning on building something is one thing. Building it is another.

The Commerce Department on Wednesday reported that construction started on 4.3% more homes in May than a month earlier, adjusting for seasonal swings. That was a partial reversal of April’s 26.4% decline in housing starts, but nothing like the 22.3% jump economists expected to see.

The report showed that the number of permits authorizing residential construction rose a much sharper 14.4%, though, which was better than economists’ estimated gain of 10.8%.

The housing-starts figures seemed a bit out of step with what other housing data have been showing. On Tuesday, the National Association of Home Builders said that its measure of builder sentiment registered its largest jump ever this month.

Meanwhile, mortgage applications for home purchases have rebounded as people have taken up plans to buy homes again, helped along by the Federal Reserve’s efforts to lower borrowing costs in response to the Covid-19 crisis.



Perhaps the rebound in construction was merely a bit delayed in May and bigger jumps in housing starts will be coming soon, but there are two potential hurdles to that happening that investors should consider. The first is that the novel coronavirus crisis has made it harder to build a house.

Workers in many places are now required to take additional safety measures while on the job, which can slow things down. Moreover, the supply-chain problems and shipping delays that the pandemic has introduced can make some tools, materials and parts harder to come by.

The second is demand. There is good reason to be optimistic it will be picking up in the months ahead, and making anticipatory moves such as applying for building permits makes sense. But with the economy still on the ropes and the course of the pandemic uncertain, actually breaking ground on a new home is a big step. It takes nearly eight months to construct a single-family home. If ever there was a lot of uncertainty about what will occur in the next eight months, it is now.

In the housing boom and bust of the 2000s, home builders got a painful lesson in what can happen when optimism runs ahead of reality. It isn’t a mistake they are likely to repeat now.

How Exactly Do You Catch Covid-19? There Is a Growing Consensus

Surface contamination and fleeting encounters are less of a worry than close-up, person-to-person interactions for extended periods

By Daniela Hernández, Sarah Toy, and Betsy McKay

A waiter wearing a face mask served diners in Paris on June 2. mohammed badra/EPA/Shutterstock


Six months into the coronavirus crisis, there’s a growing consensus about a central question: How do people become infected?

It’s not common to contract Covid-19 from a contaminated surface, scientists say. And fleeting encounters with people outdoors are unlikely to spread the coronavirus.

Instead, the major culprit is close-up, person-to-person interactions for extended periods. Crowded events, poorly ventilated areas and places where people are talking loudly—or singing, in one famous case—maximize the risk.

These emerging findings are helping businesses and governments devise reopening strategies to protect public health while getting economies going again. That includes tactics like installing plexiglass barriers, requiring people to wear masks in stores and other venues, using good ventilation systems and keeping windows open when possible.

Two recent large studies showed that wide-scale lockdowns—stay-at-home orders, bans on large gatherings and business closures—prevented millions of infections and deaths around the world. Now, with more knowledge in hand, cities and states can deploy targeted interventions to keep the virus from taking off again, scientists and public-health experts said.

That means better protections for nursing-home residents and multigenerational families living in crowded conditions, they said. It also means stressing physical distancing and masks, and reducing the number of gatherings in enclosed spaces.

“We should not be thinking of a lockdown, but of ways to increase physical distance,” said Tom Frieden, chief executive of Resolve to Save Lives, a nonprofit public-health initiative.

“This can include allowing outside activities, allowing walking or cycling to an office with people all physically distant, curbside pickup from stores, and other innovative methods that can facilitate resumption of economic activity without a rekindling of the outbreak.”

The group’s reopening recommendations include widespread testing, contact tracing and isolation of people who are infected or exposed.


 



One important factor in transmission is that seemingly benign activities like speaking and breathing produce respiratory bits of varying sizes that can disperse along air currents and potentially infect people nearby.


Health agencies have so far identified respiratory-droplet contact as the major mode of Covid-19 transmission. These large fluid droplets can transfer virus from one person to another if they land on the eyes, nose or mouth. But they tend to fall to the ground or on other surfaces pretty quickly.

Some researchers say the new coronavirus can also be transmitted through aerosols, or minuscule droplets that float in the air longer than large droplets. These aerosols can be directly inhaled.

That’s what may have happened at a restaurant in Guangzhou, China, where an infected diner who was not yet ill transmitted the virus to five others sitting at adjacent tables. Ventilation in the space was poor, with exhaust fans turned off, according to one study looking at conditions in the restaurant.

Aerosolized virus from the patient’s breathing or speaking could have built up in the air over time and strong airflow from an air-conditioning unit on the wall may have helped recirculate the particles in the air, according to authors of the study, which hasn’t yet been peer-reviewed.

Sufficient ventilation in the places people visit and work is very important, said Yuguo Li, one of the authors and an engineering professor at the University of Hong Kong. Proper ventilation—such as forcing air toward the ceiling and pumping it outside, or bringing fresh air into a room—dilutes the amount of virus in a space, lowering the risk of infection.


A gym in Chino Hills, Calif., on June 12. / Photo: Will Lester/Orange County Register via Zuma Press .


Another factor is prolonged exposure. That’s generally defined as 15 minutes or more of unprotected contact with someone less than 6 feet away, said John Brooks, the Centers for Disease Control and Prevention’s chief medical officer for the Covid-19 response.

But that is only a rule of thumb, he cautioned. It could take much less time with a sneeze in the face or other intimate contact where a lot of respiratory droplets are emitted, he said.

Superspreaders

At a March 10 church choir practice in Washington state, 87% of attendees were infected, said Lea Hamner, an epidemiologist with the Skagit County public-health department and lead author of a study on an investigation that warned about the potential for “superspreader” events, in which one or a small number of people infect many others.

Members of the choir changed places four times during the 2½-hour practice, were tightly packed in a confined space and were mostly older and therefore more vulnerable to illness, she said. All told, 53 of 61 attendees at the practice were infected, including at least one person who had symptoms. Two died.

Several factors conspired, Ms. Hamner said. When singing, people can emit many large and small respiratory particles. Singers also breathe deeply, increasing the chance they will inhale infectious particles.

Similar transmission dynamics could be at play in other settings where heavy breathing and loud talking are common over extended periods, like gyms, musical or theater performances, conferences, weddings and birthday parties.

Of 61 clusters of cases in Japan between Jan. 15 and April 4, many involved heavy breathing in close proximity, such as karaoke parties, cheering at clubs, talking in bars and exercising in gyms, according to a recent study in the journal Emerging Infectious Diseases.

The so-called attack rate—the percentage of people who were infected in a specific place or time—can be very high in crowded events, homes and other spaces where lots of people are in close, prolonged contact.

An estimated 10% of people with Covid-19 are responsible for about 80% of transmissions, according to a study published recently in Wellcome Open Research. Some people with the virus may have a higher viral load, or produce more droplets when they breathe or speak, or be in a confined space with many people and bad ventilation when they’re at their most infectious point in their illness, said Jamie Lloyd-Smith, a University of California, Los Angeles professor who studies the ecology of infectious diseases.

But overall, “the risk of a given infected person transmitting to people is pretty low,” said Scott Dowell, a deputy director overseeing the Bill & Melinda Gates Foundation’s Covid-19 response. “For every superspreading event you have a lot of times when nobody gets infected.”

The attack rate for Covid-19 in households ranges between 4.6% and 19.3%, according to several studies. It was higher for spouses, at 27.8%, than for other household members, at 17.3%, in one study in China.
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Rosanna Diaz with her son Tomas. / Photo: Rosanna Diaz .


Rosanna Diaz lives in a three-bedroom apartment in New York City with five other family members. The 37-year-old stay-at-home mother was hospitalized with a stroke on April 18 that her doctors attributed to Covid-19, and was still coughing when she went home two days later.

She pushed to get home quickly, she said, because her 4-year-old son has autism and needed her. She kept her distance from family members, covered her mouth when coughing and washed her hands frequently. No one else in the apartment has fallen ill, she said. “Nobody went near me when I was sick,” she said.

Being outside is generally safer, experts say, because viral particles dilute more quickly. But small and large droplets pose a risk even outdoors, when people are in close, prolonged contact, said Linsey Marr, a Virginia Tech environmental engineering professor who studies airborne transmission of viruses.

No one knows for sure how much virus it takes for someone to become infected, but recent studies offer some clues. In one small study published recently in the journal Nature, researchers were unable to culture live coronavirus if a patient’s throat swab or milliliter of sputum contained less than one million copies of viral RNA.

“Based on our experiment, I would assume that something above that number would be required for infectivity,” said Clemens Wendtner, one of the study’s lead authors and head of the department of infectious diseases and tropical medicine at München Klinik Schwabing, a teaching hospital at the Ludwig Maximilian University of Munich.


He and his colleagues found samples from contagious patients with virus levels up to 1,000 times that, which could help explain why the virus is so infectious in the right conditions: It may take much lower levels of virus than what’s found in a sick patient to infect someone else.

Changing policies

Based on this emerging picture of contagion, some policies are changing. The standard procedure for someone who tests positive is to quarantine at home. Some cities are providing free temporary housing and social services where people who are infected can stay on a voluntary basis, to avoid transmitting the virus to family members.

The CDC recently urged Americans to keep wearing masks and maintaining a distance from others as states reopen. “The more closely you interact with others, the longer the interaction lasts, the greater the number of people involved in the interaction, the higher the risk of Covid-19 spread,” said Jay Butler, the CDC’s Covid-19 response incident manager.

If the number of Covid-19 cases starts to rise dramatically as states reopen, “more extensive mitigation efforts such as what were implemented back in March may be needed again,” a decision that would be made locally, he said.

CDC guidelines for employers whose workers are returning include requiring masks, limiting use of public transit and elevators to reduce exposure, and prohibiting hugs, handshakes and fist-bumps.

The agency also suggested replacing communal snacks, water coolers and coffee pots with prepacked, single-serve items, and erecting plastic partitions between desks closer than 6 feet apart.
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A crowd gathered at a bar in Columbus, Ohio, on May 15.  / Photo: Doral Chenoweth/The Columbus Dispatch/Associated Press .


Current CDC workplace guidelines don’t talk about distribution of aerosols, or small particles, in a room, said Lisa Brosseau, a respiratory-protection consultant for the University of Minnesota’s Center for Infectious Disease Research and Policy.

“Aerosol transmission is a scary thing,” she said. “That’s an exposure that’s hard to manage and it’s invisible.” Ensuring infected individuals stay home is important, she said, but that can be difficult due to testing constraints. So additional protocols to interrupt spread, like social distancing in workspaces and providing N95 respirators or other personal protective equipment, might be necessary as well, she said.

Some scientists say while aerosol transmission does occur, it doesn’t explain most infections. In addition, the virus doesn’t appear to spread widely through the air.

“If this were transmitted mainly like measles or tuberculosis, where infectious virus lingered in the airspace for a long time, or spread across large airspaces or through air-handling systems, I think you would be seeing a lot more people infected,” said the CDC’s Dr. Brooks.

Sampling the air in high-traffic areas regularly could help employers figure out who needs to get tested, said Donald Milton, professor of environmental and occupational health at the University of Maryland School of Public Health.


“Let’s say you detect the virus during lunchtime on Monday in a dining hall,” he said. “You could then reach out to people who were there during that time telling them that they need to get tested.”

Erin Bromage, a University of Massachusetts Dartmouth associate professor of biology, has been fielding questions from businesses, court systems and even therapists after a blog post he wrote titled “The Risks—Know Them—Avoid Them” went viral.

Courts are trying to figure out how to reconvene safely given that juries normally sit close together, with attorneys speaking to them up close, Dr. Bromage said. Therapists want to be able to hold in-person counseling sessions again. And businesses are trying to figure out what types of cleaning and disease-prevention methods in which to invest most heavily.

He advises that while wiping down surfaces and putting in hand-sanitizer stations in workplaces is good, the bigger risks are close-range face-to-face interactions, and having lots of people in an enclosed space for long periods.

High-touch surfaces like doorknobs are a risk, but the virus degrades quickly so other surfaces like cardboard boxes are less worrisome, he said. “Surfaces and cleaning are important, but we shouldn’t be spending half of our budget on it when they may be having only a smaller effect,” he said.
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Plexiglass dividers at the Bellagio Hotel and Casino in Las Vegas on June 4. / Photo: Joe Buglewicz/Bloomberg News .


Drugmaker Eli Lilly & Co. has a medical advisory panel that’s reading the latest literature on viral transmission, which it is using to develop recommendations for bringing back the company’s own workers safely.

To go into production facilities, some of which are in operation now, scientists must don multiple layers of personal protective equipment, including gloves, masks, goggles and coveralls. That’s not abnormal for drug-development settings, said Lilly Chief Scientific Officer Daniel Skovronsky. “The air is extensively filtered. There’s lots of protection,” he said.

The places he worries about are the break rooms, locker rooms and security checkpoints, where people interact. Those are spaces where the company has instituted social-distancing measures by staggering the times they are open and how many people can be there at once.

Only a few cafeterias are open, and those that are have socially distanced seating. In bathrooms, only half the stalls are available to cut down on the number of people.

“We’ll never be more open than state guidelines,” Dr. Skovronsky said, but “we’re often finding ourselves being more restrictive because we’re following the numbers.”


—Adam Falk contributed to this article.