U.S. markets to take hit as second wave occurs like is happening now in Europe, Bernstein says

Published Thu, Sep 17 20201:23 PM EDT

Jesse Pound @/in/jesse-pound @jesserpound

(This story is for CNBC Pro subscribers only). The United States is likely to see a true second wave of Covid-19 like is currently happening in Europe, possibly requiring a reversal of some of the steps of the economic reopening, Bernstein warned clients in a note on Thursday. A World Health Organization official said Thursday that Europe is currently facing a " very serious situation ," and Spain and France in particular have seen large increases in their rate of new cases. Bernstein said that the U.S., which has seen rolling waves of infection in different regions, was poised to get a Europe-like second wave in the months ahead. "We are not getting out of this without a vaccine," the note said. The best case scenario for the U.S. is that the more recent hot spots can stabilize at around 60 cases per million people per day, Bernstein said, roughly where the northeast region of the country has held since enduring its initial wave. However, with schools and parts of the economy continuing to slowly reopen, another surge in the northeast and across the country is the more likely outcome, Bernstein said. "The Northeast has been slower to reopen as much as Europe has (still no indoor dining or international travel without quarantine) and thus we have not seen the second wave yet. However, as we open schools and offices, the epidemic will likely start spreading and because we are starting from a higher incidence rate, it will become an issue within a month," the note said. There are several reasons to think that the next wave won't be as bad as the first ones, Bernstein said. A younger group of people appears to be getting infected, and hospitals are not at capacity anymore. The U.S. also had regions where 15% or more of people are estimated to have already contracted the virus, making them unlikely to be infected again for some amount of time. "The hope for the US is that the impact would be moderated by being 'bad enough' already," the note said. There have now been more than 29.9 million global cases of the virus, with over 6.6 million of those coming from the states, according to data from Johns Hopkins University. At least 196,831 have died in the U.S. from the disease. Under investment implications, the firm said, "The conclusion here is that we are going to take some pain."

Blood collection specialist Niilo Juntunen removes the IV from recovered coronavirus patient Monica Jacobs as she finishes donating convalescent plasma at the Central Seattle Donor Center of Bloodworks Northwest during the coronavirus disease (COVID-19) global outbreak, in Seattle, Washington, September 2, 2020.

Lindsey Wasson | Reuters

(This story is for CNBC Pro subscribers only).

The United States is likely to see a true second wave of Covid-19 like is currently happening in Europe, possibly requiring a reversal of some of the steps of the economic reopening, Bernstein warned clients in a note on Thursday.

A World Health Organization official said Thursday that Europe is currently facing a "very serious situation," and Spain and France in particular have seen large increases in their rate of new cases. Bernstein said that the U.S., which has seen rolling waves of infection in different regions, was poised to get a Europe-like second wave in the months ahead.

"We are not getting out of this without a vaccine," the note said.