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Our briefing for Friday, February 4, 2022:
Feb 4, 2022 3:50:56 PM
- In the United States, the jobs report for January, just released today, shows the economy created far more jobs than expected despite the disruptions caused by Omicron. The survey of establishments showed that nonfarm payrolls increased by 467,000 jobs last month, while estimates had only ranged from a decrease of 400,000 to increases of 385,000. The employment report also showed 709,000 more jobs were added in December and November than previously estimated. Between December 29 and January 10, about 8.8 million people reported not being at work because of coronavirus reasons, according to the Census Bureau’s Household Pulse Survey that was published in mid-January.
- In Canada, the federal government issued an order-in-council to clarify that unvaccinated and partially vaccinated truckers are not exempt from a vaccine mandate. Last month the Canada Border Services Agency told the media that unvaccinated truckers would remain exempt from quarantine and testing requirements after entering the Canada-U.S. border. The federal government has since said that statement was made in error. The government has now issued an order-in-council to clarify that this was not the case, and that unvaccinated and partially vaccinated truckers are not exempt from the mandate. The order-in-council will be in effect until at least the end of February.
- In the United Kingdom, four of Prime Minister Boris Johnson’s top aides have resigned in the latest struggle over the “partygate” scandal. Johnson's head of policy, Munira Mirza, chief of staff Dan Rosenfield, principal private secretary Martin Reynolds, and communications director Jack Doyle all left their positions on Thursday, only days after the release of Sue Gray’s report found that multiple parties took place at Downing Street while the rest of the country was under lockdown. "Against the backdrop of the pandemic, when the Government was asking citizens to accept far-reaching restrictions on their lives, some of the behaviour surrounding these gatherings is difficult to justify," the report said.
- France is set to start using Pfizer’s Covid-19 drug Paxlovid, the first European Union country to start providing the treatment since it won regulatory approval last week. France’s health ministry announced on Wednesday that 10,000 doses of Paxlovid have arrived in the country and will be available in pharmacies starting today. The drugs will be given to those at highest risk of developing serious illness, according to European Medicines Agency Guidelines. The French government began to lift restrictions on Wednesday, making outdoor masks no longer mandatory and allowing crowds to return to large venues.
- In India, coronavirus deaths have reached 500,000, although some analysts believe the figure to be much higher because of underreporting. The exact number of deaths in the federal health ministry’s update was 500,055, up 1,027 in the previous 24 hours. Infections rest at 41.9 million, behind only the U.S. in numbers. India is in the midst of its third wave of coronavirus infections, led by the Omicron variant, though the health ministry said last week there were indications that the virus was plateauing in several parts of the country. To combat case numbers, officials are carrying out vaccination drives in remote parts of the country, with healthcare workers going door-to-door to administer shots.
- In Australia, the government is considering deploying defence forces to help manage a Covid-19 outbreak in the long-term care sector. Defence Minister Peter Dutton says the government will make the move if that’s what is required. "Well, if that is what is required to fix this problem and to provide dignity to these people, that is what we will do. But at the moment, I mean, we're bringing in nurses, we're bringing in the extra shifts," Dutton told local media. As death rates and daily case numbers in the care homes continue to rise, the minister says more booster shots are also being rolled out.
Covid-19 – Due Diligence And Asset Management
Emerging market investors get 'jitters' in January
Brief: Money has flooded out of emerging market securities at breakneck speed in January as concerns over geopolitical tensions, monetary policies and recovery speeds gave investors the “jitters”, according to the latest data from the Institute of International Finance. With flows into emerging markets totalling an estimated $1.1bn for the month, IIF said increased volatility has generally pushed investors out of their emerging market bets. In December last year, IIF said foreign investment in emerging markets had come to an "abrupt standstill". Following a global pattern, inflation still remains an issue for many policymakers across the emerging market landscape while geopolitical tensions brew. IIF economist Jonathan Fortun said: "We see investors pulling money from emerging markets' bonds and equities at the fastest pace since March-2021, as anxiety builds over tighter monetary conditions, geopolitical frictions and fears that many economies will not recover quickly enough from the pandemic this year.
Canada lost 200,100 jobs in January as Omicron hit economy
Brief: Canada’s labor market suffered a larger-than-expected setback last month after the nation was hit with fresh lockdowns meant to contain the omicron variant of COVID-19. The country shed 200,100 jobs in January, Statistics Canada reported Friday from Ottawa, ending a seven-month streak of gains. Economists in a Bloomberg survey were expecting a drop of 110,000. The unemployment rate rose to 6.5 per cent, from 6 per cent at the end of last year. Despite the setback, analysts expect a rebound as early as this month as containment measures are lifted, putting the economy back up against what the Bank of Canada believes is full capacity. Still, the sharper-than-expected decline could raise questions about the timing of Governor Tiff Macklem’s expected interest rate hikes. The Canadian dollar fell 0.7 per cent on the report to $1.2763 per U.S. dollar as of 9:22 a.m. Yields on Canadian two-year bonds rose, after U.S. employers added more jobs than expected in January.
It’s Taken a Pandemic to Get the Boardroom in Touch With the Workforce
Brief: Companies often say that employees are their most important asset, but you’d never know that by looking at corporate boards. Directors largely come from the ranks of current and retired CEOs, finance chiefs, lawyers and investors, with a smattering of academics thrown in. What you rarely found in the boardroom were human-resources experts.That’s changing. With workers quitting jobs at a record clip and corporate cultures convulsing over issues like remote work, burnout and diversity and inclusion, boardrooms are opening the door to more directors with actual experience managing workforces. The share of directorship roles across all companies in the S&P 1500 with specific human-resources skills increased to 19.4% in January from 11.3% two years ago, according to ISS ESG, the responsible-investing arm of Institutional Shareholder Services.
Oil majors are close to erasing all losses since pandemic began
Brief: European oil majors are erasing their pandemic slump as tensions between Russia and the West drive Brent crude above US$92 a barrel. The Stoxx Europe 600 energy sub-index is outperforming all other sectors on Friday as crude heads for its seventh week of gains. Shell Plc, BP Plc and TotalEnergies SE led the rally, and the companies have now either erased their pandemic losses entirely or are close to doing so. Energy stocks have had the best returns in Europe so far in 2022 and strategists are bullish on a sector that underperformed in the past three years. A tight market and tensions around Ukraine have sent crude prices soaring. Now, investors are looking to earnings and guidance from the biggest companies to see where the stocks go from here.“Energy stocks are an attractive diversifier as the sector remains absolute and relative cheap with ongoing earnings upgrades,” said Ulrich Urbahn, head of multi-asset strategy and research at Berenberg. “On top, the sector could also benefit from geopolitical tensions, strong nominal GDP growth in 2022, rising bond yields and heightened inflation risks.”
Roche sees slower 2022 sales growth as COVID tests demand eases
Brief: Swiss drugmaker Roche said on Thursday sales growth would slow this year as it braces for less demand for its COVID-19 medicines and tests, expecting immunity against the novel coronavirus to prevail in the population from about April. In an earnings statement, the company said it expected currency-adjusted 2022 sales to be flat or grow in the low-single digits, below last year's 9% gain. Roche anticipates sales of COVID-19 medicines and diagnostics to decrease by about 2 billion Swiss francs ($2.17 billion) to around 5 billion francs, it added. It proposed raising its 2021 dividend to 9.30 francs per share but its stock fell 2.6% on the outlook. Group earnings edged higher in 2021 as brisk demand for COVID-19 diagnostic tools and new prescriptions for drugs such as Hemlibra against haemophilia and cancer immunotherapy Tecentriq offset a sales decline in older cancer drugs.
