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Our briefing for Friday July 16, 2021:
Jul 16, 2021 3:48:48 PM
- In the United States, the number of Americans applying for unemployment benefits fell to its lowest level since the beginning of the pandemic. According to data from the US Bureau of Labour Statistics, claims fell by 26,000 to 360,000 last week. Numbers have been steadily falling since early January when they topped 900,000, which shows how quickly the U.S. is emerging from the pandemic recession. Some forecasters have even predicted that the economy will grow by approximately 7 per cent this year. Despite the recent rise in numbers, vaccine rollouts have been successful at reducing new viral cases.
- In Canada, Brig.-Gen. Krista Brodie, the military general in charge of overseeing vaccine distribution across the country, says the supply of doses could potentially outweigh demand. She says Canada needs a “more nuanced” approach to distribution as provinces currently have an inventory of almost 9 million doses, and there are two million doses already being held back because provinces aren’t able to use them. The goal now is to avoid waste by not distributing doses that provinces don’t need, so that Canada can determine whether to start donating those doses to other countries.
- As the United Kingdom inches closer to the end of all pandemic restrictions next week, or what some are calling “Freedom Day,” the government’s top medical advisor issued a warning. Chief Medical Officer Chris Witty warned people late Thursday not to underestimate how quickly the pandemic can bring trouble. Witty says hospitalizations could reach “quite scary” levels if current trends continue, where the number of people in hospital with Covid-19 is doubling about every three weeks. "We are not by any means out of the woods yet on this, we are in much better shape due to the vaccine program, and drugs and a variety of other things," he said. "But this has got a long way to run in the U.K., and it's got even further to run globally."
- In Spain, infections are soaring in unvaccinated young people, as the country faces an uptick in numbers caused by the spread of the delta variant. Barcelona and the surrounding northeast corner of Spain are shutting down and imposing a curfew from 1 am to 6 am amid the rising case numbers. The regional government had already said on Thursday that it was looking to impose the restrictions, pending approval from the courts. This comes after the Spanish constitutional court ruled some lockdown restrictions imposed by the government were unconstitutional.
- In the Netherlands, a music festival has led to over 1000 new coronavirus infections. The Verknipt outdoor festival, which took place in early July in Utrecht, was attended by over 20,000 people in two days. All attendees of the festival had to show either proof of vaccination or a negative Covid-19 test. While organizers insisted the event was carefully planned, the event exposed problems in the “test for entry” process. People were allowed to show negative Covid-19 tests up to 40 hours before the event. People were also allowed to get festival passes immediately after being vaccinated, when it actually takes several weeks for immunity to build.
- In Australia, there have been some cases reported of fully vaccinated people contracting the delta variant. In New South Wales on Tuesday a nurse tested positive despite being fully vaccinated and wearing personal protective equipment. Experts are warning that such breakthroughs can happen, that vaccines are not perfect, and people can still get infected despite doing all the right things. New South Wales Chief Health Officer Dr. Kerry Chant confirmed on Friday that one of the 18 people in intensive care had received a single dose of AstraZeneca.
Covid-19 – Due Diligence And Asset Management
As stock prices peak, markets begin to fear looming threats
Brief : With the U.S. economy humming, corporate profits flowing and stock prices peaking, investors on Wall Street are beginning to pose an anxious question: Is it all downhill from here? Financial markets are always trying to set prices now for where the economy and corporate profits are likely to be in the future. And even though readings across the economy are still at eye-popping levels, investors see some areas of concern. New variants of the coronavirus are threatening to weaken economies around the world. Many of the U.S. government’s pandemic relief efforts are fading. Inflation is raging as supplies of goods and components fall short of surging demand. And the beginning of the end of the Federal Reserve’s assistance for markets is coming into sight.
Sunak May Wait to Spring for Next Budget Key to U.K.’s Recovery
Brief: Rishi Sunak may wait until the spring to deliver his next U.K. budget, people familiar with the matter suggested, giving the Chancellor of the Exchequer time to assess the economic damage caused by the pandemic. After delivering his last budget in March, Sunak was expected to deliver a fresh spending blueprint in the fall, given his predecessor Philip Hammond had shifted the annual statement to that period from the spring in 2016 to give businesses more time to prepare for any tax changes in the new financial year. But on Friday, two people familiar with the matter left open the prospect of a spring budget, telling Bloomberg no decision had been taken on its timing.
U.S. stocks fall as ebbing sentiment dents confidence
Brief: Stocks declined as an erosion in U.S. consumer sentiment added to concern about the sustainability of the economic expansion. Crude oil futures fluctuated and the dollar strengthened. Energy and material shares led the S&P 500 lower, reversing an earlier gain posed after a report showed June retail sales topped all estimates in a Bloomberg survey. The S&P has closed at either a gain or a loss every other day this week. Moderna jumped after the vaccine maker was named to the U.S. equity benchmark. The 10-year Treasury yield rose for the first time in three trading sessions.
Gundlach says the dollar is ‘doomed’ over the long term because of rising U.S. deficits
Brief : DoubleLine Capital CEO Jeffrey Gundlach offered a dire long-term assessment on the U.S. dollar Thursday, telling CNBC in an interview he thinks the greenback is “doomed.” “Ultimately, the size of our deficits — both trade deficit, which has exploded post-pandemic, and the budget deficit, which is, obviously, completely off the charts — suggest that in the intermediate term — I don’t really think this year, exactly, but in the intermediate term — the dollar is going to fall pretty substantially,” Gundlach said on “Halftime Report.”
Wells Fargo Says Office Return to Look ‘Mostly’ Like Pre-Covid
Brief: Wells Fargo & Co., the U.S. bank with the most employees, is laying out a back-to-office plan set to begin in September, telling staff their schedules will look a lot like they did before the pandemic. The firm, which has almost 260,000 workers, will start calling those who have been working remotely back to the office on Sept. 7, and the process will continue through October, according to an internal memo Friday. It will also begin collecting employees’ vaccination statuses next week.“When we return, our schedules will mostly resemble our pre-pandemic working approach, with additional flexibility,” Chief Operating Officer Scott Powell wrote in the memo. “Choosing not to get vaccinated will not influence your ability to work remotely.”
ESG in a time of crisis: Why ESG scores cannot mitigate risk
Brief: When the coronavirus pandemic spread around the world in 2020, investors quickly grasped the gravity of the situation and a sense began to emerge that it was perhaps a moment when firms with strong environment, social and governance (ESG) would be less negatively affected than others. It quickly became evident, however, that this was not the case. During the initial stages of the pandemic when equity markets fell, the established ESG indexes did not appear to capture the outperformance of ESG that many believed to be there. In fact, over the whole of the first quarter of 2020 the difference in performance between a number of ESG indices and the MSCI World Net index was less than 1%.
