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Our briefing for Friday, July 30, 2021:
Jul 30, 2021 3:10:05 PM
- In the United States, President Biden announced new coronavirus requirements for federal workers, as a way to address the lagging vaccination rates. The government will require all federal workers to sign forms saying they’ve been vaccinated, or otherwise comply with mandatory masking, weekly testing, distancing and other rules. While the federal government directly employs about 4 million people, it is estimated that the new rules could affect as many as 7 million people when contract workers are factored in. "I know this is hard to hear. I know it's frustrating. I know it's exhausting to think we're still in this fight, I know we hoped this would be a simple straightforward line, without problems or new challenges. But that isn't real life," Biden said on Thursday about the struggles of the pandemic.
- In Canada, the province of Alberta is eliminating almost all of their Covid-19 public health orders. Close contacts of positive cases are no longer required to isolate, and as of August 16 individuals who test positive won’t be required to isolate either. The province is also ending asymptomatic testing. Calgary Mayor Naheed Nenshi says the move is “inconceivable.” In Ontario, about 80% of people in the province age 12 and older have had at least one dose of vaccine. This means the province has now met one in three conditions required to move beyond Step 3 of its reopening plan.
- In the United Kingdom, the “pingdemic” continues as people are alerted by the official Covid-19 app and told to self-isolate. A record high was reached during the week ending July 21, with around 690,000 people being alerted by the app in England and Wales. But some businesses are starting to notice a drop in the number of contacts being made through the app, likely because employees are deleting it. The pingdemic created issues for supply chains and retailers with significant staff shortages. The government responded by allowing some essential workers to skip the isolation period, they also plan to exempt anyone who is fully vaccinated by August 16.
- In France, Doctors without Borders has set up a tent in North Paris to offer vaccines to migrants, the homeless and other vulnerable people. This comes after the government launched their health pass which is required to access restaurants, trains and many other public spaces. In order to get the health pass, people must be fully vaccinated or have proof of a negative test or recent recovery from Covid-19. "People think that these people wouldn't need a vaccine passport," Cristiana Castro, who oversees Doctors Without Borders' COVID operations in France, told The Associated Press. But "they often need to access public places for housing, administrative processes, and they worry that one day the passport would be required to access those, and it creates a lot of anxiety."
- In Brazil, the health minister announced plans to cancel a contract signed in March for 10 million doses of Russia's Sputnik V coronavirus vaccine. Health Minister Marcelo Queiroga says the contract was cancelled because of missed deadlines with Brazilian health regulator Anvisa, and that the nation’s immunization program doesn’t need the Russian vaccine. Brazil still has the second highest COVID-19 death toll, after the United States.
- In Australia, Prime Minister Scott Morrison says 80% of adults will have to be fully vaccinated before the country can open its border. On Friday he laid out a four-stage plan for reopening, announcing that the country is currently in phase A of the plan, which includes lockdowns. Morrison said the border would reopen in Phase C when 80% of adults have been vaccinated, currently only about 18% of adults in Australia are vaccinated. "We will lift all restrictions on out-bound travel for vaccinated Australians," Morrison told a news conference, referring to phase C. "There will be a gradual reopening of inward and out-bound international travel with safe countries," he said.
Covid-19 – Due Diligence And Asset Management
The Covid bet: How the pandemic has disrupted the Momentum-Value equity equation
Brief: New research from Unigestion’s equities team suggests investor confidence has been dented in recent weeks as the Delta variant has taken hold in several countries that had earlier been buoyed by the vaccine rollout. Earlier, the stock market rally towards the end of 2020 into 2021 – propelled by the vaccine push – had reversed the fortunes of certain so-called Covid “winner” and “loser” equities, such as healthcare and software. Unigestion said this ‘winners and losers’ theme in equities, which emerged out of the disruption of the pandemic, has underpinned the performance of both Momentum and Value names for much of the past year – but is now being disrupted as investors shift their focus toward economic reopening and recovery.
Covid-19 pandemic shifts investors' focus to the 'S' of ESG
Brief:The coronavirus pandemic has increased the importance of the social aspects of ESG for investors, according to a survey by Berenberg WAM. Among 112 respondents, who were primarily from the UK and Germany, some 47% considered the social ‘S' element of ESG as the most important, followed by 35% selecting environmental factors ('E'), while 18% said governance (‘G') took precedence. The survey found the pandemic had increased the importance of social factors the most, followed by environmental factors. When asked to predict what the most relevant ESG product would be for respondents in five years' time, actively managed ESG strategies emerged as the favourite for 19%. This was followed by 17% for impact investments and 15% for Sustainability/SDG-linked bonds.
U.S. personal spending strengthened in June along with prices
Brief: U.S. personal spending accelerated more than expected in June, reflecting a ramp up in outlays on services, while a closely watched inflation measure continued to climb. Purchases of goods and services increased 1 per cent from a month earlier, following a downwardly revised 0.1 per cent drop in May, Commerce Department figures showed Friday. The personal consumption expenditures price gauge, which the Federal Reserve uses for its inflation target, rose 0.5 per cent for a second month. Thanks to vaccinations and a broader reopening of the economy, consumers had the confidence and ability to spend money on services like dining out as well as merchandise. With goods spending well above pre-pandemic levels, outlays have increasingly shifted to the pandemic-battered service sector.
George Weston earns $108-million Q2 profit a year after tough pandemic quarter
Brief: George Weston Ltd. is reporting a profit in its latest quarter, a year after enduring its most difficult three months of the COVID-19 pandemic. The Toronto-based company says its net income attributable to common shareholders was $108 million or 70 cents per diluted share, compared with a loss of $255 million or $1.66 per share a year earlier. Excluding one-time items, adjusted profits nearly doubled to $272 million or $1.78 per share, from $139 million or 91 cents per share in the second quarter of 2020. Revenues for the three months ended June 19 increased four per cent to $12.9 billion, from $12.4 billion in the prior year quarter.
The U.S. economy is bigger than it was pre-pandemic, but Covid could still decide what happens next
Brief: The U.S. economy is now larger than it was before the pandemic, but its growth rate may have peaked this year at a much slower pace than expected. That doesn’t mean the second half of the year won’t be strong or the recovery will be derailed. The question is how strong growth can be, with a number of factors that can impact it, including the delta variant of the coronavirus. Gross domestic product accelerated at a 6.5% annualized rate in the second quarter, slightly better than the revised 6.3% gain in the first quarter. But it was well below the 8.4% expected by economists, and far less than their earlier forecasts that growth in this year’s peak quarter would be 10% or higher.
