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Our briefing for Friday, October 22, 2021:
Oct 22, 2021 3:53:14 PM
- The United States has now donated 200 million vaccine doses globally, the White House announced on Thursday. Last month President Joe Biden committed to donating over 1 billion doses to countries in need across the world. Just last week he announced a one-time donation of 17 million doses of the Johnson & Johnson vaccine to the African Union, bringing their total number of donations to 50 million. "These vaccines will help save lives, protect livelihoods, and heal economies currently battered by this pandemic," the White House said in a statement. Some world leaders have still criticized the U.S. for not doing enough.
- Canada has removed its advisory against non-essential travel for the first time since March 2020. The Government of Canada’s website was updated with a new notice, now advising all travellers to get fully vaccinated before taking a trip. “If you’re unvaccinated, you remain at increased risk of being infected with and spreading the virus that causes Covid-19 when travelling internationally. You should continue avoiding non-essential travel to all destinations,” the notice states. The notice also advises travellers to continue to follow the standard public health measures such as social distancing, hand washing and mask wearing.
- In the United Kingdom, case numbers have hit 50,000 for the first time since mid-July. The U.K. reported 52,009 new Covid-19 cases on Thursday, and 115 new deaths. Despite the rising case numbers, Prime Minister Boris Johnson has said the government will continue with its current plan, adding that hospitalizations and deaths have remained within the parameters of what was predicted. He also said that the country is in a considerably better place than it was last year because of vaccinations, and that’s why people have confidence in the government’s plan. On Wednesday Sajid Javid, the health secretary, warned that lower vaccine uptake could lead to more restrictions.
- In the Philippines, Covid-19 vaccinations have slowed in recent days, and its largely due to logistical challenges. According to Vaccines Czar Carlito Galvez Jr., the country is now sitting on a stockpile of about 39 million vaccines because of issues with deployment. Vaccine hesitancy has also become a problem alongside the logistical challenges, which Galvez said the government will address by conducting home-to-home visits. The Philippines aims to have 50% of its population fully vaccinated by the end of this year, and 70% of its population fully vaccinated by May 2022.
- New Zealand has set a target of 90% for full vaccination rates before it will end coronavirus lockdowns. Prime Minister Jacinda Ardern says she will require each of the nation’s 20 Health Districts to reach the 90% target. New Zealand currently has some of the strictest lockdown measures in the world, with its largest city of Auckland under restrictions for almost two months now. So far about 68% of eligible New Zealanders are fully vaccinated, while about 86% have had their first dose. New Zealand reported a total of 129 new coronavirus infections, a record for the third time this week, bringing the nation’s total number of cases for this outbreak to 2389.
- Australia’s state of Victoria saw residents flock to the bars and restaurants after a 262-day lockdown was finally lifted in the region. Victoria is the third state, after New South Wales, and the Australian Capital Territory, to exit lockdown and start living with the virus as the population hit its target of 70% full vaccination rates. Residents in Victoria can now leave their homes for any reason, restaurants and cafes are allowed to serve up to 20 people indoors and 50 people outdoors (all must be vaccinated), and up to 10 visitors are allowed in homes. Mask rules remain in place.
Covid-19 – Due Diligence And Asset Management
HSBC has some strategies for investors to overcome the ‘wall of worry’
Brief: HSBC Asset Management has shared a raft of advice with clients looking to navigate the current “wall of worry” facing global markets. With concerns about global growth and inflation causing jitters of late, along with the prospect of premature central bank policy adjustments and the resurgence of Covid-19 in certain parts of the world, investors have plenty on their plate when deciding where to allocate money. In a message to clients earlier this week, HSBC Asset Management Global Chief Global Strategist Joe Little recommended a number of strategies, including looking at Asian fixed income, “reasonably priced inflation hedges,” and value and cyclical stocks. Consensus forecasts for U.S. 2021 GDP [gross domestic product] have been cut by 0.7 percentage points to 5.9%, according to HSBC’s aggregate, while supply chain disruption has pushed up U.S. 2021 inflation expectations by a full percentage point to 4.3%.
Wall Street profits this year approach record level. Here's why it matters to New York
Brief: The COVID-19 pandemic has not slowed profits on Wall Street as pre-tax earnings this year have beaten last year's outsized growth, a report Thursday found. The financial sector is critical to New York's economy, and the first half of 2021 was extraordinary strong for Wall Street, Comptroller Thomas DiNapoli said in a report. For the first six months of the year, pre-tax earnings hit $31 billion, up from $27.6 billion from the same period last year, and the most since 2009.“Wall Street’s success during the pandemic has benefited New York’s economy and finances during a difficult time," DiNapoli said in a statement. "The securities industry’s strong profits have helped shore up tax revenues and securities industry workers have been among the first to return to the office.”Wall Street is vital to the state's finances, making up about 18% of all state revenue each year.
Hedge funds edge towards USD4 trillion milestone as volatility surges
Brief: Total hedge fund industry assets have swelled to almost USD4 trillion globally, a rise of nearly USD370 billion since the start of this year, according to new capital flows data. Hedge fund managers attracted USD5.6 billion of new investor money throughout the third quarter, supplemented by marginal performance-based gains, putting total industry capital at USD3.97 trillion overall, Hedge Fund Research stats show. Global hedge fund assets have rebounded sharply over the course of the Covid-19 pandemic, according to HFR’s latest Global Hedge Fund Industry Report – with total industry capital soaring by more than USD1 trillion in the previous six quarters, after falling below USD3 trillion in Q1 2020 when the coronavirus outbreak began. With the USD5.6 billion of inflows for Q3 this year, net inflows since Q3 2020 total some USD40 billion, HFR said.
Europe’s Top Two Economies Sound Alarm Over Absent Supplies
Brief: An aggravating global supply squeeze caused the steepest decline in French manufacturing output since stringent coronavirus lockdowns were in place last year and severely damped growth momentum in Germany, purchasing managers report. Gauges for factory orders in both countries deteriorated in October, with some goods producers mentioning that “severe delays” on inputs were responsible for contracts being canceled or postponed. Inflation pressures grew amid the bottlenecks, according to IHS Markit surveys. “While until recently, the effects of inputs shortages have been most apparent on prices, we’re now seeing them have a noticeable impact on production levels and order book,” said Joe Hayes, a senior economist at the London-based firm.
VIX Index Closes at Lowest Level Since Beginning of Pandemic
Brief: The Cboe Volatility Index, known as Wall Street’s fear gauge, closed Thursday at its lowest level since before the pandemic hit as strong earnings pushed stocks to record highs.The VIX closed down 3.1% at 15.01, its lowest close since Feb. 19, 2020. The VIX has averaged 19.71 in 2021. The VIX is measure of market expectations of 30-day volatility and can serve as a way to gauge fear among market participants. The S&P 500 notched its seventh consecutive increase on Thursday, closing at a record; the VIX is down from 19.85 to 15.01 during the same time period.In a note published on Thursday, Susquehanna International Group equity derivative strategist Chris Murphy wrote that while the VIX has “cratered,” volatility is still high in other parts of the market.
