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Our briefing for Monday, December 6, 2021:
Dec 6, 2021 3:17:42 PM
- In the United States, delta is still the top coronavirus strain, accounting for over 99% of cases, despite omicron now being detected in almost a third of U.S. states. The country’s top infectious disease expert, Dr. Anthony Fauci, says the new variant may be less dangerous than delta. Reports from South Africa, where the variant originated, show that hospitalization rates have not increased significantly. “Thus far, it does not look like there’s a great degree of severity to it,” Fauci said on CNN’s State of the Union. “But we have really got to be careful before we make any determinations that it is less severe or it really doesn’t cause any severe illness, comparable to delta.” Fauci also said he hopes the travel ban that was placed on several African countries will be lifted soon.
- Canada’s MPs will discuss a pandemic support bill today, as the 12-member House of Commons finance committee meets to move the bill closer to a final vote. The bill, which was introduced in the commons a few weeks ago and would provide more than $7 billion in additional pandemic benefits, has not been supported by the opposition parties. The Liberals, in an effort to fast-track the legislation, have agreed to have Finance Minister Chrystia Freeland sit before the finance committee for at least two hours of questioning. The New Democrats say the bill does not do enough to support vulnerable Canadians, while the Conservatives say they want to see greater accountability.
- In the United Kingdom, a study that was published last week has found that mRNA vaccines make the best boosters. The trial looked at the safety and efficacy of seven different vaccines when given after two doses of AstraZeneca or Pfizer. Vaccines included in the study were AstraZeneca, Pfizer, Moderna, Johnson & Johnson, Novavax, Valneva and Curevac. The study found that all seven vaccines boosted immunity when given after two doses of AstraZeneca, while six out of seven boosted immunity when given after two doses of Pfizer. The study found that third doses given by Moderna and Pfizer gave very effective boosts to antibody and T-cell levels, regardless of which vaccine the person initially received. The study involved 2,878 adults over 30, with around half of the participants being over the age of 70.
- Italy has officially launched its “Super Green Pass”, placing more restrictions on the unvaccinated. Beginning today through to January 15, Italian police will be able to check whether patrons of restaurants and bars are fully vaccinated or have recovered from Covid-19. Having a recent negative test is no longer an option where the Super Green Pass is required, which will include indoor restaurants, theatres, concerts, sports and other public events. The regular Green Pass, which can still be obtained with a negative Covid-19 test, will be required for access to local public transportation and to stay in hotels.
- Brazil’s Supreme Court has ordered a probe into President Jair Bolsonaro after he made claims that Covid-19 vaccines can increase the chance of contracting AIDS. Bolsonaro made the comments in a live broadcast in October, after which he was temporarily suspended from Facebook and YouTube. The probe was ordered by Judge Alexandre de Moraes on Friday, in response to a request from a Senate investigative committee. The committee, known as CPI in Portuguese, found in October that Bolsonaro had committed nine crimes related to his handling of the pandemic, including crimes against humanity. Moraes said in his ruling that Bolsonaro “used the modus operandi of mass dissemination schemes in social networks”.
- Australia’s medicines regulator on Sunday provisionally approved the Pfizer vaccine for children ages five to 11. A one-third dose of Pfizer was deemed safe and effective for the age group by the Therapeutic Goods Administration. The vaccine still needs approval from the Australian Technical Advisory Group on Immunisation before it can be made available to approximately 2.3 million eligible children. Health Minister Greg Hunt said the rollout could begin as early as January 10. Australia has become one of the most vaccinated countries in the world, with 88% of Australians over the age of 16 having had both doses.
Covid-19 – Due Diligence And Asset Management
NYC Business Group Blasts Private-Sector Vaccine Mandate
Brief: Some of New York City’s biggest banks and other companies were “blindsided” by Mayor Bill de Blasio’s decision to impose a vaccine mandate on private sector employees, according to Kathryn Wylde, who runs the Partnership for New York City, an influential business group that counts JPMorgan Chase & Co. and Goldman Sachs Group Inc. as members. De Blasio on Monday said all private-sector employers must require their workers to be vaccinated by Dec. 27, with no test-out option. The mandate will cover roughly 184,000 businesses. Although many large companies like Goldman Sachs and Morgan Stanley already require vaccination to work from their buildings, Wylde said the city’s decision to impose a mandate wasn’t made in coordination with companies and executives and that it will sow uncertainty among the business community.
Morgan Stanley Sees Fed as Bigger Threat to Stocks Than Omicron
Brief: Stock investors probably have more important things to worry about than the emergence of the new coronavirus strain, according to Morgan Stanley strategists. While they are “not that concerned about omicron as a major risk factor for equities,” the strategists see headwinds building elsewhere, after Federal Reserve Chairman Jerome Powell signaled the possible accelerated tapering of asset purchases. “Tapering is tightening for the markets and it will lead to lower valuations like it always does at this stage of any recovery,” the strategists led by Michael Wilson wrote in a note to clients. The comments echo the views of other strategists, including those at JPMorgan Chase & Co., who singled out a hawkish turn by central banks as the main risk to their outlook for stocks. But while JPMorgan reiterated on Monday that its base-case scenario is for the equities rally to continue into next year, Morgan Stanley sees the S&P 500 trending lower, and valuations declining.
Covid variants 'biggest concern' for market stability in 2022
Brief: Financial advisers have named Covid variants as the biggest threat to market stability in 2022, as the Omicron strain of the virus starts to spread across the UK and other parts of the world. Quilter Investors surveyed 300 financial advisers as part of its 2022 Global Outlook report, with 66% saying new variants and the speed of global vaccination campaigns is the biggest concern as this year comes to an end. An additional 19% cited higher inflation as the biggest risk, while 12% were most concerned about the potential failing of, or short lived, strong economic growth. The end of November saw the FTSE 100 suffer its worst session in more than a year on the back of news that the Omicron variant had reached the UK.
European stocks close higher as investors monitor omicron variant, bitcoin volatility
Brief: European stocks closed higher on Monday as investors closely monitored developments around the omicron Covid variant and bitcoin volatility.The pan-European Stoxx 600 provisionally ended up around 1.4%, with travel and leisure stocks jumping over 4.1% to lead gains. Almost all sectors and major bourses closed the session in positive territory. While European markets made a positive start to the trading week on Monday, the picture is more mixed at a global level.Stocks in Asia-Pacific dropped on Monday as investors monitored bitcoin prices after they fell sharply over the weekend. Meanwhile, oil prices jumped more than 2.8% in European afternoon trading hours after mostly falling last week on Covid uncertainty and the OPEC+ plan to increase output in January.
Omicron Uncertainty Sends Investor Imaginations to ‘Dark Places’
Brief: Investors’ imagination often goes to “dark places” in the face of uncertainty, but this week they might have overreacted, according to Kara Murphy, the chief investment officer of Kestra Investment Management. The multiple blows from Covid and a new hawkish tilt to the Federal Reserve is similar to what we saw over the summer, Murphy said in an interview with Bloomberg’s “What Goes Up” podcast. Back then, traders were also preparing for more Covid cases and stimulus withdrawal. But this time around, markets are better able to handle a setback, if there is one, she said. Below is a condensed and lightly edited transcript of Murphy’s conversation with Bloomberg. Click here to listen to the full show and subscribe on Apple Podcasts, Spotify or wherever you listen.
