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Our briefing for Monday, January 24, 2022:
Jan 24, 2022 3:28:37 PM
- In the United States, early signs show the Omicron wave may be peaking, as case numbers finally begin to fall. There was a 7% decrease in the number of cases reported for the week ending Friday over the previous week, and deaths were only up slightly. Parts of the northeast in particular, such as New York, Rhode Island and Connecticut, are seeing steep declines after reaching their peaks and the rest of the states are expected to follow, with most likely to peak by the end of January. According to data from the Centers for Disease Control and Prevention, the Omicron variant now accounts for nearly 100% of all new Covid-19 cases in the nation.
- In Canada, the two most populous provinces are seeing a decline in hospitalizations, as one of them expands its vaccine passport program. Ontario reported a drop of 229 patients being hospitalized on Sunday, while Quebec reported 12 fewer patients were hospitalized. But the two provinces still had more than 7,000 hospitalizations between them as of Sunday. Quebec just ended a three-week ban on Sunday shopping that was imposed to try to help curb hospitalizations, and also expanded its vaccine passport program to include more retail settings. It now applies to big-box and grocery stores with areas of 1,500 square meters or more.
- In the United Kingdom, the worst of the Covid-19 pandemic is over, according to one of the country’s top scientists. Professor Neil Ferguson, epidemiologist at Imperial College London and major contributor to shaping Britain’s lockdown strategy, says he’s optimistic that the U.K. will be prepared for possible challenges along the way, including new variants. “The very high level of immunity in the U.K. population – acquired via both vaccination and infection – means that the risk of a new variant causing unmanageable levels of healthcare demand is much reduced,” he said. “An additional positive is that if any new variant arises from Omicron – not a certainty – there is a fair chance it will retain the reduced severity of that strain.”
- Ireland dropped almost all Covid-19 restrictions on Saturday, after coming through the latest surge in cases. Prime Minister Michael Martin said booster uptake in the country, which is one of the highest in the continent, has helped keep the number of seriously ill people lower than in previous waves. “We have weathered the Omicron storm,” Martin said in Friday’s televised address. “I have stood here and spoken to you on some very dark days. But today is a good day.” Bars and restaurants will no longer need to close at 8 PM or ask for proof of vaccination, and venues will return to full capacity limits. Some measures, like mask wearing on public transport and in indoor spaces, will remain in place until the end of February.
- Germany’s Chancellor Olaf Scholz and the 16 state governors are meeting to discuss the coronavirus pandemic and the country’s future direction through the Omicron wave. The leaders are expected to limit the use of PCR tests to the elderly, healthcare workers and those deemed high-risk as the rising case numbers put a strain on capacity. On Sunday, Scholz told German local media that it would be “naive” to think that the pandemic will be over any time soon. The leaders are not expected to discuss the universal vaccine mandate, which Scholz supports and says is necessary to get vaccination rates up.
- New Zealand on Sunday ordered nationwide restrictions after nine cases of the Omicron variant were detected in a single family. The country will move into its “red stage,” of pandemic response, meaning masks must be worn and there are limits on gatherings. Prime Minister Jacinda Ardern stressed that the red setting is not a lockdown and made a point of saying businesses can remain open and people can still travel freely. "Our plan for managing Omicron cases in the early stage remains the same as delta, where we will rapidly test, contact trace and isolate cases and contacts in order to slow the spread," Ardern told reporters on Sunday.
Covid-19 – Due Diligence And Asset Management
UK dividends rebound 46% in 2021 but remain below pre-covid level
Brief: UK dividends rebounded significantly on their 2020 lows, with the headline figure jumping 46.1% to £94.1bn, but payouts remain below their pre-covid levels, according to Link Group's latest UK Dividend Monitor. This figure was boosted by a record amount of one-off special dividends as companies paid out £16.9bn in this format, triple the normal level. The mining sector provided more than a third of the total special dividends, contributing £6bn from just six companies. As a result, Rio Tinto knocked Royal Dutch Shell of its typical top spot as the company paying the highest dividends, while BHP, Anglo American and Glencore all feature in the top ten. On a headline basis, mining dividends increased 160% year-on-year, one of five sectors to more than double payouts in 2021.
Living With Covid Proving Tough for a Gridlocked World Economy
Brief: The surging omicron variant is complicating the recovery for a world economy that continues to be wracked by supply chain chaos, worker absenteeism and faltering assembly lines. Supermarkets are struggling to stock shelves amid chronic staff shortages. Airlines are grounding flights. Manufacturers are facing disruption and shipping lines remain backed up. At the same time, surging energy prices are adding to inflation, pressuring central banks to raise interest rates even as the recovery slows. Optimists argue that the economic hit from omicron will be limited as vaccinations and boosters allow the disease to shift from an acute phase to an endemic one. U.S. Treasury Secretary Janet Yellen said she doesn’t expect the variant to derail the U.S. recovery.
Why the huge stock market correction may be actually good news about the pandemic
Brief: Just like everyone else this January, the stock market has the Omicron blues. Several "at-home" stocks, including Peloton and Netflix got crushed this week, amid reports of slipping demand and lower-than-anticipated performance. Meanwhile, the Nasdaq closed dow on Wednesday and fell deeper into correction territory on Friday when it dropped 2.7%—marking its worst week since 2020. It shows that the stock market is reassessing how to value the companies that cater to people putting up with COVID quarantines and reduced socializing amid high caseloads. Netflix tumbled more than 24% on Friday after the streaming service acknowledged it only added 8.3 million net new subscribers last quarter, missing expectations.
Boom times are back on Wall Street as some Goldman partners mint $15 million pay packages
Brief: Bonus season has arrived on Wall Street, and the bankers who produced record revenue last year for firms including Goldman Sachs are reaping the rewards. Goldman and JPMorgan Chase informed investment bankers and traders of their pay packages this week, part of an annual ritual that can leave workers elated — or deflated — as they learn how much their 2021 efforts were valued. The compensation pool for Goldman’s investment bankers jumped 40% to 50%, according to people with knowledge of the situation. At rival JPMorgan, the bonus pool for that category rose 30% to 40%, other people with knowledge said, confirming a Bloomberg report. “I know bankers who are exceptionally happy, they generally did the best this year as opposed to traders,” said David McCormack, head of finance recruitment firm DMC Partners.
BNP Paribas, Citigroup Set Feb 7 Return-To-Office Date for U.S. Staff
Brief: Citigroup has told staff in the New York Tri-State area to start returning to the office from Feb. 7, while BNP Paribas is targeting the same date for U.S. staff after recently postponing its return-to-office plans by nearly a month due to the Omicron variant. Wall Street firms were among the first to encourage staff to return to offices, but a winter wave of COVID-19 infections driven by Omicron has forced many to rethink their plans and review their vaccination policies in recent weeks. "With what happened with Omicron, we wanted to go back into a more conservative mode. So we only have people in the office if there's a business critical need for them to be in," said Kevin Abraszek, head of HR change and transformation at BNP Paribas in New York.
