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Our briefing for Monday, March 28, 2022:
Mar 28, 2022 3:20:02 PM
- In the United States, the Biden administration plans to move forward with the decision to offer second booster shots to adults aged 50 and older. The Food and Drug Administration (FDA) could authorize a second shot as early as next week, officials said, with the Centers for Disease Control and Prevention (CDC) following shortly after with its own recommendation. Unlike the first round of regulatory decisions surrounding booster shots, there will be no advisory committee meetings of either the FDA or the CDC ahead of the decision on second boosters. Officials have said that in the fall, Americans of all ages should get a second shot.
- In Canada, Quebec’s Medicago vaccine has been denied authorization for emergency use by the World Health Organization (WHO), because of ties to a tobacco company. Philip Morris Investments, subsidiary of tobacco giant Philip Morris International, currently holds a 21% stake in the company which keeps the vaccine from being part of the Covid-19 Vaccines Global Access (COVAX) program. "It is our understanding that this decision is linked to Medicago's minority shareholder and not the demonstrated safety and efficacy profile of our COVID-19 vaccine," said Medicago president and CEO Takashi Nagao in a statement Friday. The WHO has said it is currently exploring policy options for other valid health products linked to the tobacco industry and will provide more information soon.
- In the United Kingdom, new Covid-19 cases have rose by a million in one week, according to data from the Office of National Statistics (ONS). Driven by the highly infectious BA.2 Omicron subvariant, cases are now hovering at around 4.3 million, up from 3.3 million the week before. Rates are rising in England and Wales, and have reached an all-time high in Scotland, Northern Ireland is the only region where case numbers have decreased. ONS data shows approximately one in 16 people in England are now infected, with hospitalizations also on the rise. There were approximately 17,440 patients in the hospital with the virus on March 24, with just over 300 in intensive care.
- Israel’s prime minister has tested positive for Covid-19 and will be working from home over the next few days, his office confirmed. Naftali Bennett says he is still feeling fine and will continue with his schedule as planned, after holding a series of in person meetings that included U.S. Secretary of State Antony Blinken. A state department spokesperson has since confirmed that Blinken will be following Centers for Disease Control and Prevention recommendations, such as masking and undergoing appropriate testing. Nearly half of Israel, including Bennett, have received three vaccinations.
- China has announced its largest city-wide lockdown since the pandemic began two years ago. The city of Shanghai has been divided in half for a two-part lockdown which will take place over the course of nine days, as the city carries out mass testing. The eastern part of the city will be locked down from Monday until April 1, while the western part will be locked down from April 1-5. Public transportation will be suspended and companies must stop their operations or work remotely, authorities said. Chinese authorities have avoided lockdowns in Shanghai so far to prevent economic disruption, however, after the city recorded its highest daily number of cases on Saturday since the pandemic’s early days, they appeared to have changed course.
- In Western Australia, Level 2 Covid-19 restrictions will begin to ease from Thursday, amid high vaccination rates and lower than anticipated hospital admissions. Almost three quarters of people aged 16 and older in Western Australia have had three vaccinations. The changes to restrictions will include the abolition of mandatory check-ins, except for venues where proof of vaccination is required. Masks will still need to be worn indoors, and private home gatherings will be limited to 30 people. “Our numbers in hospital remain relatively stable and obviously our number of new cases actually has declined from where it was last week,” Premier Mark McGowan told reporters on Monday.
Covid-19 – Due Diligence And Asset Management
Hedge funds performed well in February despite market turmoil, says PivotalPath
Brief: The PivotalPath Composite Index, a broad measure of overall hedge fund performance, was up 0.3 per cent in February, outperforming most major indices, according to data released by hedge fund research and intelligence specialist PivotalPath. The firm's Dispersion Indicator meanwhile, decreased during the month to 3.8 per cent. The firm writes in its Pivotal Point of Viuerw for March 2022, that strategies able to capitalise on the 'flattening yield curve rally in the energy complex and other factor trends', include Global Macro, Managed Futures, and Equity Quant. Multi-strategy, Managed Futures, Global Macro and Credit were also positive for the month, while commodities, especially oil, reached fresh highs not seen in a decade which, in turn, benefited Global Macro and Managed Futures funds.
U.K. Would Be in Recession Were It Not for Post-Covid Bounce
Brief: A downgrade on that scale “in any ordinary year” would have left the economy in recession, David Miles, head of macroeconomic forecasting at the OBR, told U.K. lawmakers. That would be the third recession in 14 years. Rocketing energy prices are expected to drive the consumer prices index of inflation to a 40-year high of 8.7% later this year and trigger the worst household living standards crisis in over half a century. The economy is still rebounding from the pandemic, having only just recovered the output lost in 2020. That tailwind prevents a downturn. Normally, “if you’d seen the forecast of growth fall by around 2.5%, we would be in recession,” Miles said. Miles said the squeeze “hits consumption and that’s the biggest part of the downgrade in growth … it’s a hit to the standard of living of this country, it is a terms of trade shock. We are spending more on stuff we import and less on stuff we produce in the U.K.”
Investors Exit Istanbul’s Huge New Airport as Virus Halts Growth
Brief: Smaller investors in Istanbul Airport, set to be the world’s highest-capacity hub when completed, have agreed to exit the project after the coronavirus pandemic slowed travel and delayed expected profits. Limak Yatirim Holding AS and Mapa Insaat AS are each selling their 20% stakes in the operating company IGA Havalimani Isletmeleri AS, according to people with direct knowledge of the matter. The two remaining partners Kalyon Insaat AS and Cengiz Insaat AS will raise their holdings to 55% and 45%, respectively, after the transaction, the people said, asking not to be identified because the talks are confidential. Limak, Kalyon and Cengiz declined to comment. Mapa Insaat, owned by Istanbul-based MNG Group, didn’t immediately respond to requests for comment. When signed, the deal will mark the second exit by the original builders that won the rights to build and operate the airport in a joint venture with equal stakes in 2013. Kolin was the first to sell its stake in 2019.
Poor and Rich in U.K. Hit Hardest in Pandemic’s First Year
Brief: Household incomes in the U.K. continued to grow on average in the first full year of the coronavirus pandemic but the poor fared worse than others, official figures show. Adjusted for inflation, the median after-tax income rose by 2% in the year through March 2021 to 31,385 pounds ($41,270), the Office for National Statistics said Monday. It followed a 4.1% gain the previous year. However, the pandemic had a disproportionate impact, with the poorest fifth of the population experiencing a 2% fall in income. Many found themselves furloughed on reduced wages when businesses were shuttered to fight the spread of Covid-19, and an increase in welfare benefits only partially made up for the hit, the ONS said.The richest fifth also lost income, although not to the same extent, and the gap with the lowest-income households remained at almost 50,000 pounds.
China Economy Faces Worst Slowdown Since Pandemic, Nomura Says
Brief: China’s economy faces its worst downward pressure since the spring of 2020 when it was hit by the first wave of Covid-19, according to Nomura Holdings Inc. The slowdown in China’s growth worsened in the first quarter and markets should be concerned about a further slide in the second, Nomura Holdings Inc. economists including Lu Ting wrote in a note Saturday. Economic activities “may notably deteriorate across the board” in March, weighed down by increasing mobility restrictions across the country and a continued property sector slump, they said. With the outbreaks suppressing a wide range of sectors, including in-person services, construction and some manufacturing activity, “it’s getting harder for Beijing to achieve its ‘around 5.5%’ GDP growth target for 2022,” the economists said.
