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Our briefing for Thursday, December 23, 2021:
Dec 23, 2021 4:40:47 PM
- In the United States, the president of the country’s largest flight attendants union has called a request by Delta Air Lines CEO for federal health officials to reduce the recommended quarantine time for breakthrough COVID-19 cases, the “wrong move”. Earlier in the week, Delta CEO Ed Bastian wrote to Centers for Disease Control and Prevention (CDC) Director Dr. Walensky, urging the agency to cut the time quarantine time in half to five days, saying longer quarantine times are hurting the industry. Sara Nelson, president of the Association of Flight Attendants (AFA) told CNBC a decision like that “may put flight attendants in a position to be forced to come back before they feel better.” The AFA represent 50,000 flight attendants across more than a dozen airlines, but Delta isn’t one of them as their attendants aren’t unionized.
- In Canada, the Omicron is taking hold in the country’s two most populous provinces. In what is likely to become a reoccurring theme over the next several days, Ontario and Quebec set new daily records for daily reported COVID-19 cases on Thursday. Ontario reported 5,790 new cases, a tally well above the previous record of 4,812 recorded back in April and the Quebec government reported 9,397 new cases – another daily record. Health officials in Montreal – Quebec’s largest city – said one of every five Montrealer’s getting tested for COVID-19 were getting a positive result and 90% of those infections were the Omicron variant.
- In the United Kingdom, it appears Prime Minister Boris Johnson doesn’t want any tabloid pictures of him being characterized as the Grinch. With the UK reporting yet another daily record on Thursday for daily COVID-19 cases at just over 119,000, the BBC is reporting the prime minister is standing firm to not announce any more restrictions until at least early next week. Earlier in the week, Prime Minister Johnson took to British airways and stated fresh curbs wouldn’t be brought in ahead of December 25th, but now the hospitality industry wants to see a clear plan on what New Year’s Eve plans will look like as initial studies from government scientists have claimed the Omicron variant of COVID-19 is milder than Delta.
- France now can be added to the list of countries setting new daily COVID-19 case counts, thanks to the Omicron variant. French public health officials recorded 91,608 new cases on Thursday, surpassing the previous high of almost 87,000 from November 2020. Health Minister Olivier Veran has his eyes focused on the UK for trends in the variant spread as their country is 10 to 14 days ahead of France in terms of virus progression. France’s hospitalizations and intensive care unit admissions have been rising, but not as quickly as cases and are remaining well below previous pandemic peaks.
- With China set to host the Winter Olympics in just a few short weeks, the country is taking no chances, plunging a city of 13 million into lockdown on Thursday to avoid an increase in COVID-19 infections. The restrictions, located in the northeastern city of Xi’an, took effect at midnight Wednesday, with no word on when they will be lifted. The restrictions placed on Xi’an are some of the harshest since China shut down a city of more than 11 million people, in and around the city of Wuhan, where the coronavirus was first detected in late 2019. China’s capital city – Beijing - are hosting the Winter Olympic Games, set to start on February 4th, 2022.
Covid-19 – Due Diligence And Asset Management
Here Are the Hedge Fund Surprises From 2021
Brief: Private equity real estate investors are raising money faster than they can spend it. U.S. funds have amassed a record $287.8 billion for commercial-property deals, according to Preqin. That’s up 11% from a year earlier and 57% more than at the end of 2019. The pileup of capital affirms the bet that real estate’s rally will continue while inflation rises, stocks wobble and bond returns lag -- and despite new Covid 19 variants that could threaten a comeback for offices, hotels and malls. U.S. property investment volume is expected to rise by 5% to 10% next year as firms try to spend down their dry powder, according to CBRE Group Inc. Private equity giant Blackstone Inc. raised $33.5 billion for real estate deals in the first three quarters of this year while deploying only $25.3 billion. The challenge is that clients -- pensions, endowments, high-net-worth individuals -- are hungry for more. “Investors view real estate as a safe place to be in an inflationary and low-rate environment,” Nadeem Meghji, Blackstone’s head of America’s real estate, said in an interview. The volume of cash chasing deals helped drive up U.S. commercial-property prices an average of 18% in the 12 months through November, led by a 22% jump in warehouses and other industrial real estate, according to Real Capital Analytics Inc. An expected surge of distressed deals hasn’t materialized, freezing deployment of more than $91 billion in dry powder.
Morgan Stanley Tells Staff to Wear Masks, Limit Big Meetings
Brief: Morgan Stanley told employees who have to be in the office through the first two weeks of January to wear face coverings when not at their desks and limit large in-person meetings. “This guidance applies to all locations (even those where everyone is fully vaccinated),” the New York-based bank said in a memo to staffers this week. “Masking is always encouraged for anyone who is at increased risk or who has a household member who is unvaccinated or at increased risk.” A Morgan Stanley representative declined to comment. A surge in Covid-19 increases worldwide amid the rise of the highly contagious omicron variant has led Wall Street firms and other companies to rethink their return-to-office plans. Citigroup Inc. last week told staffers in the New York metropolitan area they could work from home again through the holidays if they are able. Earlier this month, Jefferies Financial Group Inc. asked its employees to work remotely and get a vaccine booster by the end of January, and Chief Executive Officer Rich Handler self-quarantined after testing positive for Covid-19 himself.
U.S. Consumer Spending Buffeted by Fastest Inflation in Decades
Brief: U.S. consumers took a breather in November a month after an early holiday spending surge, but that pause risks becoming more lasting if Americans pull back when faced with both the fastest inflation in decades and the omicron variant. Purchases of goods and services, after adjusting for higher prices, were little changed following a solid 0.7% gain in October. The government’s figures were the marquee of a pre-holiday burst of economic reports Thursday that showed stronger orders for durable goods, increased new-home sales and firmer consumer sentiment. Underlying the spending figures are a series of crosscurrents. Buffeted by headlines about snarled supply chains, many Americans started their holiday shopping earlier than usual this year, helping to explain the strong advance in the prior month. But consumers are also facing the fastest inflation in decades. With every trip to the grocery store and gas pump eating away a little more of their paychecks, people have less left over for discretionary purchases. And the new omicron variant of Covid-19 threatens to curb the incipient rebound in outlays for services.
Canada’s Economy Grows for Sixth Straight Month in November
Brief: Canada’s economy was humming in the final weeks of 2021 at about pre-pandemic levels, before the country was hit by a wave of Covid-19 cases and fresh lockdowns. Gross domestic product rose by 0.3% last month, extending the streak of monthly gains to six, according to a preliminary estimate from Statistics Canada published Thursday. In October, the economy expanded by 0.8%, the agency said. The gains brought GDP back to about where it was before the crisis hit, amid a strong second-half rebound that came after authorities lifted most Covid restrictions. Some of those restrictions are returning because of the fast-spreading omicron variant. “Overall, these figures are stale in that they speak to conditions before uncertainties related to omicron,” Derek Holt, an economist with Bank of Nova Scotia, said by email. According to Bloomberg calculations, output in November hit levels just shy of where it was in February 2020, before the start of the pandemic. Growth is on track to reach nearly 6% annualized in the fourth quarter, similar to the strong levels recorded in the third quarter.
It’s Time to Stop Forcing Vaccinations, Living in ‘Fear of COVID,’ Hedge Fund Manager Says
Brief: Hedge fund manager Bill Ackman exhorted social media users to stop living in “fear of COVID.” Ackman — who leads the firm Pershing Square Capital Management — responded to a tweet from American Enterprise Institute senior fellow Scott Gottlieb, who noted that there is a “striking decoupling” between deaths and cases due to the advent of the Omicron variant of SARS-CoV-2, the virus that causes COVID-19. “We have reached the stage in the Covid crisis where our attention needs to focus on severity and protecting those who are vulnerable rather than case counts,” Ackman said. “While unvaccinated Americans are still at risk, the vax decision is a personal one. We need to give the healthcare system the resources it needs, and we need to start living again.” “It appears that Omicron will ‘vaccinate’ everyone who isn’t already vaccinated. Let’s protect the vulnerable and continue to live our lives. The beginning of the end of living in fear of Covid is near,” Ackman added in a follow-up tweet.
