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Our briefing for Thursday, February 10, 2022:
Feb 10, 2022 4:25:28 PM
- In the United States, more and more states are making it clear they aren’t waiting for Washington for guidance on how the country will emerge from the latest forms of pandemic restrictions. On Thursday, Nevada was the latest state to drop their mask mandate, effective immediately. President Biden’s administration has long promised to “follow the science” in confronting the pandemic but is currently between a rock and a hard place, waiting on fresh guidance from federal health officials. So far, the Centers for Disease Control and Prevention are still recommending that nearly all Americans wear masks in most indoor settings. However, even Democratic states such as New York, New Jersey and Connecticut aren’t waiting – loosening mask restrictions for most public indoor settings earlier in the week.
- Canada’s border blockades over COVID-19 restrictions are continuing to last, expanding to other provinces and now angering their neighbours south of the border. Michigan Governor Gretchen Whitmer is urging Canadian authorities to step-in on their side of the Ambassador Bridge, which connects Detroit to Windsor, and is one of the busiest land border crossings in North America. “My message is simple: reopen traffic on the bridge,” Whitmer said in a statement. The bridge closure has negatively impacted the economy, including the automotive, agriculture and manufacturing sectors on both sides of the border. Canada’s national capital Ottawa is about to enter its third weekend of protests, while border protests persist in Ontario, Alberta and now demonstrators have set-up at the Manitoba/North Dakota border.
- In the United Kingdom, Prime Minister Boris Johnson continues to face criticism over his role in “partygate”. Currently in Poland, reporters peppered the prime minister with questions on whether parties held in 10 Downing Street during lockdown had “shredded” Britain’s diplomatic reputation. “That is demonstrably untrue,” said Johnson. Pressed on whether he had broken his own party’s lockdown rules, Johnson replied, “I’m going to have plenty to say on that in due course.” Making a speech in London, Sir John Major, the country’s former prime minister, lashed out in a wide-ranging attack on Prime Minister Johnson saying his ministers have had to “defend the indefensible” and believed Johnson and his team had broken the law with their parties and their response has left the government looking “distinctly shifty.”
- Looking to avoid the mistakes made in Canada, authorities in France and Belgium on Thursday banned road blockades threatened by groups organizing online against COVID-19 restrictions. Paris and Brussels officials citing “risks of trouble to public order” banned protests aimed at “blocking the capital” from Friday through Monday. Paris police will put measures in place to protect roads and detain violators. Blocking traffic can lead to two years in prison, €4,500 in fines and a suspended driver’s license, the police department said in a statement.
- The Philippines have lifted a nearly two-year ban on foreign travelers on Thursday. Foreign travelers from 157 countries with visa-free arrangements with the country and who have been fully vaccinated against COVID-19 and tested negative for the virus will be welcomed back. They also no longer need to quarantine upon arrival. The Philippines imposed one of the world’s longest and strictest lockdowns, which has caused the worst economic recession since the 1940s and has pushed unemployment and hunger to near record levels.
- Japan has granted fast-track approval for Pfizer’s COVID-19 pill, the country’s health minister announced on Thursday. The approval is much faster than what Japan would normally ever allow when it comes to foreign drug approvals, since Pfizer only applied in mid-January. However, the country is struggling to contain fast-spreading omicron infections with most of Japan’s 47 prefectures under a mild version of a state of emergency. Prime Minister Fumio Kishida announced plans to extend current COVID-19 restrictions in Tokyo and 12 other areas for three more weeks until March 6th. Kishida said the country has secured 2 million doses of the Pfizer pills with distribution set to begin on Monday.
Covid-19 – Due Diligence And Asset Management
Inflation Surges 7.5% on an Annual Basis, even more than Expected and Highest Since 1982
Brief: Consumer prices surged more than expected over the past 12 months, indicating a worsening outlook for inflation and cementing the likelihood of substantial interest rate hikes this year. The consumer price index for January, which measures the costs of dozens of everyday consumer goods, rose 7.5% compared with a year ago, the Labor Department reported Thursday. That compared with Dow Jones estimates of 7.2% for the closely watched inflation gauge. It was the highest reading since February 1982. Stripping out volatile gas and grocery costs, the CPI increased 6%, compared with the estimate of 5.9%. Core inflation rose at its fastest level since August 1982. The monthly CPI rates also came in hotter than expected, with headline and core CPI both rising 0.6%, compared with the estimates for a 0.4% increase by both measures.
Oil Gains on Traders Pouring into Commodities as Inflation Hedge
Brief: Oil recovered from earlier losses as soaring U.S. consumer prices prompted traders to pour into commodities as a hedge against inflation. Futures in New York rose as much as 2.3% on data that showed U.S. inflation rose to a four-decade high. Central banks are under pressure to tame higher consumer prices, boosting the chances of further interest-rate hikes. While equities dropped after the U.S. data was released, oil is viewed as a safer bet as the dollar loses purchasing power. “When you have an inflationary period, that’s generally good for commodities,” said Stewart Glickman, energy equity analyst at CFRA Research in New York. “As a physical commodity, oil tends to hold its value better. Oil and gold are now seen as safer havens while other assets are being inflated out.” Also keeping crude afloat are the market’s consistent signals of tight supplies. U.S. crude stockpiles fell to the lowest since 2018 last week. Geopolitical tensions remained a supportive factor as Russian forces started joint military exercises in Belarus that include drills near the border with Ukraine.
Only 25 per cent of the Biggest Chinese Quant Hedge Funds Made Money in Q4 2021
Brief: Only seven of the 28 largest Chinese quant hedge fund managers – those managing more than CNY10 billion – generated positive returns in the last quarter of 2021, according to a report in The Wall Street Journal. High-Flyer Quant took the biggest hit losing an average of more than 11 per cent across its funds and made a public apology to investors as a result, citing problems with its algorithms and rapid industry growth for the setback. By comparison, seven of the 28 generated cumulative returns of more than 100 per cent over the past three years according to fund distributor Simwuang. And the company predicts that as Chinese quants increasingly trade against each other, the opportunities to generate excess returns will dwindle.
Integrating Hybrid Services Could Transform the Advice Industry
Brief: After the long slog of the pandemic, we were hoping we would be able to welcome some of our clients in person at our annual conference last week. In fact, we had planned ourfirst ever hybrid conference, with attendees joining us in London and more participating remotely from their homes and offices. But as we have learnt repeatedly over the past couple of years, the virus has no respect for our plans. When Omicron hit and the government confirmed the extension of plan B measures in early January, we reluctantly took the decision to move the whole thing online. Fortunately, another thing that has happened over the past couple of years is that technology has made advances that might otherwise have taken a decade. I cannot deny that the experience of speaking on stage in an almost empty auditorium was a strange one. But, thanks to innovations made by our virtual event partner, many of the small but vital interactions that delegates experience when they attend conferences in person were still possible. Almost four times as many delegates attended online as could have been accommodated in the venue.
Wells Fargo asks Employees to Return to Office in Mid-March
Brief: Most of Wells Fargo & Co's employees, including those in customer-facing roles, will return to their offices on March 14 and work under a hybrid flexible model, according to a company memo seen by Reuters on Wednesday. The bank had delayed plans to bring its staff back to the office in December, citing "changing external environment" amid the spread of the Omicron coronavirus variant. At the time, it had said it would announce plans for a full return in the new year. The San Francisco-based bank's announcement comes a little over a week after Goldman Sachs Group Inc ushered its U.S.-based staff back to the office with several of its rivals set to follow a similar return this month as the number of COVID-19 cases drop. Contact center employees and those in operations will return shortly after staff employees resume work from office, the memo said, adding that there is no change to the work schedules for essential employees.
