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Our briefing for Thursday, January 27, 2022:
Jan 27, 2022 3:25:20 PM
- The United States has donated over 400 million doses of Covid-19 vaccines to 112 countries around the world. White House response coordinator, Jeff Zients, said that the U.S. has donated four times more vaccines than any other country. The Biden administration has set a goal of 1.2 billion doses to be sent to developing nations struggling to secure vaccines on their own. Zients continued that 70 per cent of seniors in the U.S. have received a booster shot, and just over 50 per cent of eligible adults have received a third dose. “This is significant progress, as the doctors and data have made crystal clear. Vaccinations and boosters provide the best protection,” Zients said. The number of cases over the last week has dropped to approximately 692,400, a 6 per cent decrease from the week previous. However, the number of deaths has risen 21 per cent to an average of 2200 a day. “This data demonstrates that Covid-19 disease severity appears to be lower with the Omicron variant than with prior variants,” said Dr Rochelle Walensky, director of the Centers for Disease Control.
- Canadian Prime Minister Justin Trudeau is isolating after being exposed to Covid-19. In a tweet posted on Thursday morning, the prime minister said that although he tested negative on a rapid test, he will continue to isolate for 5 days to comply with local public health regulations. “I feel fine and will be working from home,” Trudeau said. “Stay safe, everyone -- and please get vaccinated.” The exact source of the exposure has not been released, however, Trudeau appeared with Finance Minister Chrystia Freeland, Foreign Minister Melanie Joly and Defense Minister Anita Anand at an in-person news conference on Wednesday. The government said that the exposure was in the afternoon, after the conference. It is not yet clear whether the other members of cabinet are also isolating. Joly has recently recovered from Covid-19 after testing positive on a rapid test on December 20th, 2021.
- The United Kingdom reverted to “Plan A” Covid-19 measures on Thursday, signaling an end to restrictions that have been in place for a large part of the pandemic. The requirements for masks to be worn in public spaces and the use of vaccine passports for large scale gatherings are now a thing of the past. The government has also rescinded the call to work from home where possible, allowing much of Britain’s work force to return to their offices. Venues hosting large groups of people will still be able to require an NHS Covid Pass showing proof of vaccination, but that decision will now be voluntary. “Our vaccines, testing and antivirals ensure we have some of the strongest defences in Europe and are allowing us to cautiously return to Plan A, restoring more freedoms to this country,” said UK Health Secretary Sajid Javid. The rollback of restrictions comes with a new “Get Boosted Now” campaign from the government. “As we learn to live with COVID we need to be clear eyed that this virus is not going away so if you haven’t already – please come forward for your first, second or booster jab,” Javid said.
- Italy will ease Covid-19 restrictions for all travelers coming from the European Union on February 1st. Italian Minister of Health, Roberto Speranza, said on Wednesday that those entering the country will now only require a “green pass” which is effectively a vaccine passport showing proof of vaccination, previous infection, or a negative test. On December 14th, Italy had ruled that anyone entering the country will be required to test before arrival, despite wider easement of regulations across the bloc. In September, Italy created tourist-corridors which allowed Italians to travel several tourist destinations without the need to isolate upon return. Such destinations included the Maldives, Seychelles, and Mauritius among others. On February 1st, more destinations will be added to list including Cuba, Singapore, Turkey, and Thailand. On Wednesday, Italy reported 167,206 new cases of Covid-19 and 426 deaths, down from 468 the day before.
- Japan recorded over 70,000 new cases of Covid-19 on Thursday, breaking its previous record for a third day in a row. The country recorded just under 79,000 new cases on Thursday with Tokyo recording 14,086, 2000 more than the previous day. Tokyo Governor Yuriko Koike said that hospitals are at 44.4 per cent capacity and that the city will enact a state of emergency if bed capacity reaches 50 per cent, which is likely to happen in the coming days. Cases hit a record high in 33 of Japan’s 47 prefectures in the last week and several areas are being monitored closely by government officials. The country had seen relatively low numbers of cases until recently and Tokyo is quickly becoming the epicenter of the outbreak. There are currently 18 people in intensive care units, although it is not yet clear whether those patients are suffering from the Omicron or Delta variants. The number of daily cases in Tokyo have doubled in the last week, and three more deaths were recorded in the capital on Thursday.
Covid-19 – Due Diligence And Asset Management
Fed Signals Liftoff ‘Soon,’ Sees Asset-Reduction Start Afterward
Brief: The Federal Reserve signaled it will start raising interest rates “soon” and shrink its bond holdings after liftoff has begun, moving toward ending ultra-easy pandemic support to fight the hottest inflation in a generation. “With inflation well above 2% and a strong labor market, the committee expects it will soon be appropriate to raise the target range for the federal funds rate,” the Federal Open Market Committee said in a statement Wednesday following a two-day policy meeting. In a separate statement, the Fed said it expects the process of balance-sheet reduction “will commence after the process of increasing the target range for the federal funds rate has begun.” The pivot, against a backdrop of turmoil in stocks, comes amid consumer inflation readings that have repeatedly surprised and hit 7% — the most since the 1980s — and a tight labor market that’s pushed unemployment down faster than anticipated to almost its pre-pandemic level.
From BlackRock to Vanguard, Managers Move Before Powell Speaks
Brief: While the financial world waits for the Federal Reserve’s announcement on monetary policy Wednesday afternoon in Washington, some of the biggest bond-fund managers have already made their moves. They anticipate Fed Chairman Jerome Powell will confirm their expectations, based on his determined signaling that rates will rise for the first time since 2018, likely starting in March, to combat the fastest inflation in four decades. With the economy recovering from the pandemic’s disruptions, everyone knows the central bank at some point will withdraw a lot of the bountiful liquidity its provided through quantitative easing. In advance of Fed action, Vanguard Group Inc. is looking at floating-rate debt, BlackRock Inc. is heading toward neutral duration, and Pacific Investment Management Co. sees some attractive reopening trades in fixed income. Here’s what people handling trillions of dollars in assets under management expect to hear from Powell, and what they’re doing about it.
JPMorgan Executives Ousted in a $200 Million Probe Land New Jobs
Brief: Wall Streeters shuddered as the news broke last year that U.S. regulators were examining whether bank employees were using personal phones to text about business with each other and clients -- a rule that just about everyone seemed to be breaking. Yet for those quietly worrying, there’s a silver lining emerging: It doesn’t appear to be a career killer. Shortly after being ousted over the scrutiny, a trio of executives from JPMorgan Chase & Co. -- the first bank hammered by authorities in the widening probe -- landed new jobs in the industry. The firm itself paid $200 million in fines for its surveillance lapses. Ben Sykes, an executive director who left last year, landed at competitor Jefferies Financial Group Inc. in September, according to records filed with brokerage regulators. Earl Dowling, a former managing director who people familiar with the matter say was also was pushed out, started this month at investment banking boutique PJT Partners Inc.
U.S., Other ‘Populist’ Nations Mishandled Pandemic, Study Says
Brief: The U.S., Britain, Brazil and other nations with “populist” governments mishandled the Covid-19 pandemic in 2020 and caused unnecessary deaths with relatively lenient policies, according to an academic research paper. Excess mortality -- the number of deaths beyond those that could be expected without the pandemic -- was more than twice as high on average in populist-governed countries, Michael Bayerlein, a researcher at the Kiel Institute for the World Economy and one of the authors of the paper, said Thursday in a press release. The main reason for the difference was that “citizen mobility” -- measured using Google data on the number of people in places like grocery stores or parks -- was higher in populist countries at similar infection rates, the study showed. Excess mortality was 18% in populist-led countries and 8% in non-populist nations.
3 reasons why private equity will enable the post-pandemic economy
Brief: For three-quarters of a century, small and medium-sized enterprises (SMEs) have been the growth engine of the global economy. In recent years, they have created 62% of net new jobs in the US, and even more in developing economies. There is little doubt that as we emerge from the COVID-19 pandemic, any meaningful and sustainable economic recovery will again be driven by SMEs. However, this crisis has been like nothing in recent history – the whipsawing of real US GDP from a negative 36% in the second quarter of 2020 to a positive 30% in the third quarter has no parallel in modern economic history. Given the magnitude of the disruption, it is testimony to how resilient our economic systems are. However, three trends stand out in affecting SMEs disproportionately, and therefore threatening their role as economic growth engines.
