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Our briefing for Thursday, September 9, 2021:
Sep 9, 2021 4:40:31 PM
- In the United States, children are being hospitalized for Covid-19 at alarming rates, just as schools reopen and temperatures drop. The latest available data from the U.S. Department of Health and Human Services shows that 2396 children were hospitalized with the virus as of Tuesday, a record high. According to the American Academy of Pediatrics, children now make up more than 26% of new Covid-19 cases in the U.S. Many of the children being hospitalized had no pre-existing conditions. Experts say it’s important to protect children from the delta variant, to prevent further spread and to maintain classroom learning.
- In Canada, a new online poll suggests that support has increased in Alberta for vaccine passports, despite the province’s premier opposing them. In Alberta, 54% of people who responded to the survey support mandatory proof of vaccination for public activities. While several provinces, including British Columbia, Ontario, Quebec and now Nova Scotia, have opted to bring in vaccine passports, Alberta Premier Jason Kenney maintains that they would interfere with the province’s Health Information Act. He instead announced last Friday that he would offer $100 incentives to help encourage people to get vaccinated.
- In the United Kingdom, the Joint Committee on Vaccination and Immunisation (JCVI) is scheduled to meet to make a decision about the Covid-19 booster program. A week ago, the JCVI approved boosters for people with weakened immune systems, but this is separate from a formal booster program. The leader of the World Health Organization (WHO), Director-General Tedros Adhanom Ghebreyesus, is calling for another moratorium on booster shots, this time through to the end of the year. “A month ago, I called for a global moratorium on booster doses, at least until the end of September to prioritize vaccinating the most at risk people around the world who are yet to receive their first dose,” Tedros said. “There has been little change in the global situation since then.”
- In South Korea, the government is concerned about eroding vigilance as the country deals with a surge in cases. According to Korea’s Disease Control and Prevention Agency (KDCA), Seoul reported more than 2100 new infections in the past 24 hours. Despite the rise in case numbers, officials announced on Wednesday plans to lift restrictions and reopen once enough people have been vaccinated. The health ministry said with the current vaccination levels, the target of 80% will likely be hit in late October. As of Tuesday, about 42.6% of adults in South Korea had been fully vaccinated.
- In Japan, authorities have extended a state of emergency in Tokyo and other regions until the end of this month. The extension is intended to help avoid hospitals becoming overwhelmed, despite the fact that cases are falling and vaccinations are rising. "Inoculation of all those who wish to be vaccinated will be completed in October or November," Prime Minister Yoshihide Suga told reporters. "And from then, we will be able to ease restrictions by using proof of vaccination or testing results." Japan’s emergency restrictions are based around restaurants closing early and not serving alcohol.
- In Australia, New South Wales (NSW) unveiled its reopening plan, with the lockdown expected to ease next month provided enough people are vaccinated. State Premier Gladys Berejiklian did not provide a date for the reopening but said it would happen the first Monday after the 70% vaccination target is reached. Right now, about 43% of adults in NSW are fully vaccinated while 75% have had at least one dose. NSW reported 1405 new Covid-19 cases and five new deaths, while neighbouring Victoria state reported 324 new cases, its highest figure since August 2020.
Covid-19 – Due Diligence And Asset Management
The Pandemic Has Made Europe’s Top Executives Smarter… and Humbler
Brief: As the world slowly begins to shake off the unprecedented effects of the Covid-19 pandemic, corporate executives around the globe have been forced to grapple with challenges that even the most forward-thinking business leaders couldn’t have imagined just two short years ago. For many of the top-scoring chief executives in Institutional Investor’s 2021 All-Europe Executive Team, supply-chain issues top the list. “Supply chains around the world are in significant disarray,” said Nestlé’s Ulf Mark Schneider, the top-ranked chief executive in the food sector. “The consequences are rising raw material and freight costs.” Schneider said that the secret to overcoming these issues — and coping with an uncertain geopolitical environment — lies in increased agility and flexibility. For him, that’s not about knowing all the answers, but knowing he can delegate decisions to those who do: “We rely strongly on our people in the markets to know the best way to deliver for consumers, the company and society.”
Wall Street turns higher after jobless claims hit new pandemic-era low
Brief: Stocks rose on Thursday, with Wall Street hoping to stave off a 4th consecutive day off losses as investors struggle to reconcile a still hot jobs market with an economy that's had its momentum dented by soaring COVID-19 infections. On Wednesday, the Dow Jones Industrial Average and S&P 500 Index posted their 3rd consecutive day of losses, and the technology-laced Nasdaq fell for the first time since last week. The market has mostly taken disappointing news in stride, but August's jobs data falling far short of market expectations last week tempered hopes for the fourth quarter.Separately, however, Labor Department data showed that open jobs hit yet another series record, with workers quitting their jobs en masse, and nearly 11 million positions unfilled. On Thursday, new jobless claims set a new pandemic era low at 310,000, temporarily allaying fears about the economy.
Goldman Sachs Ends Social Distancing, Free Food in London Office
Brief: Goldman Sachs Group Inc. is dropping social distancing rules in its London office and will return to full occupancy starting next week. With the “vast majority” of staff in the U.K. fully vaccinated, Goldman is already seeing about half of its London workers in the office each day, according to an internal memo seen by Bloomberg News. “We encourage those of you who have not yet had the opportunity to be in the office to speak to your manager about doing so,” the memo said. The bank will keep mask wearing in common areas and a mandatory testing program in place. Goldman is also ending free meals in the office from Sept. 20 “ to encourage support of the local restaurants and businesses reopening around us.” The move was first reported by Financial News.
Deep Dive: Absolute return managers adjust to the 'pandemic paradigm'
Brief: In 1837 Hans Christian Andersen wrote a folktale entitled The Emperor's New Clothes which always seems to come to the forefront when modern day markets' behaviour deviates from academic investment reason. Since March of 2020, when markets reeled from the pending pandemic effect on global economies, world governments have used record amounts of monetary and fiscal stimulus to attempt to shore up the world economy. While market crises have largely been avoided, the sheer size of the coordinated effort has led asset prices to surge, in some cases diverging from any fundamental valuation, at least relative to historical levels/multiples.
Muni-Bond Ratings Hit as Delta Derails Tourism Industry Revival
Brief: The persistence of the pandemic is dealing a fresh financial hit to corners of the municipal-bond market. As the strength of the tourism revival is restrained by the surge in the delta variant, S&P Global Ratings this month downgraded bonds partly backed by hotel-room revenue in Anaheim, California, the home of Disneyland. Bonds issued for New York’s Jacob K. Javits Convention Center had their rating cut by Moody’s Investors Service, with the trade association business plunged back into uncertainty. And Fitch Ratings knocked down its grade of the subway system serving San Francisco, the tech industry hub where companies have been kicking back the timeline for returning to the office.“Whether you take a vacation is one of the most discretionary choices you have,” said Dora Lee, director of research at Belle Haven Investments, which oversees $15.4 billion in investments.
