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Our briefing for Tuesday, August 24, 2021:
Aug 24, 2021 3:27:43 PM
- In the United States, the Food and Drug Administration (FDA) has officially approved the Pfizer-BioNTeech Covid-19 vaccine. It is the first time a Covid-19 vaccine has received approval beyond emergency status since the pandemic began. The decision applies to vaccines for people ages 16 and older, while vaccines for children ages 12-15 remain under emergency authorization. “While millions of people have already safely received COVID-19 vaccines, we recognize that for some, the FDA approval of a vaccine may now instill additional confidence to get vaccinated,” said FDA Acting Commissioner Janet Woodcock.
- In Canada, many major sporting and cultural events will require attendees to be vaccinated or show proof of a negative Covid-19 test. The Blue Jays recently announced that proof of vaccination or a negative test will be required at their baseball games beginning on Sept. 13. The Toronto International Film Festival made a similar announcement, saying it will require proof of vaccination or a negative test for all staff, audience members and visitors. The Calgary Flames are also on board, requesting that all fans and employees be fully vaccinated by Sept. 15 in order to attend events at the Saddledome or McMahon Stadium.
- In the United Kingdom, deaths from Covid-19 are now averaging at 100 per day. According to figures released from Public Health England, the seven-day average for deaths within 28 days of a positive test now rests at 100. After a significant fall in mid-July, case numbers have begun to rise again with 31,914 reported on Monday. Scientists are warning that cooler temperatures brought by the fall and winter, combined with students returning to schools, could further drive up case numbers and deaths. Some scientists have suggested that this could mean the return of social distancing rules and face masks.
- In Japan, the government made an appeal to hospitals in Tokyo to accept more Covid-19 patients. Currently Tokyo hospitalizes fewer than one in 10 patients for coronavirus. "The Delta variant's strong infectiousness just isn't comparable to previous ones," said Health Minister Norihisa Tamura. "We would like to have further support from the medical community to secure hospital beds for coronavirus patients." Japan reported more than 25,000 daily infections in the past week, with only about 40% of the population fully vaccinated. The situation has generated public frustration with Prime Minister Yoshihide Suga and his government’s response to the pandemic.
- New Zealand has extended its nationwide lockdown until midnight on August 27, though Auckland will have restrictions in place until at least August 31. As case numbers jump, the health ministry said in a statement that it would not be unusual to see a rise in daily case numbers at this stage of the outbreak. New Zealand saw the highest increase in cases since April 2020, with 41 new cases recorded, taking the total number of infections in the country to 148. Authorities have said that despite the rising cases, the numbers are not rising exponentially and the majority of cases are still contained in Auckland.
- In Australia, New South Wales (NSW) saw a total of 753 new cases, down slightly from the previous day, as their lockdown continues. NSW Premier Gladys Berejiklian said that officials are in talks about potentially giving more freedoms to vaccinated people. Currently about 30% of Australia’s eligible population is fully vaccinated, while 53% have had at least one shot. The Doherty Institute, the government’s pandemic modelling advisor, said the country can move forward with its reopening plans once 70-80% vaccination levels are reached. “It doesn’t matter whether it’s 30 cases or 800 cases, the conclusions are the same, and that’s what the Doherty Institute said … we can do this safely and we do need to do it,” said Prime Minister Scott Morrison on Nine News.
Covid-19 – Due Diligence And Asset Management
Scotiabank, BMO Earnings Get a Boost From Canada’s Reopening
Brief: Earnings at Bank of Nova Scotia and Bank of Montreal got some help from Canada’s economic reopening. The banks reported fiscal third-quarter results on Tuesday that topped analysts’ estimates on gains in domestic personal and business loans as well as continued strength in the Canadian housing market. That helped make up for slower rebounds in the lenders’ U.S. and international businesses. Canada’s vaccination campaign trailed the U.S.’s by a few months, pushing the revival of activities like restaurant dining and nonessential shopping across much of the country into June. The strong domestic results for Bank of Montreal and Scotiabank likely reflect that “initial jolt” of activity from the early phases of the reopening, said Paul Gulberg, an analyst at Bloomberg Intelligence.“Canada looks fairly decent,” he said in an interview. “You have modest growth in loans, and it looks like it’s in both consumer and business lending, not just the mortgage business.”
Citi Sued for Profiting From Fund’s Demise as Covid Struck
Brief: Citigroup Inc. is facing a lawsuit for pulling support from a European credit fund as the Covid-19 pandemic roiled the markets, then giving its own traders a potential profit at the fund’s expense. The New York-based bank was sued by Ver Capital Partners in London for forcing the fund to default on a 224 million-euro ($263 million) loan in March 2020 and selling linked assets to its trading desk. This liquidation process created a conflict of interest at the bank, while ignoring the chance of better offers from other possible buyers and leaving the fund further out of pocket, Ver said in a legal filing. Citigroup undervalued the assets it sold to the traders, acting “with the intention of generating a profit for itself” at the expense of “the best price reasonably obtainable,” Ver’s lawyers said in the filing made available last week.
Employers ready to embrace remote and hybrid working in post-pandemic years
Brief: Hybrid working looks likely to be the working model of the future, with just three-in-10 employees expecting their workforce back onsite full time in two years’ time, a survey by Willis Towers Watson has found.The majority (85%) of businesses have anticipated that most employees who would like to return to the workplace will have done so by the end of 2021, the insurance company found, however working practices are unlikely to return to their pre-pandemic state. Employers have estimated around a quarter (23%) of the workforce will work remotely on a full-time basis in two years' time, while just more than two-in-five (41%) will embrace hybrid working. Lucie McGrath, director of health and benefits GB at Willis Towers Watson, said hybrid working was here to stay, adding: "We've all weathered a huge amount of change over the last two years. Employers should think carefully about how to support their employees' mental health as we adjust to the new working world."
Morgan Stanley’s Slimmon Says Buy Reopening Before Too Late
Brief: When clients call Andrew Slimmon for advice on how to position their portfolios given the rapid spread of the delta variant, he tells them in no uncertain terms: Prepare for an economic recovery, and soon. Slimmon, who oversees about $7.5 billion at Morgan Stanley Investment Management, says it’s not unusual to see economic hiccups this time of year. Going forward, “people will turn a little bit more optimistic,” which bodes well for equities that have sold off due to Covid-related worries. Rates could bottom in the coming months and recover in the fourth quarter as well, he added.“The opportunity set is in those stocks that got hit the most, namely the cyclical stocks, the energy stocks, the reopening stocks -- those are the ones that are down the most,” he said in an interview.
Cramer says people were ‘desperate’ to buy stocks after FDA’s Pfizer vaccine approval
Brief: The rally on Wall Street after Pfizer’s Covid vaccine received full approval from the Food and Drug Administration showed “people are desperate to get into stocks,” CNBC’s Jim Cramer said Monday. “You rarely see a market that’s this straightforward, but anything with any cyclicality roared today on the Pfizer story,” the “Mad Money” host said. The S&P 500 advanced 0.8% to close at 4,479.53, while the Dow Jones Industrial Average added 215.63 points, or 0.6%, to finish at 35,335.71. The tech-heavy Nasdaq outperformed, rising 1.5% to close at 14,942.65. “What’s the market telling us here? ... It’s saying that people are desperate to get in, desperate to buy stocks even if they have to pay up. Now there’s a word for these gains, and that word is obvious,” Cramer said.
