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Our briefing for Tuesday, August 31, 2021:
Aug 31, 2021 3:54:34 PM
- The United States is urging its citizens to avoid travel to Canada because of high risks of Covid-19. The Centers for Disease Control and Prevention (CDC) issued the advisory on Monday, putting Canada at a Level 3 which indicates high levels of the virus in the country. Earlier this month, the U.S. made the decision to keep its land border closed to non-essential Canadian travellers until at least Sept. 21, due to concerns about the delta variant. About 61% of eligible adults in America are fully vaccinated, compared with 75% of Canadians over age 12.
- In Canada, the city of Edmonton is reinstating its mask rules, after the city council voted in favour of extending and fortifying a bylaw. Residents will now have to wear masks in all indoor spaces, including on public transit, in taxis and ridesharing vehicles. The bylaw comes into effect on Friday. Meanwhile in Saskatchewan, Premier Scott Moe has dismissed the call for provincial vaccine passports, calling them a “heavy-handed approach.” Speaking at a news conference on Monday, Moe said his government will work with those businesses and workplaces that require proof of vaccination. “It won’t be the government that comes out and forces such a policy,” he said.
- In the United Kingdom, Britain has reported its lowest number of new Covid-19 cases in almost three weeks. According to government data, there were 26,476 new Covid-19 cases reported on Monday, the lowest number since August 10. According to a recent study by Public Health England (PHE) and Cambridge University, those infected with the delta variant are twice as likely to be hospitalized as those with the alpha variant. The study looked at healthcare data from 43,338 positive coronavirus cases in England and confirmed they were either the delta or alpha variant through genome sequencing.
- Italy has eliminated the need to quarantine for fully vaccinated travellers from the U.K. Under the previous rules, travellers were required to show a negative Covid-19 test, self-isolate for five days on arrival and then take another test to be released from quarantine. The new rules will require travellers to have received a second dose of vaccine at least 14 days prior to arriving, or to have a negative Covid-19 test 48 hours before arriving in order to skip the self-isolation. Italy’s existing restrictions for travellers from other countries will remain in place.
- Japan will consider mixing doses of different vaccines in an effort to speed up its vaccination campaign. On Sunday the minister in charge of vaccinations said he asked the health ministry to look into the use of the AstraZeneca vaccine paired with a second shot of Pfizer of Moderna. This could speed up the vaccination campaign by shortening the intervals between the first and second shots when using the AstraZeneca vaccine (AstraZeneca has a longer waiting period between doses). Japan’s vaccination rollout has been sluggish, with only about 43% of the population fully vaccinated.
- Australia’s capital city of Canberra has extended a lockdown for another two weeks as the city struggles to contain the delta variant. Canberra reported 13 new cases in 24 hours. Meanwhile in neighbouring Victoria state, 76 new cases were reported, up slightly from 73 reported the previous day. State Premier Daniel Andrews is expected to make an announcement about the current lockdown on Wednesday, although he did say that too many people are unvaccinated for restrictions to significantly ease. Australia has used a series of strict lockdowns and quarantines to try to contain the spread of the delta variant, but has struggled with a slow vaccine rollout.
Covid-19 – Due Diligence And Asset Management
U.S. Consumer Confidence Falls to Six-Month Low on Delta Variant
Brief: U.S. consumer confidence dropped in August to a six-month low, suggesting concerns over the delta variant and elevated prices are weighing on Americans’ views of the economy now and in the coming months. The Conference Board’s index fell to 113.8 from a revised 125.1 reading in July, according to the group’s report Tuesday. Economists in a Bloomberg survey had called for a decline to 123. The figures suggest the spread of the delta variant has dented consumers’ views of the economy and threatens to undermine spending on services. The latest spike in Covid-19 infections has already curbed restaurant reservations, airline travel and hotel occupancy. At the same time, Americans are paying more at the grocery store and at the gas pump, which may be further weighing on sentiment.
What data can teach us about the post-Covid travel industry recovery
Brief: Covid-19 has accelerated many behavioural changes for consumers. But one tradition – vacations – is highly unlikely to change. If anything, we believe the suppressed travel of the last 18 months is likely to give way to a travel boom when people feel safe to get back on trains and planes and to stay in hotels. However, the recovery of travel around the world is unlikely to be uniform. But with the help of big data, we can observe how vacation appetites are playing out in real time this summer and develop actionable investment insights. Travel has recovered in fits and starts so far. In the US, a major milestone was reached over the July 4 holiday as passengers screened at US airports exceeded pre-pandemic levels for the same week in 2019. Hotel bookings confirm the US recovery as higher prices at US hotels have helped offset volumes that remain slightly below 2019 levels.
European Stocks Steady Amid Optimism Over Pandemic and Policy
Brief: European stocks edged higher on Tuesday, on the cusp of their longest monthly win streak since 2013 amid a brightening outlook for risk assets on the policy and pandemic fronts. The Stoxx 600 Index was up 0.1% at 8:17 a.m. London time, with gains led by miners, technology stocks and autos. The FTSE 100 Index was little changed following a U.K. holiday on Monday. While risks such as China’s regulatory crackdown and the early withdrawal of stimulus have haunted markets recently, Friday’s speech from Federal Reserve Chair Jexrome Powell reassured investors that the central bank was in no rush to raise rates. Coupled with Europe’s vaccination push to curb the spread of the coronavirus, the backdrop for equities is looking rosier heading into September. The region’s equity benchmark is set to post a gain of about 2.4% for August, during which it hit a series of record highs.
Stocks wobbly after hitting record; dollar falls
Brief: Stocks fluctuated as traders assessed whether lofty valuations can withstand the unwinding of pandemic-era stimulus. The S&P 500 edged lower after hitting its 12th all-time high in August, while European shares retreated as a governing member of the region’s central bank said it may be time to discuss the bond-buying program. Investors also sifted through data showing a drop in U.S. consumer confidence, the biggest jump in home prices in more than 30 years and signs of a slowdown in Chinese growth. The dollar declined. American equities still headed toward their seventh straight monthly advance -- the longest winning streak since January 2018 -- amid a tonic of strong corporate profits and moderate monetary policy. The rally is stirring doubts, with warnings mounting over a slower economic recovery as the delta coronavirus variant delays reopenings in some parts of the world.
City Centers Are Bouncing Back from the Pandemic Lows
Brief: One of the major lifestyle trends emerging from the pandemic has been movement out of cities to smaller suburban or rural locations. U.S. Postal Service change-of-address data showed that in the February – July 2020 period, New York City saw a 487% increase over 2019 in change of address forms to other locations. Chicago saw its change-of-address requests double from 2019.Remote working allowed many people the opportunity to relocate to places with less density and more distance between neighbors. In New York, the move to home offices has led some commercial office towers to begin converting to apartments. It’s one sign of a changing downtown environment in many cities. But are these trends here to stay? In the latest episode of The Economists, CME Group Chief Economist Blu Putnam and Senior Economist Erik Norland look at the health of cities 18 months into the pandemic and explore whether the movement trend was only temporary.
