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Our briefing for Wednesday, April 13, 2022:
Apr 13, 2022 3:50:57 PM
- In the United States, new White House Coronavirus Response Coordinator Dr. Ashish Jha says he is not “excessively concerned” about the country’s Covid situation, despite the recent rise in case numbers. Dr. Jha called for calm on Monday, explaining that the BA.2 subvariant is responsible for the uptick in cases. “The thing that we care most about, people getting really sick, hospitalisations, deaths, they remain really low. We have fewer people in the hospital right now than at any point in the pandemic,” Dr Jha said. According to the Centers for Disease Control and Prevention, the BA.2 subvariant made up 86% of new Covid-19 cases nationwide last week.
- In Canada, health experts have criticized the country’s leadership, saying the messaging around Covid-19 has given the impression that the pandemic is no longer important. Julie Lajoie, a research associate in medical microbiology at the University of Manitoba with a PhD in virology and immunology, told CTV news on Monday that too many places in Canada are making it sound like the virus is in an endemic phase. Colin Furness, an epidemiologist with the University of Toronto’s Institute of Health Policy, Management, and Evaluation, also said the government is downplaying the impacts of the virus. “The government narrative – which is, ’there isn't much COVID, there is no pandemic, there is no wave, everything's fine’ – this is a dreadful, really, really dreadful way to mislead the public into dropping their guard and becoming ill. That's a huge problem,” Furness told CTV News last week.
- In the United Kingdom, Prime Minister Boris Johnson has dismissed calls from the National Health Service (NHS) to reinstate Covid-19 restrictions, saying the hospital data doesn’t justify a shift from ‘living with the virus.” Over the weekend, at the NHS Confederation, health officials accused Johnson’s government of abandoning any interest in Covid, and ignoring the threat is poses because of ideological reasons. Right now, in the U.K. there are more than 20,000 patients in the hospital with Covid-19, the highest number since February 2021, meaning a strain on the NHS. “There is no change to our guidance and our living with Covid plan still stands,” a government spokesperson said. “Thanks to a combination of vaccination and treatment and our better understanding of the virus, we are now able to manage it as we do with other respiratory infections, so that remains the case with our approach.”
- In Spain, a nurse discovered a mosquito in a vial containing the Moderna vaccine, causing a recall of 760,000 doses. The nurse in Malaga reported the discovery to the regional health authority, who in turn reported it to the Spanish Medicine Agency. This particular serum is produced in Spain by the Rovi pharmaceutical company, and some doses from the same batch had already been distributed to members of the public. The pharmaceutical company explained that there are no risks to those that may have received doses from the same batch, so no further treatment would be necessary. The Spanish Medicine Agency has also carried out an investigation to make sure the laboratory is using safe procedures.
- In Italy, a new study shows vaccine protection halved the country’s Covid-19 death toll. The National Health Institute (ISS) estimated on Wednesday that vaccines prevented about 150,000 deaths and 8 million cases last year. The ISS study, which ran from the beginning of 2021 to the end of January this of this year, also estimated that the vaccination campaign prevented 500,000 hospitalizations and 55,000 admissions to intensive care. Italy’s death toll currently rests at 161,032, the second highest in Europe and the eighth highest in the world. The country on Tuesday began offering second boosters to people over 80, those living in long-term care homes and those over 60 who are considered at most risk from the virus.
- Western Australia Premier Mark McGowan says the state will relax more coronavirus restrictions at midnight, including the close contact isolation rules. Under the new rules, only household or intimate contacts will be considered close contacts and need to isolate. This brings Western Australia’s definition of a close contact in line with the rest of the nation’s. Beginning on Thursday all gathering limits, both indoor and outdoor, will be lifted. According to McGowan, the changes are being introduced because of low hospitalization and intensive care admission rates. As of Tuesday, there were 215 West Australians in the hospital with Covid-19, and four in intensive care.
Covid-19 – Due Diligence And Asset Management
JPMorgan's Dimon downbeat as profit drops 42%
Brief: JPMorgan Chase & Co's Chief Executive Jamie Dimon warned of economic uncertainties arising from Russia's invasion of Ukraine and soaring inflation, after first-quarter profits at the largest U.S. bank slumped 42%. JPMorgan had reported record profit during the first quarter last year, benefiting from a dealmaking boom after the Federal Reserve pumped liquidity into capital markets to mitigate the economic impact of the COVID-19 pandemic. This year, however, investment banking revenues declined as companies delayed takeovers and stock market listings amid a surge of volatility in equity markets. The bank also set aside $902 million to cover potential loan losses. JPMorgan is seen as a bellwether for the U.S. economy and its lackluster results set the tone for first-quarter earnings from Wall Street banks as the Fed looks to rein in inflation and the trading bonanza banks enjoyed during the pandemic tapers off.
Investors flee COVID pill drugmaker on report tying treatment to birth defects
Brief: Shionogi & Co. slumped the most in more than a decade after the drugmaker said studies on animals showed its experimental COVID drug disturbed fetal development, triggering concerns about its approval. The stock fell as much as 16% in Tokyo trading Wednesday, the biggest intraday decline since March 2011. Shionogi shares are down 8.4% this year through yesterday. The drug likely won’t be recommended for pregnant women, Kyodo News reported Tuesday, without giving attribution. The animal data, which showed harm when it was given at high doses, was submitted to Japanese regulators in February when the company sought a priority review required for conditional approval, a Shionogi spokesman said. The pill’s chance of commercial success fell to 5% from 50% after the report tying it to birth defects, which may make it less competitive, said Stephen Baker, an equities analyst at Jefferies & Co.
Hedge fund manager confidence levels resilient despite global economic headwinds, says AIMA
Brief:Confidence levels among hedge fund mangers remain resilient despite the war in Ukraine, Russian economic sanctions, and global inflationary concerns, according to AIMA. Hedge fund returns have been mixed, with some strategies struggling while others have racked up bumper returns, resulting in wide performance dispersion across the industry. While some fund strategies have experienced a challenging start to the year, others have thrived. "Despite these challenges and the threat of more still to come, the industry’s global confidence score for Q1 reflects the fact that hedge funds are reinforcing their value proposition of offering investors financial security and uncorrelated returns during uncertain times," writes AIMA. Global macro (+19) and multi-strategy (+18) strategies reported the highest confidence scores in AIMA's latest Hedge Fund Confidence Index poll and both are currently among those strategies most appealing to investors looking to make hedge fund allocations.
China’s Covid Outbreak Highlights Weak Lending as Borrowers Hold Back
Brief: China’s central bank is struggling to drive up lending in the economy despite cutting interest rates and giving banks a cash boost. With a worsening Covid outbreak locking down mega cities Shanghai and Shenzhen, worries about jobs and incomes mean businesses and consumers are unwilling to take on more debt. Banks are reluctant to extend more loans too as a property downturn drives up bad debts and squeezes profits. That creates a challenge for the People’s Bank of China, which is set to diverge further with a tightening U.S. Federal Reserve by possibly cutting policy interest rates for a second time this year on Friday. Many economists also expect the central bank to reduce the amount of cash banks must hold in reserve, freeing up more money for lending. Problem is, with restrictions to contain the spread of omicron amid China’s ongoing Covid Zero strategy keeping consumers on edge, any new stimulus may end up being parked at banks rather than flowing through to the real economy.
A new world order for the stock market is coming, explains BlackRock CIO
Brief: Making money in the stock market will likely look different over the next few years compared to the low interest rate era seen from the end of the Great Financial Crisis, says BlackRock's CIO of U.S. fundamental equities Tony DeSpirito. "It's a really big deal," says DeSpirito on Yahoo Finance Live. DeSpirito explains that since the end of the financial crisis, the economy has experienced very low growth, very low inflation and very low rates. But those factors largely ended during the pandemic, with that regime being one with high inflation and a love for stay-at-home stocks. Now things are changing once more as home prices have shot higher at this point in the pandemic, stock prices are still elevated, the unemployment rate is sub 4% and interest rates are headed upward. This emerging backdrop means investors have to search for companies that have pricing power and sell unique products. All in, it will be a more complicated backdrop for investors to navigate, concedes DeSpirito. "This is fertile ground for individual stock pickers," says DeSpirito.
