.png?width=200&height=78&name=CH%20Diligence%20(thicker%20line).png "CH Diligence (thicker line).png")
Our briefing for Wednesday, August 11, 2021:
Aug 11, 2021 3:37:07 PM
- In the United States, the Centers for Disease Control and Prevention (CDC) lowered the travel recommendation for Canada to Level 2. The U.S. State Department also lowered the travel advisory for Canada to “Level 2 Exercise Increased Caution.” The U.S. has not indicated as to when they might ease travel restrictions for Canadian travellers, despite Canada opening its border to fully vaccinated Americans on August 9. The CDC also recommended Americans avoid travel to France, Israel, Thailand, Iceland and several other countries because of high rates of infection.
- In Canada, a fourth wave of infections is inevitable, experts say. Unlike previous waves, this time things are expected to be slightly different because of high vaccination rates. Approximately 60% of Canadians are now fully vaccinated. The seven day average for new daily cases is around 1,300, with the majority of new cases in B.C., Alberta, Saskatchewan, Ontario and Quebec. The vast majority of new cases are among unvaccinated individuals, federal public health data shows. Vaccination rates are lowest in some regions of rural Alberta and Manitoba. Federal data also shows that approximately six million eligible Canadians have yet to get the shot.
- In the United Kingdom, Sajid Javid, the health secretary, said he expects a vaccine booster program to start in early September. The Joint Committee on Vaccination and Immunisation (JVCI) recommended in June that if boosters were to be offered, they should go to people over 50, those who are immunocompromised or other vulnerable people. Despite broad public support for the booster program, some scientists have questioned whether it’s actually needed, especially in light of the need for more vaccines in the developing world.
- In Germany, free coronavirus testing for citizens will end in October, as a way to encourage more people to get vaccinated. Chancellor Angela Merkel says the government aims to have 75% of people vaccinated, but so far only slightly more than 55% have had both shots. Children and those who cannot be vaccinated for medical reasons will continue to get the tests for free. Merkel said the speed of Germany’s vaccination campaign has significantly declined and she urged those who are already vaccinated to encourage others to get the shot
- In New Zealand, a group of health experts have advised the government to keep the borders closed until more people have been vaccinated. The Strategic Covid-19 Public Health Advisory Group released a report saying the borders should have a slow, phased reopening. According to the advisory group, a border reopening should not happen until early 2022. The group also says that a progressive system should be used to allow travellers in based on a variety of risk factors including their vaccination status. On Thursday, Prime Minister Jacinda Ardern is set to provide the government’s response to the recommendations.
- In Australia, the city of Melbourne extended its sixth lockdown for a second week, until the end of August 19. "This is very challenging, I know, for every single Victorian who would like to be going about their business. They'd like to be open and have a degree of freedom that's simply not possible because of this delta variant," Victoria Premier Daniel Andrews said. "If we were to open, then we would see cases akin to what's happening, tragically, in Sydney right now." The Victoria state government reported 20 new infections in a 24 hour period, while meanwhile New South Wales reported 344 new cases.
Covid-19 – Due Diligence And Asset Management
Macro hedge funds primed to capitalise on market trends amid fragmented global recovery
Brief: Macro strategies have advanced 7.82 per cent so far in 2021, according to data provider BarclayHedge, after managers posted a narrow gain of 0.19 per cent in July. In comparison, the broader Barclay Hedge Fund Index – which measures average industry performance across strategy classes – has risen almost 9 per cent year-to-date, BarclayHedge said this week. Macro managers take long and short positions across a wide range of markets and indices, including equities, bonds, currencies, and commodities, with bets shaped by their outlook on broader macroeconomic trends and events. Last year, the sub-strategy generated an annual return of more than 10 per cent. Despite macro hedge funds suffering the largest volume of investor outflows towards the end of the first half – allocators withdrew some USD5.57 billion from the sector in June, according to eVestment data – the outlook for managers remains positive.
Has Covid-19 given women the chance to make their mark in private equity?
Brief: While the damage wrought by the Covid-19 pandemic has been all-encompassing, research shows that it is women who have been disproportionately impacted. PWC's Women in Work 2021 research reports that women's job losses outpaced men's in 2020, with women forced to reduce their participation in the workforce due to the disproportionate burden of care. The findings point to a worrying reversal in progress towards gender parity in the workplace, prompting businesses across all sectors to reprioritise a recovery from Covid, which puts equality front and centre. Although discouraging, can these circumstances create a vital moment for change? And against this backdrop, what is the view from private equity, specifically? We know that the sector has historically had a reputation for being a less caring and socially inclusive place to work than many. Is this finally an opportunity for change?
U.S. stocks retreat from highs; dollar drops after CPI
Brief: U.S. stocks were off the highs of the day and the dollar weakened after data showed consumer prices increased at a more moderate pace in July, reducing concern about the timing of an unwinding of some of the stimulus that has helped the economy recover from the COVID pandemic. The S&P 500 and Dow Jones Industrial Average indexes climbed to records after data showed CPI rose 0.5 per cent in July after climbing 0.9 per cent in June. The tech-heavy Nasdaq 100 declined as investors rotated to cyclical shares from traditional growth favorites such as Amazon.com. The reaction was muted in the Treasury market, with yields lower on two-year notes and slightly higher on 10-year securities. Investor focus on U.S. price data comes as Federal Reserve Chair Jerome Powell and other officials discuss the prospects of unwinding stimulus that has helped the recovery from the pandemic. Chicago Fed President Charles Evans said he expects substantial further progress later this year on the central bank’s tapering intentions.
FTSE hits post-pandemic high as stocks rally around the world
Brief: The FTSE 100 closed at an 18-month high on Wednesday, as stocks rallied around the world on stimulus hopes and easing inflation fears. The FTSE 100 (^FTSE) rose 0.8% to close at 7,220, its highest finish since March 2020. The index remains around 200 points off levels it was trading at before the onset of the COVID-19 pandemic. In Europe, Germany's DAX (^GDAXI) was up 0.3% and the CAC (^FCHI) rose 0.5%. Global sentiment was helped by signs that US inflation could be topping out. Consumer price figures published 1.30pm Europe time showed US prices growing at 5.4% in July. That was flat on the prior month and broadly in line with forecasts. "With US CPI having beaten expectation for most of 2021, it’s almost a surprise to see the numbers come out in line with expectations," said Mike Owens, a global sales trader at Saxo Market.
Dow jumps 150 points to new record after inflation report is not as bad as feared
Brief: Stocks rose on Wednesday after inflation jumped, but not by quite as much as investors feared when stripping out volatile food and energy prices. The Dow Jones Industrial Average gained about 170 points, or 0.5%, to reach a new intraday record. The S&P 500 rose 0.1% to an intraday high. The Nasdaq Composite traded 0.45% lower.The 10-year Treasury yield turned flat following the CPI report, giving up an earlier gain and trading around 1.344%. July’s Consumer Price Index released Wednesday showed prices jumped 5.4% since last year, compared to expectations of 5.3%, according to economists surveyed by Dow Jones. The government said CPI increased 0.5% in July on month-to-month basis. But investors were concentrating on the core rate of inflation. CPI, excluding energy and food prices, rose by 0.3% last month, below the 0.4% increase expected. Core prices still jumped 4.3% on a year-over-year basis.
