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Our briefing for Wednesday, February 2, 2022:
Feb 2, 2022 3:19:54 PM
- In the United States, many Americans have accepted that living with Covid-19 is the new normal, according to results from a recent poll. The poll was released on January 31 by Monmouth University in New Jersey, it included 794 adults and was conducted between Jan. 20 and Jan. 24. Of the survey respondents, 23% said they were very concerned about getting sick from one of the new Covid-19 variants, while 27% said they were somewhat concerned. About 70% of survey respondents said, “it’s time we accept that Covid is here to stay and we just need to get on with our lives.” Some poll participants, about 28%, said they thought a return to normalcy would never happen. The poll has a margin of error of 3.5 percentage points.
- In Canada, Quebec Premier Francois Legault has done a surprising about-face and announced that he is scrapping a plan to tax people who are unvaccinated against Covid-19. Plans for the tax were first introduced back in January, when hospitalization rates were on the rise from Omicron. Legault initially said the tax was necessary to address the burden unvaccinated people put on the healthcare system. He has since admitted that the plan was divisive and polarizing. “My role is to try and bring Quebecers together and stay united as a people,” he told reporters in Quebec City. “This is why we won’t go ahead with the health contribution.”
- In the United Kingdom, reinfections (people who have had more than one positive test for the coronavirus) are now being included in the official Covid-19 statistics, going back to the beginning of the pandemic. England reported another 92,000 Covid cases on Monday, a steep rise from the day before when reinfections weren’t included in the data. Reinfections have not been included in the case counts until now because health officials were not sure whether they occurred, or about the interval between cases. With the emergence of the Omicron variant, reinfections are becoming increasingly common. Health officials are using the universally recommended definition of reinfection, which is at least 90 days between two positive tests.
- Germany has failed to meet its target of vaccinating 80% of the population by the end of January. As of Monday, 75.8% of Germans have received at least one vaccine dose, placing behind other European countries such as Italy, France and Spain. Officials have not set a new target for the 80% threshold but have said the goal is still to augment vaccination rates going forward. On Friday, the health minister said the protection of older people who have not been vaccinated is the country’s main priority. "Germany has a comparatively high number of unvaccinated older people - four times as many as England and three times as many as Italy," Health Minister Karl Lauterbach said in a news conference.
- In India, frontline healthcare workers are struggling to address the issue of vaccine certificate fraud. Workers say second doses could be falsely registered by people who didn’t attend appointments by using personal records from their first dose, and that the fraud is happening because of pressure to meet government targets. India set a goal of having everyone vaccinated by the end of 2021, which they failed to meet but according to official statistics, 75% of the population is now fully vaccinated. However, as the Guardian reports, these figures may have been manipulated, and as many as 20-35% of those people may have been falsely registered as double vaccinated. The figure could be as high as 40-60% in rural areas.
- Australia is seeing hospitalizations fall to their lowest numbers in weeks, as the Omicron wave continues to slow. Hospitalizations fell to 4,600 after reaching a peak of nearly 5,400 a week ago. "We've seen the peaks of Omicron, I think, come through in (New South Wales and Victoria)," Prime Minister Scott Morrison told a media briefing. Morrison said he has asked health officials to check the status of the system before making a move to ease more border measures. Morrison says he hopes the border will be able to reopen fully before Easter.
Covid-19 – Due Diligence And Asset Management
U.S. Private Jobs Plunged Last Month on Omicron, ADP Data Show
Brief: Employment at U.S. companies declined in January by the most since the early days of the pandemic as the omicron variant of the coronavirus registered a swift yet likely temporary blow to the nation’s labor market. Businesses’ payrolls fell by 301,000 last month in a broad-based decline, according to ADP Research Institute data released Wednesday. The median forecast in a Bloomberg survey of economists called for a 180,000 rise. The decrease in employment, due to a surge in Covid-19 infections that led to some business closures and restrained activity, exacerbates tightness in the job market. A near-record number of unfilled positions and increased employee turnover are contributing to capacity constraints. Still, employment growth is seen picking up as the spread of the omicron variant wanes.
After a huge year for growth, the U.S. economy is about to slam into a wall
Brief: Spurred by a massive inventory rebuild and consumers flush with cash, the U.S. economy last year grew at its fastest pace since 1984. Don’t expect a repeat performance in 2022. In fact, the year is starting with little growth signs at all as the late-year spread of omicron coupled with the ebbing tailwind of fiscal stimulus has economists across Wall Street knocking down their forecasts for gross domestic product. Combine that with a Federal Reserve that has pivoted from the easiest policy in its history to hawkish inflation-fighters, and the picture has suddenly changed substantially. The Atlanta Fed’s GDPNow gauge is currently tracking a first-quarter GDP gain of just 0.1%. “The economy is decelerating and downshifting,” said Joseph LaVorgna, chief economist for the Americas at Natixis and former chief economist for the National Economic Council under then-President Donald Trump.
Bridgewater Sees Market Turmoil on ‘Aggressive’ Fed Tightening
Brief: Investors may be underestimating the need for “aggressive” monetary tightening from the Federal Reserve and other central banks to combat inflation, resulting in “significant risks” for markets, according to Bridgewater Associates. Following hawkish comments from the Fed Chair Jerome Powell last week, investors have brought forward expectations of tightening, pricing in five quarter-point rate hikes this year. Further out, however, they’re predicting fewer rate increases, anticipating the Fed will end the cycle with the policy rate at about 1.65% and long-term inflation expectations anchored around 2%. Consumer prices surged 7% in December from a year earlier, the fastest pace since 1982. “The markets are discounting a smooth reversion to the prior decades’ low level of inflation, without the need for aggressive policy action -- that it will mostly just naturally happen on its own,” the world’s biggest hedge fund said in its 2022 outlook. “We see a coming clash between what is about to transpire and what is now being discounted.”
PayPal Joins the Growing List of Pandemic Boom-to-Bust Stocks
Brief: PayPal Holdings Inc. shares were set to sink to almost the lowest level since the pandemic’s onset, joining the likes of Peloton Interactive Inc. and Netflix Inc. in a post-earnings selloff. These companies have given back most of their multi-fold gains as demand for their services during Covid-19 lockdowns and mobility restrictions have quickly come to an end. PayPal’s December quarter numbers showed the same, prompting investors to dump the stock and hand losses of 19% in premarket trading. If these levels hold, it will be the stock’s worst day on record. Total payments volume climbed just 23% in the final three months of last year, the smallest increase in two years and fell short of analyst expectations. The results dragged down the share price of rival Block Inc., formerly Square Inc., by 8% and Affirm Holdings Inc. by 3% in premarket trading.
Black Americans’ lack of participation in the stock market likely to widen post-pandemic wealth gap
Brief: Thanks to the historic stock market rebound from pandemic lows, affluent 401(k)-holders and savvy investors in the U.S. enjoyed double-digit returns from stocks over the past two years. But not for the majority of Black Americans. Only 34% of Black American households owned equity investments, as compared with 61% of white families, according to Federal Reserve Board’s most recent survey in 2019. The average value of stocks Black Americans owned amounted only to $14,400, nearly a quarter of what their white peers held, the data said. “Because Black households are less likely to be invested in the stock market and on every level less likely to be engaged in the financial system, they not only entered the pandemic with large gaps, the likelihood is that we are going to see some of these gaps widen coming out of the pandemic,” said John Lettieri, the Economic Innovation Group’s president and CEO.
