.png?width=200&height=78&name=CH%20Diligence%20(thicker%20line).png "CH Diligence (thicker line).png")
Our briefing for Wednesday, February 9, 2022:
Feb 9, 2022 4:04:39 PM
- In the United States, the Biden administration might be changing the way hospitalizations for Covid-19 are counted, as officials work to provide a clearer understanding of the strain on healthcare systems and what resources might be needed to fight the surges. The Department of Health and Human Services and the Centers for Disease Control and Prevention have created a task force to work with hospitals across the country to improve on Covid-19 reporting. The group is asking hospitals to keep the number of patients who go in with Covid-19 separate from the number of those who go in for other reasons and still test positive. The goal is to get a clearer understanding of Covid-19’s impact on hospitals and whether it is causing severe disease.
- In Canada, Alberta Premier Jason Kenney announced the removal of some Covid-19 restrictions, explaining that the Omicron wave has peaked and hospitalization numbers are slowing. As of today, the restrictions exemption program is no longer in place, which means people no longer have to show proof of vaccination. Food and beverage restrictions were removed and all capacity limits have ended except for very large (500+) venues. Meanwhile in Quebec, the premier has said that most Covid-19 restrictions will end by March 14, including the removal of all limits on indoor gatherings. The province will however, be keeping vaccine passports and mask mandates in place.
- In the United Kingdom, Health Secretary Sajid Javid has said he will hire 15,000 more healthcare workers by the end of March, to deal with the National Health Service (NHS) backlog. His pledge comes after the government was warned that waiting lists might not go down until 2024. Of the new recruits, 10,000 would be overseas nurses and 5000 would be healthcare support workers. Right now there are about 6 million people in England on the NHS waiting list for treatment, and the list could potentially grow longer due to people not coming forward in the pandemic.
- France has announced they will drop Covid-19 testing requirements for fully vaccinated travellers outside of the European Union. Currently, any traveller arriving from a country outside of the EU, including Britain and America, is required to show a negative test result from the previous 24 hours, regardless of vaccination status. Europe Minister Clement Beaune told France 2 TV on Tuesday: “We again required tests in December over the Omicron variant. In the coming days, we will announce that tests are no longer needed for vaccinated people.” He added that there will probably be a new protocol for vaccinated people arriving from outside of the EU, with eased measures.
- In Germany, some states are beginning to roll back Covid-19 restrictions, even as the Omicron surge continues. Germany reported 95,267 new daily cases on Monday, a 22% rise compared with the same day last week. Hospitalization rates, however, are at their lowest point in more than two months. The state of Bavaria has said they will lift a nighttime curfew on restaurants and ease restrictions on sports and cultural events. Berlin’s neighbouring state of Brandenburg is set to make a decision about easing retail restrictions and may allow unvaccinated people to enter some shops with a mask. Other regions like Saxony announced the easing of restrictions last week.
- New Zealand’s Omicron wave will likely peak by mid-March, says Prime Minister Jacinda Ardern. The country reported 202 cases on Tuesday, down from Saturday’s record of 243. Case numbers have been their highest ever since the pandemic began over the past seven days. On Tuesday morning, Ardern told the national radio broadcaster that she expects New Zealand’s peak numbers to be between 10,000 and 30,000 cases. “It’s widely variable and ultimately the defining feature of where we will peak will be booster uptake. The more people who take a booster, the lower the likelihood of our peak,” she said.
Covid-19 – Due Diligence And Asset Management
Bracing for a stock market that's going 'a whole lot of nowhere'
Brief: Unless your name is Meta (FB) or Peloton (PTON), the fourth quarter earnings season has been surprisingly kind to corporate America. Leaving the beleaguered social network (whoops, I mean metaverse pioneer) and fitness brand aside, Q4 results have continued to post strong growth in the face of the Omicron variant of COVID-19, skyrocketing inflation and supply chain headwinds. The latest of the encouraging batch of results came from Chipotle (CMG), which expects to top 7,000 restaurants in North America this year, continuing to ride the COVID-19 era trend of digital orders that accounted for around 42% of Q4 sales, Yahoo Finance’s Brooke DiPalma reported on Tuesday. The closing chapter of 2021 saw S&P 500 growth up over 23%, with nearly 80% of companies beating earnings estimates, according to S&P Global data. That’s been just enough to mollify an incredibly jumpy market where investors are struggling to adjust to the impending end of cheap money.
Macro Funds Are Designed to Outperform When Markets Tank. January Put Them to the Test.
Brief: The financial markets were battered by extreme volatility in January, but macro hedge funds saw strong, negatively correlated gains in the choppy environment, according to a Hedge Fund Research report. “In 2021 and 2020, higher beta strategies were the best performing strategies; risk-on dominated over that period of time,” Kenneth Heinz, president of HFR, told Institutional Investor. “January was the opposite of that — equities declined, fixed-income declined, and commodities were up.” Heinz said that compared to most investment methodologies, macro strategies generally produce the lowest returns, but their relatively low correlation to short-term market movements can make them a perfect antidote to a tough, volatile market environment like the one seen in January. HFR’s macro index gained 0.85 percent in January, and the HFRI 500 Macro Index grew 1.35 percent.
Pfizer eyes $100B year on pandemic boon for 2022
Brief: The pandemic has been transformational for many businesses, but few can boast near-global domination the way Pfizer (PFE) can. The Pfizer/BioNTech (BNTX) vaccine accounts for 70% of all doses in the U.S. and E.U., as of February 5, according to CEO Albert Bourla Tuesday. He added that the vaccine and other Pfizer medicines reached 1.4 billion patients in 2021, or about one in six people on Earth. As a result, the company saw a 92% increase in operational revenue growth in 2021 alone, of which only 6% was not related to its COVID-19 vaccine, Comirnaty, or it oral treatment, Paxlovid. "This year, we'll do 5% operating growth, excluding COVID and Paxlovid," said CFO Frank D'Amelio. But that didn't seem to sway investors Tuesday, as the company's stock took a hit on news that it would miss revenue estimates for the upcoming year. But Bourla said the company sees sustained need for the vaccine and oral treatment, which supports the 2022 outlook.
Fund selectors: Covid repercussions top economic risk in 2022
Brief: The top risks facing global economies are supply chain disruptions, easing central bank policy and new Covid variants, according to a survey of international fund selectors carried out by Natixis Investment Managers. The 436 global fund selectors expect to "battle a difficult market landscape" in 2022 as inflation hits 30-year highs, central banks across the globe withdraw stimulus, while client expectations "exceed realistic returns", the survey found. Between them, the fund selectors - based in 23 countries across Africa, the Americas, Asia and Europe - manage a combined $12.6trn in client assets. Half of them are concerned about the impact of supply chain disruptions to the global economy, while 45% said less supportive central bank policy is a top economic risk. Meanwhile, recent disruptions caused by the Omicron variant of Covid-19, such as frontline labour shortages, prompted 40% of the fund selectors to rank new Covid variants as a key cause for economic concern in 2022.
UBS survey: Investor optimism in Europe falls
Brief: Investors in Europe are less optimistic than they were in the autumn of last year, with rising interest rates and inflation among the biggest concerns, according to the latest UBS Investor Sentiment survey. The decline in optimism is, however, from a relatively high base. The survey by UBS showed that in Europe, excluding Switzerland, investor optimism has fallen nearly 10 percentage points since the previous survey in the third quarter of last year, with 68% of European investors feeling optimistic about the region’s economy in the short-term.Short-term optimism in stocks has also fallen, with 43% planning to invest more in the next six months. Switzerland bucked the wider European trend. Swiss investor optimism is up from last quarter, with 68% feeling optimistic about their economy in the short-term, a 12 percentage points increase from the previous survey.Among Swiss investors, 68% are optimistic about Swiss stocks, up from 46%.
