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Our briefing for Wednesday, January 26, 2022:
Jan 26, 2022 3:55:53 PM
- In the United States, a New York state judge has ruled against a mandate that required the wearing of masks in public places; however, an appellate court judge on Tuesday temporarily put it back in place, at least until the end of the week. The judge on Monday ruled that the state’s Department of Health needed the approval of the legislature to enact the mandate. Judge Thomas Rademaker of New York State Supreme Court on Long Island found that the mandate “is a law that was promulgated and enacted unlawfully by an executive branch stat agency, and therefore void and unenforceable.” Appellate Divison Justice Robert Miller granted the state’s request to keep the mandate in place while the governor’s administration prepares to appeal.
- In Canada, the province of Quebec is easing some pandemic restrictions as of January 31, the premier said on Tuesday. Francois Legault announced plans to ease some curbs, very slowly, with vaccine passports still required for most activities. Restaurants will be allowed to open next week at a capacity of 50%, with tables limited to four people from two bubbles. People will be able to resume private indoor gatherings, again with a maximum of four people from two bubbles. A second phase of the reopening will begin on February 7 and will involve concerts and cinemas being allowed to operate at 50% capacity.
- In the United Kingdom, the Metropolitan Police Service said they would begin investigating the Downing Street parties held during coronavirus lockdowns. The investigation puts further pressure on Prime Minister Boris Johnson, who is facing calls to resign after there were even more revelations of gatherings including one for his birthday. The gatherings are already being investigated by senior civil servant Sue Gray, whose report is expected this week and is a critical part of determining whether Johnson remains in power. Johnson says he welcomes the police investigation and hopes it will help “draw a line” under matters.
- France reported over half a million new coronavirus cases on Tuesday, a new record for the country with only a week to go until some pandemic restrictions are eased. Case numbers totaled 501,635 on Tuesday, while deaths rose by 467 up to 129,489. More than 30,000 people are in hospital right now, the highest number since November 2020. But the number of patients in intensive care is only a little more than 3,700, lower than it was last week. On Monday, France’s vaccine passport system came into effect, barring unvaccinated people from most social activities, a move that French leaders expect will help keep case numbers manageable.
- South Korea reported more than 8,000 new coronavirus cases on Tuesday, setting a new record after the numbers exceeded 7,000 for three days in a row. Experts are predicting case numbers will reach 10,000 and possibly even 20,000 after the Lunar New Year holiday that begins this weekend. South Korea announced, in an effort to reduce the strain on hospitals and other essential services, that they will reduce quarantine times and expand testing. Officials are also hoping to treat a larger number of milder and moderate cases at home. More than 85% of South Korea’s population is fully vaccinated, and according to the Korea Disease Control and Prevention Agency, 50.1% have been administered booster shots.
- In Australia, restrictions will remain in place in New South Wales for another month, Premier Dominic Perrottet announced on Tuesday. This means the indoor mask mandate, QR code check-ins, and a ban on singing and dancing, will be extended until February 28. ‘It comes down to priorities. I want there to be confidence in our parents, I want there to be confidence in our teachers that we can get kids back in the classroom for day one, term one,” Perrottet said. “If you’re to ask what’s more important, someone singing or dancing or someone getting their non-urgent elective surgery back, I know what the right approach is.”
Covid-19 – Due Diligence And Asset Management
Logitech says offices starting to re-equip for post-pandemic life
Brief: Logitech International is seeing offices starting to re-equip for staff returning from working at home during the COVID-19 pandemic, Chief Executive Bracken Darrell said on Tuesday as the company raised its full-year outlook. The tech company has been a big beneficiary of people exiled from their workplaces during the pandemic stocking up on its computer mice, keyboards and webcams. It is now seeing companies examining how their offices will look in future, when people use a hybrid of home and on-site locations, Darrell said after Logitech reported smaller-than-forecast declines in third-quarter sales and operating income. "I do think it is the big thaw," Darrell told Reuters. "It's as if we have had the big freeze and ...we are starting to see people making decisions on what the offices are going to be like when we get back into them.
Trillion-dollar tech companies set to report quarterly results amid worst January slump since 2008
Brief: As the largest U.S. companies get set to report earnings, investors are torn between two ways of thinking about the technology industry. Tesla reports earnings on Wednesday and Apple on Thursday. Amazon, Meta and Alphabet all report next week. Microsoft reported earnings after the market close Tuesday. Each stock is down between 9% and 15% so far this year. Amid the slump, the bull thesis hasn’t changed much. The world’s digital transformation is in its early innings and has decades of growth ahead, whether it’s from the transition to electric vehicles, the surge in demand for connected devices or the emergence of the crypto-economy and the metaverse. Cloud computing and artificial intelligence will transform every industry in the coming years, and investments in cybersecurity are required at an unprecedented scale. Tech’s bellwethers are poised to capture huge amounts of consumer and business spending.
BofA Brings Staff Back to Some U.S. Offices as Covid Cases Decrease
Brief: Bank of America Corp. is bringing employees back to offices in U.S. regions where new coronavirus cases have started to decline. The bank’s staff have returned or are making their way back in the coming weeks based on their region’s Covid-19 data and medical guidelines, according to people with knowledge of the plans. Previously the company had told employees to work remotely through at least the third week of January, and until they’re advised to come back. A Bank of America representative declined to comment. As coronavirus conditions improve across the country, employees across major financial firms are being asked to come back. Citigroup Inc. staffers in the New York City region and Credit Suisse Group AG’s workforce across the U.S. are being urged to return to offices in early February. In New York City, the percent of people testing positive for Covid-19 is decreasing, with a daily average of 8,269 cases in the past week.
How a New Asset Class Is Growing Out of Subscription Revenue
Brief: Venture funds and bank loans are no longer the sole source of capital for emerging technology companies. Revenue-based financing, which allows companies to borrow against recurring revenue and return a fixed percentage of ongoing profits to investors, has become a new source of funding for entrepreneurs that don’t want to dilute current investors. Backers of the financing option are hoping it will become a new asset class. For so-called SaaS companies — technology firms that charge customers periodically for their software services — and similar businesses, the new financing option has reshaped the landscape of early-stage fundraising. Revenue-based financing “was invented a decade ago, but it really gained momentum in the last few years,” said Ed Goldstein, a partner at Pennington Alternative Income Management. The growth, he explained, is due in part to the rise of SaaS companies during the pandemic, as remote workers required reliable cloud infrastructures.
J&J Sees 2022 Earnings and Sales Above Wall Street Expectations
Brief: Johnson & Johnson forecast 2022 earnings and sales above Wall Street’s expectations as it prepares to separate its drug and medical device unit from its consumer business. Fourth-quarter revenue narrowly missed analysts’ estimates. The health-care giant expects annual earnings of $10.40 to $10.60 a share, according to a statement Tuesday, ahead of analysts’ average projection of $10.32 a share. Sales, including those of its Covid-19 vaccine, will be $98.9 billion to $100.4 billion, the company said. Chief Financial Officer Joseph Wolk said he hopes to see reduced Covid disruptions to the health-care system in 2022. “Each quarter is getting a little bit progressively better,” he said in an interview. Investors are preparing for a transformative year at New Brunswick, New Jersey-based J&J as new leadership has taken the helm and the conglomerate prepares to split, a move already underway at other health-care companies including GlaxoSmithKline Plc and Pfizer Inc.
