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Our briefing for Wednesday July 21, 2021:
Jul 21, 2021 4:37:53 PM
- In the United States, the delta variant now accounts for an estimated 83% of all new coronavirus cases, according to the U.S. Centers for Disease Control and Prevention (CDC). “This is a dramatic increase, up from 50% for the week of July 3,” said Director Dr. Rochelle Walensky in a Senate Committee hearing. Walensky said that the percentage is even higher in some regions where vaccination rates are low. Although vaccines are proven to be effective against the delta variant, CDC data shows that less than half of the U.S. population is fully vaccinated.
- In Canada, a new report shows that Canadians are anxious about returning to their workplaces after the pandemic. The latest LifeWorks Mental Health Index is based on 3000 survey responses collected online between May 28th and June 4th, 2021. According to the report, 25% of respondents said they are not clear about their employer’s return to work plan. These respondents reported lower mental health scores compared to those who said their employers had a sound return-to-work plan. Approximately 38% expect to return to their pre-pandemic work environments, while 17% said they believe they will be allowed to work remotely.
- In the United Kingdom, scientists are warning that mask wearing and other coronavirus restrictions could be reimposed in as early as three weeks, if hospital admissions continue to rise. Members of the Scientific Advisory Group for Emergencies (Sage) have said the prime minister should be prepared to reintroduce restrictions in the first week of August, to avoid excessive pressure on the National Health Service (NHS). On Tuesday, there were 46, 558 new cases, and 96 deaths, the highest daily death toll in nearly four months. Prime Minister Boris Johnson hasn’t ruled out the idea of reimposing restrictions, although he did say he wanted to avoid it.
- In Italy, the government is expected to impose new restrictions on unvaccinated people as they try to curb the spread of the delta variant. Similar to the rules in France, the government may require people to be vaccinated in order to access some public spaces like indoor restaurants and bars, stadiums and cinemas. They are expected to make showing a “green pass” mandatory for passengers on domestic flights and long-distance trains. The government is expected to finalize their plans this week and changes could take effect as early as July 26th.
- South Korea continues to grapple with the delta variant as cases surged this week. The country reported 1,784 new cases on Tuesday, breaking its previous record set last week. According to data from the Korea Disease Control and Prevention Agency (KDCA), genetic analyses of 2,381 cases last week found that nearly 40% were the delta variant. So far 32% of South Koreans have received at least one dose of a coronavirus vaccine, while the government hopes to vaccinate 70% by September. Despite the high case numbers, there have been no increases in hospitalizations or deaths.
- In Australia, Prime Minister Scott Morrison refuses to apologize for the way his government handled the country’s vaccine program. To date, just over 11% of Australians are fully vaccinated. Frustrations are growing as 13 million people (more than half the population) are now living under lockdown. “We have had our problems, there is no doubt about that, and they are problems that are not always things within our control, that is the nature of Covid-19,” Morrison said during a radio interview. Morrison says his government has been focused on resolving the issues around the vaccine rollout.
Covid-19 – Due Diligence And Asset Management
What Companies Can Do To Mitigate Gender Parity Damage of Pandemic
Brief : The pandemic has set back gender equality on company boards in the UK by as much as four years, with new research suggesting that parity between male and female members won’t be reached until 2036. The annual Women Count report, published by consultancy The Pipeline, found that progress in boosting gender diversity has slowed significantly over the past year, with men now holding 78% of all executive committee roles in the FTSE 350 – and women holding just 22% of positions. Although women are in a better position than five years ago, the pandemic has slowed the rate of change. In 2021, we witnessed an increase of 2.5% on the previous year, but in 2020 this same annual measure was 2.7%.
United Air Sees Profit on Horizon Despite Renewed Virus Fear
Brief: United Airlines Holdings Inc. expects to end a year and a half of losses this quarter despite rising investor anxiety about whether COVID-19 infections will upend a travel resurgence. The forecast for an adjusted pretax profit in the third quarter and another in the fourth quarter excludes any benefit from billions of dollars in federal airline aid, United said in a statement Tuesday as it reported earnings. While the carrier didn’t quantify how much it expected to earn, any profit would top the second-half losses expected by Wall Street. “Our airline has reached a meaningful turning point: We’re expecting to be back to making a profit once again,” United Chief Executive Officer Scott Kirby said in the statement.
NatWest Chairman Says London Office Life Will Never Return
Brief: The changes wrought by the pandemic on U.K. office life are here to stay, according to the chairman of one of the country’s biggest banks. NatWest Group Plc’s Howard Davies said in a Bloomberg TV interview Wednesday that he doesn’t expect central London’s footfall to revert to pre-pandemic levels as office workers resist a return to five days a week in the office and the daily commute. “The days when 2,500 people walked in through our office door at Bishopsgate at 8:30 a.m. and then walked out again at 6 p.m., I think that is gone,” Davies said. While some workers -- particularly traders -- may remain desk-bound, the majority of NatWest’s staff are expected to come in only intermittently, he said.
Stock Market is at Risk of a Correction if This Happens Amid the Spread of the Delta Variant
Brief : Most Wall Street strategists agree that Monday's market rout — fueled by yawning worries about the fast-spreading COVID-19 Delta variant — should serve as a wake-up call to investors who have sent stock prices to record valuations. And they also generally agree on what could send stocks spiraling even lower from here — a subpar second quarter earnings season chock-full of concerning guidance due to the ongoing uncertainty of the pandemic. "This market is vulnerable to a bigger pullback or correction if there’s a new negative introduced, and that negative could be disappointing earnings," warns Sevens Report Research founder Tom Essaye in a research note to clients. "If corporate earnings calls warn about (1) margins (which was hinted at by a few companies) or (2) overall economic activity (if management says activity declined in late June as COVID cases accelerated) then that will combine with the other issues (stretched valuations, complacent investors, summer doldrum trading) to cause a real pullback or a correction of 10% or more."
CN Reports Strong Earnings Growth as Rail Traffic Recovers From Pandemic
Brief: Canadian National Railway Co. reported a strong uptick in earnings and revenues in its second quarter as the company begins to recover from the COVID-19 pandemic. The Montreal-based railway earned $1.03 billion or $1.46 per share, up from $545 million or $0.77 per share in the first quarter of 2021. Excluding one-time items, adjusted profits were $1.06 billion or $1.49 per share, compared with $988 million or $1.28 per share in the first quarter. Revenue for the three months ended June 30 was $3.60 billion, up from $3.21 billion the previous quarter. The company also declared a dividend for its third quarter, of 61.5 cents per share to be paid in September.In 2020, CN was forced to build longer and heavier trains due to the sharp retreat in rail volumes and customer demand during the COVID-19 pandemic. The company said in a news release that as the economy rebounds, it has been able to revert to its standard operating plan and improve train speeds.
