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Our briefing for Wednesday, July 28, 2021:
Jul 28, 2021 3:04:14 PM
- In the United States, the Centers for Disease Control and Prevention (CDC) updated their mask guidelines on Tuesday as cases surged. The CDC now recommends that even fully vaccinated people should be wearing masks indoors and in other areas where there’s a high risk of transmission. They also recommend that all teachers and students should be wearing masks in the classroom, regardless of whether they’ve been vaccinated. According to the CDC, 63% of U.S. counties have high transmission rates that should warrant mask wearing. Many Americans may choose not to follow the new recommendations as they are not binding.
- In Canada, Prime Minister Justin Trudeau says the country now has enough doses of vaccine to inoculate every eligible Canadian. Speaking at a vaccine clinic in New Brunswick, Trudeau encouraged all Canadians to get their shot, saying there are “no more excuses.” As of Tuesday the country had received 66 million doses, enough for all 33.2 million Canadians who are 12 and older. “Back in the winter I made a promise that we would have enough vaccines for all eligible Canadians by the end of September. Not only have we kept that promise, we've done it two months ahead of schedule,” Trudeau said.
- In the United Kingdom, the government announced a change to international travel rules. The change will allow people who have been fully vaccinated in the U.S. or most of Europe to avoid quarantine if they’re arriving from amber list countries, beginning on August 4. Under the current rules, only those who have been vaccinated by the National Health Service (NHS) are eligible for a “Covid-19 pass” that allows them to skip quarantine if returning from an amber list country. The European countries included are all but one of the 27 EU member states, as well as Norway, Iceland and Switzerland, plus Lichtenstein, Monaco, Andorra and Vatican City. France is the only exception because it remains on the “amber plus” list, meaning quarantine is unavoidable even for fully vaccinated travellers.
- In Japan, Tokyo has set another coronavirus record, reporting 3,177 new cases, the first time cases have exceeded 3000 in a day. Although Japan has kept its cases and deaths relatively low compared to other countries, its vaccination campaign started late and has been slow. While Japan is now averaging about 10 million shots a week, the country’s vaccination minister Taro Kono says the speed of the campaign is less important than getting jabs to young people. "Even if we slow down a little bit, I’m OK. Rather we need to reach out to the younger people, so that they would feel that it’s necessary for them to get vaccinated,” Kono said, speaking in English during an interview.
- In South Korea case numbers have reached an all-time high as the country continues to deal with its fourth wave. There were 1,896 new cases reported on Tuesday, up from the previous record set on July 22. Tighter social distancing restrictions were enacted across most of the country, most areas are under a level three on a four-level scale. This means a 10 PM curfew and a ban on gatherings of more than four people. The greater Seoul area remains under level four curbs, which means gatherings of more than two people after 6 PM are banned.
- In Australia, Sydney’s lockdown will be extended for at least another four weeks, officials announced. The lockdown, which began on June 26, will be extended until at least August 28. New South Wales state Premier Gladys Berejiklian reported 177 new cases on Wednesday, the most in a day since March 2020. After containing smaller outbreaks, Victoria and South Australia lifted their lockdown measures, but experts are warning that the restrictions in Sydney could last until September or even later. The nation’s vaccine program has struggled, with only 16% of the adult population fully vaccinated.
Covid-19 – Due Diligence And Asset Management
UK institutional investors show concern over economy coming out of pandemic
Brief: Almost forty per cent of UK institutional investors are optimistic about the economy as the country emerges from the pandemic, according to the latest Institutional Investor Compass Survey from MFS Investment Management. The survey found that almost half of respondents (48 per cent) are confident about achieving their three- to-five-year goals but are less certain (24 per cent) of meeting their shorter-term objectives, post-pandemic. Adding to this mixed sentiment, the survey showed that more than 57 per cent of institutional investors agree some industries will not recover, with more than 47 per cent agreeing that Covid-19 has created investment opportunities and 35 per cent agreeing that markets do not fully reflect the long-term economic impact of the pandemic.
IBM Report: Cost of a Data Breach Hits Record High During Pandemic
Brief: IBM Security today announced the results of a global study which found that data breaches now cost surveyed companies $4.24 million per incident on average – the highest cost in the 17-year history of the report. Based on in-depth analysis of real-world data breaches experienced by over 500 organizations, the study suggests that security incidents became more costly and harder to contain due to drastic operational shifts during the pandemic, with costs rising 10% compared to the prior. Businesses were forced to quickly adapt their technology approaches last year, with many companies encouraging or requiring employees to work from home, and 60% of organizations moving further into cloud-based activities during the pandemic.
Top UAE Banks See Profits Surge as Impairments Drop on Recovery
Brief: The three largest banks in the United Arab Emirates reported a drop in impairment charges by nearly a third in the first half as they took advantage of an economic recovery from the Covid-19 pandemic. Emirates NBD PJSC, Dubai’s biggest lender, and its counterpart in the UAE capital, First Abu Dhabi Bank PJSC, posted an increase in profit in the first half, supported by higher fee income and a drop in the cost of risk. Dubai Islamic Bank’s first-half impairments fell 29% even though profit dropped. The results reflect an improvement in economic conditions in the UAE, OPEC’s third-biggest producer, whose vaccine rollout fed an upswing in activity and as oil prices rebounded. Executives emphasized lower-than-expected loan-loss charges, pointing to their banks’ strengthening balance sheets and adequate provisioning while still sounding caution about the outlook.
This Type of Day Is Price of Progress in Post-Pandemic Stocks
Brief: The Nasdaq 100 Index trades for 38 times earnings. Abby Joseph Cohen says it’s a market with “no margin for error.” It’s only July, and the S&P 500 Index has put in a gain that most fund managers would consider a stellar year. So when big drops like Tuesday’s land with no obvious bad news to explain them, it’s useful to consider how far the market has already come. “It’s priced to short-term perfection,” said Kim Forrest, founder and chief investment officer at Bokeh Capital Partners. “Was yesterday the high? Because that’s what everyone is acting on. I don’t believe yesterday was the high of the year,” she added, citing views on earnings over the next six months.
Everyone Is Losing It Over Inflation. Except Financial Markets
Brief: It’s everywhere. At the White House. In consumer data. On earnings calls: Anxiety that inflation is about to gut the economy. Two places it isn’t are the stock and bond markets, where investors have taken Jerome Powell’s “transitory” mantra to heart. Breakeven rates -- a gauge of bond market inflation expectations -- have barely budged in a month, even after the hottest price print in more than a decade. Meanwhile, tech giants -- thought to be vulnerable to a pickup in price pressures -- have overpowered cyclical shares, which normally fare better in an inflationary environment. The divide highlights a dynamic that has persisted since pandemic lockdowns began 16 months ago: Economic hardships crimping companies real time, while markets stay calm on grounds this too shall pass. So far it’s been a winning strategy for investors, who stood firm amid the deepest recession in generations and now seem bent on reprising the high-wire act as the latest stresses play out.
