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Our briefing for Friday, April 1, 2022:
Apr 1, 2022 3:50:00 PM
- In the United States, a new study published on Wednesday found that children ages five to 11 who had the Pfizer BioNTech Covid-19 vaccine were 68% less likely to be hospitalized during the Omicron wave. The study, conducted by the Centers for Disease Control and Prevention and the Boston Children’s Hospital looked at both vaccinated and unvaccinated patients with and without Covid-19, at 31 hospitals in 23 states. The study found that adolescents ages 12-18 were 40% less likely to be hospitalized by Omicron after receiving two shots of the vaccine. The risk of developing serious illness or requiring a ventilator was lowered by about 80% for those who received the shots in this age group.
- Canada has officially eliminated the testing requirement for fully vaccinated travellers entering the country by air, land or water. As of today, these rules are no longer in place, though people could still be subjected to random testing at the airport. Unvaccinated travellers will still be tested on arrival and again eight days later, and will need to isolate for 14 days. The Tourism Industry Association of Canada welcomed the change, expecting a surge in travel bookings, though the surge is not expected to reach pre-pandemic levels just yet. Federal officials have said they will continue to monitor the situation as it evolves.
- In the United Kingdom, a group of bereaved families called on Prime Minister Boris Johnson to resign after it was announced that 20 fines will be issued over the partygate scandal. The Covid Bereaved Families for Justice said in a statement that the Prime Minister’s team was being fined for breaking their own rules “clearly and blatantly,” also adding that the Prime Minister should have resigned months ago. "It’s crystal clear now that whilst the British Public rose to the challenge of making enormous sacrifices to protect their loved ones and their communities, those at 10 Downing Street failed," the statement said. After the announcement about the fines, the group gathered at the Covid memorial wall opposite parliament.
- Germany has reached its Omicron peak, the Robert Koch Institute (RKI) said Thursday. The institute explained in a statement that the peak of the wave has likely passed but “infection pressure remains very high with more than 1.5 million Covid cases reported to the RKI within one week.” The BA.2 Omicron subvariant has become the dominant strain in the country, now accounting for 81% of all new cases. The RKI and the Health Ministry are set to propose changes to the country’s quarantine rules, Reuters is reporting. Health Minister Karl Lauterbach wants to change the mandatory seven-day isolation for people with Covid-19, to a voluntary five days of isolation with a test at the end.
- Italy has exited its state of emergency, more than two years after it was introduced at the beginning of the coronavirus pandemic. The country’s Green Pass, a document that proves whether a person has been vaccinated, had a recent negative test or recent recovery, is no longer required for access to outdoor areas of bars and restaurants, museums, banks and public offices as well as on local and regional transportation. The Green Pass will still be required for indoor dining at restaurants and on long-distance transportation until April 30. Mask mandates will also remain in place until that date.
- Australia’s most populous state of New South Wales (NSW) has added 331 to its death toll, after health authorities reviewed registry data. NSW Health cross-checked the death certificates between January 2020 and March 2022 that listed Covid as the contributing factor or cause of death. That puts the total Covid death toll for NSW at 2,422, with 270 of the unreported deaths occurring in 2022, 58 in 2021 and three in 2020. NSW Health said in a report they were not sure why the details of the deaths were not reported to them.
Covid-19 – Due Diligence And Asset Management
Citi raises its forecast for China’s GDP growth, bringing it closer to the official target
Brief: China’s economy faces so much new pressure from Covid that Beijing may increase stimulus — boosting overall growth, Citi said Thursday. “Given the strong start of the year and the anticipated government support, we revise up our growth forecast from 4.7% to 5.0% for 2022,” Xiangrong Yu, chief China economist at Citi, said in a report late Thursday. The new forecast is closer to the official gross domestic product target of around 5.5%, which was announced in early March. For January and February, China reported better-than-expected growth in retail sales, fixed asset investment and industrial production. The upgrade to Citi’s GDP forecast comes on the back of expectations of investment in projects such as infrastructure and affordable housing, according to the report. The official Purchasing Managers’ Indexes — which measure market conditions — for manufacturing and services businesses both fell into contraction territory in March. That’s the first time both indexes have done so since February 2020.
Airlines’ Rally Stands on Shaky Ground as Investors Scamper
Brief: Airline stocks managed to outperform the S&P 500 Index in the first quarter as economies reopened and people started traveling again, but prospects for a sustained rally look shaky. An exchange-traded fund that tracks the sector is on pace for its biggest-ever monthly outflow in March. Since Russia invaded Ukraine more than a month ago, oil prices have shot above $100 a barrel and jet fuel prices have soared, and with the war showing no sign of abating, those headwinds are unlikely to go away anytime soon. The US Global Jets ETF’s outflow for March stood at about $335 million, according to Bloomberg data as of Thursday morning. The fund’s second-largest monthly outflow was in December, about $122 million. After a spate of upbeat outlooks from several carriers suggested demand for air travel was stronger than what the market had anticipated, airline stocks have rallied back over recent weeks from the lowest levels since October 2020.
Wall Street Upbeat on Health Stocks After Worst Hit in Two Years
Brief: Wall Street analysts are optimistic that health-care stocks are poised to keep rebounding from the first quarterly loss since the onset of the pandemic. As geopolitical tensions mount, inflation surges and the bond market flashes warning signals that interest-rate hikes may set off a recession, there are signs of investors circling back to health-care stocks that are often seen as a haven from swings in the economy. AbbVie Inc., AmerisourceBergen Corp., Anthem Inc. and UnitedHealth Group Inc. have all jumped back to record highs even though as a group they still trade at valuations below the S&P 500 Index. “There seems to be seem a sentiment shift since recent Fed commentary,” said Bloomberg Intelligence strategist Michael Casper. “Oversold sectors like health-care have caught a bid in sign of relief the Fed wasn’t more aggressive at the March meeting.”
U.S. Recession Unlikely Despite Bond Market Alarm: PIMCO, Amundi
Brief: The United States is unlikely to face an economic recession in the next two years despite bond markets flashing warning signs, inflation at its highest in decades and rising geopolitical risks, portfolio managers at PIMCO and Amundi said. A closely monitored part of the U.S. Treasury yield curve briefly inverted on Tuesday, a sign that investors were concerned the U.S. Federal Reserve's aggressive rate hikes to tame inflation could tip the economy into recession. "We see low probability of a recession this year or next. Our models show the risk is slightly higher than the historical average, but not at a level that is concerning," Erin Browne, multi-asset portfolio manager at bond giant PIMCO, told the Reuters Global Markets Forum on Wednesday. Browne's view was echoed by Ken Monaghan, co-head of high yield at the U.S. arm of Europe's largest asset manager Amundi, who told the forum he does not expect a recession in 2022 and reckons it is unlikely in 2023 despite some elevated risks.
Americans Added $4.2 Trillion in Pandemic Savings Skewed to Rich
Brief: American households had an extra $4.2 trillion of readily available cash at the end of last year compared with before the pandemic, after they received more government support and trimmed spending due to Covid curbs, according to the latest Federal Reserve data. Savings increased to $14.7 trillion from $10.6 trillion at the end of 2019, the Fed data show. The biggest portion of that increase came in the form of checking-account deposits and physical cash, which soared to $3.9 trillion from about $1 trillion. The rest of the extra liquidity is in the form of time deposits and short-term investments. The windfall is piling up at the top of the income distribution. About two-thirds of the excess savings were accumulated by the highest 20% of earners, with $1.2 trillion of it held by the top 1%.
