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Our briefing for Friday April 3, 2020:
Apr 3, 2020 3:02:13 PM
- As worldwide cases of the coronavirus have now climbed over the 1 million mark, the United States have close to 250,000 cases and more than 6,000 deaths. New York state continues to be the hardest hit in the country with their death toll closing in on 3,000. The state had 562 deaths due to the virus on Thursday, their deadliest day yet.
- In Canada, Prime Minister Justin Trudeau had to make a plea to the United States government to reconsider their stance via the Defense Production Act in his Friday media briefing. The US government is putting pressure on medical device maker 3M to create N95 masks for American purposes only, cutting out Canada and other Latin American countries. Trudeau noted, “There is so much trade that goes back and forth in essential services, and it could end up hurting Americans as much as it hurts anybody else. That is the point that we're making very directly and have been making for many days now to various levels of the American administration — and that message is getting through." Elsewhere in Canada, Ontario Premier Doug Ford had his province’s health experts lay out the worst-case scenario projections on Friday. Canada’s largest province could experience 3,000 to 15,000 deaths due to the coronavirus, with ramifications lasting from 18 months to two years.
- Germany also found itself involved in the 3M/United States situation. Media reports from Germany noted 200,000 masks made by 3M and intended for Berlin police were diverted to the United States as they were being transferred between planes in Thailand.
- In the United Kingdom, Matt Hancock, the country’s health secretary indicated he believes the daily death rate could peak on April 12th and Prime Minister Boris Johnson has urged citizens to stay indoors as they expect a warm spring weekend ahead. The country saw its death toll from the virus increase by 684 in one day and now sits at 3,600 + overall. The country’s first pop-up hospital and world’s largest critical care unit is now up and running. The NHS Nightingale has 500 beds but can increase its capacity to between 4,000-5,000. Even more impressive the facility was put together in just nine days.
- Several states in Australia are placing checkpoints at their borders to prevent all but essential travel from neighbouring territories. Country officials are urging people to stay home over the upcoming Easter holiday as their daily increase in infections have fallen to 5% a day, compared to 25% and 30% just two weeks ago.
Covid-19 – Due Diligence And Asset Management
Money Managers Attempt to Calm Layoff Fears Amid Downturn
Brief: As firms brace for the financial impact of COVID-19, money managers and large banks with investment management staff, like Morgan Stanley, Goldman Sachs and T. Rowe Price Group, say they have no immediate plans to turn to layoffs amid the pandemic. For most firms it remains unclear how long this will be the case, however, as the coronavirus continues to wreak havoc on the economy and businesses, pushing U.S. unemployment claims to new highs. On March 26, Morgan Stanley CEO James Gorman told employees that there will not be a reduction in the workforce in 2020, according to an internal memo obtained by Pensions & Investments.
Bridgewater’s Main Hedge Fund Loses About 20% in First Quarter
Brief: Ray Dalio’s flagship hedge fund at Bridgewater Associates ended the first quarter down about 20%, according to people with knowledge of the matter. Bridgewater extended this year’s decline after getting caught on the wrong side of the market sell-off that began in late February as a result of the rapidly spreading coronavirus. The firm’s Pure Alpha II strategy fell about 16% in March after posting smaller losses in the first two months of the year, said the people, who asked not to be identified because the information isn’t public. Dalio, who earlier this year urged investors not to miss out on an opportunity to benefit from strong markets, wrote in mid-March that the pandemic hit the firm at the “worst possible moment” because Bridgewater’s portfolios were tilted to benefit from a rise in the market.
Billionaire Hohn’s Hedge Fund Suffers Record Monthly Loss of 19%
Brief: Billionaire activist investor Christopher Hohn’s hedge fund suffered its steepest ever monthly decline in March as the global market turmoil hit his stock bets. The Children’s Investment Fund lost about 19% during the month, the worst since it started in 2004, according to people with knowledge of the matter. The decline pushed the fund’s first-quarter loss to about 23%, the people said, asking not to be identified because the information is private. A spokesman for the London-based investment firm, which managed about $30 billion before March losses, declined to comment.
Bank of America CEO Says Half a Million Customers Have Deferred Payments
Brief: Half a million of Bank of America Corp.’s 66 million customers have deferred loan payments because of financial fallout from the coronavirus. “The idea is to defer the payment, defer the impact,” Chief Executive Officer Brian Moynihan said in an interview Friday on CNBC. “We’re working with our customers who need help, who are losing their jobs. We have to preserve their ability to have cash flow.” The bank’s portal for small-business relief loans went live Friday morning and had 40,000 applications by the afternoon, according to a person familiar with the situation.
Russian Fund Calls for Joint Efforts in U.S. in Tackling Coronavirus
Brief: A Russian state fund called on Thursday for promoting dialog between Moscow and Washington, which is crucial in tackling the global spread of coronavirus, as Moscow stepped up diplomatic efforts on the global stage in fighting the infection… The Russian Direct Investment Fund (RDIF) said it was the fund that took up half the cost. The fund said it has been consistently calling for dialog between Russia and the United States. Relations between the two countries have been strained in recent years by matters ranging from Syria to Ukraine to U.S. election interference, which has been denied by Russia.
Ken Griffin’s Virus Plan Now Includes Emergency Trading Site in Florida
Brief: Citadel Securities this week opened an office in Florida to help ensure billionaire Ken Griffin’s giant trading firm can continue at full capacity during the coronavirus pandemic -- and cope with the explosion in volume the illness has spurred. The firm opened a new, temporary trading floor in Palm Beach on Monday with 24 people, according to a memo from the firm to employees seen by Bloomberg. The market maker debuted the facility two days before Florida’s governor announced astay-at-home orderfor the state of 21.5 million.
