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Our briefing for Friday March 19, 2021:
Mar 19, 2021 3:35:24 PM
- Just 58 days since being elected as President of The United States, Joe Biden has reached his goal of vaccinating 100 million people. The news comes a day after the U.S. agreed to loan surplus vaccines to Canada and Mexico. Awaiting authorization from domestic health authorities, the U.S. has already secured tens of millions of doses of the Astra-Zeneca vaccine, which has been approved for use by the World Health Organization. The U.S. is currently administering an average of 2.2 million doses of coronavirus vaccines a day and that number is likely to increase in the near future as the Astra-Zeneca vaccine is approved and supply chains widen. While American vaccination efforts are improving, the number of American deaths stemming from the virus has already surpassed 530,000 in the country to date.
- Roughly a third of Canada’s long-term care workers have not yet received a Covid-19 vaccine, despite being eligible since December. According to the Ontario Ministry of Long Term Care, nearly 95 per cent of long-term care residents have received at least one shot of two coronavirus vaccines, while only 67 per cent of workers have received their first shot. The discrepancy is being blamed on a number of factors including long wait times, changing public health guidelines and economic factors. However, as Sharleen Stewart, president of SEIU Healthcare, a union representing staff in many of Ontario's long-term care homes says, the “number one” reason for workers not receiving the vaccine is the lack of sick days allotted to healthcare workers. "These very low-wage earners, predominantly women ... they cannot afford to lose, you know, $200, $300 a paycheque by having to stay home for a couple of days to rest after their vaccination.
- The United Kingdom has announced today over 1.7 million doses of a Covid-19 vaccine must be retested before they are able to be administered to public. While U.K. is leading Europe in vaccination rates, they are expecting less vaccines to come into the country in April than they did in March. Prime Minister Boris Johnson has said that the rollout of vaccines will be slower in the coming month, it will still be better than what was expected in February. Many countries around the world are feeling the crunch to have their citizens vaccinated as soon as possible, which is negatively effecting supply chains. Johnson avoided putting blame on India, where the majority of vaccines destined for Britain are being produced, saying “there is a delay as there often is, caused for various technical reasons, but we hope to continue to work very closely with the Serum Institute [of India], and indeed with partners around the world.”
- The European Union has announced a proposal to create a Digital Green Certificate to indicate whether an individual has been vaccinated against Covid-19, received a negative test result, or has recovered from the virus. It will be issued in the form of a QR code, or in paper format to allow free passage within member states of the union. Commissioner for Justice, Didier Reynders, said “with the Digital Green Certificate, we are taking a European approach to ensure EU citizens and their family members can travel safely and with minimum restrictions this summer.” While the certificate will be valid throughout the bloc, individual member states will still have the authority to decide which travel restrictions to abide by when screening entry into their jurisdictions. Reynders continued by stating that the certificate “will not only help us to gradually restore free movement within the EU and avoid fragmentation. It is also a chance to influence global standards and lead by example based on our European values like data protection.”
- A new wave of infections sweeping the Philippines have prompted government authorities to tighten restrictions in the nation’s capital of Manila on Friday. Surging infection rates have brought restaurants, arcades and bars back down to 30 per cent capacity as the city struggles to contain the virus. Just over 7000 new infections were reported on Friday, marking the highest number of cases since pandemic began. Experts in the country are suggesting that infection rates are expected to hit 11,000 a day by the end of the month unless strict action is taken to curb the outbreak. The Philippine’s drug regulator on Friday approved the administration of the Russian Sputnik V vaccine, the fourth vaccine to be approved in the country. The government has also imposed night-time curfews, and a ban on foreigners entering the country in an attempt to avoid locking down Manila as was this case earlier in the pandemic.
Covid-19 – Due Diligence And Asset Management
Borrowers hit hardest by COVID risk paying £1000s more in monthly repayments, new research from Legal & General reveals
Brief : UK borrowers who have seen their income fall due to the COVID-19 crisis may soon be paying thousands of pounds more in monthly repayments as one in three (32%) borrowers consider staying on their lender’s Standard Variable Rate (SVR) once their existing mortgage product expires, according to new research from Legal & General Mortgage Club. 32% of borrowers who have been negatively financially impacted by the pandemic say they are likely to move onto their lender’s Standard Variable Rate (SVR) rather than remortgage. These buyers could face a £2,500 annual increase in their repayments if they don’t consider their remortgage options, impacting their finances which may already be stretched. One in two (50%) homeowners are also concerned that their decision to take a payment ‘holiday’ will affect their future ability to borrow. For homeowners whose finances have been adversely impacted by the pandemic, exploring their mortgage options is essential to understanding where better alternatives are available, but the research suggests that the impact of COVID-19 is deterring thousands of borrowers with maturing loans from remortgaging. This could impact over 700,000 borrowers who will reach the end of their two- and five-year residential fixed-rate mortgages in 2021.
How The COVID-19 Pandemic Shifts Insurtech Investment Priorities
Brief: The pandemic has had a dramatic impact on the entire economy, and the insurance business is no exception. The socially distanced environment has forced many insurers to focus on technology that can help customers purchase insurance, interact with their policies and file claims online, according to Deloitte. In addition, companies are focusing more on providing more comprehensive offerings instead of point solutions. The Insurtech Numbers: The good news for the insurtech industry is that the pandemic didn’t appear to negatively impact overall investment. In 2020, insurtech funding hit a record $7.1 billion, according to WillisTowersWatson. Total funding was up 12% and the total number of funding deals were up 20%. In the fourth quarter of 2020, property & casualty (P&C) insurtechs accounted for 67% of the $2.1 billion in funding raised.
Easy money? Gen Z invest online to beat coronavirus woes
Brief: Juggling homework, friends and his personal YouTube channel, 12-year-old Kwon Joon is often too busy to check on his investments – not that the South Korean schoolboy is too concerned. With impressive returns of 42% since he began dabbling in the stock market last year, Kwon believes online trading can safeguard his financial future, in a world made increasingly insecure by the economic fallout from COVID-19. “To be honest, I sometimes forget to check my stock account because of my school work or when I’m playing with my friends,” said Kwon, who has made 14 million won ($12,364) in profits since he invested 25 million won in seed money last April. “I’m going to take the shares with me until I become an adult. I think this is the benefit of investing in stocks as a young person because you can invest in it for the long term,” he told the Thomson Reuters Foundation from southern Jeju Island. From South Korea to the United States, a growing number of teens and young adults born after 1996 – dubbed Generation Z – are turning to online investment platforms that offer the chance to make a living with a swipe, but often pose unforeseen risks.
Wall Street Week Ahead: Investors got the stimulus boost, but now face tax worries
Brief: Investors are turning their attention to prospects that higher taxes could threaten the rally in U.S. stocks as President Joe Biden's administration moves forward with its agenda and seeks ways to pay for its spending plans. In recent days, investors have focused on a rise in bond yields that has pressured share prices, though indexes remain close to their record highs. Nevertheless, some worry that at least a partial rollback of the corporate tax cuts that fueled stock gains during the Trump era could eventually drag on equities, whose valuations have already grown rich by some measures. "It is an issue," said Quincy Krosby, chief market strategist at Prudential Financial. "It's going to be talked about as it becomes a reality. But the market's focus right now is clearly on getting to the other side of this pandemic." The S&P 500 has gained more than 4% this year, with Biden's newly passed $1.9 trillion coronavirus relief plan providing the latest fuel for the economy and the stock market. The pace of the economic recovery and COVID-19 vaccinations will remain in investors' focus next week, along with the rise in U.S. bond yields that has pressured tech and growth shares and further supported bank and other value stocks.
Tech Leads Stocks Higher; Yields Retreat From Peak
Brief: A rebound in the technology sector pushed U.S. stocks into the green and Treasury yields retreated from the highest levels of the day as investors weighed the risk of inflation with economic growth accelerating. The yield on the benchmark 10-year Treasury had spiked earlier after the Federal Reserve let a capital break for big banks expire. Crude oil rebounded after tumbling Thursday. The S&P 500 edged higher, led by the energy and communication services sectors. JPMorgan Chase & Co. and other banks weighed on the Dow Jones Industrial Average in the wake of the Fed ruling. Facebook Inc. helped the tech-heavy Nasdaq 100 rebounded from Thursday’s 3.1% slump. Traders are bracing for quadruple witching Friday, a major expiration of options and futures contracts that can exacerbate swings in asset prices. “What we have to watch out for is a persistent rise in inflationary expectations and that’s how the rise in the 10-year Treasury could potentially get out of control,” said David Donabedian, chief investment officer of CIBC Private Wealth Management. “That’s today probably the biggest risk for the stock market.”
Fed easy monetary policy means it's time for active management: Mohamed El-Erian
Brief: Last year, it was tough to find an asset class that was underperforming. U.S. stock benchmarks rose in 2020, after plunging at the onset of the coronavirus pandemic. Government and corporate bond prices rose as yields contracted. Bitcoin quadrupled. Gold rose 24%. That uniform outperformance has been a lot harder to come by thus far in 2021. All three major stock averages have hit highs on multiple occasions, but the Nasdaq (^IXIC) has fallen about 7% since its most recent record on Feb. 12. Bitcoin (BTC-USD) has suffered a couple of double-digit percentage pullbacks, although it remains higher year-to-date. Many of the declines in risk assets have been triggered by rapid increases in Treasury yields, reflecting markets digesting the potential for inflation and the Federal Reserve's willingness to let the economy run hot. Now one of the best-known macro strategists, Mohamed El-Erian, is saying that because of the Fed's current policy, investors should get more active. "It's going to be an environment for very active management, building portfolios from a bottom-up perspective," El-Erian tells Yahoo Finance Live.
