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Our briefing for Friday October 23, 2020:
Oct 23, 2020 3:39:29 PM
- The United States hit a three-month high on Thursday, recording over 70,000 new cases of Covid-19. The staggering number of new infections marks the fourth largest single-day increase the country has seen since the pandemic began. According to The Atlantic’s Covid Tracking Project, hospitalizations in the country are up 33 per cent in October. The new infections are creeping across the Sun Belt, the Midwest and the northern states. A study conducted by the University of Washington's Institute for Health Metrics and Evaluation revealed yesterday that only 49 per cent of Americans report that they “always” wear a mask in public. Across the nation, only the state of Oregon is reporting a downward trajectory in new infections, while all other states are reporting increases.
- In Canada, the reopening of schools has not been the disaster some had anticipated according to Dr. Michael Silverman, medical director of the infectious diseases care program at St. Joseph’s Hospital in London, Ontario. The decision to bring children back to the classroom was initially met with great resistance from parents who believed it was inevitable that the virus would run rampant through the schools. Just over 1500 cases have been reported in the Ontario public school system since classes began on September 5th, “for the vast majority of children and the vast majority of teachers, this has been a safe and effective intervention,” says Silverman. “That has led to children restarting their education, which has led to long-term benefits for all of us”
- The United Kingdom is attempting a new method of pinpointing the spread of Covid-19 by processing wastewater in selected communities. The Department for Environment, Food and Rural Affairs began testing sewage in areas most affected by the virus in June and since then has been able to more accurately assess spikes in specific communities or institutions. The program has been largely successful, “particularly in areas where there may be large numbers of people who aren’t showing any symptoms and therefore aren’t seeking tests,” said UK Environment Secretary George Eustice. The information given to the National Health Service’s Test and Trace committee allows experts and community leads to take action to slow the spread of the virus in targeted areas.
- India is no longer on track to pass the United States for the highest number of cases of Covid-19. While the virus is taking hold once more across the globe, India has seen decreasing numbers in October. The country’s top scientists believe that the virus had peaked in India in September and could potentially be under control by February of 2021. The news comes as roughly 100 Indian volunteers have signed up to be some of the first people outside of Russia to test the Russian Sputnik V vaccine. India has ordered over 100 million doses of the first registered coronavirus vaccine and has made arrangements with the Russian Direct Investment Fund and a local pharmaceutical company for the vaccines distribution when it becomes available. India has seen over 7.5 million cases of Covid-19 and has recorded over 115,000 deaths.
- French Prime Minister Jean Castex has reinstated curfews for eight regions in country, admitting that the “second wave is here.” France and much of Europe have seen major increases in the virus over the last week causing the government to re-evaluate the current levels of regulation. The curfew will be introduced Friday at midnight is expected to last at least six weeks unless new cases vastly decrease during that time. With the daily number of new cases hovering around 30,000, the Prime Minister said that the virus is spreading less quickly than at the start of the pandemic, but its spread has become much more extensive. Castex on Thursday said, “the situation is grave,” with hospitals in Paris alone recording a 44 per cent occupancy rate and other parts of the country are seeing hospitalizations increasing at roughly the same pace.
Covid-19 – Due Diligence And Asset Management
Asset managers plan to outsource costly non-core work to focus on investing, poll finds
Brief: Asset managers plan to outsource functions such as data management and middle and back office operations in order to cut costs and focus on their core job of generating investment returns for clients, according to a survey by US manager Northern Trust. The poll found that 45% of respondents consider data management as the function most likely to be outsourced within the next two years. Some 40% are looking to outsource back room operations, and 38% at middle office functions. The survey of 300 asset managers, including 40% in Asia, was conducted in the first quarter of 2020. Respondents’ assets under management range between US$10 billion and $500 billion. According to Ryan Burns, head of global fund services at Northern Trust, asset managers are facing rising cost pressures, including those related to regulations and technology.
Big Banks Moving Beyond COVID-19
Brief: Citigroup (C), JPMorgan (JPM), Bank of America (BAC), and Goldman Sachs (GS) are all fresh off earnings with the highly disruptive COVID-19 backdrop still festering. The headline numbers were fantastic with beats on both the top and bottom line for Citigroup, JPMorgan, and Goldman Sachs, with Back of America missing on top-line revenue but beating on bottom-line profit. Big banks are evolving to the COVID-19 landscape domestically and abroad despite the possibility of widespread loan defaults, liquidity issues, ballooning credit card debt, and stressed mortgages. To exacerbate these COVID-19 impacts, interest rates, Federal Reserve actions, yield curve inversion, and liquidity are critical elements. The business's customer side continues to be problematic as the pandemic's duration continues to drag on with no signs of slowing. A segment of the consumer base is faced with lost wages and the real possibility of not meeting their financial obligations, which will unquestionably have a negative impact on revenue and earnings.
Billionaire Hedge Fund Manager Paul Tudor Jones Expects $1.7 Trillion Stimulus Deal In Next Six To 12 Weeks
Brief: In a Thursday morning appearance on CNBC's Squawk Box, billionaire hedge fund manager Paul Tudor Jones said he believes the next six to 12 months could be the most volatile period for markets he's seen in more than 40 years of trading, as a result of a blue wave election outcome that could pump trillions into the American economy. Tudor Jones, who founded Stamford, Conn.-based Tudor Investment Corporation in 1980, said he believes the U.S. presidential election will result in a victory for former Vice President Joe Biden and a blue wave in which Democrats gain control of the Senate and retain a majority of the House. That would allow for a "massive" $1.7 trillion stimulus in the next six to 12 weeks that would "undoubtedly benefit Main Street America," with an estimated $700 billion going toward another round of stimulus checks, the 66-year-old said.
Goldman Sachs sends employees home after two Covid-19 cases on trading floors
Brief: Goldman Sachs has sent some employees at its Plumtree Court headquarters home after two staff on its London trading floors tested positive for Covid-19, as banks in the City keep some key workers in the office amid a spike in virus infections across the UK. In a memo to staff sent on 15 October, seen by Financial News, the bank said that one employee on the fourth floor of its London office and another on the fifth floor were self-isolating after testing positive with Covid-19. Equities trading is on the fourth floor, and its fixed income currencies and commodities unit is on the fifth, according to a person familiar with the matter. "If you have been identified as a close contact of these individuals, the Wellness team has already reached out to you to share guidance," the memo said.
The Covid-19 Crisis Is Starting To Hurt State Bond Ratings. What Does This Mean For Your Investments?
Brief: Investors are losing trust in the Land of Lincoln. Illinois, the fifth largest state economy in the United States, is being forced to pay sky-high interest rates on its general obligation municipal bonds to compensate investors for the risk of lending the state money. The three largest credit rating agencies have not only classified Illinois debt as on the brink of junk, but they’ve also issued negative outlooks to boot. The Prairie State has plenty of company in this regard. Moody’s recently lowered the credit ratings of both New York State and New York City. New Jersey, despite being known as the state with the most millionaires per capita in the U.S., is considered a problematic bet—two credit rating agencies have it on negative outlook.
Permanently remote workers seen doubling in 2021 due to pandemic productivity: survey
Brief: The percentage of workers around the world that is permanently working from home is expected to double in 2021 as productivity has increased during the coronavirus pandemic, according to a survey from U.S.-based Enterprise Technology Research (ETR). ETR in September surveyed about 1,200 chief information officers from around the world across different industries. The CIOs also expressed increased optimism about business prospects in 2021, as they see an increase in tech budgets by 2.1%, compared with a 4.1% decline this year due to the lockdowns triggered by the pandemic. The survey said information technology decision-makers expect permanent remote work to double to 34.4% of their companies’ workforces in 2021, compared with 16.4% before the coronavirus outbreak, a result of positive productivity trends.
