Brief : Federal Reserve Bank of St. Louis President James Bullard said that getting three-quarters of Americans vaccinated would be a signal that the Covid-19 crisis was ending, a necessary condition for the central bank to consider tapering its bond-buying program. “It’s too early to talk about changing monetary policy,” Bullard said in an interview with Bloomberg Television’s Kathleen Hays Monday. “We want to stay with our very easy monetary policy while we are still in the pandemic tunnel. If we get to the end of the tunnel, it will be time to start assessing where we want to go next.” About 36% of Americans had been given a first vaccine dose and 22% were fully vaccinated, according to the Bloomberg Vaccine Tracker. Centers for Disease Control and Prevention officials have urged Americans to continue to take safeguards, including restricting their travel, with the number of cases rising. “When you start to get to 75% vaccinated, 80% vaccinated and CDC starts to give more hopeful messages that we are bringing this under better control and starts relaxing some of their guidelines, then I think the whole economy will gain confidence from that,” Bullard said.
Brief: Goldman Sachs Group Inc executives are examining how well the bank navigated several major market events this year that caused extreme volatility, people familiar with the matter told Reuters. The review will include a market-wide fire sale of stocks triggered by Archegos Capital Management’s default on margin calls at banks including Goldman, the sources said. The meltdown of Archegos, a New York investment fund run by former Tiger Asia manager Bill Hwang, has sent shock waves across Wall Street and drawn regulatory scrutiny in three continents. Goldman Sachs is also looking more broadly at how it handled recent market events, with a particular lens on compliance and best practices, the sources said. That could include what happened during the Reddit-fueled trading frenzy in equity markets, including shares of GameStop Corp, as well as the U.S. Federal Reserve’s decision to end pandemic-related capital relief for banks, which caused issues in fixed-income markets. Also this year, there was chaos in energy markets in mid-February after a deep freeze in Texas sent the cost of fuel and power sky-high.
Brief: United Nations Secretary-General Antonio Guterres is calling on nations to institute a wealth tax to help reduce global inequality exacerbated by the Covid-19 pandemic. There has been a $5 trillion surge in the wealth of the world’s richest in the past year even as those at the bottom were made increasingly vulnerable, Guterres told a UN economic and social forum on Monday. “I urge governments to consider a solidarity or wealth tax on those who have profited during the pandemic, to reduce extreme inequalities,” he said. “We need a new social contract, based on solidarity and investments in education, decent and green jobs, social protection, and health systems. This is the foundation for sustainable and inclusive development.” With the Covid-19 fallout causing government debt to swell, and hurting poorer people most, wealth taxes are being debated from California to the U.K. as a tool both to pay down debt and address inequality. U.S. Senator Elizabeth Warren, Nobel laureate Joseph Stiglitz and economist Thomas Piketty are among proponents. In the U.S., Warren, along with Representatives Pramila Jayapal and Brendan Boyle, have proposed a 2% annual tax on households and trusts valued at between $50 million and $1 billion, though the measure is unlikely to garner the support needed to pass, particularly in the evenly divided Senate.
Brief: The Ontario Securities Commission (OSC) today released a new study that explores the impact of the pandemic on the behaviours and attitudes of retail investors. This study is part of the OSC’s ongoing efforts to monitor the impact of the pandemic on investors and markets. The COVID-19 pandemic has uniquely affected the financial situation of each retail investor. Most investors are simply trying to endure the hardship and uncertainty of the pandemic, but some see it as an opportunity to increase their participation in the capital markets. “We continue to see the uneven impact that this crisis is having on retail investors,” said Tyler Fleming, Director of the Investor Office at the OSC. “Understanding how the pandemic is affecting different segments of the population is essential for supporting retail investors during this difficult time.”
Brief: Hedge fund managers are feeling optimistic about their economic prospects over the next 12 months. In a recent survey, 90 percent of hedge funds reported a positive outlook for their firms’ futures, according to the Hedge Fund Confidence Index, a global index produced by the Alternative Investment Management Association with law firms Simmons & Simmons and Seward & Kissel. The HFCI was based on a poll over 300 hedge funds across the globe, accounting for approximately $1 trillion in assets, during the first quarter of 2021. Respondents were asked to rate their economic confidence levels on scale of -50 to +50, with +50 indicating the highest level of confidence. Based on responses, the average measure of confidence was +18 percent, a nearly 40 percent increase from the confidence levels reported last quarter. “Hedge funds appear to be riding a wave of optimism sweeping the globe as it moves closer to exiting the pandemic,” the group said in the report. The report attributes much of this “cautious optimism” to the increased distribution of Covid-19 vaccinations and the slow lifting of pandemic-related economic restrictions. In the first three months of 2021, hedge funds have also seen a “solid set of results,” returning 6 percent net of fees for the year as of March 2021, according to the report.
Brief: Singapore’s largest companies missed a collective target to get more women on their boards, with diversity efforts taking a backseat to combating the coronavirus pandemic. The proportion of women on the boards of the 100 biggest listed companies rose 1.4 percentage points to 17.6% as of end-2020 from a year earlier, according to the Council for Board Diversity. The target was 20%. Some companies didn’t view board diversity as a priority last year as they battled the global outbreak, the council said. “Board diversity, a recognized hallmark of progressive boards even before Covid-19, is more critical now than before,” Loh Boon Chye, co-chair of the council, said in a statement. “Post-pandemic recovery offers opportunities for innovation and business repositioning. Having directors with a wider mix of gender, age, skills, experiences, and backgrounds allows boards the broad-based choices as they assess what is best for the future.” The percentage of top companies with 30% or more women on their boards rose to 16% in 2020 from 12% the year before, the report showed. There were still 18 all-male boards in 2020, and only seven of the top 100 firms were chaired by women.