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Our briefing for Monday December 7, 2020:
Dec 7, 2020 4:08:01 PM
- In the United States, President Elect Joe Biden unveiled his healthcare team who will have the unenviable task of guiding the country through its worst pandemic in over 100 years. Xavier Becerra, the California attorney-general and former member of Congress, will be in charge of the US health department. Rochelle Walensky, the chief of infectious diseases at Massachusetts General Hospital, will become the head of the Centers for Disease Control and Prevention (CDC), the public health body coordinating the federal government’s response to COVID-19. As mentioned last week in Castle Hall’s COVID-19 Diligence Briefing, Dr. Anthony Fauci will remain as the Director for the National Institute of Allergy and Infectious Diseases, as well as serve as President Elect Biden’s chief medical adviser on COVID-19.
- Canadian Prime Minister Justin Trudeau held a news conference on Monday, flanked by the military general who will lead the country’s vaccine logistics, to announce shots will start to be in Canadian’s arms by the end of the year. Prime Minister Trudeau announced up to 249,000 doses (so about 125,000 people will be inoculated due to the two-dose program) of the Pfizer COVID-19 vaccine will be on hand by year’s end. The vaccines will be distributed to jurisdictions on a per-capita basis, so each province will receive vaccine doses in a number proportionate to their share of the population. Ontario, Quebec and Alberta are Canada’s three hardest hit provinces right now – setting daily COVID-19 case records on a routine basis over the last several weeks.
- The United Kingdom plans to give their first inoculations of the Pfizer/BioNTech vaccine on Tuesday. The country is gearing up to deploy the vaccine with more than 1,000 centers being set-up over the next several weeks. The Department of Health and Social Care said on Sunday the first batches have arrived at secure UK locations via Belgium. Following quality checks to ensure the vaccine has been kept at the correct temperature, the shots will be made available to 50 hospital hubs around the country, before being distributed to doctor-run vaccination centers, which will administer the shots. Some of Britain’s most famous figures have stepped forward to say they would receive the vaccine to encourage others to follow their lead. Queen Elizabeth II and Prince Philip, both in their 90’s, are two of those famous figures and will receive their shots within a few weeks, according to various media reports.
- The Financial Times is reporting a World Health Organization’s (WHO) report on Italy’s handling of the pandemic’s first wave was taken down from health body’s website just hours after its publication in May. The assessment titled, “An unprecedented challenge, Italy’s first response to COVID-19” called the country’s response “improvised” and “chaotic”. The report was completed by a group of pan-European WHO scientists, led by Venice-based Francesco Zambon. Italy’s decentralized approach to public health policy, as well as delays in testing and tracing potential COVID-19 infections were other reasons for their harsh outcome during the first wave. In a written response to the Financial Times, the WHO said the document was removed from their website due to “factual errors in some of the data and statistics” but declined to provide specific details.
- The United Arab Emirates (UAB) are facing a spin-off effect from the coronavirus pandemic: cyber-attacks. The UAB’s top cyber security chief said the Middle East region is facing a “cyber pandemic” as citizens moved into a full online life creating a huge increase in cyber-attacks. Mohamed al-Kuwaiti told a CNBC moderated panel at the Gulf Information Security Expo and Conference in Dubai over the weekend that the UAE has seen at least a 250% increase in cyberattacks in 2020 with the financial and health care sectors being the most targeted.
- China has given its own pharmaceutical company its own kind of injection: a $515 boost to increase production and distribution efforts as it draws closer to its final stage of COVID-19 vaccine approval. Sinovac is the firm receiving the cash injection and is considered China’s frontrunner to be sold worldwide. The company’s vaccine is currently undergoing large-scale trials in Brazil, Pakistan, Indonesia and Chile. China has pledged to distribute their vaccines across the developing world as an attempt to gain future political favour, looking to replace the United States as that recognized superpower since they have taken a more domestic approach over the last several years via President Donald Trump’s foreign policy.
Covid-19 – Due Diligence And Asset Management
Goldman Plots Florida Base for Asset Management in a Blow to New York
Brief: Goldman Sachs Group Inc. is weighing plans for a new Florida hub to house one of its key divisions, in another potential blow to New York’s stature as the de facto home of the U.S. financial industry. Executives have been scouting office locations in South Florida, speaking with local officials and exploring tax advantages as they consider creating a base there for its asset management arm, according to people with knowledge of the matter. The bank’s success in operating remotely during the pandemic has persuaded members of the leadership team that they can move more roles out of the New York area to save money. Goldman may yet decide against centering asset management in Florida, where it would join a growing list of firms seeking tax and lifestyle advantages. It also may opt for another destination like Dallas, where it has been accelerating its expansion, the people said. The deliberations at the Wall Street icon, often a trendsetter for the industry, adds to the cloud over New York’s future. As restaurants and stores fight to survive, the city is trying to stem the flight of white collar jobs to states with lax tax regimes and lower costs of living.
BlackRock Takes Equities to Overweight for 2021, Sees Powerful Restart to the Economy
Brief : BlackRock has raised equities to overweight for 2021, based on its view that the restart of the economy will accelerate with the distribution of vaccines. The firm is raising equities from neutral on a tactical basis, meaning over a six-to-12-month basis. From a long-term strategic view, BlackRock remains neutral on stocks, due to valuations and a challenging environment for earnings and dividend payouts. The S&P 500 has traded to new highs and risen more than 14% this year, even after the big selloff in March. “The big change around the outlook itself is upgrading risk assets overall and seeing 2021 as a very constructive year for risk assets,” said Mike Pyle, BlackRock’s global chief investment strategist. BlackRock released its 2021 outlook Monday. Pyle said BlackRock has cut investment grade credit to underweight, on a tactical basis, and prefers high yield debt for income potential. The firm also upgraded emerging market debt to neutral and Asian fixed income to overweight. “We see 2021 as a really powerful year for the restart, in terms of economic activity, but also importantly a year where we’re going to see central banks hold interest rates within a pretty tight range,” Pyle said.
‘Unstoppable Trends’ Powering Bullish Global Outlook, says Citi
Brief: After proving its resilience in the face of a once-in-a-century healthcare crisis, the global economy is set to rebound in spectacular fashion, according to a new report from Citi Private Bank. In its Outlook 2021 report, Citi Private Bank said 2020 was a chance for the world to “test drive the future” and set the stage for growth at the end of the pandemic. A strong financial system, the effectiveness of government actions to buoy businesses and individuals, and a successful rush to develop an effective vaccine have provided momentum for a bullish 2021 outlook. “Our optimism going into 2021 is buoyed by strong financial institutions, high household savings and growing confidence levels among businesses and consumers alike,” said David Bailin, chief investment officer of Citi Private Bank. “We’re also seeing increased investor optimism due to low global interest rates that will enable a full economic recovery.” The COVID-19 pandemic distorted valuations for many assets, which the report said will unwind going into 2021. The shakeup will ultimately prove beneficial for COVID cyclical sectors such as financials, industrials, real estate, it said, along with hotels, restaurants, and airlines.
Amid Pandemic, Davos Event to be Held in Singapore Next Year
Brief: Organizers of the annual World Economic Forum event in Davos, Switzerland, have again changed their planned venue for next year’s edition, announcing it will now take place in Singapore in May — a sign that the COVID-19 crisis has played havoc with planning. Forum leaders in early October had said the elite gathering that usually takes place in the frigid climes of the Swiss Alps every January would be held in the Swiss city of Lucerne and nearby town of Buergenstock in May next year, delayed because of the pandemic. “The change in location reflects the Forum’s priority of safeguarding the health and safety of participants and the host community,” managing director Adrian Monck said. “After careful consideration, and in light of the current situation with regards to COVID-19 cases, it was decided that Singapore was best placed to hold the meeting.” The May 13-16 event is being billed as “the first global leadership event to address worldwide recovery from the pandemic,” and will — as usual — bring together heads of state and government, chief executive officers, civil society leaders, global media and youth leaders from around the world. The event is expected to return to Davos in 2022.
JPMorgan Sends Policy Recommendations to Biden Team on Ways to Prevent More Covid-Related Misery
Brief: JPMorgan Chase has a set of policy recommendations for ways President-elect Joe Biden can prevent a coming wave of economic misery and reduce inequality in a post-Covid world, CNBC has learned. The first priority is for lawmakers to agree on another round of pandemic relief payments to lower-income households and extending benefits for the unemployed, according to the paper, which can be found here. Failing to do so will result in unnecessary suffering as the pandemic deepens in coming months, according to Heather Higginbottom, head of the bank’s policy group, whose findings are backed by data from hundreds of thousands of Chase customers. “We see how real households are weathering this, and can project that if they don’t have additional savings and income, they’re going to be in dire straits,” Higginbottom said in a phone interview. “We have a cliff of a bunch of programs that will expire at the end of the year. There are families relying on those payments, and many of them will be food insecure. We’ll see a lot of families feeling a lot of economic pain.”
Coronavirus Recovery and US Dollar Weakness Put Asia in Bond Investment Spotlight
Brief: Asian financial markets could reap the benefits if US President-elect Joe Biden proves more conventional than his predecessor in the White House, potentially triggering a reallocation of global capital to the region. Consensus expectations point to less confrontational diplomacy for a Biden administration, creating less geopolitical headline risk, fewer market shocks and reduced volatility. Any warming of US-China ties would relieve pressure on global supply chains, which would be positive for foreign direct investment into Asia. A reduction in volatility would also be positive for Asian markets in general. It could encourage investors to refocus on the fundamental strengths of governments and companies in the region. Asian economies are more advanced in their pandemic recovery than their Western peers, having demonstrated greater state capacity to manage the crisis. China, Singapore, South Korea, Australia and New Zealand appear likely to suffer less long-term structural damage to their economies. In addition, Biden might roll back some US corporate tax cuts and deregulations implemented by sitting President Donald Trump.
