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Our briefing for Thursday March 26, 2020:
Mar 26, 2020 3:54:34 PM
- In the United States, unemployment rates soared close to 3.3 million. This number shatters the highest number of initial jobless claims recorded since the Department of Labor started tracking such data in 1967. The previous high was 695,000 claims filed in the week, ending October 2nd, 1982.
- The Senate on Wednesday passed the $2 trillion stimulus package in an unanimous 96-0 vote, a remarkable sign considering how politically divided the country has been in recent years. The House of Representatives will now vote on the bill on Friday. Treasury Secretary Steve Mnuchin says Americans should start receiving deposits within three weeks of the bill becoming law.
- In Canada, Prime Minster Justin Trudeau has implemented the Quarantine Act, which forces travellers coming home from abroad to self-isolate for two weeks. The measure which makes some exceptions for health-care workers and truckers, allows for fines and even jail time for people who ignore the order.
- Global News in Canada is reporting White House officials are actively discussing putting soldiers near the Canadian border because of security concerns, relating to Covid-19. "Canada is strongly opposed to this U.S. proposal and we've made that opposition very, very clear to our American counterparts," said Deputy Prime Minister Chrystia Freeland on Thursday.
- As the United Kingdom closes in on 10,000 coronavirus cases, Home Secretary Priti Patel noted the new lockdown enforcement allows police officers to order people to go home, leave or disperse an area and ensure parents are taking steps to stop their children from breaking the law. Those who refuse to listen, could find themselves facing a fine.
- Italy continues to take small steps towards their recovery from the coronavirus as the country noted their daily growth rate in diagnosed cases has been under 10 per cent for the fourth consecutive day. However, their death toll stands at just over 8,100 from the virus, the most of any country in the world.
- In China as the country slowly tries to return to normal, their foreign ministry is set to temporarily suspend entry to the country for almost all visas and residence permits. Starting on March 28th, entrance of foreign nationals will be barred with the small exception of diplomatic visas. Individuals who are coming to China for urgent humanitarian reasons, or for essential trade or science must apply for an exemption.
Covid-19 – Due Diligence And Asset Management
Tudor Jones says DC coronavirus aid is biggest fiscal-monetary ‘bazooka’ ever, More Like ‘Nuclear Bomb’
Brief: Hedge fund manager Paul Tudor Jones said Thursday investors should commend Washington’s policy response to the economic shock from the coronavirus pandemic. “Investors can take heart that we’ve counteracted this existential shock with the greatest fiscal, monetary bazooka. It’s not even a bazooka. It’s more like a nuclear bomb,” Jones said on CNBC’s “Squawk Box.” Jones said the actions from the Federal Reserve and Congress have brought “safety” to the economic system, even as COVID-19 spreads across the U.S. and disrupts daily life. “We did in two weeks what it took the Fed eight months to do in 2009,” the billionaire investor said. “Remember, we didn’t even get quantitative easing until well after the great financial crisis had started, well into the recession.”
Two U.S. Banks Halt Layoffs Amid Coronavirus Uncertainty
Brief: Morgan Stanley (MS.N) and Citigroup Inc (C.N) have hit pause on layoffs as the coronavirus pandemic has led to a record level of unemployment claims and unprecedented economic uncertainty, according to sources. Morgan Stanley on Thursday pledged to not cut any jobs this year, according to a memo seen by Reuters, as the Wall Street bank sought to reassure worried employees during the coronavirus pandemic. Contents of the memo were confirmed by a Morgan Stanley spokesman. Citigroup Chief Executive Michael Corbat has also ordered a suspension of any planned layoffs, a source told Reuters. Further details were not immediately available.
Hedge Fund Legends Quietly Contacting Investors, Citing Historic Buying Opportunities
Brief: “Please note,” the hedge fund firm’s website warns, “the Baupost partnerships are generally closed to new capital and do not actively solicit or market to prospective investors. But right now,Seth Klarman’s firmis making an exception, along with a number of other superstar managers who are typically impossible to invest with. The massive drop in asset prices catalyzed by the novel coronavirus pandemic has some elite hedge funds quietly shopping for extra capital to invest, sources say. In addition to Baupost, which managed $29 billion at the end of last year, The Children’s Investment Fund (TCI) has selectively reopened to additional money.
Talpins’s Element is Betting on Sharp Market Reversal After Rout
Brief: Jeff Talpins’s Element Capital Management is predicting that global markets are near a turning point and has begun betting on a sharp market reversal. The $15 billion hedge fund firm told clients it has started deploying cash and is taking positions on the prospect that equities will gain. Element is also shorting the long end of the interest rate market. In a note sent to clients Monday, the day before the S&P 500 bounced back with gains of more than 9%, the firm said the stimulus packages announced across continents to soften the economic blow from the coronavirus means the worst is over.
Joint Statement by the FCA, FRC and PRA
Brief: The coronavirus (Covid-19) pandemic is an unprecedented situation but it is important to recognise that, while the reduction in activity associated with coronavirus could be sharp and large, it is likely to rebound sharply when social distancing measures are lifted. In addition, in the intervening period, while activity is disrupted, substantial and substantive government and central bank measures have been put in place in the UK and internationally to support businesses and households. These measures, which have been evolving rapidly and could evolve further, are expected to remain in place throughout the period of disruption. Successful and sustainable businesses underpin our economy and society by providing employment and creating prosperity. Equity and debt capital markets play a vital role providing finance to these businesses and will aid the recovery. Governments and regulators around the world remain focused on keeping capital markets open and orderly.
SEC Extends Conditional Exemptions from Reporting and Proxy Delivery Requirements for Public Companies, Funds and Investment Advisers Affected by Coronavirus Disease 2019 (COVID-19)
Brief: Today, the Securities and Exchange Commission announced that it is extending the filing periods covered by its previously enacted conditional reporting relief for certain public company filing obligations under the federal securities laws, and that it is also extending regulatory relief previously provided to funds and investment advisers whose operations may be affected by COVID-19. In addition, the SEC’s Division of Corporation Finance issued today its current views regarding disclosure considerations and other securities law matters related to COVID-19.
