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Our briefing for Tuesday March 24, 2020:
Mar 24, 2020 4:43:01 PM
- In the United States, the President and health experts are seemingly at opposite ends of the spectrum with it comes to the coronavirus. President Donald Trump has repeatedly said over the past few days he wants to see the country back up and running. During a town hall for Fox News, the President stated, "I give it two weeks… I guess by Monday or Tuesday [March 30th/31st], it's about two weeks. We will assess at that time and give it more time if we need a little more time. We have to open this country up."
- Meanwhile the World Health Organization during a call with reporters on Tuesday said the United States has the potential, due to their large acceleration in the number of cases, to become the new epicentre of the virus, replacing Europe.
- In Canada as of early Tuesday there are close to 2,200 confirmed and presumptive cases of the coronavirus with Quebec overtaking B.C. and Ontario for most cases. Quebec noted a huge spike with over 1,000 confirmed/presumptive cases, nearly tripling their number from Sunday to Monday.
- Premier Francois Legault says one of the factors is the province’s spring break takes place at an earlier date than the rest of the country, so Quebecers started returning home earlier. Quebec’s public health director also notes more testing and including the number of potential cases in the total number of cases as reasons too for the dramatic increase.
- In Japan, the country has come to an agreement with the International Olympic Committee (IOC) to postpone the 2020 Summer Olympics in Tokyo until 2021. This news comes as pressure mounted against the IOC and Japan to cancel the games due to the worldwide spread of the coronavirus. Countries like Canada and Australia made the decision to pull their athletes from Tokyo 2020 just a few days ago.
- In a live television address Tuesday evening, Indian Prime Minister Narendra Modi seemed to spark panic amongst his people, announcing an abrupt, minimum 21-day lockdown of the country’s 1.3 billion citizens. The lockdown would start at midnight local time.
- While Modi assured people the government would work to maintain essentials like milk, food and vegetables, he was vague on how people were supposed to obtain these essentials if they weren’t permitted outside of their home.
- In Italy, the country is showing small signs of improvement marking the second consecutive day of new cases increasing by less than 10%. However, the government on Tuesday approved new measures to punish anyone who appears to have broken restrictions on social distancing, including a fine up to €4,000, and ability to close businesses for up to 30 days.
- In the United Kingdom, more than 8,000 people have tested positive for the coronavirus as the country experiences its first full day under lockdown after Prime Minister Boris Johnson made the announcement Monday evening. People in the UK can only leave their home to shop for essentials, for one form of exercise per day, medical need or to provide care to a vulnerable person, or travelling to and from essential work.
- China reported some good news as Wuhan, the city at ground zero of the coronavirus epidemic, is scheduled to have its shutdown lifted on April 8th. The date would be more than two months after the city was first locked down from the outside world. Similar lockdown measures for other cities in China’s Hubei province, for which Wuhan is the capital will have their lockdown lifted as early as Wednesday.
Covid-19 – Due Diligence And Asset Management
Trump, Pence Held Call on Economy with Investors including Paul Tudor Jones, Stephen Schwarzman
Brief: President Donald Trump and Vice President Mike Pence held a call to discuss the coronavirus impact on the economy, according to sources. Investors on the call included Third Point’s Dan Loeb, Blackstone’s Stephen Schwarzman, Vista Equity’s Robert Smith, Intercontinental Exchange’s Jeffrey Sprecher and Paul Tudor Jones, hedge fund manager and co-founder of JUST Capital. The call with some of Wall Street’s top investors and hedge fund leaders was less focused on potential actions the administration could take to mitigate the impact of the novel coronavirus. Instead, it was more focused on how America’s top money managers are viewing markets and the U.S. economy, the people familiar with the matter said.
Citadel Turns 2020 Profit After Spotting Virus Risks Early
Brief: Citadel, the Chicago-based hedge fund giant led by billionaire Ken Griffin, has so far weathered the coronavirus market storm well, turning a slight profit in its flagship Wellington hedge fund for the year through Monday, according to a person familiar with the situation.The fund, which practices a so-called multi-strategy array of bets on stocks, bonds, commodities and other securities using teams of traders, was as of Friday down 5.25% for March, the person said, who requested anonymity because the information is private. The exact year-to-date gain, which is net of fees, was not finalized.
JPMorgan Plans Firm-Wide Hiring Freeze Amid Virus Uncertainty
Brief: JPMorgan Chase froze hiring across most of the firm as millions of people stay at home to help stem the spread of the coronavirus, according to people familiar with the matter. The bank asked managers in businesses including the corporate and investment bank, the consumer unit, and the asset- and wealth-management group to review job postings and pull listings for roles that don’t need to be filled immediately, said the people, who asked not to be identified discussing the private plans.
Bill Ackman Makes $2.5 Billion ‘Recovery Bet’ Amid Coronavirus Tumble
Brief: Activist investor Bill Ackman said he has made a “recovery bet” on the economy, investing $2.5 billion in equities, including upping his positions in several of his portfolio companies and reinvesting in others like Starbucks Corp. The billionaire investor said he has taken off all the hedges that he put in place for his Pershing Square Capital Management, through shorts in the credit market. Those hedges were put in place to offset the effects of the coronavirus, he said. Ackman said his hedge fund has used the proceeds to reinvest over the past 10 to 12 days in several of his portfolio companies, including Lowe’s Cos., Hilton Worldwide Holdings Inc. and Warren Buffett’s Berkshire Hathaway Inc.
German Tells Hedge Funds: Make No Mistake, We’ll Protect our Companies
Brief: Germany quickly wants to get aid to companies struggling with the impact of coronavirus, Economy Minister Peter Altmaier said on Monday, adding that Berlin was ready to protect firms from unwanted takeovers with a new fund during the crisis. “Make no mistake, we’re determined to protect our companies and jobs,” Altmaier said during a joint news conference with Finance Minister Olaf Scholz, adding that this message was directed at hedge funds.
UK’s FCA says Don’t Blame Short-Sellers for Market Rout
Brief: Short-sellers cannot be blamed for the rout in stocks and markets should be kept open during the coronavirus epidemic, regulators in Europe said on Monday. Europe’s STOXX 600 index has fallen to around a seven-year low as investors price a likely recession into markets after the virus shut down swathes of the economy.A handful of European Union states have introduced temporary curbs on short-sellers in a bid to quell volatility, fanning talk of a suspension across the market as the next step.
