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Our briefing for Wednesday April 7, 2021:
Apr 7, 2021 3:46:45 PM
- In the United States, the National Institutes of Health has begun a mid-stage study to determine the risk of allergic reactions to COVID-19 vaccines made by Moderna and Pfizer. The study, which will be funded by the National Institute of Allergy and Infectious Diseases, will enroll 3,400 adults between the ages of 18 to 69, with about 60% of those participants having a previous history of severe allergic reactions to either food, insect stings or immunotherapy. The results of the study are expected to be released later in the summer.
- In Canada, Ontario’s “emergency brake” installed last week has done little to stem the third wave of COVID-19 in the province, so instead, a stay-at-home order will be implemented as of 12:01 Thursday morning. Ontario’s ministry of health recorded 3,215 new cases on Wednesday – the most since January 17th and the seven-day average now at close to 3,000. The stay-at-home order is expected to last as long as four weeks and will close all non-essential stores, with big-box stores only permitted to sell grocery and pharmacy items for in-person shopping. The top public health officers from Ontario’s largest health units – Toronto, Peel and Ottawa urged Premier Doug Ford earlier in the week to impose the order, along with travel restrictions between regions and an emergency mandate for paid sick days.
- The United Kingdom’s drug regulator says people under 30 will be offered another product other than the AstraZeneca COVID-19 vaccine due to a rare blood clot risk. The Medicines and Healthcare Products Regulatory Agency said Wednesday the AstraZeneca vaccine continues to outweigh the risks for the vast majority of people. The UK’s decision was announced shortly after the European Union’s drug regulator said it had found a “possible link” between the AstraZeneca coronavirus vaccine and a rare clotting disorder, but the agency didn’t recommend any new restrictions for those taking the vaccine over the age of 18. The Moderna COVID-19 vaccine is expected to gain approval as the third vaccine for use in the UK in the coming days.
- With Germany struggling to cope with the third wave of the coronavirus pandemic, Reuters is reporting Chancellor Angela Merkel is supportive of a demand for a short, tough lockdown. “Every call for a short, uniform lockdown is right,” deputy government spokeswoman Ulrike Demmer told a group of reporters on Wednesday. Chancellor Merkel has struggled to get all of Germany’s 16 state leaders on the same page with some states imposing night-time curfews over Easter, while others were experimenting with the easing of some restrictions.
- China might be kept out of the next probe into COVID-19 origins as a group of scientists have called for more rigorous investigations – with or without Beijing’s involvement. An open letter signed by 24 scientists and researchers from Europe, the United States, Australia and Japan said the study conducted by the World Health Organization in January was tainted by politics. The letter states the study’s conclusions were based on unpublished Chinese research, while critical records and biological samples “remain inaccessible”. “Their (WHO) starting point was, let’s have as much compromise as is required to get some minimal cooperation from China,” said Jamie Metzl, one of the members who drafted the letter.
- Brazil set another unfortunate record on Tuesday with 4,195 deaths in one day due to the coronavirus. The numbers from Johns Hopkins University show just how dire the situation is in Latin America’s largest country. The month of March was the deadliest for the country since the pandemic began with at least 66,573 recorded deaths. Brazil has accounted for 28% of the world’s COVID-19 death toll since March 21st and only 2.42% of the total population in the country have been fully vaccinated. President Jair Bolsonaro has refused a national lockdown stating: “We will look for alternatives, we will not accept the ‘stay at home’ policy to close everything, to lockdown. The virus will not go away. The virus, like others is here to stay, and will stay for a lifetime. It is practically impossible to eradicate it.”
Covid-19 – Due Diligence And Asset Management
Fink says In-Person Client Meetings are Top Priority Post-Covid
Brief : BlackRock Inc. Chief Executive Officer Larry Fink said the thing he looks forward to most in the post-pandemic world is meeting with clients again, as the U.S. vaccination campaign continues and companies weigh how to unwind remote work setups. In his annual letter to shareholders, Fink said that there is no substitute for in-person meetings. His comments add to earlier remarks that he fears corporate culture can erode over time while working from home. “I miss the personal connections and unexpected ideas that come from meeting face-to-face and sharing a meal together,” Fink said Wednesday in the letter. “It’s often through a less structured conversation than one can have on a video call that we learn most about each other and experience intangibles, like culture, that are hard to see through a screen.” More than a year into the Covid-19 pandemic, global financial firms like BlackRock are deciding how to safely bring employees back to in-person work settings. BlackRock executives last year signaled the office will remain the primary work location for employees in the long term, and full-time remote work permission will be given only selectively.
JPMorgan CEO Dimon sees U.S. Economic Boom Through 2023
Brief: JPMorgan Chase & Co Chief Executive Officer Jamie Dimon said on Wednesday the United States could be in store for an economic boom through 2023 if more adults get vaccinated and federal spending continues. “I have little doubt that with excess savings, new stimulus savings, huge deficit spending, more QE (quantitative easing), a new potential infrastructure bill, a successful vaccine and euphoria around the end of the pandemic, the U.S. economy will likely boom,” Dimon wrote in his annual letter to shareholders published on the bank’s website. “This boom could easily run into 2023 because all the spending could extend well into 2023.” As head of the biggest U.S. bank, Dimon is widely seen as the face of America’s banking sector, and he used the letter to share his views on the country’s economic health and to press for policies to help address inequality and improve the criminal justice system.
IMF Proposes Temporary ‘Solidarity’ Tax on Pandemic Winners and the Wealthy
Brief: High earners and companies that prospered in the coronavirus crisis should pay additional tax to show solidarity with those who were hit hardest by the pandemic, according to International Monetary Fund. A temporary tax would help to reduce social inequalities that have been exacerbated by the economic and health crisis of the past year, the fund said in its twice-yearly fiscal monitor on Wednesday. It would also reassure those worst affected that the fight against COVID-19 is a collective endeavour within societies. Vitor Gaspar, IMF’s head of fiscal affairs, told the Financial Times that a symbolic rise in taxation from those who have prospered over the past year would strengthen social cohesion even if there was not a pressing need to repair the public finances. Countries should consider this policy as it would help boost their citizens’ perception “that everybody contributes to the effort necessary for recovery from COVID-19,” he said.
Seward & Kissel Survey Finds Alternative Investment Allocators Likely to Increase Allocations to Less Liquid Strategies and Embrace New Managers
Brief: While the “fear gauge” that tracks market volatility has remained at elevated levels since the onset of the pandemic, those who allocate alternative investment dollars for large investors are showing no signs of skittishness, according to the Alternative Investment Allocator Survey conducted by leading law firm Seward & Kissel.The survey found that allocators are likely to increase allocations to less liquid strategies and continue to embrace emerging managers in 2021. The full survey is available here. The survey analyses the views of individuals from pension funds, endowments, family offices, seeders, high-net-worth individuals, and others. Asked how their organisations’ allocations across a wide range of alternative investments would change in 2021, on average 42 per cent of participants anticipated their organisations to increase allocations to at least one strategy and 54 per cent said they would maintain their allocations, while just 4 per cent said their allocations would decrease. The strategies for which participants expect to increase allocations to in 2021 were primarily less liquid strategies typically utilised by closed-end funds with private equity, private credit, and venture capital accounting for the top three of the four strategies of interest for increased allocations, followed by equity hedge.
Biden White House in Talks with Airlines on Vaccine Passports; will Issue Guidance
Brief: The Biden administration is in extended discussions with U.S. airlines and other travel industry groups to provide technical guidance for vaccine passports that could be used to ramp up international air travel safely, industry officials said. The administration has repeatedly made clear it will not require any businesses or Americans to use a digital COVID-19 health credential, however. It will also publish guidelines for the public. The key question, airline and travel industry officials say, is whether the U.S. government will set standards or guidelines to assure foreign governments that data in U.S. traveler digital passports is accurate. There are thousands of different U.S. entities giving COVID-19 vaccines, including drugstores, hospitals and mass vaccination sites. Airline officials say privately that even if the United States does not mandate a COVID-19 digital record, other countries may require it or require all air passengers to be vaccinated.
ESG Funds Beat out S&P 500 in 1st Year of COVID-19
Brief: In the first 12 months of the COVID-19 pandemic, many large investment funds with environmental, social and governance criteria outperformed the broader market. One fund went from being among the poorest performers to the top of the list following tweaks to its portfolio. S&P Global Market Intelligence analyzed 26 ESG exchange-traded funds and mutual funds with more than $250 million in assets under management. We found that from March 5, 2020 — the month that the World Health Organization officially declared COVID-19 a pandemic — to March 5, 2021, 19 of those funds performed better than the S&P 500. Those outperformers rose between 27.3% and 55% over that period. In comparison, the S&P 500 increased 27.1%. Funds that identify as "ESG-focused" screen for stocks based on value and growth like many other funds, but add various criteria such as ESG-focused governance practices, sustainability scores, disclosure practices, fossil fuel exposure, adherence to religious principles and workplace diversity. Critics of ESG investing often question whether the strategy can deliver premium returns. But ESG fund managers have said their focus on nontraditional risks led to portfolios of companies that so far have been resilient during the COVID-19 downturn.
