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Vaccination programmes face new sense of urgency



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  • Cruise operator Carnival reported a preliminary net loss of $2.2bn for the fourth quarter after its sailings were largely suspended during the pandemic

  • Regeneron called for action to help its antibody treatment reach more Covid-19 patients

  • Iran said it hoped to import the Oxford/AstraZeneca jab through third countries and avoid more costly US vaccines

Vaccine makers prepare for game of ‘Covid cat and mouse’

Vaccination programmes have begun and manufacturers are busy churning out the vast amount of doses needed to hasten the end of the pandemic. But what happens when the virus mutates? Will existing jabs still be appropriate or will drugmakers be sent back to the drawing board?

US pharma correspondent Hannah Kuchler examines how vaccine developers and regulators are gearing up for a game of “Covid cat and mouse”. Jabs that use messenger RNA technology, such as those from BioNTech/Pfizer and Moderna, can be adapted fairly swiftly, but for others the process could be more time consuming.

In the meantime, we report today on a triple shot of good supply-side news. BioNTech/Pfizer announced it would boost supplies of its existing jab by 500m doses, Sanofi said it would consider helping manufacture rivals’ products after delays to its own, and Russia said it had begun trials of a one-shot vaccine — “Sputnik Lite” — that could help meet export demand.

The need for more rapid production of vaccines has been reinforced by the increasing virulence of the virus in Europe and in the US.

US states yesterday reported record-breaking seven-day averages for new infections and deaths, while England’s chief medical officer warned of a “health emergency” and Prime Minister Boris Johnson said the UK was at a “perilous moment” as ministers hinted that lockdown restrictions might need to be intensified. 

More than ever, governments’ ability to bring the virus under control rests on the speed of the vaccination programme rollouts. Our (dynamically updating) chart shows how many jabs have been administered across the world. Some countries have unveiled detailed proposals — the UK’s grand plan unveiled today includes a big jump in the number of vaccination “mega-centres”. Others such as India, which has recorded 10.4m infections and 151,000 deaths and begins its mass vaccination programme on Saturday, have yet to begin in earnest.

Live-updating bar chart showing countries’ progress in adminstering vaccines against coronavirus


Bank stocks may have received short shrift from investors recently on fears of loan defaults but are now back in favour thanks to positive vaccine news and American political developments, says US financial editor Robert Armstrong. US bank indices have outperformed the wider market by more than 25 percentage points since the BioNTech/Pfizer vaccine announcement, while in Europe, an index tracking bank stocks climbed 30 per cent in November, its best performance since 2009. 

Line chart of US bank sector's price/earnings ratio, as a percentage of the S&P 500's ratio

The exodus of many renters from big US cities is putting a strain on the market in bonds backed by mortgages on apartment blocks. At the same time, many of the remainers are struggling to pay their rent. “As the nation enters a winter with increasing Covid-19 case levels and even greater economic distress . . . it is only a matter of time before both renters and housing providers reach the end of their resources,” said a housing association chief.

FTfm, our fund management section, talks to investment bosses about opportunities and risks in 2021, especially the effect of coronavirus vaccine programmes. One refers to Covid-19 as “the great accelerator” — turbocharging pre-existing themes such as the transition to “green infrastructure”.


CES, the word’s largest electronics show, is taking place virtually for the first time. The products on display are also heavily influenced by pandemic shifts: touchless and voice-based technologies are in abundance alongside kit for the “smart home,” from entertainment gizmos to the latest in electronic bidets.

Canary Wharf, the east London hub of the UK’s financial services industry, is facing an uncertain future with its corporate skyscrapers still largely empty as a result of the pandemic. “They have great big corporate tenants looking to downsize and all these massive towers. I think Canary Wharf will be reinvented because it has to be,” said one office agent.

Chart of % breakdown of Canary Wharf occupants by sector

Irish whiskey-makers are turning their focus away from the pandemic-struck economies of the US and Europe towards Asia, report our colleagues at Nikkei. There is plenty of scope for growth: Irish products made up just 0.04 per cent of total whiskey consumption by volume in the region in 2019, according to Euromonitor.

Global economy

Confirmation that the Democrats now control Congress has given fresh hope to cash-strapped US states hit hard by the pandemic as chances rise of new Federal stimulus. Goldman Sachs reckons on a $750bn package in the first quarter, with $200bn earmarked for municipalities.

Chart of state tax collections for March-Nov 2020, compared with the previous year (%), showing how there have been more losers than winners due to the pandemic

Our Brussels Briefing newsletter highlights the debate around EU finances and the fiscal fallout from the bloc’s emergency pandemic measures. Portugal, which took over the EU presidency at the start of this month, is facing two pressing issues: should the escape clause from normal fiscal rules be extended and is it time to push for deeper reforms?

Chinese inflation rose faster than expected in December, thanks mainly to food prices, raising hopes for the country’s recovery. Core inflation, however, which excludes food and energy prices, remains weak.


Too many organisations considered bureaucracy a necessary evil before the pandemic and have delighted at being able to discard old habits and obstacles during the emergency period, says management editor Andrew Hill. He warns however that “streamlined ad hoc solutions may be useful in the heat of a crisis, but care must be taken not to embed poor practice — or “bad hoc”.

Have your say

Dexterhouse comments on the article Distressed debt specialist Howard Marks warns on corporate borrowing burden

The exceptionally low interest rate cost and the need to keep surviving during this unprecedented time means companies are becoming dependent on debt to tide them over. The day of reckoning will come. Either the heavy debt burden will force respective governments to keep interest rates lower and longer, which means kicking the can down the road, or there will be a blood letting as companies fold up rapidly. Either situation is unpalatable. I feel despair for the younger generation: through no fault of their own, they are landed with this mess.

Please share your views with us — email us at Thanks

Final thought

Working from home combined with the acceleration of cashless payment during the pandemic means many of us no longer need to carry around that wodge of cash and bulging collection of unused ID/travel/loyalty cards. Is the end in sight for the humble wallet?

Chart showing sales of wallets and coin pouches, by region ($bn)

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Wall Street stocks follow European and Asian bourses lower




Equities updates

Wall Street stocks followed European and Asian bourses lower on Friday after markets were buffeted this week by jitters over slowing global growth and Beijing’s regulatory crackdown on tech businesses.

The S&P 500 closed down 0.5 per cent, although the blue-chip index still notched its sixth consecutive month of gains, boosted by strong corporate earnings and record-low interest rates.

The tech-focused Nasdaq Composite slid 0.7 per cent, after the quarterly results of online bellwether Amazon missed analysts’ forecasts. The tech conglomerate’s stock finished the day 7.6 per cent lower, its biggest one-day drop since May 2020.

According to Scott Ruesterholz, portfolio manager at Insight Investment, companies which saw significant growth during the pandemic may see shifts in revenue as consumers move away from online to in-person services.

“[Consumers are] going to start spending more on services, and so those businesses and industries which have benefited in the last year, companies like Amazon, will be talking about decelerating sales growth for several quarters,” Ruesterholz said.

The sell-off on Wall Street comes after the continent-wide Stoxx Europe 600 index ended the session 0.5 per cent lower, having hit a high a day earlier, lifted by a bumper crop of upbeat earnings results.

For the second quarter, companies on the Stoxx 600 have reported earnings per share growth of 159 per cent year on year, according to Citigroup. Those on the S&P 500 have increased profits by 97 per cent.

But “this is likely the top”, said Arun Sai, senior multi-asset strategist at Pictet, referring to the pace of earnings increases after economic activity rebounded from the pandemic-triggered contractions last year. Financial markets, he said, “have formed a narrative of peak economic growth and peak momentum”.

Column chart of S&P 500 index, monthly % change showing Wall Street stocks rise for six consecutive months

Data released on Thursday showed the US economy grew at a weaker than expected annualised rate of 6.5 per cent in the three months to June, as labour shortages and supply chain disruptions caused by coronavirus persisted.

Meanwhile, China’s regulatory assault on large tech businesses has sparked fears of a broader crackdown on privately owned companies.

“It underlines the leadership’s ambivalence towards markets,” said Julian Evans-Pritchard of Capital Economics. “We think this will take a toll on economic growth over the medium term.”

Hong Kong’s Hang Seng index closed 1.4 per cent down on Friday, while mainland China’s CSI 300 dropped 0.8 per cent, after precipitous slides earlier in the week moderated.

Japan’s Topix closed 1.4 per cent lower, after the daily tally of Covid cases in Tokyo surpassed 3,000 for three consecutive days. South Korea’s Kospi 200 dropped 1.2 per cent.

The more cautious investor mood on Friday spurred a modest rally in safe haven assets such as US government debt, which took the yield on the 10-year Treasury, which moves inversely to its price, down 0.04 percentage points to 1.23 per cent.

The Federal Reserve, which has bought about $120bn of bonds each month throughout the pandemic to pin down borrowing costs for households and businesses, said this week that the economy was making “progress” but it remained too early to tighten monetary policy.

“Tapering [of the bond purchases] could be delayed, which in many ways is not bad news for the market,” said Anthony Collard, head of investments for the UK and Ireland at JPMorgan Private Bank.

The dollar, also considered a haven in times of stress, climbed 0.3 per cent against a basket of leading currencies.

Brent crude, the global oil benchmark, rose 0.4 per cent to $76.33 a barrel.

Unhedged — Markets, finance and strong opinion

Robert Armstrong dissects the most important market trends and discusses how Wall Street’s best minds respond to them. Sign up here to get the newsletter sent straight to your inbox every weekday

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US regulators launch crackdown on Chinese listings




US financial regulation updates

China-based companies will have to disclose more about their structure and contacts with the Chinese government before listing in the US, the Securities and Exchange Commission said on Friday.

Gary Gensler, the chair of the US corporate and markets regulator, has asked staff to ensure greater transparency from Chinese companies following the controversy surrounding the public offering by the Chinese ride-hailing group Didi Chuxing.

“I have asked staff to seek certain disclosures from offshore issuers associated with China-based operating companies before their registration statements will be declared effective,” Gensler said in a statement.

He added: “I believe these changes will enhance the overall quality of disclosure in registration statements of offshore issuers that have affiliations with China-based operating companies.”

The SEC’s new rules were triggered by Beijing’s announcement earlier this month that it would tighten restrictions on overseas listings, including stricter rules on what happens to the data held by those companies.

The Chinese internet regulator specifically accused Didi, which had raised $4bn with a New York flotation just days earlier, of violating personal data laws, and ordered for its app to be removed from the Chinese app store.

Beijing’s crackdown spooked US investors, sending the company’s shares tumbling almost 50 per cent in recent weeks. They have rallied slightly in the past week, however, jumping 15 per cent in the past two days based on reports that the company is considering going private again just weeks after listing.

The controversy has prompted questions over whether Didi had told investors enough either about the regulatory risks it faced in China, and specifically about its frequent contacts with Chinese regulators in the run-up to the New York offering.

Several US law firms have now filed class action lawsuits against the company on behalf of shareholders, while two members of the Senate banking committee have called for the SEC to investigate the company.

The SEC has not said whether it is undertaking an investigation or intends to do so. However, its new rules unveiled on Friday would require companies to be clearer about the way in which their offerings are structured. Many China-based companies, including Didi, avoid Chinese restrictions on foreign listings by selling their shares via an offshore shell company.

Gensler said on Friday such companies should clearly distinguish what the shell company does from what the China-based operating company does, as well as the exact financial relationship between the two.

“I worry that average investors may not realise that they hold stock in a shell company rather than a China-based operating company,” he said.

He added that companies should say whether they had received or were denied permission from Chinese authorities to list in the US, including whether any initial approval had then be rescinded.

And they will also have to spell out that they could be delisted if they do not allow the US Public Companies Accounting Oversight Board to inspect their accountants three years after listing.

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Wall Street stocks climb as traders look past weak growth data




Equities updates

Stocks on Wall Street rose on Thursday despite weaker than expected US growth data that cemented expectations that the Federal Reserve would maintain its pandemic-era stimulus that has supported financial markets for a year and a half.

The moves followed data showing US gross domestic product grew at an annualised rate of 6.5 per cent in the second quarter, missing the 8.5 per cent rise expected by economists polled by Reuters.

The S&P 500, the blue-chip US share index, closed 0.4 per cent higher after hitting a high on Monday. The tech-heavy Nasdaq Composite index climbed 0.1 per cent, rebounding slightly after notching its worst day in two and a half months earlier in the week.

The dollar index, which measures the US currency against those of peers, fell 0.4 per cent to its weakest level since late June after the GDP numbers.

“Sentiment about the economy has become less optimistic, but that is good for equities, strangely enough,” said Nadège Dufossé, head of cross-asset strategy at fund manager Candriam. “It makes central banks less likely to withdraw support.”

Jay Powell, the Fed chair, said on Wednesday that despite “progress” towards the bank’s goals of full employment and 2 per cent average inflation, there was more “ground to cover” ahead of any tapering of its vast bond-buying programme.

“Last night’s [announcement] was pretty unambiguously hawkish,” said Blake Gwinn, rates strategist at RBC, adding that Powell’s upbeat tone on labour market figures signalled that the Fed could begin tapering its $120bn a month of debt purchases as early as the end of this year.

The yield on the 10-year US Treasury bond, which moves inversely to its price, traded flat at 1.26 per cent.

Line chart of Stoxx Europe 600 index showing European stocks close at another record high

Looking beyond the headline GDP number, some analysts said the health of the US economy was stronger than it first appeared.

Growth numbers below the surface showed that consumer spending had surged, “while the negatives in the report were from inventory drawdown, presumably from supply shortages”, said Matt Peron, director of research and portfolio manager at Janus Henderson Investors.

“This implies that the economy, and hence earnings which have also been very strong so far for Q2, will continue for some time,” he added. “The economy is back above pre-pandemic levels, and earnings are sure to follow, which should continue to support equity prices.”

Those upbeat earnings helped propel European stocks to another high on Thursday, with results from Switzerland-based chipmaker STMicroelectronics and the French manufacturer Société Bic helping lift bourses.

The region-wide Stoxx Europe 600 benchmark closed up 0.5 per cent to a new record, while London’s FTSE 100 gained 0.9 per cent and Frankfurt’s Xetra Dax ended the session 0.5 per cent higher.

In Asia, market sentiment was also boosted by a move from Chinese officials to soothe nerves over regulatory clampdowns on the nation’s tech and education sectors.

Beijing officials held a call with global investors, Wall Street banks and Chinese financial groups on Wednesday night in an attempt to calm nerves, as fears spread of a more far-reaching clampdown. Hong Kong’s Hang Seng rose 3.3 per cent on Thursday, although it was still down more than 8 per cent so far this month. The CSI 300 index of mainland Chinese stocks rose 1.9 per cent.

Brent crude, the global oil benchmark, gained 1.4 per cent to $76.09 a barrel.

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