Powerscourt

By Powerscourt on 01/09/2020

Powerscourt Coronavirus Briefing – 01 September 2020

ANALYSIS

The V-shaped recovery is back! Germany’s Kiel Institute for the World Economy sounded a hopeful note, pointing out that world trade was recovering faster than it did during global financial crisis.

Kiel’s president Gabriel Felbermayr said that a “deep slump and a quick rebound…the current situation is significantly better” than 2008.

Germany is due to produce economic output figures at 10am UK time. There is speculation the recession in Germany will be less severe than anticipated.

Meanwhile, today marks a potential watershed day for the UK’s recovery from the pandemic and the economy in particular, as schools are set to re-open. This comes despite a National Association of Headteachers survey of 6000 school staff in England which revealed that nine in 10 teachers are worried about how social distancing in schools will work. It also now looks likely GCSE and A-Level students will face an exam delay next summer to allow pupils more time to study during the coronavirus pandemic.

The World Health Organisation has warned that opening up countries before the virus is under control is a “recipe for disaster”. WHO director-general Tedros Adhanom Ghebreyesus said he recognised that many people are getting tired of restrictions and want to return to normality saying: “We want to see children returning to school and people returning to workplaces, but we want to see it done safely. No country can just pretend the pandemic is over.”

Willie Walsh, CEO of IAG (parent of Aer Lingus, British Airways and Iberia) is highly critical of the UK Government’s approach to quarantine saying the UK has “officially hung up the closed sign: Britain’s economy is powered by our international connectivity and the ease with which we do business with other countries. Make no mistake: this is being destroyed by the government’s blanket quarantine on travel from a staggering 160 countries. Safeguarding people’s health is obviously the top priority. But enforced quarantine from an ever-shifting list of countries isn’t effective. Healthy people shouldn’t be locked up for 14 days simply because they have been travelling.”

Despite this, Portugal is now likely to go back on the quarantine list, while Spain is “several weeks” from coming off the list. Switzerland, the Czech Republic and Jamaica joined the 14-day quarantine list on Saturday.

Finally, one way to fight the pandemic: lose weight.

Bloomberg reports a French study, to be released this week shows that 90% of people who ended up in intensive care were too heavy.

Researchers at Lille University Hospital in France found that about half of the 124 intensive-care patients with Covid-19 in a sample they studied were obese and most of the remaining ones were overweight. By contrast, only a quarter suffered from obesity and another quarter were overweight in a control group of several hundred patients admitted to intensive care for reasons unrelated to the pandemic.

The researchers said: “The increased risk posed by this virus to people living with obesity could not be clearer. Our data show that the chances of increasing to more severe disease increases with BMI, to the point where almost all intensive care Covid-19 patients with severe obesity will end up on a ventilator.”

 

WHAT ARE COMPANIES SAYING?

 

Retail

Dunelm
The homewares retailer provided a trading update this morning, in which it reported total year-over-year sales growth up 59% in July and 24% in August. Dunelm ascribed the July figures partly to pent up demand and the timing of its sales. The company said: “This performance reflects the strength of our proposition within a resilient homewares market, positive footfall growth to our mainly out-of-town superstores and continued strong growth in our home delivery offer.”

 

Industrials 

Wizz Air
The airline said this morning that it expects capacity for Q2 to be at roughly 60%. The company warned that its capacity expectations for Q3 might fall from 80% to 60% “if mobility restrictions across the network persist” and that it might have to park parts of its fleet throughout the winter season to protect its cash balance.

 

TMT

Zoom Video Communications
The company reported revenue of $663.5m for the second quarter, which is higher than its revenue for the whole of 2019. Founder and CEO Eric S. Yuan said: “Organizations are shifting from addressing their immediate business continuity needs to supporting a future of working anywhere, learning anywhere, and connecting anywhere on Zoom’s video-first platform.”

 

IN THE NEWS

Law firms launch new round of cost cuts as pandemic bites – The Financial Times

Glaxo starts key Covid-19 antibody trial – The Times

Tax rises will be ‘acid rain on green shoots’ as investors flee overseas, warns minister – The Telegraph




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