By Powerscourt on 10/10/2020
President Trump’s championing of Regeneron’s experimental monoclonal antibody drug – creatively codenamed REGN-COV2 – seems to have had the desired effect. The Wall Street Journal reported late yesterday that the drug was ‘weeks or even days’ away from FDA approval for public use. However, demand is expected to outstrip supply until next year at the earliest.
The week ended well for US markets as stocks enjoyed a second week of gains, shaking off a technology-driven rout last month. The S&P 500 booked its biggest weekly advance (3.8%) since early July. Investor cheer comes from renewed hopes of another round of government stimulus and growing expectations of a decisive Biden victory in next month’s presidential election.
Reports emerged yesterday that The White House was preparing a $1.8 trillion coronavirus relief offer, its largest proposal to date in the long running negotiations with congressional Democrats. The president tweeted “Covid Relief Negotiations are moving along. Go Big!”
In the UK, infection rates continue to cause alarm, with cases doubling in a week according to the latest ONS data. Prof. Jonathan Van-Tam, deputy chief medical officer, has warned that Britain is ‘back where it was in March’. He told MPs that intensive care units in the northwest could be full within three weeks.
In response, Chancellor Rishi Sunak has continued the spend, spend, spend approach to mitigate the economic damage. With the UK government set on Monday to unveil a tough new three-tier approach to manage local surges, Mr. Sunak announced on Friday a significant expansion of his Jobs Support Scheme which will see two-thirds of staff wages covered by The Treasury for up to six months. While good news for many, the support only applies to those businesses forced to shut down under the new system, dismaying business owners who are unlikely to qualify.
With Treasury sources admitting that this new support package will cost hundreds of millions of pounds a month, attention will again turn to how the Chancellor will fulfil his sacred responsibility to balance the books.
With a tax assault on the wealthy looming, the Daily Telegraph’s Head of Personal Finance, Lauren Davidson, asks an interesting question: what constitutes wealthy? While various polling firms point to strong public support for increasing taxes on the rich to pay down the Covid debt, there is substantial divergence of opinion as to how much one must earn to be ‘rich’. Davidson concludes that voters who back a tax on the rich are really just backing a tax on the ‘richer-than-themselves’.
WHAT ARE COMPANIES SAYING?
Norwegian Air is considering laying off staff at its base at Gatwick Airport, a spokesman warned on Friday, as the struggling budget airline steps up its cost-cutting drive. The move could affect 259 cabin crew and pilots, just under a quarter of the 1,142 staff at Britain’s second-busiest airport, the spokesman said as the airline started a 45-day consultation period with staff and unions. “These unprecedented circumstances that we now find ourselves in require us to review the London Gatwick crew base in line with current business needs and the associated costs going forward,” the company said in a statement. “We have entered into consultation with our crew colleagues and unions based in the in UK and will look to find common solutions and mitigate redundancies.”
Financials & Real Estate
Goldman Sachs has begun offering its US-based bankers free coronavirus tests and antibody tests in a bid to encourage staff back into the office. In a memo sent on Friday the bank told employees that it had “engaged vendor partners to offer off-site Covid-19 tests to eligible people in the US at no cost”. These included tests to diagnose active infection as well as antibody ones that could make some staff more comfortable about commuting. The programme, which is only free to those who plan to go into the office, is also being considered for employees in other offices including London.
Retail & Consumer
Edinburgh Woollen Mill
Edinburgh Woollen Mill, which includes brands Peacocks, Jaeger and Austin Reed, filed notice to appoint FRP Advisory, a corporate restructuring specialist yesterday. This means that about 21,500 jobs are now at risk at the big British retailer after local lockdowns exacerbated a slump in sales. A recent reduction in its credit insurance has meant that suppliers are less willing to work with the group, which has also been affected by the harsh trading conditions during the pandemic.
L’Oreal plans to close retail locations to restructure its US luxury operations as the company grapples with severe changes to consumer behaviour amid the pandemic. L’Oreal said as many as 400 roles in the luxe division would be affected in the US, the company’s biggest market. The company said the luxe division of L’Oreal USA plans to shift investment to growth areas such as e-commerce as part of the reorganisation over the next six months.
The international governing body of football said the value of international transfers in the men’s game fell by 30% to $3.9bn in the latest window, which ran from around June and closed on October 10. The Financial Times reported that football club’s slashed their extended summer transfer window, the busiest time for trading as coronavirus continued to hit their revenues. It is the first time since 2016 that the value of transfer fees has sunk below $5bn.
IN THE NEWS
Rishi Sunak unveils new wages scheme as lockdown looms again – THE TELEGRAPH
Coronavirus: Northern leaders warn further lockdown restrictions will have ‘devastating’ effect – SKY NEWS
US should not approve vaccine based on UK trials, says Pelosi – FINANCIAL TIMES