Powerscourt

By Powerscourt on 24/10/2020

Powerscourt Coronavirus Briefing – 24 October 2020

ANALYSIS

The United States faces a surge in cases, a few weeks behind Europe’s second wave and 11 days ahead of the November 3 general election. There have been 441,000 positive results over the seven days to Friday, the highest since July. Opinion polls consistently show that the pandemic is the most important issue for Amercian voters and also that President Donald Trump, like leaders in many countries, is blamed in part for faltering responses.

The surge is at its worst this weekend in the Midwest where Trump and Joe Biden, his Democrat rival, are focused on three so-called Swing States: Michigan, Ohio and Pennsylvania. Trump is ahead in polls in Ohio and behind in the other two. Will the increased infection rate impact his chances of clawing back support?

Biden is (naturally) pessimistic in his public utterances on the issue. He warned during Thursday’s TV debate of a “dark winter”. Unsurprisingly, Trump said yesterday that there would be no dark winter and that America is rounding the final bend. Increasing rates of infection don’t help his argument.

The race for a vaccine is heating up. Both AstraZeneca and Johnson & Johnson got the green light from the US Food & Drink Administration to restart trials in America after addressing early concerns. Astra is testing on 30,000 people in the US for its so-called Oxford vaccine, long seen as a front runner in the race.

Another leading contender, Russia’s Sputnik V, has a second customs in Brazil where a  local drug company is going to start manufacturing. Trials are also starting in India.

In the UK, many people woke up today to greater restrictions to curb high transmission rates. At 12.01am, South Yorkshire joined Liverpool City, Lancashire and Greater Manchester in tier 3 restrictions. Yesterday evening at 6pm Wales went into an even stricter two week ‘firebreak’.

There is more to come: Nottinghamshire and Warrington are likely to enter tier 3 next week and the Scottish parliament is to debate a new five tier system.

As greater restrictions spread across the UK, there was at least some consolation yesterday that they were having some effect. Data from the Government Office for Science shows that the R value – the average number of cases generated by an infected individual – is down to 1.2 to 1.4 from 1.3 to 1.5. The R number and growth rate are now highest in regions less affected by the highest restrictions, led by the South West.

Whether this means that restrictions will allow for normality at Christmas – a hope expressed previously by Boris Johnson – remains to be seen. Scottish officials have started to talk about a ‘digital Christmas’ while chief scientific officer Patrick Vallance said that this would depend on the coming weeks.

If the prospect of a turkey dinner is receding into the distance, restaurants have been at pains to point out to diners that household mixing is permitted if the primary purpose of the occasion is business. The truth of this interpretation is disputed, with a Downing Street spokesperson stressing on Tuesday that it is intended for the freelancer and the self-employed in need of locations to conduct business. Culture Minister Oliver Dowden muddied the waters on Thursday by stressing that people should, “go to work or as normally as we can in this crisis”.

Elsewhere the issue of food in the pandemic was of greater critical urgency. Yesterday, footballer Marcus Rashford shared details on Twitter of many local businesses stepping up to provide free food to those in need. This too came as part of the latest wave of support for of his campaign to feed those in receipt of free school meals in the school holidays. McDonalds, Iceland, Aldo, Tesco, The Co-Operative, Waitrose and Kellogg’s are also heavily involved.

 

WHAT ARE COMPANIES SAYING?

 

Industrials 

Carnival

Carnival ended the week with a splash amid talk yesterday that American cruise ships will be given the green lights to set sail again next week. The giant liners that criss-cross the Caribbean and elsewhere have been stranded in ports since March, when the United States banned them from carrying passengers. The no-sail order was extended a few weeks ago, but is due to expire next weekend. 

 

Financials & Real Estate 

Goco
The development of a new technology that automatically chooses the best insurance deals has been hailed by Goco as a key reason for it stealing a march over its price comparison rivals. The company behind Go Compare unveiled a 13% rise in quarterly revenues to £131 million yesterday, significantly outshining Moneysupermarket, its competitor, which reported a 16% decline on Thursday. Matthew Crummack, CEO, said that the business was fortunate that the “core business isn’t overexposed to travel or other areas of business highly impacted by COVID-19.”

 

Retail & Consumer

Edinburgh Woollen Mill
Edinburgh Woollen Mill has warned its 21,500 staff that even if it could strike a deal to rescue parts of the business, there would be store closures. The retailer, which has about 1,100 shops in Britain, including its Peacocks and Austin Reed brands, wrote to employees yesterday after the High Court granted a two-week extension of creditor protection. Philip Day, the owner, is a secured creditor and is working to buy back some of the business.

Travelodge
The biggest owner of Travelodge hotels has shelved plans to kick the budget chain out of its properties in favour of a rival operator. Nick Leslau’s Secure Income REIT, which leases 123 hotels to Travelodge, said that it had decided not to exercise a break clause to terminate Travelodge’s leases and that it had halted a parallel sales process for the properties. Secure Income said that although the auction of its 123 properties had received multiple bid, none of the offers reflected the potential for a recovery once COVID-19 had subsided. 

 

Healthcare

AstraZeneca
AstraZeneca’s confidential coronavirus vaccine deal with Oxford university allows it to make as much as 20% on top of the cost of goods for manufacturing the jab, according to people with knowledge of the contract. UK-headquartered AstraZeneca has pledged to sell the vaccine “at cost” during the pandemic, eschewing profits. It has declined to say how much the vaccine costs to make. Observers have expressed fears over a lack of transparency around the global deals involving of potential vaccines.

 

IN THE NEWS

Covent Garden restaurants make a meal of Sunak’s latest support – Financial Times

Retail sales smash expectations in September – The Daily Telegraph

Retailers battle to prepare for an unpredictable COVID Christmas – The Times




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