By Powerscourt on 04/11/2020
As the world holds its breath for the outcome of the US elections (note: it will be hard to hold breath until we have a result!), one thing is clear: coronavirus has deepened fault lines within American society.
There will not be a clear winner for some time, but President Trump has held several key swing states including Florida, Texas and Ohio, giving him a clearer path to victory than was envisaged in most predictions before voting got underway and with a significant chance of holding the Presidency for four more years.
What is clear from the results filtering in, is that many US voters fear economic shut down more than they fear the virus.
A national voter survey conducted for AP Votecast and other news organizations has confirmed something which President Trump has perhaps instinctively understood better than his Democrat challenger Joe Biden. For his core supporters, white male voters living away from the nation’s big cities and without a college degree, financial ruin is far more terrifying than a bout with coronavirus.
For the average Biden voter, urban and suburban, more likely to be college educated and female, the President’s reluctance to actively tackle the virus, was a major strike against him. For a blue collar rust belt or farm worker, the loss of work may be a more acute threat.
The number of coronavirus patients in US hospitals breached 50,000 on Tuesday, the highest level in nearly three months, as a surge in infections threatens to push the nation’s health care system to the edge of capacity.
A rise in social gatherings, colder temperatures and growing fatigue with COVID-19 restrictions that have now been in place for more than six months, are likely all behind the rising numbers.
The trade-off between threatening the freedom of individual citizens and protecting health has particular resonance in America. But a version of this debate is playing out in many countries.
In the UK, Prime Minister Boris Johnson appears for now to have held off an incipient revolt from his Conservative party after the announcement of a second UK national lockdown from Thursday.
The Financial Times reports that Conservative MPs accept that the second set of restrictions were unavoidable. While some MPs are likely to challenge the Prime Minister in a vote on Wednesday, the government is likely to win.
Test and trace is the top of the agenda in the UK. The government on Tuesday announced that Liverpool would be the first city in the UK to conduct population-wide testing for COVID-19.
Johnson has again hailed test and trace as the best route out of the crisis, saying the testing programme would “enable us to defeat the virus by the spring”. But the FT says some of the tests are of questionable accuracy.
One of Johnson’s own MPs, paymaster general Penny Morduant, meanwhile, cast doubt on this, telling parliament that there could well be a third wave.
Meanwhile, a study of the lungs of people who have died from COVID-19 may shed striking light on the syndrome known as ‘long COVID’. The study of 41 patients killed by the disease, at Kings College London, found persistent and extensive lung damage in most cases. Maura Giacca, who led the study, said investigators found “really vast destruction of the architecture of the lungs”, with healthy tissue “almost completely substituted by scar tissue”.
Bond markets and the dollar rose in Asia into Wednesday morning, as markets awaited clarity on the outcome of the election.
WHAT ARE COMPANIES SAYING?
Stobart Group Limited, the aviation and energy infrastructure group, announced today its interim results for the six months to 31 August 2020 reporting total revenue as £53.2m. Chief Executive Warwick Brady said “COVID-19 has created unprecedented challenges for the Group. In response, we have taken decisive action to bolster liquidity, reduce cash burn and protect our long-term strategic objectives.”
Financials & Real Estate
Provident Financial, the leading provider of credit products to consumers who are underserved by mainstream lenders, announced the Group’s third quarter trading update today. At the end of September, total liquidity was c.£1.1bn with a CET1 ratio of c.36%. The Group is expected to meet market expectations for its financial year to December 2020, with CEO Malcom Le May saying “our capital and liquidity are a source of competitive advantage and we remain vigilant for possible economic shocks, including those caused by further local and national lockdowns.”
Apax Global Alpha
The collective investment scheme AGA, has reported today strong performance during the quarter ended 30 September 2020. Liquidity position is healthy with €72.9m of cash and total NAV return of 8.5%. COO of Apax Partners Ralf Gruss said “Despite the challenging environment, we are pleased to see that AGA’s investment strategy and sector focus have delivered continued strong NAV performance in the quarter.”
Retail & Consumer
Marks and Spencer
British retailer Marks and Spencer announced today the Group’s half-year report indicating robust performance in the face of COVID-19. Food adjusted operating profit is up 19% and Ocado Retail revenue is up 47.9%. Marks and Spencer’s revenue was down 15.8% to £4,090.9m, compared to £4,860.9m H1 2019 results. CEO Steve Rowe said “in a year when it has become impossible to forecast with any degree of accuracy, our performance has been much more robust than at first seemed possible.”
Britain’s oldest Brewer and owner and operator of 319 high quality pubs announces today full year results. Shepherd Neame reported decreased turnover to £123.6m compared to £145.8m in 2019, a direct result of 3 months’ of closure. Chief Executive Jonathan Neame commented “This has been the most challenging period any of us in the hospitality industry have ever faced…we have worked hard to drive positive cash flow in the new financial year and have suffered liquidity for the forseeable future”.
IN THE NEWS
Coronavirus: Schools given new rules on masks – THE TIMES
UK spends £1bn on Johnson’s rapid testing ‘moonshot’ – FINANCIAL TIMES
Nearly half of Covid patients in some hospitals likely to have caught virus after admission – THE TELEGRAPH