Powerscourt Coronavirus Briefing – 14 November 2020

Despite positive news on the development of a vaccine, the second wave of infection continues to gather momentum globally. The U.S. broke a record in daily cases, 170,000 on Friday, with deaths also surging to 2,238, the highest in almost five months. The surge in infections has now spread to 49 states, with seven-day average cases in New York up 72 per cent in the past week. President Donald Trump declared that he would not issue nationwide lockdown orders. President-elect Joe Biden has pledged to make controlling the virus a top priority and is likely to push for mask wearing mandates and more fiscal stimulus.

In the U.K., infections continue to rise, though at a slower rate than previous weeks. The R rate is between 1.0 and 1.2 across the U.K., lower than last week’s estimate of 1.1-1.3. The latest figures offer some hope that the most stringent restrictions can be eased for Christmas.

Markets appear far more positive, with British shares having their best week in seven months. The FTSE 100 climbed by 6.9 per cent this week and the FTSE 250 gained 7.6 per cent, their best performance since April. US stocks reached a record high on Friday and have rallied just under 10 per cent since the start of November.

Central bank chiefs appear optimistic also, though they have made it clear that now is not the time for policymakers to relax their guard. Jay Powell, chair of the US Federal Reserve, said that “significant challenges and uncertainties” remained, especially in how effective the vaccine might be and how it will be distributed. Christine Lagarde, president of the ECB, welcomed the vaccine news but with a reminder that unforeseen events such as the Danish mink crisis could derail the policy response. Andrew Bailey, Bank of England governor, was also cautiously optimistic saying that any post-pandemic restructurings would probably be less severe than those of the 1980s or 1990s.

New data showed that more than 80 per cent of EU job losses in the second quarter were temporary workers, revealing how those employees have been disproportionately hit hard by the crisis. In the three months to June, there were 2.3m fewer temporary workers than in the last quarter of 2019.

Difficulties in distribution, and growing concern over inequal access to vaccines, were highlighted by an alliance backed by the World Health Organization, which raised more than $2bn for poor countries to access 1bn doses of Covid-19 vaccines, amid rising concerns rich nations will be first in line for immunisation. However, the Gavi alliance warned that a further $5bn would be needed next year to vaccinate key workers and vulnerable people in the 92 low and middle-income countries.

WHAT ARE COMPANIES SAYING?