Archives of “Pandemic” tag

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Copper and silver prices spike as governments decarbonize

  
  Analysis
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Money is flowing into the markets for such materials as copper, silver and aluminum on growing demand thanks to a shift to renewable energy and electric cars.

The trend was triggered by solid demand in China, which brought the COVID-19 pandemic under control ahead of other countries. Now investors around the world are trying to get ahead of the curve on the so-called green cycle poised to lift the commodity markets over the long term.

Three-month copper futures on the London Metal Exchange, the global benchmark, hit a seven-year high earlier this month. With the price at $7,984.50 per ton as of Friday, copper futures have risen about 80% from a low in March when the coronavirus was wreaking havoc in China.

Ever since the spread of infections settled down there, the Chinese government has been propping up the economy through public works investment and other steps. “In China, there is a shortage of many industrial products, and this is spreading to materials,” said Naohiro Niimura, a partner at Japanese commodities consultancy Market Risk Advisory.

China’s monthly imports of copper ingots and related products are well above year-earlier levels in volume terms. Meanwhile, many mines in South America and elsewhere have been forced to cut output due to COVID-19 infections. (more…)

Moody’s downgrades UK credit rating to Aa3 from Aa2, outlook stable

  
  Analysis
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Moody’s cuts the United Kingdom

Boris Johnson
This isn’t entirely unexpected but you hate to see it. Fitch recently affirmed the UK at AA-, which is the equivalent of Aa3. S&P remains one notch higher at AA but it’s under review.
Moody’s cited three reasons for the sovereign downgrade:

(more…)

New confirmed COVID-19 cases in Italy hit their highest since May on Wednesday

  
  Analysis
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Italy reported 1,367 new coronavirus cases on Wednesday

  • highest daily tally since May
  • Wednesday number of tests was 93,529 (around almost 20,000 more than Tuesday and a record since the beginning of the pandemic)
Despite the renewed surge in infections, authorities in the country persist with saying there are no plans for a new lockdown.

US election outcome poses potential downside risks to US equities

  
  Analysis
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Via HSBC, beginning with where we are at:
  • latest national opinion polls show Senator Joe Biden maintaining a healthy lead over President Trump
  • although lower than the double-digit gap reached in late June
  • Biden’s strong polling performance has coincided with a period of high US unemployment as the country grapples with the Covid-19 pandemic and a period of heightened social tensions earlier this summer
But, that could change:
  • A number of factors could materially shift either candidate’s standing in the coming weeks. 
  • Positive for Trump would be developments that lead to a faster economic recovery. This may include the potential for the pandemic to subside or further progress to be made with treatments and/or vaccines. Congress passing a new stimulus package that includes an extension to the unemployment insurance top-up will also be considered important. 
  • Other factors complicate the picture. There is uncertainty about the impact of increased mail-in voting due to the pandemic. Meanwhile, the US Electoral College system places greater importance on ‘battleground states’ to the final result, making national polls a less useful predictor. In the majority of these states, Biden is forecast to do worse than at the national level.
For markets:
  • The outcome of the election poses some potential downside risks to US equity markets. 
  • These include the possibility of a divided government and “deadlock” over fiscal policy support, while Biden may implement higher corporate taxes. 
  • For the time being, we maintain our overweight view on US equities as the “swoosh” economic recovery remains in play.”

China’s Global Times says the US is becoming the biggest uncertainty in future global economic growth

  
  Analysis
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An opinion piece in the state-owned tabloid

Some of the remarks in the piece:
  • The US has rolled out a series of policies to monetize financial deficit …  which has aggravated financial risks in the country, and cast a shadow over further investments.
  • US’ failure to handle the coronavirus may even prolong the pandemic
  • skyrocketing unemployment has resulted in sliding consumption which in turn is causing a decline in exports from its trade partners
  • huge debt and expanding stock market bubbles have damaged the confidence of global investors
GT is a barometer of official thinking in China re the US, relations between the two contries are on a downward path.
Global Times editor Hi Xijin:
An opinion piece in the state-owned tabloid

Full statement of the BOE August monetary policy meeting decision

  
  Analysis
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The full statement by the BOE on its August policy decision

The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. In that context, its challenge at present is to respond to the economic and financial impact of the Covid-19 pandemic. At its meeting ending on 4 August 2020, the MPC voted unanimously to maintain Bank Rate at 0.1%. The Committee voted unanimously for the Bank of England to continue with its existing programmes of UK government bond and sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, maintaining the target for the total stock of these purchases at £745 billion.

The Committee’s projections for activity and inflation are set out in the accompanying August Monetary Policy Report. Although recent developments suggest a less weak starting point for the Committee’s latest projections, it is unclear how informative they are about how the economy will perform further out. The outlook for the UK and global economies remains unusually uncertain. It will depend critically on the evolution of the pandemic, measures taken to protect public health, and how governments, households and businesses respond to these factors. The MPC’s projections assume that the direct impact of Covid-19 on the economy dissipates gradually over the forecast period. Given the inherent uncertainties regarding the evolution of the pandemic, the MPC’s medium-term projections are a less informative guide than usual.

Global activity has strengthened over recent months, although it generally remains below its level in 2019 Q4. Covid-19 has continued to spread rapidly within a number of emerging market economies, however, and there has been a renewed rise in cases in many advanced economies. (more…)

EU proposes €750 billion pandemic stimulus fund

  
  Analysis
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Including €390 billion in grants

the EU is proposing a €750 billion stimulus fund. The grants within that fund are proposed at €390 billion. This is lower than the €500 billion that Germany and France propose, but is higher than the €350 billion billion counterproposal from the so-called frugal countries.

  • You proposes €1.074 trillion for blocks 2021 – 2027 budget

China’s Wuhan has officially banned the eating of wild animals

  
  Analysis
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Wuhan was the epicentre of the coronavirus pandemic in China. Its a big city, with a population of around 11m people.

City authorities there have officially banned the eating of all wild animals,
  • Wuhan will become a “wildlife sanctuary”
  • virtually all hunting of wild animals to be banned (exception for “scientific research, population regulation, monitoring of epidemic diseases and other special circumstances”).
  • also introduced controls on the breeding of all wild animals
  • prohibiting any to be reared for food
The coronavirus spread from bats to people in wet markets in the city.
Wuhan was the epicentre of the coronavirus pandemic in China. Its a big city, with a population of around 11m people. 

Fitch affirms France rating at ‘AA’ but lower its outlook from stable to negative

  
Analysis, Economy
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Fitch Ratings has affirmed France at ‘AA’ but cites (amongst other factors) the substantial worsening in public finances and economic activity expected this year due to the COVID-19 pandemic for its lowering of the outlook to negative.

  • The combination of much reduced economic activity due to containment measures introduced from March and government policies to support the economy in the period of enforced reduced activity will sharply increase government borrowing and indebtedness. This deterioration of France’s public finance metrics will happen in the context of already high debt levels in comparison with rating peers, limited progress in fiscal consolidation since the global financial crisis, and moderate real economic growth.
That’s a summary, the report also notes:
  • France’s ratings are underpinned by a large, wealthy and diversified economy, strong and effective civil and social institutions and a track record of macro-financial stability. Public finances, and particularly the high level of government debt, remain a rating weakness relative to the ‘AA’ category. 
More at that link above
Fitch Ratings has affirmed France at 'AA' but cites (amongst other factors) the substantial worsening in public finances and economic activity expected this year due to the COVID-19 pandemic for its lowering of the outlook to negative.

Links……..For U

  
Analysis, LINKS
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Staying Safe:

• 24 Hours at the Epicenter of the Coronavirus Pandemic: Doctors, nurses, a congressman, workers in deserted museums and theatres, men on early release from Rikers, and the newly unemployed strained to keep New York City, and themselves, going. (New Yorker)
• What if immunity to covid-19 doesn’t last? (MIT Technology Review)
• ‘Frostbite’ toes and other peculiar rashes may be signs of hidden coronavirus infection, especially in the young (Washington Post)
• We have to wake up: factory farms are breeding grounds for pandemics (The Guardian)

Aid and assistance:

• COVID Tests Are Free, Except When They’re Not (Kaiser Health News)
• Useful table of extended state tax filing deadlines  (Tax Foundation)
• Figuring Out Your Personal Finances Together (Wall Street Journal)

Staying Sane WFH:

• Signs You May Be Burning Out—and What to Do About It (Businessweek)
• “It Is Harrowing. It Is Daunting. It Is Overwhelming”: The Mental Toll of Coronavirus Is Crushing Medical Workers (Vanity Fair)
• Which epidemiologist do you believe? (UnHerd)
• Yuval Noah Harari: ‘Will coronavirus change our attitudes to death? Quite the opposite’ (The Guardian)

Vaccine & Treatment Updates:

• In Race for a Coronavirus Vaccine, an Oxford Group Leaps Ahead (New York Times)
• Some Countries Are Squashing the Coronavirus Curve. Vietnam Is One. (Wall Street Journal)
• Three potential coronavirus vaccines moving ahead in tests (Los Angeles Times)
• When will we get the Covid-19 vaccine? (UnHerd) see also How Long Will a Vaccine Really Take? (New York Times)
• UCSF team has discovered drugs that block coronavirus, paving way for ‘a better drug sooner’ (San Francisco Chronicle)
• The Secret Group of Scientists and Billionaires Pushing a Manhattan Project for Covid-19 (Wall Street Journal)

Resolving the Crisis:

• Dogs are being trained to sniff out coronavirus cases (Washington Post)
• Could contact tracing bring the US out of lockdown? (Vox)
• LA Becomes The First Major City In The US To Offer Free Testing To Every Resident, Even Those With No Symptoms (LAist)
• Why America’s coronavirus testing problem is still so difficult to solve (Vox)
• No Testing, No Treatment, No Herd Immunity, No Easy Way Out (The Atlantic)
• Poop may tell us when the coronavirus lockdown will end (LA Times)
• We Cannot “Reopen” America: The source of the economic shock is not government orders. It’s the pandemic. (The Bulwark)
• Reopening Plans Across U.S. Are Creating Confusing Patchwork (New York Times)

Post-Crisis

• What will cities look like once the lockdown lifts? (King’s College London)
• Five Ways the U.S. Military Will Change After the Pandemic (War on the Rocks)
• Will Travel Change After Coronavirus? Here’s What Experts Have to Say (Travel & Leisure)
• The Office You Left Is Not Going to Be the Office You Return To (Bloomberg)
• One Rich N.Y. Hospital Got Warren Buffett’s Help. This One Got Duct Tape. (New York Times)
• Covid-19’s future: small outbreaks, monster wave, or ongoing crisis (Stat)
• What the Coronavirus Crisis Reveals About American Medicine (New Yorker)
• The Immunity of the Tech Giants: When the pandemic is over, we most certainly should fear the industry more than ever (New York Times)

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