Author: BigGuy

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World shares hit fresh all-time highs; earnings and Fed in focus

LONDON (Reuters) – World shares rose to new all-time highs overnight and European indexes strengthened, with market sentiment generally upbeat on the prospect of fiscal stimulus and vaccine rollouts and ahead of a speech by U.S. Federal Reserve Chair Jerome Powell. The MSCI world equity index, which tracks shares in 49 countries, was up 0.2% at 0833 GMT, having touched new peaks shortly before. Overnight, MSCI’s ex-Japan Asian shares index also broke above its previous high hit in January.. European indexes strengthened after a shaky start, with the STOXX 600 and London’s FTSE 100 both up 0.2%. The dollar slipped slightly against a basket of currencies, down 0.2% at a two-week low of 90.263. “The reflation rally continues and interestingly with the dollar now weakening which suggests inflows into Asia are being recycled,” wrote Sebastien Galy, senior macro strategist at Nordea Asset Management in an emailed note. “Eventually, the reflation in commodities will start to affect real economic activity and create a negative feedback loop, especially oil,” he said. Oil prices rose overnight but steadied as European markets opened. Brent has risen for eight days in a row, the longest sustained run of gains since January 2019, while U.S. oil gained for seven days, the longest rally since February 2019. China’s consumer price index fell more than expected, but factory prices posted their first year-on-year rise in 12 months, suggesting gathering momentum in the industrial sector. up. Chinese stocks rose to multi-year highs on the last trading day before the week-long lunar new year holidays “China has been able to recover quickly because it controlled the pandemic quickly, which enabled it to fill the gap caused by production bottlenecks in countries where COVID-19 restrictions were still in place,” Marcin Adamczyk, head of emerging markets debt at NN Investment Partners, wrote in a note. U.S. President Joe Biden said on Tuesday he agreed with a proposal by Democratic lawmakers that would limit or phase out stimulus payments to higher-income individuals as part of his $1.9 trillion COVID-19 relief bill. The U.S. government will begin shipping COVID-19 vaccines directly to community health centres next week, as part of Biden’s goal of administering 100 million doses of the vaccine in his first 100 days in office. Earnings also contributed to market optimism. Japan’s Toyota hiked its full-year earnings forecasts by 54% to a record $19 billion. Societe Generale beat profit forecasts for the fourth quarter, as did Dutch bank ABN Amro. After a slight pullback on Wall Street on Tuesday, S&P 500 futures pointed towards a stronger open, up 0.3%. U.S. Federal Reserve Chair Jerome Powell will speak in a webinar about the state of the U.S. labour market at 1900 GMT. “The Fed’s job in avoiding unwarranted moves higher in yields is about to get more difficult,” wrote Derek Halpenny, MUFG head of research for global markets EMEA, in a note to clients. “Tonight’s speech will need to be carefully balanced between an improving outlook due to COVID and continued caution given the high levels of uncertainty and the long road to achieving its new, higher inflation goal.” U.S. CPI data is also due later in the session. The 10-year treasury yield was little changed at 1.1534%, having dipped from a spike on Monday to its highest since March last year. In Europe, the benchmark 10-year German Bund yield was steady at -0.445%. Italian borrowing costs hit a one-month low on Tuesday as Mario Draghi made progress in his attempt to form a government. The euro was up 0.2% at $1.2137, its highest in 9 days. Elsewhere, Bitcoin was trading around $46,763 and Ethereum hit new record highs.

 

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UK minister: “we don’t know” when international travel will resume

The key question could be when will we be able to travel, when will we be able to international travel. The answer is, we don’t know the answer to that question yet. It depends on both the level of vaccination here and critically elsewhere. And as I mentioned, I was just checking the figures this morning, we’ve done 13 million plus vaccinations, which is just more than the whole of the EU put together. So we’ll need to wait for other countries to catch up as well in order to be able to do that wider international unlock because we can only control the situation here.” “But I think the British public would expect a pretty strong action. Because we’re not talking now just about – oh, there’s a lot of coronavirus in that country and you might bring some more of it back when we already have plenty of it here. What we’re talking about now are the mutations, the variants, and that is a different matter because we don’t want to be in a situation where we later on discover that there’s a problem with the vaccines. For the time being I have to say getting vaccinated is the very best thing that people can do.”

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Does the world need new COVID vaccines? ‘Jury is out’, Oxford’s Pollard says

LONDON (Reuters) – It is not yet clear whether the world needs a new set of vaccines to fight different variants of the novel coronavirus but scientists are working on new ones so there is no reason for alarm, the head of the Oxford Vaccine Group said on Tuesday. South Africa has paused a planned rollout of AstraZeneca’s vaccines after data showed it gave minimal protection against mild infection among young people from the dominant variant there, stoking fears of a much longer battle with the pathogen.

AstraZeneca and Oxford University aim to produce a next generation of vaccines that will protect against variants as soon as the autumn before the Northern Hemisphere winter, AstraZeneca’s research chief said this month.

“There are definitely new questions about variants that we’re going to be addressing. And one of those is: do we need new vaccines?,” Andrew Pollard, Chief Investigator on the Oxford vaccine trial, told BBC radio. “I think the jury is out on that at the moment, but all developers are preparing new vaccines so if we do need them, we’ll have them available to be able to protect people.” Vaccines are seen as the swiftest path out of the COVID-19 crisis which has killed 2.33 million people and turned normal life upside down for billions. Researchers from the University of Witwatersrand and the University of Oxford said in a prior-to-peer analysis that the AstraZeneca vaccine provided minimal protection against mild or moderate infection from the South African variant among young people. Protection against moderate-severe disease, hospitalisation or death could not be assessed in the study of around 2,000 volunteers who had a median age of 31 as the target population were at such low risk, the researchers said. “I think there’s clearly a risk of confidence in the way that people may perceive you. But as I say I don’t think that there is any reason for alarm today,” Pollard said. “The really important question is about severe disease and we didn’t study that in South Africa, because that wasn’t the point of that study, we were specifically asking questions about young adults.”

The so called South African variant, known by scientists as 20I/501Y.V2 or B.1.351, is the dominant one in South Africa and is circulating in 41 countries around the world including the United States.

Other major variants include the so-called UK variant, or 20I/501Y.V1, and the Brazilian variant known as P.1. An analysis of infections by the South African variant showed there was only a 22% lower risk of developing mild-to-moderate COVID-19 if vaccinated with the AstraZeneca shot versus those given a placebo. If vaccines do not work as effectively as hoped against new and emerging variants, the world could be facing a much longer – and more expensive – battle against the virus than previously thought. “As long as we have enough immunity to prevent severe disease, hospitalisations and death then we’re going to be fine in the future in the pandemic,” Pollard said. Pollard said the South African government was right to look at how it deployed the AstraZeneca vaccine because the original plan was to use it in young adults – particularly healthcare workers – who were not expected to get severe disease. “It needs a relook at how best to deploy the vaccine,” Pollard said.

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US markets end on record highs as investors eye stimulus

Wall Street’s main indexes hit record highs today. US investors have made risky bets on hopes that a fiscal relief package would lead to a speedy economic recovery. Investors were keeping an eye on bitcoin as it rose again, with Elon Musk promising Tesla would soon take payment for its electric vehicles in the currency and revealing it had already bought $1.5 billion worth of it. Benchmark US Treasury yields surged to 11-month highs as the US fiscal stimulus was seen boosting economic growth and raising inflation more quickly than expected, and before the Treasury Department sells new longer-dated debt. The Reddit rally looks to be coming to a long-awaited end with Gamestop trading down nearly seven per cent to $59.11 while fellow meme stock AMC Entertainment plunged 11.2 per cent to $6.05 per share. Meanwhile, London markets started the week on the right foot, bringing the FTSE three-session losing streak to an end. The FTSE 100 by the close was up 0.7 per cent to 6,533. Investor sentiment has turned positiuve of a global economic recovery from the pandemic and renewed optimism over US stimulus plans. The FTSE 250 was up 0.1 per cent to 21,087, gaining for a sixth straight day. “The UK commodities are higher, which is tied into the hopes that a $1.9 trillion US stimulus package is going to passed without the help of Republicans. I think that is the underlying market driver,” said Connor Campbell, analyst at Spreadex. Elsewhere, Asian stock markets rose, buoyed by the growing pace of vaccine rollouts and falling rates of coronavirus infection. The Asian mood was upbeat as all major indexes clocked gains as shares hovered near record highs

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Factbox: What we know about the South African variant of COVID-19

Feb 8 (Reuters) – South Africa halted the planned rollout of the COVID-19 vaccine developed by AstraZeneca and Oxford University after data showed it gave minimal protection against mild infection from one variant of the virus found in the country.

* The variant was identified in December and is now the dominant variant in South Africa, responsible for 80%-90% of COVID-19 new cases.

* Scientists say it is different from other variants circulating in South Africa because it has multiple mutations in the important “spike” protein that the virus uses to infect human cells.

* The 501Y.V2 variant, part of the B.1.351 lineage, is about 53% more transmissible than earlier variants of the virus, research shows.

* South African scientists say there is no clear evidence that it is associated with more severe disease or worse outcomes. However, it does appear to spread faster than previous iterations.

* As of Jan. 27, it had been identified in 41 countries, according to the World Health Organization. Australia, China France, Japan and Switzerland are among the countries that have found cases.

* Drugmakers including Pfizer/BioNTech , Moderna, AstraZeneca are testing whether their vaccines protect against the variant.

Here is what the trials found:

ASTRAZENECA-OXFORD UNIVERSITY:

In an analysis, which has not been peer reviewed, the shot developed by the British partners provides minimal protection against mild-moderate COVID-19 infection from the B.1.351 coronavirus variant first identified in South Africa. (https://bit.ly/3aPLpSp)

The study was based on 2,026 volunteers who were on average 31 years old – half were given a placebo. Mild disease was defined as at least one symptom of COVID-19. Prior to widespread circulation of the more contagious variant, the vaccine was showing efficacy of around 75%, researchers said. In a later analysis based mostly on infections by the new variant, there was only a 22% lower risk of developing mild-to-moderate COVID-19 versus those given a placebo. Although researchers said the figure was not statistically significant, due to trial design, it is well below the benchmark of at least 50% regulators have set for vaccines to be considered effective against the virus. The study did not assess whether the vaccine helped prevent severe COVID-19 because it involved mostly relatively young adults not considered to be at high risk for serious illness. AstraZeneca said it believed its vaccine could protect against severe disease given that the neutralising antibody activity was equivalent to that of other COVID-19 vaccines that have demonstrated protection against severe disease. The British partners aim to produce a next generation of COVID-19 vaccines that will protect against variants as soon as the autumn.

REACTIONS SO FAR:

* Some scientists say it may be better to roll out the AstraZeneca shot in South Africa to provide some protection rather than waiting for the delivery of other shots.

Andrew Pollard, chief investigator on the Oxford vaccine trial, said the data confirms that the coronavirus will find ways to spread, but shots could help ease the toll on health care systems if they prevent severe disease.

* While it was only a small sample size and in low-risk volunteers, the data highlights the need to determine if the shot is effective in prevent more severe illness, the WHO said on Monday.

Additional studies are needed to confirm the optimal vaccination schedule, it said.

“What these results tell us is that we need to do everything we can to reduce circulation of the virus and delay mutations that may reduce the efficacy of existing vaccines,” it said.

“It also seems increasingly clear that manufacturers will have to adjust to the COVID-19 viral evolution, taking into account the latest variants for future booster shots.”

Emma Hodcroft, a researcher at the University of Bern: “If the vaccine is less effective, there would be a concern that any partial protection it may offer could allow mutations that confer an advantage by evading that immunity to rise to prominence, perhaps leading to variants that are completely escaped from vaccine-immunity.”

PFIZER-BIONTECH:

Preliminary data, which have yet to be peer reviewed and involve a small number of patients, show the vaccine may be less able to protect against infection with the South African variant of the virus.

NOVAVAX AND J&J:

Clinical trial data on COVID-19 vaccines developed by Novavax and Johnson & Johnson have found the South African coronavirus reduced their ability to protect against the disease.

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Nasdaq, S&P close on record highs as House passes budget bill

  • US stocks gained on Friday, with the S&P 500 and Nasdaq-100 closing at record highs.
  • The gain was driven by continued progress on President Biden’s $1.9 trillion stimulus package.
  • A weaker than expected January jobs report could boost chances of Biden’s stimulus deal getting passed.

US stocks gained on Friday as a weaker than expected jobs report set the stage for a swift passage of President Joe Biden’s $1.9 trillion stimulus proposal. The S&P 500 and Nasdaq-100 indexes closed at record highs. The US Senate approved a budget measure early Friday morning to enable the passage of a $1.9 trillion stimulus bill without Republican support. The approval, for which Vice President Kamala Harris cast the tiebreaking vote, came hours before the January jobs report missed analyst estimates. The US added just 49,000 jobs in January, well below the estimate for 105,000 new jobs. But the unemployment rate continued to decline, falling to 6.3% from 6.7%. Also supporting stocks on Friday was Johnson & Johnson’s submission of its single-dose COVID-19 vaccine data to the Food Drug Administration for emergency use authorization. The FDA could approve the vaccine in a matter of weeks, and Johnson & Johnson said it would supply the US with 100 million doses by the summer. GameStop and AMC Entertainment had small bounces on Friday after Robinhood removed all buying restrictions on the volatile stocks that were involved a short squeeze last week. Shares of Pinterest surged as much as 11% on Friday after the company reported earnings that beat analyst expectations. The social-media platform said it added 100 million users in 2020. The strong demand for Peloton bikes has led to extensive wait times for new customers, and the stock fell 7% after the company said it would invest $100 million to help shrink long wait times to more acceptable levels. The former baseball superstar Alex Rodriguez is betting that investor demand for special-purpose acquisition company initial public offerings will remain elevated in the 2021. Rodriguez filed with the Securities and Exchange Commission to form the Slam Corp. SPAC, which is seeking up to $575 million to search for a deal. Rodriguez will serve as the CEO. Oil prices rose. West Texas Intermediate crude jumped as much as 1.32% to $56.98 per barrel. Brent crude, oil’s international benchmark, gained 1.04%, going up to $59.44 per barrel at intraday highs.

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Habitual use of vitamin D supplements and risk of coronavirus disease 2019 (COVID-19) infection

After adjustment for covariates, the habitual use of vitamin D supplements was significantly associated with a 34% lower risk of COVID-19 infection (OR, 0.66; 95% CI, 0.45–0.97; P = 0.034). Circulating vitamin D levels at baseline or genetically predicted vitamin D levels were not associated with the risk of COVID-19 infection. The association between the use of vitamin D supplements and the risk of COVID-19 infection did not vary according to the different levels of circulating or genetically predicted vitamin D (P-interactions = 0.75 and 0.74, respectively).

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Mutated virus may reinfect people already stricken once with covid-19, sparking debate and concerns

A trial of an experimental coronavirus vaccine detected the most sobering signal yet that people who have recovered from infections are not completely protected against a variant that originated in South Africa and is spreading rapidly, preliminary data presented this week suggests. The finding, though far from conclusive, has potential implications for how the pandemic will be brought under control, underscoring the critical role of vaccination, including for people who have already recovered from infections. Reaching herd immunity — the threshold when enough people achieve protection and the virus can’t seed new outbreaks — will depend on a mass vaccination campaign that has been constrained by limited supply. Anthony S. Fauci, director of the National Institute of Allergy and Infectious Diseases, noted that it appears a vaccine is better than natural infection in protecting people, calling it “a big, strong plug to get vaccinated” and a reality check for people who may have assumed that because they have already been infected, they are immune.

Some experts fear vaccines may be less effective against strains of the coronavirus that were first found in the United Kingdom, South Africa and Brazil.

In the placebo group of the trial for Novavax’s vaccine, people with prior coronavirus infections appeared just as likely to get sick as people without them, meaning they weren’t fully protected against the B.1.351 variant that has swiftly become dominant in South Africa. The variant has been detected only a handful of times in the United States, including a case reported Friday in Virginia, which became the third state to identify the presence of the virus variant.The preliminary finding from the South African vaccine trial, based on a data set with limitations, stirred debate and concern among researchers as results first hinted at in a news release last week were revealed more broadly this week.

“The data really are quite suggestive: The level of immunity that you get from natural infection — either the degree of immunity, the intensity of the immunity or the breadth of immunity — is obviously not enough to protect against infection with the mutant,” Fauci said.

Even if they don’t agree on the scope of the threat, scientists said reinfection with new variants is clearly a risk that needs to be explored more. There is no evidence that second cases are more severe or deadly, and a world in which people may have imperfect protection against new versions of the virus is not necessarily a world in which the pandemic never ends.“I worry especially that some of these premature sweeping conclusions being made could rob people of hope,” said Angela Rasmussen, a virologist at Georgetown University’s Center for Global Health Science and Security. “I worry the message they may receive is that we’re never going to be rid of this. When in fact that’s not what the data suggests.” She and others emphasized the apparent lack of severe health repercussions from reinfection — and the lack of evidence that reinfection is common. When Maryland biotechnology company Novavax first disclosed results from two international vaccine trials last week, the company noted in its news release that some people in the trial with earlier infections had become reinfected, probably with the variant B.1.351, which had become dominant during the trial.On Tuesday, details of the Novavax trial were presented at the New York Academy of Sciences. About 30 percent of the people in the South African trial had antibodies in their blood at the start of the trial showing they had recovered from an earlier infection. But that previous exposure didn’t necessarily appear to afford protection. Among those who got saltwater shots, the people with a prior infection got sick at the same rate as study participants who had not been previously infected — a surprise because they would have been expected to have some immunity. Nearly 4 percent of people who had a previous infection were reinfected, an almost identical rate to those with no history of infection.

“It’s awful strong data,” said Larry Corey, a virologist at the Fred Hutchinson Cancer Research Center in Seattle who is co-leading the federal clinical trial network testing coronavirus vaccines in the United States. “Basically, it’s saying vaccination actually needs to be better than natural immunity. But vaccination is better than natural immunity.

The study found that two shots of the experimental vaccine did provide protection against the variant. The reinfection result was incidental to the main objective of the study, which was to determine the vaccine’s efficacy and safety. It was not designed to test the likelihood of reinfection, and others argued that it can’t be used to draw firm conclusions and cautioned against assuming that the previous infection provided no protection. The study backs up recent laboratory data from South African researchers analyzing blood plasma from recovered patients. Nearly half of the plasma samples had no detectable ability to block the variant from infecting cells in a laboratory dish. In a separate study, scientists at Rockefeller University in New York took blood plasma from people who had been vaccinated and found that vaccine-generated antibodies were largely able to block mutations found on the B.1.351 variant.Novavax did not provide a breakdown of mild, moderate and severe cases, but severe cases of covid-19 were rare in the trial, suggesting that reinfection is unlikely to send people to the hospital. “It is not surprising to see reinfection in individuals who are convalescent. And it would not be surprising to see infection in people who are vaccinated, especially a few months out from vaccine,” said Michel Nussenzweig, head of the Laboratory of Molecular Immunology at Rockefeller University. “The key is not whether people get reinfected, it’s whether they get sick enough to be hospitalized.” “Everyone’s still trying to digest this and asking, is this really what’s happening?

Because the implications are pretty huge,” said Chris Murray, who leads the modeling team at the Institute for Health Metrics and Evaluation at the University of Washington. “If the data holds true, it means we will need to walk the public back on the idea of how close we are to the finish line for ending this pandemic.”

Others are less sure. Marc Lipsitch, an epidemiologist at Harvard University, said he couldn’t draw clear conclusions from the data because it remains limited and preliminary. “The pace has been dizzying, and several times today, I have learned new things that significantly change my view of those data,” Lipsitch said.Projections created by data scientist Youyang Gu — whose pandemic models have been cited by the Centers for Disease Control and Prevention — suggest that about 65 percent of America’s population will reach immunity by June 1. But built into that 65 percent is roughly 20 percent having immunity from past infections only. Scientists are unsure how the potential for reinfection might influence their projections. They are eager to see if other vaccine trial data in coming weeks will corroborate the trend from the Novavax trial.

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U.S. House plans vote to advance Biden’s $1.9 trillion COVID aid package

WASHINGTON (Reuters) – President Joe Biden’s drive to enact a $1.9 trillion coronavirus aid bill gained momentum on Friday as the U.S. Senate narrowly approved a budget blueprint allowing Democrats to push the legislation through Congress in coming weeks with or without Republican support.

At the end of about 15 hours of debate and votes on dozens of amendments, the Senate found itself in a 50-50 partisan deadlock over passage of the budget plan. That deadlock was broken by Vice President Kamala Harris, whose “yes” vote provided the win for Democrats.

This was a “giant first step” toward passing the kind of comprehensive coronavirus aid bill that Biden has put at the top of his legislative agenda, Senate Majority Leader Chuck Schumer said. Shortly before the final vote, Democrats flexed their muscles by offering an amendment reversing three earlier votes that Republicans had won. Those had used the coronavirus aid battle to voice support for the Canada-to-United States Keystone XL pipeline that Biden has blocked and support for hydraulic fracking to extract underground oil and natural gas. Also overturned was a Republican amendment barring coronavirus aid to immigrants living in the United States illegally. With Democrat Harris presiding, she broke a 50-50 tie to overturn those Republican victories. It marked the first time Harris, in her role as president of the Senate, cast a tie-breaking vote after being sworn in as Biden’s vice president on Jan. 20. Before finishing its work, the Senate approved a series of amendments to the budget outline, which had already passed the House of Representatives on Wednesday. As a result, the House must now vote again to accept the Senate’s changes, which could occur as early as Friday. For example, the Senate added a measure calling for increased funding for rural hospitals whose resources are strained by the pandemic. Senate Democrats and the Biden administration have said they want comprehensive legislation to move quickly to address a pandemic that has killed more than 450,000 Americans and left millions jobless. They want to spend the $1.9 trillion to speed COVID-19 vaccines throughout the nation. Other funds would extend special unemployment benefits that will expire at the end of March and make direct payments to people to help them pay bills and stimulate the economy. They also want to send money to state and local governments dealing the worst health crisis in decades. But as the hours wore on and dozens of amendments were offered, exhausted senators mainly spent the night disposing of Republican ideas, such as ending all U.S. foreign aid and prohibiting Congress from expanding the U.S. Supreme Court beyond its current nine justices. Senators voted on issues ranging from immigration and abortion to energy and taxes. But none of the approved amendments will carry the force of law in a budget blueprint and mainly are guidelines for developing the actual coronavirus aid bill in coming weeks. More importantly, the budget plan unlocks a legislative tool called reconciliation that is designed to let Democrats approve Biden’s $1.9 trillion proposal by a simple majority. Most legislation must get at least 60 votes in the 100-seat Senate to advance. But the chamber is divided 50-50 and Republicans oppose the Democratic president’s proposal. Reconciliation would allow the Senate’s 48 Democrats and two independents who align with them to approve the relief package, with a tie-breaking vote from Harris. Republicans have countered the budget plan with proposals that would be less than one-third the cost. While their plan dovetails with the Democrats’ in some respects, Biden has deemed it as too anemic to put the country back on its feet after a year of suffering through the pandemic. A group of 10 Republican senators who met with Biden at the White House on Monday sent him a letter on Thursday saying that significant amounts of money already appropriated by Congress have not yet been spent. Last year, Congress passed emergency bills totaling around $4 trillion to deal with the health and economic crisis caused by the COVID-19 virus. In early voting on Thursday, senators delivered a message to the Biden administration that direct payments should be tailored to those who need the money the most, as it voted 99-1 to recommend that high-income earners not qualify for a new round of government checks that could amount to $1,400 for individuals. Senators did not specify income limits. But an earlier round of direct payments placed thresholds of $75,000 for individuals and $150,000 for married couples before the money would start scaling down. “The decent compassionate thing is for us to target the relief to our neighbors who are struggling every day to get by” during the coronavirus pandemic, said Democratic Senator Joe Manchin, author of the proposal.