Pablo Pardo (Washington) | In September, the slowdown has, unexpectedly, arrived in the US. The main culprit is the Delta variant of the coronavirus, which is once again claiming 1,500 lives daily and threatens to cause a ‘W’ revival. Until just a month ago, the biggest question regarding the US economy was whether its growth would beat China’s for two years in a row. The last time US GDP growth…
Olivia Álvarez (Monex Europe) | The EU, a significant laggardin Q1, starts to rise from the ashes. With below 10% of the total population having received at least one jab by the end of March, the European Commission entered negotiations with main suppliers to ramp up deliveries. As a result, the EC set ambitious goals to have 70% of the EU adult population vaccinated by the end of June, which accounts for 55%-60% of the total EU population.
Santander, BBVA, CaixaBank, Bankia, Sabadell and Bankinter posted combined losses of €5.55 Bn last year, with their accounts badly affected by the coronavirus, compared to the more than €13.5 Bn achieved in 2019. These negative figures are mainly due to the great losses suffered by Santander, €8.77 Bn, the first of its history, compared to the €6.51 Bn it earned in 2019. Santander’s losses came after increasing provisions for the covid-19 crisis and assuming an impairment of €12.6 Bn in the value of its subsidiaries in the UK, the US and Poland.
The unstoppable spread of the pandemic is currently hitting Portugal and Spain with particular severity. And it has been worsened with possible delays in the production of vaccines, both by Pfizer and Astrazeneca, thus jeopardizing the pace of deliveries and the vaccination schedule in Europe. At the same time, the short term is being complicated on the continent by the increase in the number and depth of restrictions. These are weakening the prospects for recovery in the first part of the year.
Thomas A. Singlehurst/ Nithin Pejaver, CFA/ Mark Li, CFA/ Brian Gong (Citi GPS) | COVID-19 has created one of the most significant disruptions to students in history, with 1.6 Bn learners in 190+ countries being affected by school closures. Education technology (edtech) currently makes up only 3% of the $6 Tr+ overall market primarily because of inertia on the part of educational institutions. We see the current crisis driving an acceleration in edtech growth with the market doubling over the next 5 years to $360 Bn.
Regina Borromeo (Robeco ) | Since the summer, our view has been that voting momentum will follow the path of the pandemic and the economic recovery. Trump’s handling of the coronavirus pandemic has been compared to George W. Bush’s mishandling of the disaster response to Hurricane Katrina, which coincided with a fall in the President’s polling and approval ratings. National polls have seen Biden extend his lead to over 10% recently, a larger spread compared to 2016 when Hilary Clinton ran against Trump.
The symbolism of President Trump testing positive for coronavirus will not be lost on market participants and economists. Many things – from US-China relations, post-election tax policy, the US’s relationship with global institutions, trade, climate change progress, social cohesion in the US –depend on how a 74-year old man reacts to getting a virus that has claimed over a million lives globally this year
Lidia Conde (Frankfurt) | Are there many? Or just a few? One in five Germans believes in populist arguments or has ideas which go against the system or the elite or pluralism. Two years ago, it was one in three. According to a study by the Bertelsmann Foundation, populism is less and less popular. However, watching thousands of people demonstrating against the anti-pandemic restrictions in a country which is a model in containing the pandemic, one wonders if Germany has not gone completely mad.
Telefónica presents its proposal for a Digital Deal in Spain. In line with the 2018 Manifesto, the deal promotes the establishment of game rules adapted to the new post-COVID reality to avoid inequalities in the digital world. Spain’s digital reinvention could have an annual impact of approximately 1.8% of GDP until 2025.
Monex Europe | The FOMC kept rates unchanged, extended its swap facility, and added language to its statement emphasizing that the path of the US economy depended heavily on the path of the virus. In our view, outcome-based forward guidance is likely as early as September, when the FOMC will have a new batch of projections, as well as hard data indicating the costs of the second wave of COVID-19 infections.