BioNTech CEO Confident Vaccine Will Work on U.K. Covid-19 Variant Further studies are needed to be completely sure, its chief executive said.
- The new faster-spreading mutation of the virus has also been detected in Australia, Denmark and Gibraltar, Prime Minister Boris Johnson’s spokesman, Jamie Davies, told reporters on Monday.
- Sunday was the third day in a row in which more than 1 million people passed through U.S. airport screening, the first time that has occurred since the virus erupted in mid-March, according to Transportation Security Administration data. Even with the recent surge, the number of people flying on Friday through Sunday was only 42% of the equivalent three days last year. But even around Thanksgiving, TSA never had back-to-back days that hit 1 million passengers screened.
- Thirty-five percent of U.S. adults say they are comfortable going out to eat, a share that hasn’t changed much since mid-November. Read more.
- New York Governor Andrew Cuomo has asked the three airlines that fly from the U.K. directly to New York to add the state to a list of 120 countries requiring pre-boarding Covid tests. He said he believes the new strain is already circulating in New York.
- China’s Sinovac vaccine, which scientists hope can be used to combat Covid-19 in much of the developing world, has shown to be effective in late-stage trials in Brazil, people involved in its development told The Wall Street Journal.
- Charts from NBF:
What Is in the $900 Billion Covid-19 Aid Bill Stimulus checks, jobless aid and PPP small-business loans are part of the $900 billion Covid-19 relief passed by Congress.
The legislation would authorize a second round of economic-impact payments, following the checks Americans received in the spring and summer, at a cost of $166 billion.
Households would receive $600 for each adult and $600 for each dependent, instead of $1,200 and $500, respectively, in the first round. Mixed-status households, where some people are ineligible noncitizens, would get payments based on the number of eligible people in the households, as opposed to being shut out as they were in the first round.
The payments would be based on income from 2019 and begin phasing out for individuals with adjusted gross incomes over $75,000 and married couples over $150,000. Treasury Secretary Steven Mnuchin said Monday that the first electronic payments could reach bank accounts by the beginning of next week. (…)
Workers would be eligible for a $300-a-week federal unemployment subsidy. As with the prior aid package enacted in March, gig workers and others who don’t ordinarily qualify for benefits would be eligible for the jobless aid. The money is available through March 14.
The legislation would also extend to 50 weeks the amount of time for which workers may claim benefits through both state and federal programs. Most states typically provide 26 weeks of jobless benefits.
The measure also provides an additional $100-a-week subsidy for workers who have both wage and self-employment income but whose basic unemployment benefits don’t take into account their self-employment income. The cost of the enhanced unemployment benefits are projected at $120 billion.
The bill provides $25 billion of assistance to tenants in arrears on their rent. It also extends until the end of January 2021 a federal eviction prohibition, which the incoming Biden administration may extend again. (…)
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U.S. Economy Gets a Bridge to the Spring
- The WSJ editorial board:
(…) The biggest fiasco is another round of checks—this time $600—to most Americans who earn up to $100,000. This will have little or no economic impact since it won’t change incentives; it also isn’t focused on the neediest. The personal savings rate in October was 13.6%, about twice as high as before the pandemic, with $2.4 trillion on the sidelines.
Another blunder is three more months of $300 in federal enhanced weekly unemployment benefits. This plus-up will allow half or so of workers to earn more by not working and slow the labor market recovery once the vaccine rollout gets underway since they will have less incentive to find work. (…)
We’ll see how that changes consumer buying intentions. The December U. of Michigan survey revealed that
- Expected business conditions were unchanged at 75 (pre-pandemic level: 127)
- The “buying conditions” index was 123 (pre-pandemic level: 163)
- Auto-buying plans: 119 (pre-pandemic level: 134).
- Homebuying intentions: 133 (pre-pandemic level: 143
DECEMBER DATA SHOWS CHINA MANUFACTURING AND SERVICES SECTORS BOTH POWERING AHEAD
This is the Sales Managers Index. It leads the Purchasing Managers Index, like sales lead purchases.
- The Sales Growth Indexes for both sectors of the Chinese economy reflected rapid recovery from Covid related problems in December.
- The Services sector in particular looks very robust, with the Sales Index coming in at 56.2, way higher than the already creditable 53.4 recorded in November.
- The Manufacturing sector also recorded rapid sales growth, although some way behind Services.
Fatal Landslide in Brazil Pushes Iron Ore Toward Record Iron-ore prices are surging toward a high as a landslide at a Brazilian iron-ore mine intensifies concerns about supply and Chinese demand runs hot.
THE RULE OF 20 STRATEGY
The Rule of 20 Strategy applies strict rules based on valuation (R20 P/E) and trends in earnings and inflation (R20 Fair Value). Now that effective vaccination is underway, we can use normalized earnings instead of the pandemic depressed trailing profits. The only other time normalized earnings were substituted to trailing earnings was in early 2009 when governments and central banks were clearly taking charge putting the end of the financial crisis in reasonably clear sight. In the current situation, up to now, it was too risky to presume that effective vaccines would be found and made widely available so rapidly.
At 3630 yesterday, the Rule of 20 P/E declined to 22.95 which triggers a 50% equity position.
Continuing on our following of newbie investors: “Why do I like when stocks split? Because you get double the stocks. Two stocks are better than one especially when they always go up.” (Barstool Sports’ David Portnoy on Aug. 25).
WeChat Becomes a Powerful Surveillance Tool Everywhere in China China’s do-everything app, WeChat, has become one of the most powerful tools in Beijing’s arsenal for monitoring the public, censoring speech and punishing people who voice discontent with the government.
Diamondback Buys Shale Driller QEP Resources The company’s acquisition of a West Texas rival adds to a run of low-premium takeovers in the U.S. shale patch.
The deal was valued at $2.2 billion overall, including $1.6 billion in debt, leaving $555M for shareholders. This is $2.22/sh, 5% below the previous day’s close and 15% below the most recent high (Dec. 9).
Bad sources gained more traction in 2020
In 2020, nearly one-fifth (17%) of engagement among the top 100 news sources on social media came from sources deemed generally unreliable, compared to about 8% in 2019, Axios Media Trends author Sara Fischer writes from a NewsGuard analysis. Quality filters from Big Tech platforms didn’t stop inflammatory headlines from gaining lots of traction, especially from fringe-right sources.
