Monday Musings: December 21, 2020

Dec 21, 2020

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Public Trust Credit Team
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Congress reaches a deal on COVID-19 relief bill

Congress has reached a final agreement on a pandemic relief bill worth $900 billion, successfully avoiding a government shutdown at the last minute. The relief package includes assistance for households in the form of rental relief and direct payments to eligible citizens (under $75,000 gross income in 2019) wherein households will receive $600 for each adult and an additional $600 for each dependent. The agreement is also expected to provide jobless aid by providing eligible Americans with $300 a week in enhanced unemployment benefits for up to eleven weeks. Additional measures of the stimulus package include aid for public and private schools, funding for vaccine distribution, and $325 billion in small business relief, most of which will be extended through the existing Paycheck Protection Program. Lawmakers in Washington were finally able to find a compromise to get a deal done, but the bill excludes key components of earlier negotiations including liability protection for businesses and aid for state and local governments.  

Major global equity indexes down over fears of new-found COVID-19 strain in the U.K.

Stocks are under pressure today as investors digest news of a potentially more infectious COVID-19 strain reported in the U.K. The new variant has led to a number of European countries banning travel from the U.K. as well as curtailing freight transportation across the English Channel. The new travel bans come at a time when the U.K. is already increasing domestic restrictions in response to rising COVID-19 cases. On Sunday, Germany, France, Italy, and Ireland officially closed their borders to inbound travelers coming from the U.K. France has also placed at least a 48 hour block on truck-borne freight coming from Britain. Prime Minister Boris Johnson is scheduled to chair an emergency meeting with U.K. officials today to discuss additional ways to ensure the flow of freight out of the country.

The U.S. receives authorization for a second COVID-19 vaccine developed by Moderna while the European Union approves the Pfizer-BioNTech vaccine

On December 18, 2020, the vaccine candidate developed by Moderna, Inc., mRNA-1273, received the second emergency use authorization (EUA) for a vaccine to prevent COVID-19 from the U.S. Food and Drug Administration (FDA). The Moderna approval comes precisely one week after the Pfizer-BioNTech vaccine was approved on December 11. Allocation and distribution for Moderna’s vaccine is a multi-agency effort involving Operation Warp Speed from the Department of Defense and in partnership with the Department of Health and Human Services and the U.S. Centers for Disease Control and Prevention (CDC). The Moderna and Pfizer-BioNTech vaccines use messenger RNA (mRNA) technology with Phase 3 data showing efficacy rates of 94.1% and 95%, respectively. Further, both vaccines require a two-dose regimen. Moderna anticipates having approximately 20 million doses available by the end of 2020 and between 100 million and 125 million doses available worldwide by the end of the first quarter of 2021.
 
Additionally, the European Medicines Agency (EMA) issued a recommendation for the conditional marketing authorization (CMA) for the Pfizer-BioNTech vaccine for use in the European Union including all 27 member nations and the roughly 446 million citizens within the E.U. Each of the 27 member nations will be responsible for distribution within their respective countries with deployment of the vaccine coming as early as next week. The E.U. has agreed to buy 200 million doses of the vaccine with an option for an additional 100 million. The approval comes as much of the E.U. has faced a recent surge in COVID-19 cases, while global cases have now exceeded 77 million.
All comments and discussion presented are purely based on opinion and assumptions, not fact. These assumptions may or may not be correct based on foreseen and unforeseen events. The information presented should not be used in making any investment decisions. This material is not a recommendation to buy, sell, implement, or change any securities or investment strategy, function, or process. Any financial and/or investment decision should be made only after considerable research, consideration, and involvement with an experienced professional engaged for the specific purpose. Past performance is not an indication of future performance. Any financial and/or investment decision may incur losses.

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