Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

Leading by example

Written by Erica Salowe, researcher
Edited by Kevin Pringle, partner
26 March 2020

Good morning,

There are many things I miss about home — the family-run pizza joints on every corner, the famed New Jersey boardwalks, not having to pump my own petrol. But considering how the US is fumbling to manage the spread of coronavirus, I’m inclined to forgo the New Jersian luxuries and hunker down in the UK with a can of mushy peas.  

I recently caught up with my good friend, who works as a nurse at a hospital neighbouring our hometown. There are at least 12 patients confirmed to have coronavirus in her building, and nurses outside of the quarantined ward are only given one surgical mask for the duration of their 12-hour shift.  

Thousands of hospitals throughout the US face the same predicament of a severe equipment shortage. The lack of preparedness can be attributed to the government’s failure to restock supplies after deploying 100 million masks in 2009 to stave off the H1N1 flu pandemic.  

As it stands, the US will need an estimated 3.5 billion face masks to fight Covid-19. Even with some corporations altruistically manufacturing masks, President Trump’s decision to avoid using emergency powers to compel production raises concerns about whether the country will acquire the supplies needed before hospitals are overwhelmed.  

To complicate matters further, a lack of rigorous testing means that no one is sure just how many Americans have Covid-19. To give some perspective, the testing site nearest my hometown is meant to serve several counties containing tens of thousands of people, and only has the capacity to conduct 250 tests per day

While I realise that the UK is similarly gridlocked for some supplies and tests, I see a clear difference in the level of cohesion and morale between the two countries.  

My president is downplaying the timeline for this virus and entertaining the idea that America will get back to business by Easter. Meanwhile, Boris Johnson has pragmatically announced that the lockdown is likely to extend into May or June, and the government has collaborated extensively with supermarkets to ensure the vulnerable get food and provisions during this period.  

It has also been announced that, very soon, millions of home coronavirus tests will be available for those self-isolating, with the caveat that the tests pass one more quality check. The government has bought 3.5 million test kits so far and is ordering millions more. 

Most heart-warming of all, in the last two days over half a million volunteers have pledged to help the NHS support the country’s most vulnerable. Starting from next week, volunteers will phone those in isolation, deliver food and medicines, and transport people home from the hospital. 

The US ought to look closely at the way Britain has considered vulnerable people while handling this outbreak. Though Trump has announced a massive $2 trillion package to aid small firms and individuals, it’s going to take more than just money to tackle coronavirus. In these times of uncertainty and restriction, Americans will also need opportunities to demonstrate solidarity and benevolence. 

News

The UK government has given supermarkets access to a database to prioritise food delivery for the nation’s elderly and most vulnerable. Though online delivery is booked up for the next few weeks, major grocers plan to use the government database to reach out to elderly, vulnerable and disabled customers to directly offer a delivery slot. The government is also working with food service providers to establish an emergency food parcel plan to provide essentials to the estimated 1.5 million Britons in need. 

Today, the chancellor, Rishi Sunak, is expected to set out an emergency package for those who are self-employed. Only one third of those who are self-employed will receive wages from the government. People must be able to prove their livelihood was directly affected by coronavirus, most likely by showing a comparison of past income tax receipts. 

Scottish diplomat Steven Dick has died of coronavirus at age 37 in Hungary. Dick worked as the deputy head of mission at Budapest’s British embassy, and it is unclear if he had underlying health conditions.   

Business and economy

Barclays has announced that it will waive overdraft fees from 27 March until the end of April in an effort to aid customers facing financial hardship. For the next 90 days, Barclaycard will also refrain from charging late payment fees or interest on cash advances. Lloyds Group has also said that, in the next 90 days, customers will not be charged for missing payments on credit cards loans and motor finance; additionally, for the first three months, those with an agreed overdraft will be given the first £300 without interest. 

Rishi Sunak, Bank of England governor Andrew Bailey, and acting head of the Financial Conduct Authority Chris Woolard have urged banks to cooperate to implement the loan schemes which are planned to aid struggling firms (£). Barclays is the first high street bank set to pay a major £1.03 billion dividend next week, and thus sets a precedent on whether pay outs will occur or whether banks ought to preserve spare capital and wait for clearer prospects. 

The government has ordered 10,000 ventilators from vacuum cleaner manufacturer Dyson to treat people suffering from Covid-19. Dyson has teamed up with medical experts and Cambridge-based The Technology Partnership to invent a new ventilator design that can be assembled quickly in the UK. Health secretary Matt Hancock estimates that the NHS will require 30,000 ventilators to adequately treat the number of patients expected in the coming months. 

Columns of note

In The Times, Stig Abell claims that most Britons have understood the gravity of the situation and have voluntarily confined themselves to their homes, and that those still out and about are an unruly minority. He praises the small acts of heroism from compassionate folks around the country, highlighting retired NHS staff returning to work and the massive wave of NHS volunteers jumping to support the healthcare system. In a silver lining, Abell believes that now more than ever it is clear which workers are key for society: the doctors, nurses, shelf-stackers, farmers, delivery drivers, and postal workers. 

In The Guardian, Adam Tooze and Moritz Schularick argue that Covid-19, being a fiscal rather than a monetary challenge in economic terms, has the potential to break up the eurozone. Because there is no mechanism in place allowing eurozone governments to respond jointly to the crisis, measures have been handled on a national basis and divide Europe in a time of crisis. Tooze and Schularick observe that it is only when “the house is already on fire” that the European Central Bank takes policy action, and once markets are calmed the perceived necessity to take joint fiscal action dissipates. The authors call for the development of a firm joint fiscal response, as a means of European solidarity and to sustain the European project. 

Cartoon source: Evening Standard

Markets

What happened yesterday? 

The S&P 500 rallied for the second consecutive day since 12 February, ending the session at a rise of 1.15% to 2,475.56. The Dow Jones Industrial Average also ended yesterday up 2.3% at 21,200.55 points. The gains are attributed to the US Senate and Donald Trump’s $2 trillion package to American taxpayers and businesses facing hardship due to coronavirus.  

Boeing stocks surged over 23%, with investors expecting that the US stimulus package would benefit the aircraft manufacturer. 

However, Goldman Sachs economists warned that investors should prepare for a large surge in layoffs, with jobless claims for the week of 15-21 March anticipated to rise to an all-time high of 2.25 million. 

In Europe, the session began with tumultuous trading but ended up, with the Stoxx 600 rising 3.1%. London stocks finished on a firm high as investors considered numerous stimulus packages rolled out around the world.  

The FTSE 100 gained 4.45% at 5,688.20, while the FTSE 200 attained 4.57% at 14,819.91.  

What’s happening today?

Finals
Arbuthnot 
BBGI 
Digitalbox 
Ebiquity 
Hilton Foods 
Impact Health 
International Public Partnerships 
Lamprell 

AGMs
Avi Japan Oppo. 
Dev Clever Hol. 
Ind.inv.tst 
Lg Elec Gds S 
Rm 

UK economic announcements
(09:30) Retail Sales
(12:00) BoE Interest Rate Decision 

Int. economic announcements
(07:00) GFK Consumer Confidence (GER)
(12:30) Gross Domestic Product
(12:30) Continuing Claims (US)
(12:30) Personal Consumption Expenditures (US)
(12:30) Initial Jobless Claims (US) 
 

Source: Financial Times

did you know

Americans collectively consume 100 acres of pizza per day, which is about 350 slices per second. 

Parliamentary highlights

House of Commons

Oral questions 
Digital, Culture, Media and Sport (including Topical Questions) 

Attorney General 

Business Statement 
Business Questions to the Leader of the House – Mr Jacob Rees-Mogg 

Backbench Business 
Debate on a Motion on errors in payments made to victims of the Equitable Life scandal – Bob Blackman, Mr David Davis, Sir Edward Leigh, Dame Margaret Hodge 

Consideration of Lords amendments 
If necessary 

Adjournment 
Restoration of canals – Craig Williams 

House of Lords 

Oral questions 
Appointment of a SheDecides Champion – Baroness Sheehan 

Establishment of a formal inquiry into reducing the growth of dependency of the UK economy – Baroness Bennett of Manor Castle 

How the Department for International Development is adapting its work as a result of COVID-19 – Baroness Sanderson of Welton 

Adequate income support for the self-employed and freelancers whose livelihoods are impacted by COVID-19 – Baroness Bull 

Legislation 
Prisoners (Disclosure of Information About Victims) Bill – Second reading – Lord Keen of Elie 

Scottish Parliament 

No business scheduled

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