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  • President-elect Joe Biden will release the vast majority of Covid-19 vaccine doses to speed up delivery, his team said on Friday, reversing the Trump administration policy of holding back second shots

  • London mayor Sadiq Khan declared a ‘major incident’ and warned the spread of coronavirus in the city was now ‘out of control’

  • The EU will double its supplies of the BioNTech/Pfizer coronavirus vaccine, as it seeks to quell the blame game over the slow rollout of jabs

First monthly loss of jobs in US since April

Amid the shock of the assault of the US Capitol on Wednesday it was easy to overlook the other significant development of the day: wins in the Georgia Senate run-offs mean Democrats will control both houses of Congress, making it possible for president-elect Joe Biden to push through his agenda, including a new coronavirus recovery plan.

A Biden stimulus could mean more direct payments to Americans, an extension of the jobless benefits due to end in March and more help for local administrations. Some analysts expect stimulus worth another $600bn on top of the $900bn agreed late last year. Incoming Senate majority leader Chuck Schumer said increasing aid money to $2,000 for each citizen was “one of the first things we want to do once our new senators are seated”.

Global markets welcomed the end to the uncertainties created by the long general election and expectations that the new government would put more support into the economy. Longer-term goals for the Biden administration include increased spending in infrastructure and clean energy, paid for by higher taxes. 

Line chart of MSCI World price index showing stocks in developed markets have set a new record high

But if anyone thought the task ahead was straightforward, they would have been quickly disabused by today’s disappointing employment report, which showed the US economy losing jobs for the first time since April as a resurgent coronavirus continued to be a major drag on the country’s recovery, especially in sectors such as leisure and hospitality.

The latest medical data further underline the scale of the challenge ahead: rising cases and hospitalisations over the Christmas period culminated yesterday with a death toll of more than 4,000 — the deadliest day of the pandemic so far.

Markets

New York-based Element Capital, one of the world’s biggest macro hedge funds, gained almost 19 per cent during 2020, and is returning $2bn cash to clients. The move is the latest attempt by a top fund to slim down or limit investor access after a profitable pandemic performance.

Senior editorial columnist John Plender warns of the danger to markets of being driven principally by economic policy and sounds the alarm on growing levels of debt. “Investors’ most pressing financial concern should be the reality that the world economy is hostage to debt and wayward monetary policy,” he writes. “There will, in the end, be a reckoning.”

Global debt has soared to top $270tn

Reasons to be fearful: Many investors may be glad to see the back of 2020 but has the optimism engendered by the arrival of vaccines gone too far? Markets editor Katie Martin ponders this and other reasons to remain cautious in the year ahead.

Business

Demand for computer chips and flat panels, turbocharged by the shift to homeworking and online learning, fuelled a jump in quarterly profits for South Korea’s Samsung. US west coast editor Richard Waters warned that pandemic tech bubbles carried stark reminders of the dangers of the dotcom era such as the rise of special purpose acquisition companies and too much money looking for a home. “Much like squeezing a balloon full of water, the excess cash in the system is causing bulges that are becoming impossible to suppress,” he writes.

Strong food sales over Christmas helped balance some of the pain caused by store closures for large UK retailers such as Marks and Spencer and Sainsbury’s, helped by robust online business. One analyst said the latter’s year-on-year increase in ecommerce capacity was “an amazing advancement” and noted that “this route to market is now demonstrably profitable, something for sector sceptics to note”.

How seriously will the pandemic force us to rethink and revalue the way we work? Supporters of “alternative hedonism” advocate more balanced lives with reduced workloads and more time for cultural and community activities that can improve self-esteem and wellbeing.

Global economy

There were mixed signals on the state of the eurozone recovery. Germany recorded strong manufacturing and export performances in November but retail sales across the bloc were worse than expected, albeit tempered by encouraging data on jobs. The European Commission’s economic sentiment survey showed the mood picking up in December thanks to good news on vaccine approvals.

Line chart of index (rebased) showing eurozone retail sales have stumbled

India forecast an economic hit of 7.7 per cent for the year to the end of March, the biggest in almost 70 years. Private forecasters expect a bigger shrinkage of up to 10.6 per cent, following the 24 per cent plunge in the three months to June as a result of the country’s strict lockdown.

Our colleagues at Nikkei offer their “optimists’ guide” for Asia, in 2021, highlighting the positive changes brought on by the pandemic in health, tech and the world of work.

Science

The most comprehensive study of transmission ever carried out for any disease indicated that coronavirus came to the UK mainly from southern Europe, rather than China.

Stream graph showing source of imported UK infections between January and April 2020

Some positive developments to end the week. Early tests indicate that the BioNTech/Pfizer vaccine is effective against the worrying variants of coronavirus found in the UK and South Africa, while Moderna’s jab today became the third vaccine to be approved for use by British regulators, following initial approval from the EU on Wednesday.

Have your say

Mole74 comments on Work less and be more creative — a radical prescription

I’d bet that the vast majority of people who work to excess — so that it harms their mental and physical health — do it because they have to in order to survive financially, not because they want more ‘stuff’. Cutting working hours is not really going to help them, is it? The problem isn’t how much we work, it’s how much everything (bills, transport, housing) costs and how little the average person earns. Most people are just surviving. It’s nice that Lucinda can afford to pay herself the same as one of her administrators, but not everyone has that luxury.

Please share your views with us — email us at covid@ft.com. Thanks

Final thought

The new edition of How To Spend It is a guide to feeling your very best, from the world’s top beauty and grooming destinations to meditation and turbocharging your immune system. Or as HTSI editor Jo Ellison puts it, “ideas and inspiration for anyone who’s feeling in a funk, as well as those who like to suck the marrow out of life”. 

© Klaus Kremmerz

We would really like to hear from you. Please send your reactions or suggestions to covid@ft.com. Thanks



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