David Fuller and Eoin Treacy's Comment of the Day
Category - Technology

    Peering into the post pandemic world

    Thanks to a subscriber for this report from the Bank of Singapore which may be of interest. Here is a section:

    Almost every major crisis and recession has resulted in lasting implications. The 1973 oil crisis ended the Bretton Woods system and brought about the regime of floating currencies and exchange rate volatility. September 11 permanently changed the way we travel and raised the level of security in public settings and airports. Unprecedented monetary easing after the 2008 Great Financial Crisis further propelled the unlikely continuation of the 30-year rally in government bonds and facilitated the resurgence of tech stocks and credit markets. The Global Covid-19 Crisis will also leave its permanent imprints on consumers, markets and economies. Although we are only a few months into the crisis, it is key to look forward to the next economic cycle and ask: what are the structural changes created by the Covid-19 outbreak and who will be the winners and losers?

    For companies, the focus will shift to building resilience
    As the virus outbreak results in demand and supply shocks unprecedented in terms of speed, depth and breadth, many companies face tremendous pressure, and this will have a lasting impact on risk perception.  Companies will turn more cautious and focus on building resilience in terms of their business strategies and balance sheets, and shareholders will expect management teams to take steps to ensure that the business is strong enough to take the next big shock.

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    Trump's 'Operation Warp Speed' Aims to Rush Coronavirus Vaccine

    This article by Jennifer Jacobs and Drew Armstrong for Bloomberg may be of interest to subscribers. Here is a section:

    The Trump administration isn’t alone in trying to fast-track a vaccine. One of the world’s most promising vaccine candidates has been developed by a team at Oxford University in London. Last month, scientists at the U.S. National Institutes of Health innoculated six rhesus macaques with the Oxford vaccine and then exposed them to the coronavirus, the New York Times reported.

    All six were healthy more than four weeks later, according to the Times. The researchers are currently testing their vaccine in 1,000 patients and plan to expand to stage two and three clinical trials next month involving about 5,000 more people.

    The Oxford group told the Times they could have several million doses of their vaccine produced and approved by regulators as early as September.

    In the U.S., the Bill & Melinda Gates Foundation has meanwhile shifted much of its research effort to the coronavirus virus.

    One of the people familiar with Operation Warp Speed drew a distinction with the Oxford group, describing the U.S. effort as broader in scope. It’s unclear which vaccine candidates would be part of Operation Warp Speed, or whether it would include the Oxford vaccine.

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    China Rolls Out Pilot Test of Digital Currency

    This article by Jonathan Cheng for the Wall Street Journal may be of interest to subscribers. Here is a section:

    In Xiangcheng, a district in the eastern city of Suzhou, the government will start paying civil servants half of their transport subsidy in the digital currency next month as part of the city’s test run, according to a government worker with direct knowledge of the matter.

    Government workers were told to begin installing an app on their smartphones this month into which the digital currency would be transferred, the worker said.

    Civil servants were told that the new currency could be transferred into their existing bank accounts, or used directly for transactions at some designated merchants, the person said.

    China is ahead of many other countries in preparing the launch of an official digital currency. In recent years, the use of traditional paper bills and cash has declined sharply, and smartphone payments have become so ubiquitous that many Chinese people, particularly younger urban dwellers, no longer carry their wallets or cash for shopping. Instead, they use Tencent Holdings Ltd. ’s WeChat Pay and Alipay, operated by Ant Financial Services Group, an affiliate of Alibaba Group Holding Ltd.

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    Facebook's $5.7 Billion Bet on Jio Is a Move Beyond Ads

    This note from Bloomberg Research may be of interest. Here is a section:

    Facebook's investment of $5.7 billion in India's top telecom operator Reliance Jio highlights a broader bet on India’s online growth beyond ads. Jio has more than 388 million subscribers with reach in content, payments and ecommerce, all of which Facebook can scale up via its 380 million WhatsApp, Facebook or Instagram users in India. Plans to integrate Jio’s small businesses to enable shopping on WhatsApp shows an acceleration in e-commerce.

    THESIS: Facebook will be the hardest-hit internet company in 2020 from the virus fallout as a sharp ads decline and small and medium business exposure can take growth down to low-single digits, while surging usage hits profit harder. Yet we believe exiting this uncertainty with a higher user base and new habits means diversification into new businesses and a 2021 ad rebound will make its growth emerge the strongest among peers. More than 60% of Facebook's sales are in the U.S., the U.K., Germany, Japan, France and Italy. Small and medium business make up the majority of Facebook's 7 million advertisers. Earnings in 1Q will likely reset growth expectations, creating room for longer-term sales outperformance as Facebook pushes into diversifying its business post-virus.

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    U.K. Starts Human Trials of Coronavirus Vaccine on Thursday

    Thanks to a subscriber for this report from Bloomberg which may be of interest. Here is a section:

    The U.K. will begin human trials of a coronavirus vaccine Thursday, Health Secretary Matt Hancock said, as he argued that the government’s strategy for fighting the disease had succeeded.

    “In the long run, the best way to defeat coronavirus is through a vaccine,” Hancock told the government’s daily news conference. “The U.K. is at the front of the global effort. We have put more money than any other country into a global search for a vaccine and, for all the efforts around the world, two of the leading vaccine developments are taking place here at home.”

    The trials will be of a drug developed at Oxford University. Hancock said the government would give 20 million pounds ($25 million) to support the research. “In normal times, reaching this stage would take years,” he said. Another 20.5 million pounds will go to a separate project at London’s Imperial College.

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    What is the Significance of the Bitcoin Block Halving?

    This article may be of interest to subscribers. Here is a section:

    The halving decreases the amount of new bitcoins generated per block. This means the supply of new bitcoins is lower.

    In normal markets, lower supply with steady demand usually leads to higher prices. Since the halving reduces the supply of new bitcoins, and demand usually remains steady, the halving has usually preceded some of Bitcoin's largest runs.

    In the image below, the vertical green lines indicate the previous two halvings (2012-11-28 and 2016-7-9). Note how the price has jumped significantly after each halving.

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    Email of the day on the lead time to develop a vaccine

    Early peek at data on Gilead coronavirus drug suggests patients are responding to treatment

    This article by Adam Feuerstein for statnews.com may be of interest to subscribers. Here is a section:

    Early peek at data on Gilead coronavirus drug suggests patients are responding to treatment - This article by Adam Feuerstein for statnews.com may be of interest to subscribers. Here is a section:

    A Chicago hospital treating severe Covid-19 patients with Gilead Sciences’ antiviral medicine remdesivir in a closely watched clinical trial is seeing rapid recoveries in fever and respiratory symptoms, with nearly all patients discharged in less than a week, STAT has learned.

    Remdesivir was one of the first medicines identified as having the potential to impact SARS-CoV-2, the novel coronavirus that causes Covid-19, in lab tests. The entire world has been waiting for results from Gilead’s clinical trials, and positive results would likely lead to fast approvals by the Food and Drug Administration and other regulatory agencies. If safe and effective, it could become the first approved treatment against the disease.

    The University of Chicago Medicine recruited 125 people with Covid-19 into Gilead’s two Phase 3 clinical trials. Of those people, 113 had severe disease. All the patients have been treated with daily infusions of remdesivir. 

    “The best news is that most of our patients have already been discharged, which is great. We’ve only had two patients perish,” said Kathleen Mullane, the University of Chicago infectious disease specialist overseeing the remdesivir studies for the hospital.

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    GM Plots an EV Comeback Inside Its Secretive Battery Lab

    This article by Bill Howard for Extreme Tech may be of interest to subscribers. Here is a section:

    In 2019, about 3 million pickups were sold out of 17 million vehicles. Nobody knows the size of the EV pickup market initially, or how badly EV range suffers under a heavy load (Tesla owners have known range tanks when a Model S or Model X tows a trailer), or if buyers are willing to pay extra to get the large batteries that allow 300 t0 400 miles of range on pickups.

    As for the market for all plug-in vehicles – battery electric vehicles and plug-in hybrids – the final 2019 US sales numbers for light vehicles amount to combustion-engine-only cars, 98.1 percent of the market, BEVs and PHEVs 1.9 percent.

    There is some hope – among environmentalists, at least – that Americans, in the wake of the coronavirus slowdown, will appreciate the cleaner skies in major cities and adopt plug-in vehicles to keep the air clear and clean. GM’s battery R&D is for its worldwide markets, not just the US, and it may find more traction outside the US. Depending on how many people and businesses have money to spend on new cars in the next year.

    At the Ultium rollout, GM cited forecasters who called for EV volumes to double between 2025 and 2030 to 3 million units annually – one in six vehicles sold – and added its belief the numbers could be “materially higher.”

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    China Urbanization 2.0

    Thanks to a subscriber for this report from Morgan Stanley which may be of interest. Here is a section: