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Growth Over Graves Strategy Stress Tested

Growth Over Graves Strategy Stress Tested



Asia’s markets have overcome some Monday morning nerves to climb modestly into positive territory this morning. That followed a relatively quiet weekend on the news front, and after Wall Street hit a Covid-19 speed bump on FridayThe announcement that Apple would close again, some of its stores in Southern US states spooked Wall Street, sending equities into a modest retreat. Covid-19 disquiet appears to be tempering expectations across the region today.


That is hardly surprising with Southern US states cases racing higher, along with spikes in cases across South Asia and Latin America. One could rightly argue that none of these areas are second wavers, having never successfully emerged from wave one in the first place. The same argument could also be applied to Indonesia, where reopening proceeds apace; although as I sit here writing, large swaths of the country never bought into social distancing in the first place.


It is a cold hard fact, that many countries in the world do not have the work from home optionality of many developed nations. Or in the United States’ case, the political will from the government, or the libertarian tendencies of sections of the population, to really put in the hard yards that mass lockdowns bring. Growth over graves is an uncomfortable reality for much of the world, where most economic activity and employment takes place in the informal economy.


If much of the world has entered a group-think sense of denial, necessity and hope in reopening their economies, cracks seem to be appearing in those that one could classify as true second wavers. South Korea and China are battling stubborn new outbreaks, and the Australian state of Victoria has extended control protocols for another four weeks. Meanwhile, New Zealand is facing an uptick in cases arriving at its isolation facilities from overseas Kiwi’s returning home.


The persistence of Covid-19 seems to have given the FOMO-buy everything crowd pause for thought for now. The underlying driver to the get rich quick, global recovery rally remains; bottomless amounts of free central bank money sloshing around the global financial system. As I have argued before, the only thing that can really run that of the tracks, for now, would be secondary waves of Covid-19 outbreaks forcing key economies to initiate new population lockdowns. 


The hopes of the airline industry from “corridors” and “travel bubbles” should be pared. Until a vaccine appears, that idea on a mass scale is dead on arrival. It is as believable an idea as Wirecard, its regulators, its shareholders, and its regulators, all thinking that EUR 1.9 billion of its money and its partners, should be held in trust accounts in Philippines Banks. Ooops. As a wise man once said, “there’s never just one cockroach.”


With the week’s data calendar book-ended by the China Loan Prime Rate (LPR) decisions this morning, and the US Durable Goods and GDP results on Thursday, markets look set to spend the early part of the week in self-reflection, rather than rampant buying. Tomorrow sees a flurry of PMI releases across the world, but the street will more than likely concentrate on Covid-19 and with it, a period of consolidation.


China left it’s one and five-year LPR’s unchanged this morning at 3.85% and 4.65% respectively. The result was as expected with China forging its own path monetarily through the pandemic slowdown. That appears to be via short-term liquidity injections, reductions in RRR rates, and instructing Chinese Banks to make fewer profits and lend more. The Pandora’s box of unconventional monetary policy in the West, is very easy to open, but appears to be very hard to shut; with the Federal Reserve’s taper-tantrum but one example.


Asia-Pacific stock markets edge into the green.


After sinking slightly initially, markets across the region have clawed back their early losses and have settled modestly in the green. The Covid-19 nerves shown by Wall Street have disrupted somewhat today, as the weekend passed without any significant surprises. One does detect a certain level of nervousness though, and I have no doubt, that the FOMO day traders will head for the exit door at the first sign of trouble.


The Nikkei 225 is up 0.40% with the Kospi unchanged. Mainland China’s Shanghai Composite and CSI 300 have climbed 0.20%. Singapore meanwhile has edged 0.20% higher, with the ASX 200 up 0.40% and the All Ordinaries flat for the session.


The Hang Seng has fallen by 0.40% today, weighed down by concerns over the official outline of China’s new security law for Hong Kong over the weekend. Hong Kong will struggle to rally this week as investors digest its full implications, most notably the apparent undermining of the independence of the judiciary. A preliminary draft of the official wording should arrive this week. Soothing words from Beijing are unlikely to mollify those fears.


US Dollar slips in Asia.


The Dollar continued to grind higher on Friday, with the dollar index creeping up by 0.19% to 97.61. With equity markets climbing into the green this morning, the Dollar has slipped across the board in muted trading. EUR/USD is up 0.15% to 1.1190, with AUD/USD up 0.30% to 0.6850, while USD/JPY is unchanged at 108.85. 


A similar pattern is happening across the regional space, with the Dollar retreating slightly. The rally in oil prices over the past two days is likely to lend support to the Indonesian Rupiah and Malaysian Ringgit. 


Overall, today’s trading session is a quiet one, with Europe likely to continue tentatively selling Dollars this afternoon. That said, a few negative Covid-19 headlines looks to be all it would take to turn that sentiment 180 degrees in quick time.


Oil continues to reach for the sky.


In an interesting divergence from the equity markets, oil prices continued to probe higher on Friday, although they gave back some of their gains late in the session. Brent crude traded to just shy of $43.00 a barrel, before falling to finish 1.35% higher at $42.00 a barrel. WTI broke through $40.00 a barrel, testing $40.50 a barrel, before retreating. It still though, finished higher by 1.90% at $39.80.


Trading is directionless in Asia, with Brent firming slightly to $40.30 a barrel, and WTI easing 20 cents to $39.60 a barrel. Both contracts appear content to adopt a wait and see attitude on a quiet news day in Asia.


Brent crude’s next technical target is $43.40 a barrel. Above there, it should attempt to close the chart gap from early March, and rally to $45.00 a barrel. WTI meanwhile, has traced pout a double top at $40.40 a barrel, which will probably provide some tough resistance initially. After that, its technical target is the $44.00 region followed by $45.00 a barrel, its 200-day moving average.


For today, although oil continues to impress with its resilience, it to, will be vulnerable to downside corrections if negative Covid-19 headlines hit the wires.


Is gold signalling that risk aversion is about to spike?


Gold caught the Covid-19 risk aversion wave on Friday, powering 1.25% higher to its daily resistance at $1745.00 an ounce. It has headed straight to go this morning in Asia, jumping to $1760.00 an ounce, before settling 0.50% higher at $1752.00 an ounce.


Gold’s price action is hinting that although risk aversion is restrained on equities and energy, tensions could be rising below the surface. Gold has resistance at $1760.00, followed by the May high at $1765.00. It is the later level that is the critical one, forming the top of the multi-month $1660.00 to $1765.00 range. 


Gold has been here before, letting bullish traders down severely. The risk of yet another bull market trap is high, and until we see a daily close above $1765.00 an ounce, caution is warranted at these price levels. A daily close above $1765.00 however, should open up a fully-fledged assault on $1800.00 at long last. A fall back below $1745.00 an ounce though, will mean tears of despair once again for gold bugs.


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Pfizer vaults into sickle cell market as GBT deal confirmed

Pfizer’s reported interest in acquiring sickle cell disease specialist Global Blood Therapeutics (GBT)  has been confirmed, with the
The post Pfizer…



Pfizer’s reported interest in acquiring sickle cell disease specialist Global Blood Therapeutics (GBT)  has been confirmed, with the $68.50-per-share deal valuing GBT at $5.4 billion.

As we reported this morning, the deal gives Pfizer already-approved SCD therapy Oxbryta (voxelator) – which industry watchers reckon could see a dramatic uptick in sales with Pfizer’s marketing muscle – plus a phase 3 antibody candidate, a phase 1 follow-up to Oxbryta that could offer improved dosing.

Oxbryta is the main asset in the deal, with Evaluate predicting sales could reach $1.5 billion in 2028 – a leap forward from the $195 million it made last year and $127 million in the first half of 2022.

Pfizer is expecting big things from the takeover , predicting that the company’s SCD franchise will bring in combined peak sales of more than $3 billion.

The boards of both companies have recommended the deal to shareholders, and the two companies suggested it should close before the end of the year – assuming of course it doesn’t fall foul of any antitrust issues raised by financial regulators.

The GBT deal comes at a time when the market for SCD therapies is undergoing significant change, with multiple new drugs reaching the market after years of stagnation and progress also being made with genetic therapies from the likes of bluebird bio, Vertex Pharma/CRISPR Therapeutics and Precision Bio/Novartis.

Oxbryta came to market in 2019, a few days after Novartis’ injectable anti-P-selectin antibody Adakveo (crizanlizumab), which is also tipped for blockbuster sales but like Oxbryta has suffered from a slow rollout.

CRISPR Therapeutics and Vertex are also in the running with their gene-editing candidate CTX001, in phase 1/2 trials which are due to generate final results later this year. If those results are positive the partners have said they could file for approval in the US before year-end.

Meanwhile, bluebird bio’s one-time gene therapy  lovotibeglogene autotemcel is supposed to be heading for regulatory filing in the US next year, although it has been delayed by an FDA partial clinical hold implemented after a persistent case of anaemia was seen in one adolescent patient in a clinical trial.

GBT’s inclacumab – another P-selectin antibody that could encroach on Adakveo – is in a pair of phase 3 trials due to generate results next year.

Meanwhile, there are a couple of orally-active pyruvate kinase R activators from Forma Therapeutics and Agios – etavopivat and mitapivat, respectively – in mid-stage development, and Pfizer has its own SCD candidate in PF-07209326, an E-selectin anatomist in phase 1.

It’s worth noting that this isn’t Pfizer’s first deal in SCD. In 2011 it paid $340 million for rights to rivipansel, a pan-selectin antagonist developed by GlycoMimetics, which failed a phase 3 test in 2019 and was jettisoned by Pfizer the following year.

The deal is another example of Pfizer splashing out on business development thanks to windfall cash generated by its COVID-19 vaccine Comirnaty and oral antiviral therapy Paxlovid. It comes shortly after the group closed a $6.7 billion acquisition of Arena Pharma, bringing on board etrasimod in late-stage testing for ulcerative colitis, and made an $11.6 billion takeover bid for Biohaven and its migraine therapy Nurtec ODT (rimegepant).

The post Pfizer vaults into sickle cell market as GBT deal confirmed appeared first on .

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New COVID variants could emerge from animals or from people with chronic infections – but it’s not cause for panic

Animal reservoirs and people who experience chronic COVID infections could potentially see the emergence of new variants. But these variants aren’t necessarily…



As the COVID pandemic rolls on, we’re becoming all too familiar with the continued emergence of new variants. Some can thwart immunity from vaccines and prior infections, increasing their capacity to disrupt our everyday lives. But where do new variants actually come from?

Variants develop through changes in the genetic code of the virus. This happens most commonly through mutations, essentially copy errors in the virus’ genetic information. Variants of concern are variants that have been identified to have a significant impact on transmissibility, severity of disease or immunity, likely to change the epidemiological situation of the pandemic.

Each time we’re infected with SARS-CoV-2 (the virus that causes COVID), our bodies produce a large number of virus particles with a range of genetic differences to the original infecting virus and to each other. Many of these mutations will have no effect on the virus.

Occasionally, however, mutations will occur that give the virus an advantage. For example, delta was more transmissible than earlier variants because of a mutation in its spike protein (a protein on the surface of SARS-CoV-2) allowing the virus to infect our cells more easily.

Even though we know a lot about how mutation occurs, it’s incredibly difficult to pinpoint where specific variants came from. But recent studies have investigated potential sources of new SARS-CoV-2 variants, including people who experience chronic COVID infections and animals.

Chronic infections

A chronic infection is where a person is actively infected with SARS-CoV-2 for a long period of time. This is different to long COVID, where symptoms persist well after the patient has recovered from the initial infection.

Chronic cases are rare and, to date, all documented cases have been in people with severely suppressed immune systems. These might be people undergoing treatment for cancer or following an organ transplant, for example.

Several studies have shown that the rate of mutation in these patients is higher than in those who are infected for a shorter time. Immunocompromised patients have a reduced immune response to infection and are often undergoing a range of treatments, both factors which are thought to allow a broader variety of mutations to develop. This is compounded by the longer period of time for which they may be infected.

Read more: Coronaviruses – a brief history

While new COVID variants do appear more likely to form in patients with chronic infections, the good news is they don’t seem to pose a significant threat.

In a recent study that looked at 27 chronically infected patients, there was no clear pattern of mutations. And when comparing mutations identified in the chronic patients with existing variants of concern, the chronic infections often lacked key mutations repeatedly identified in the variants of concern.

The researchers suggest the the majority of variants arising from chronically infected patients enhance virus replication, but are not characterised by improved transmission. This means they’re good at replicating in an infected person, but not as good at spreading from person to person.

The study demonstrated that there was no evidence of onward transmission from the patients with chronic infections to other people, which would be essential for a new variant to take hold and become a variant of concern. Although the authors note this may be due to human behaviour, rather than virus evolution, as immunosuppressed patients are likely to be confined to their homes.

That said, most variants of concern possess mutations that enhance transmission rather than replication, so it seems unlikely that these patients are significant sources of variants of concern.

Animal reservoirs

SARS-CoV-2 is likely to have been originally transmitted to humans via an animal market in China, and throughout the pandemic, we’ve learned that the virus can infect a variety of animals.

So another suggestion is that animals could be the source of new SARS-CoV-2 variants. The idea is they contract the virus from humans, which then mutates during infection in the animal host, before spreading back to humans.

A mink in the wild.
Could animals be a breeding ground for new COVID variants? An inspiration/Shutterstock

A species jump (or “zoonosis”) can only occur when multiple factors align. These include virological factors (for example, mutations that allow infection of human cells) and environmental factors (for example, close contact with infected animals). Zoonosis is not common, but is becoming more regular due to climate change and deforestation, which put more animals in contact with humans.

One study analysed the genetic code of omicron and showed high levels of similarity in the spike protein with that of mouse coronaviruses. The authors suggest the omicron variant may have occurred as a result of a human-to-mouse infection, mutation in the infected mouse, followed by transmission back to humans.

But often, when a virus infects a new host, such as a human, it’s unable to be transmitted further to other humans. The virus has to quickly adapt to allow it to thrive in the new host and go on to infect others. Indeed, where animal-to-human transmission of COVID occurred on Dutch mink farms, while we did see the virus mutate, there was no evidence of further transmission from the farm workers into the wider community.

Similarly, we’ve observed many instances of people infected with bird flu through prolonged close contact with birds. But there have been very few events of further transmission to other humans.

So although new variants may form in animals occasionally, it seems unlikely that they’re being re-transmitted back to humans and spreading.

Read more: Human catches COVID from a cat – here's why this new evidence is not cause for panic

While we can know geographically where new SARS-CoV-2 variants were first detected, it’s almost certain we’ll never know exactly where they come from. But as virus evolution is based on a combination of chance events such as mutation and human behaviour, it’s most likely that variants of concern are formed in a wide range of infected patients across the world.

With so many people being infected at once, many living in dense cities and travelling across the globe, the chances of viral evolution and onward spread of new mutants are increased. If large numbers of infections continue globally, more variants will continue to arise.

Grace C Roberts works at the University of Leeds and receives funding from the MRC.

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Norwegian Makes a Covid Change Royal Caribbean, Carnival Haven’t

Norwegian Cruise Line has announced a major change to its pandemic-era policies.



Norwegian Cruise Line has announced a major change to its pandemic-era policies.

Since the Centers for Disease Control and Prevention stopped tracking covid on cruise ships, the major cruise lines have been making changes to their onboard pandemic-related policies. 

Now, since the government hasn't set industry standards, each cruise line is responsible for setting its own rules.

That may or may not be a problem, but it does mean that at least at the moment, Royal Caribbean International (RCL) - Get Royal Caribbean Group Report, Carnival Cruise Lines (CCL) - Get Carnival Corporation Report, and Norwegian Cruise Line (NCLH) - Get Norwegian Cruise Line Holdings Ltd. Report all have different policies. 

During the height of the pandemic, that was not the case. The CDC set rules under its mandatory conditional sail order, and later under a voluntary program that every major cruise line opted into.

Those rules may have been overly restrictive compared with how other travel and entertainment businesses were treated. But they did create a baseline for the industry.

Now, it's a free for all. Royal Caribbean and Carnival both have new polices that take effect in early August. 

And Norwegian has made what might be the most controversial change, effective Sept. 3.

Image source: Daniel Kline, TheStreet

Norwegian Makes Big Covid Changes

Once the CDC dropped its oversight of the pandemic's impact on cruise ships, Carnival and Royal Caribbean made similar changes. Both have dropped testing for vaccinated passengers on cruises less than six nights,

Both RCL and CCL allow a certain amount of passengers ages 11 and younger to sail without being vaccinated. But in all cases they require those passengers to provide negative covid tests taken no more than three days before their sailings. (That's a change since for many months the rule had been two days.)

The rules do vary based on destinations, but the two biggest cruise lines largely have the same ones in place.

Norwegian has adopted roughly the same policies as its rivals -- with one notable difference, which the company outlined on its website.

"Guests age 12 and over will be allowed to board unvaccinated. Unvaccinated guests age 12 and over will be required to show proof of a medically supervised negative PCR or antigen test taken no more than 72 hours prior to embarkation," the company said. "For guests age 11 years or younger, no additional protocols or testing requirements apply."

No More Vaccine Requirement on Norwegian

It's sort of buried in a lot of words, but Norwegian has dropped its vaccine requirement for all passengers. 

Unvaccinated passengers ages 12 and over will still need to provide a negative test taken no more than 72 hours before their cruises, while unvaccinated guests 11 and under don't even have to test.

“Our long-awaited revisions to our testing and vaccination requirements bring us closer in line with the rest of society, which has learned to adapt and live with covid-19, and makes it simpler and easier for our loyal guests to cruise on our three best-in-class brands," Norwegian Chief Executive Frank Del Rio said in a news release.

The CEO stressed that "health and safety is our top priority," a statement that might not perfectly match up with the rule change.

Royal Caribbean has decided to enable a limited number of unvaccinated passengers 12 and over, a change President Michael Bayley discussed  on social media.

"Unvaccinated guests will be required to take one test within three days of departure. We will also continue to operate highly vaccinated cruises with a vaccinated population greater than society and which continues to exempt kids 12 and [under. And] we will welcome unvaccinated guests over 12 and guests with a certificate of recovery within 90 days to travel, keeping in mind our ships will typically sail with 80%-plus vaccinated guests onboard," he said.

Norwegian did not say whether it has any limits on how many unvaccinated passengers can sail on each ship.



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