North America Update: July 21
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- Congress will meet this week to pass another stimulus package. Members are divided on the best tools to blunt the outbreak and lift the economy amidst the health crisis. Key issues to resolve include:  providing legal protections for business and schools to reopen,  extending federal unemployment benefits that expire at the end of July,  funding for hospitals, states and local governments, and  additional direct payments to citizens.
- The second stimulus bill will have to get through both the Republican-held Senate and the Democratic-controlled House. House Democrats say the package should be in the $3 trillion range, while a Senate Republican plan would cost around $1 trillion.
- More U.S. states are introducing statewide mask mandates. As of today, 28 states have statewide orders requiring face coverings in public. Statewide mandates usually take the place of any local ordinances or business-specific requirements. Some counties and cities, such as Atlanta, are imposing mask orders even though their state has not. A growing number of major companies, including Walmart, Costco, CVS, Kroger, Home Depot and all major U.S. airlines, also require masks.
- As some provinces move forward with their re-opening plans, others that relaxed lockdown measures are beginning to see small spikes in new cases.
- Most of Ontario will enter phase three of the province’s re-opening plan on Friday, which allows for activities such as indoor dining in restaurants, live performing arts shows and the reopening of movie theaters and playgrounds.
- Provinces like Alberta and Quebec, who began significant reopening measures in June, have begun to see a rise in new cases. Last week Alberta recorded its first triple-digit increase in two-and-a-half months. On Sunday, Quebec reported 166 new cases, its highest number of new cases since the first week of June.
- According to Sarah Gilbert, Professor of Vaccinology at Oxford University, the institution’s experimental vaccine for the coronavirus is “safe” and has generated a strong immune response in the people who volunteered to trial it. The preliminary results, published in The Lancet, showed immunity after a single dose of the vaccine.
- The European Commission published guidance on preparing for the second wave of COVID-19. It advises member countries to build up stockpiles of medical gear and boost health care capacity and testing. It also requests countries run stress tests of health systems and care homes, report their needs for PPE and medical devices, and secure flu vaccines and start immunizing.
- While negotiations for the EU budget continue, the Coronavirus Recovery Fund offering was reduced to €390 billion.
- Growth and support for tourism in Asia is a vital step in economic recovery. Across the region, local governments are encouraging domestic travel. According to the Korean Tourism Organization, more than 70 percent of South Koreans have shared that they are planning domestic holidays.
- The Malaysian government has encouraged the resumption of domestic tourism. Singapore has turned to “staycations” to support the tourism industry, setting aside S$90 million.
- Asian governments are also incentivizing domestic travel. To combat the 8.1 percent shrink in Thailand’s economy, the government launched three domestic tourism stimulus packages worth $718 million. In Japan, domestic travel restrictions were lifted on June 1, and domestic tourism is expected to get an additional boost from the government’s “workations” – an initiative designed to reduce the number of office-based staff and encourage holiday-shy staff to take a break.
- Due to the economic downturn from the novel coronavirus, federal courts and the banking system are preparing to face a large number of bankruptcies. Many businesses fear that the country’s Bankruptcy Law does not cover impact for emergencies such as the COVID-19 epidemic.
- Economists and companies predict that for the remainder of 2020, consumer spending will drop by 17 percent due to stay-at-home orders, the decrease in income for some residents and the overall decrease in consumer confidence. Nearly 50 percent of the Mexican workforce has been impacted by COVID-19.
- The bonds of state-owned Petroleos Mexicanos rose for the third week, exceeding Moody’s expectations.
- Experts expect the “coronavirus plateau” to last through the end of 2020 in Brazil. According to The Pan American Health Organization (PAHO), if efforts to combat the virus remain the same, the country will reach its peak in August.
- The Brazilian government revised its fiscal outlook for 2020 predicting the economy will be impacted significantly worse than previously predicted due to COVID-19. Government officials noted that it will take a big effort to lower the nation’s deficit back to its 2019 figure. The Ministry of Economy predicted that the primary deficit in the public sector will be BRL 828.6 billion by the end of 2020.
- According to the International Monetary Fund (IMF), Latin America is set to have its worst-ever recession in history, with an estimated business cycle contraction of 9.4 percent. The latest Economic Commission for Latin America and the Caribbean (ECLAC) report for Latin America predicts a 9.1 percent drop in GDP and the closure of roughly 2.7 million companies. According to a national survey conducted by the Locomotive Institute, roughly 69 million Brazilians intend to buy less in the coming months. The government plans to release an Emergency Aid of BRL 1.7 billion into the economy.
INSIGHTS & INTEL:
- Three of the leading coronavirus vaccine candidates have published data showing positive results in clinical trials. Vaccines in development by The University of Oxford researchers and Astra Zeneca, Pfizer and German partner BioNTech, and China’s CanSino Biologics reported updates showing their candidates generated immune responses and were safe to use the vaccines. Moderna’s vaccine candidate reported positive results last week.
- According to the World Health Organization, about 160 vaccines are in development, and 20 have started human testing. The aforementioned vaccines are the front-runners, having reported positive early results. The larger, later-stage trials will prove the efficacy of the vaccine and potentially lead to approval for use.
Below are summaries of interesting business responses to COVID-19 in recent days.
- Warner Bros created an anonymous reporting mechanism in Europe so that cast and crew can alert senior managers if they witness colleagues breaking COVID-19 safety protocols during production. Kevin Trehy, Warner Bros executive vice president of physical production, spoke about the measure last week during a behind-closed-doors industry panel organized for members of the UK union, Bectu. Trehy, who sits on a WarnerMedia production restart taskforce, added that the company is taking time to listen to crew and has hired safety consultants to assuage concerns.
- Wells Fargo donated a $750,000 grant to the United Way Bay Area for emergency rent relief to tenants struggling due to the COVID-19 pandemic. The United Way hopes to raise an additional $2.5 million for the assistance fund for Bay Area renters during the next six months. The initial grant is part of the San Francisco-based bank’s $175 million national relief pledge to housing and aid groups. The grants will serve residents in eight Bay Area counties: Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara and Solano. Renters seeking assistance can apply in-person at one of the United Way’s 10 SparkPoint community centers. The centers also provide financial counseling for residents.
- Office Depot announced that it is providing $1.5 million to Feeding America, in support of its COVID-19 Response Fund to help local food banks across the country distribute more than 1.3 billion pounds of food to communities in need.
- Kellogg Company released details about several programs and partnerships it has established to help in the fight against summer hunger in 2020. Kellogg and the Kellogg Company Fund are continuing to support several hunger initiatives this summer, which are also helping to support long-term COVID-19 recovery.
COVID-19 Vaccine Testing Earns Attention
- Positive results from early vaccination trials weren’t enough to convince the market, as AstraZeneca PLC’s stock fell from a record-high over concerns of whether its vaccine can match the progress seen in rivals, Pfizer Inc. and BioNtech SE, and Moderna Inc.
- Media reports that the companies expect to begin a second early trial later this month with up to 30,000 subjects hoping to prove the vaccine’s efficacy. The news comes amid recent record-high infection rates.
- New Virtual Programming: Top conveners such as Axios, The New York Times, Reuters and Bloomberg announced new virtual events on topics such as COVID-19’s impact on the global healthcare ecosystem and dealing with chronic pain, as well as broader topics like achieving Net-Zero ambitions, and representation and democracy.
- WSL: The World Surf League cancelled the remainder of the 2020 season after previously postponing through May.
- NCAA: As conferences continue to cancel fall sports, NCAA released a third edition of COVID-19 guidelines to address concerns, including wearing masks on the sidelines and at outdoor practices as much as possible. The Ivy League, Atlantic 10, Patriot League, American East and more have already cancelled the fall sports seasons.
- Rose Parade: Organizers cancelled the iconic Rose Parade, traditionally held on January 1 in conjunction with the Rose Bowl football game. Planning for this year’s game is still ongoing.
For more information about how we are helping clients solve in this uncertain time, please contact:
- Micho Spring, Chair, Global Corporate Practice, firstname.lastname@example.org
- Pam Jenkins, President, Global Public Affairs, email@example.com