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  • Cruise operator Carnival reported a preliminary net loss of $2.2bn for the fourth quarter after its sailings were largely suspended during the pandemic

  • Regeneron called for action to help its antibody treatment reach more Covid-19 patients

  • Iran said it hoped to import the Oxford/AstraZeneca jab through third countries and avoid more costly US vaccines

Vaccine makers prepare for game of ‘Covid cat and mouse’

Vaccination programmes have begun and manufacturers are busy churning out the vast amount of doses needed to hasten the end of the pandemic. But what happens when the virus mutates? Will existing jabs still be appropriate or will drugmakers be sent back to the drawing board?

US pharma correspondent Hannah Kuchler examines how vaccine developers and regulators are gearing up for a game of “Covid cat and mouse”. Jabs that use messenger RNA technology, such as those from BioNTech/Pfizer and Moderna, can be adapted fairly swiftly, but for others the process could be more time consuming.

In the meantime, we report today on a triple shot of good supply-side news. BioNTech/Pfizer announced it would boost supplies of its existing jab by 500m doses, Sanofi said it would consider helping manufacture rivals’ products after delays to its own, and Russia said it had begun trials of a one-shot vaccine — “Sputnik Lite” — that could help meet export demand.

The need for more rapid production of vaccines has been reinforced by the increasing virulence of the virus in Europe and in the US.

US states yesterday reported record-breaking seven-day averages for new infections and deaths, while England’s chief medical officer warned of a “health emergency” and Prime Minister Boris Johnson said the UK was at a “perilous moment” as ministers hinted that lockdown restrictions might need to be intensified. 

More than ever, governments’ ability to bring the virus under control rests on the speed of the vaccination programme rollouts. Our (dynamically updating) chart shows how many jabs have been administered across the world. Some countries have unveiled detailed proposals — the UK’s grand plan unveiled today includes a big jump in the number of vaccination “mega-centres”. Others such as India, which has recorded 10.4m infections and 151,000 deaths and begins its mass vaccination programme on Saturday, have yet to begin in earnest.

Live-updating bar chart showing countries’ progress in adminstering vaccines against coronavirus.

Markets

Bank stocks may have received short shrift from investors recently on fears of loan defaults but are now back in favour thanks to positive vaccine news and American political developments, says US financial editor Robert Armstrong. US bank indices have outperformed the wider market by more than 25 percentage points since the BioNTech/Pfizer vaccine announcement, while in Europe, an index tracking bank stocks climbed 30 per cent in November, its best performance since 2009. 

Line chart of US bank sector's price/earnings ratio, as a percentage of the S&P 500's ratio


The exodus of many renters from big US cities is putting a strain on the market in bonds backed by mortgages on apartment blocks. At the same time, many of the remainers are struggling to pay their rent. “As the nation enters a winter with increasing Covid-19 case levels and even greater economic distress . . . it is only a matter of time before both renters and housing providers reach the end of their resources,” said a housing association chief.

FTfm, our fund management section, talks to investment bosses about opportunities and risks in 2021, especially the effect of coronavirus vaccine programmes. One refers to Covid-19 as “the great accelerator” — turbocharging pre-existing themes such as the transition to “green infrastructure”.

Business

CES, the word’s largest electronics show, is taking place virtually for the first time. The products on display are also heavily influenced by pandemic shifts: touchless and voice-based technologies are in abundance alongside kit for the “smart home,” from entertainment gizmos to the latest in electronic bidets.

Canary Wharf, the east London hub of the UK’s financial services industry, is facing an uncertain future with its corporate skyscrapers still largely empty as a result of the pandemic. “They have great big corporate tenants looking to downsize and all these massive towers. I think Canary Wharf will be reinvented because it has to be,” said one office agent.

Chart of % breakdown of Canary Wharf occupants by sector

Irish whiskey-makers are turning their focus away from the pandemic-struck economies of the US and Europe towards Asia, report our colleagues at Nikkei. There is plenty of scope for growth: Irish products made up just 0.04 per cent of total whiskey consumption by volume in the region in 2019, according to Euromonitor.

Global economy

Confirmation that the Democrats now control Congress has given fresh hope to cash-strapped US states hit hard by the pandemic as chances rise of new Federal stimulus. Goldman Sachs reckons on a $750bn package in the first quarter, with $200bn earmarked for municipalities.

Chart of state tax collections for March-Nov 2020, compared with the previous year (%), showing how there have been more losers than winners due to the pandemic

Our Brussels Briefing newsletter highlights the debate around EU finances and the fiscal fallout from the bloc’s emergency pandemic measures. Portugal, which took over the EU presidency at the start of this month, is facing two pressing issues: should the escape clause from normal fiscal rules be extended and is it time to push for deeper reforms?

Chinese inflation rose faster than expected in December, thanks mainly to food prices, raising hopes for the country’s recovery. Core inflation, however, which excludes food and energy prices, remains weak.

Essentials

Too many organisations considered bureaucracy a necessary evil before the pandemic and have delighted at being able to discard old habits and obstacles during the emergency period, says management editor Andrew Hill. He warns however that “streamlined ad hoc solutions may be useful in the heat of a crisis, but care must be taken not to embed poor practice — or “bad hoc”.

Have your say

Dexterhouse comments on the article Distressed debt specialist Howard Marks warns on corporate borrowing burden

The exceptionally low interest rate cost and the need to keep surviving during this unprecedented time means companies are becoming dependent on debt to tide them over. The day of reckoning will come. Either the heavy debt burden will force respective governments to keep interest rates lower and longer, which means kicking the can down the road, or there will be a blood letting as companies fold up rapidly. Either situation is unpalatable. I feel despair for the younger generation: through no fault of their own, they are landed with this mess.

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

Final thought

Working from home combined with the acceleration of cashless payment during the pandemic means many of us no longer need to carry around that wodge of cash and bulging collection of unused ID/travel/loyalty cards. Is the end in sight for the humble wallet?

Fewer people are buying wallets

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

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