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Market sell-offs ‘tend to happen in three waves’ and the last one is coming



Watling noted that building up to the first sell-off in late January, the market had seen “two years when the market pretty much went up in a straight line and the complacency was huge.” He said this was evident in phrases like “melt-up” being commonplace and investor grandees like Ray Dalio, the founder of Bridgewater Associates, forecasting a market surge.

“There’s huge complacency … Everyone’s talking about a ‘healthy market correction’ but generally when you have proper pullbacks people are slightly fearful of the bottom — they’re not regarding it as wonderful. So, typically, that ‘third wave’ is key and I think there’s probably some more downside risk over the next few weeks.”

Watling is not the only strategist to be warning of more volatility to come. Andrew Sheets, chief cross-asset strategist at Morgan Stanley, said on Monday that the recent correction was just an “appetizer, not the main course.”

Since global central banks have either started raising interest rates from historic lows, like the Fed, or tapering asset purchase programs that were introduced during the financial crisis as a way to stimulate growth, market jitters have grown over what will happen once there has been a complete withdrawal of central bank support that has boosted liquidity.

Watling said that while he believed equities were still in a cyclical bull market, declining liquidity was “dangerous.”

“This has been the most heavily, liquidity-fueled bull market ever. So sniffing taking it away, which was perhaps what the correction was about in January, is quite a dangerous environment. I’d be very nervous, in the medium-term, about what happens when liquidity is withdrawn.”

Not everyone is nervous about recent and forthcoming market activity. Martin Gilbert, co-CEO of multi-billion dollar fund Standard Life Aberdeen, said in early February that the recent fall in stock markets was just a “overdue and welcome” correction. He didn’t think the sell-off had much further to go.

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Oaktree’s Howard Marks on unrealized capital gains tax, Janet Yellen



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India has reportedly asked WhatsApp to withdraw privacy policy update



The WhatsApp messaging app is displayed on an Apple iPhone on May 14, 2019 in San Anselmo, California. Facebook owned messaging app WhatsApp announced a cybersecurity breach that makes users vulnerable to malicious spyware installation iPhone and Android smartphones. WhatsApp is encouraging its 1.5 billion users to update the app as soon as possible.

Justin Sullivan | Getty Images News | Getty Images

India’s technology ministry has asked Facebook-owned messaging giant WhatsApp to withdraw planned changes to its privacy policy that has drawn widespread backlash, multiple media outlets reported.

In an email addressed to WhatsApp chief Will Cathcart dated Jan. 18, the Ministry of Electronics and Information Technology said the proposed changes raised “grave concerns” over the implications for choice and autonomy of Indian citizens, Reuters reported.

The update relates specifically to features that allow users to interact with businesses on WhatsApp.

The ministry reportedly said it was worried about the lack of choice Indian users had over opting out of WhatsApp’s planned policy update compared with those in Europe, where data protection rules are more stringent. The tech ministry reportedly called it “discriminatory treatment” that “betrays a lack of respect for the rights and interest of Indian citizens.”

“Therefore, you are called upon to withdraw the proposed changes,” the ministry reportedly wrote, according to Reuters. The news wire added that the ministry has asked WhatsApp to respond to 14 questions including the kind of user data it collected, if it profiled users based on their usage habits and on cross-border data flows.

CNBC could not independently verify the content of the letters.

A WhatsApp spokesperson told CNBC in a statement, “We wish to reinforce that this update does not expand our ability to share data with Facebook.”

“Our aim is to provide transparency and new options available to engage with businesses so they can serve their customers and grow. WhatsApp will always protect personal messages with end-to-end encryption so that neither WhatsApp nor Facebook can see them,” the spokesperson said.

What is the update about?

India is a massive market for WhatsApp

Be it WhatsApp, be it Facebook, be it any other digital platform, you are free to do business in India … but do it in a manner without impinging upon the rights of Indians.

Ravi Shankar Prasad

India’s technology minister

“It has become a platform for many things. Small businesses and corporations are using WhatsApp to conduct commerce, payments and sharing of payroll data,” Abishur Prakash, a geopolitical specialist at the Center for Innovating the Future (CIF), a Toronto-based consulting firm, told CNBC by email. “This makes WhatsApp, an American service, a new kind of infrastructure for doing business in India.”

The stakes for WhatsApp in India are very high, according to Prakash. He explained that there is a possibility the messaging giant may change its policy “because of the strategic position India holds in its strategy.”

When seen through the lens of tech sovereignty and data, New Delhi wants to establish its own data borders after pushing for an open data marketplace where large tech firms share information with Indian companies, Prakash said. “This makes the new WhatsApp policy counter to the direction New Delhi is moving in.”

On Tuesday, India’s technology minister Ravi Shankar Prasad had a few choice words for Facebook, WhatsApp and other tech companies operating in the country.

“Be it WhatsApp, be it Facebook, be it any other digital platform, you are free to do business in India,” he said, speaking at a virtual event. “But do it in a manner without impinging upon the rights of Indians who operate there.”

“And, the sanctity of personal communications needs to be maintained,” he added. “I know there will be pressure for sharing of (data, but) this is plainly unacceptable.”

CNBC’s Arjun Kharpal contributed to this report.

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Challenges and problems in vaccine strategy



At Leipzig University Hospital, pharmacy students Anne Brandt (l) and Sarah Schulz prepare six syringes from a vial of Biontech/Pfizer’s SARS-CoV-2 corona virus vaccine for the vaccination of medical staff. There are currently more requests for vaccination appointments than can be offered at the moment.

picture alliance | picture alliance | Getty Images

Since Germany kicked off its vaccination drive in late December, along with the rest of the EU, it’s come across a raft of logistical challenges.

Now, nearly a month into the program, its sluggish progress is causing frustration and concern among some German lawmakers and health professionals.

Health Minister Jens Spahn had targeted 300,000 inoculations a day, but so far the country has failed to hit that. Data from public health agency, the Robert Koch Institute, published Tuesday showed that in the previous 24 hours, just over 62,000 vaccinations (the majority of which were first doses) were carried out.

In total, since Germany began vaccinations in all its 16 states on Dec.27, almost 1.2 million people in Germany (the priority groups for now are healthcare workers, nursing home residents and staff and the elderly) have received a first dose of the coronavirus vaccine and almost 25,000 have received their second dose.

By contrast, the U.K., which was the first country in the world to approve and rollout the Pfizer-BioNTech vaccine (partly developed in Germany), and then the University of Oxford-AstraZeneca candidate, started its Covid vaccination program earlier in December, has vaccinated over 4 million people so far with their first vaccine dose (over 450,000 have had their second dose), and was exceeding 300,000 vaccinations per day toward the end of last week.

Wide range of problems

The EU followed a policy of purchasing coronavirus vaccines as a bloc, but some countries, including Germany, also made their own additional purchasing agreements.

Nonetheless, supply issues have been an issue even at the start of Germany’s vaccination drive, with a lack of available vaccines seen in certain hubs, as well as other difficult logistical issues around vaccinating its priority groups, such as the elderly. This has created patchy vaccine deployment performance from state to state in the country.

Dr. Stefan H.E. Kaufmann, a renowned immunologist and microbiologist in Germany, and founding director of the Max Planck Institute for Infection Biology in Berlin, told CNBC Tuesday that the vaccination process was beset with challenges from the start.

“Number one priority (in the vaccination drive) are currently the elderly and people with severe pre-disposing diseases, notably in nursery homes. This process is ethically fine, but it is very time consuming. It also includes health care workers and medical staff at nursing homes and hospitals. Apparently some of the nursing home staff is hesitant with respect to vaccination,” he noted.

Fenna Martin (C) vaccines Marielotte Kilian (L), 87, and Richard Kilian (R), 86, against Covid-19 at the vaccination centre installed at the congress centre in Wiesbaden, western Germany, on January 19, 2021, as the western federal state of Hesse opened its first six vaccination centres amid the novel coronavirus.

ARNE DEDERT | AFP | Getty Images

So far, only the vaccines created by Pfizer and BioNTech, and Moderna have been approved by the European Medicines Agency for use in the bloc. The easier to store and transfer (and cheaper) candidate from AstraZeneca and the University of Oxford has not yet been approved.

Time is of the essence when it comes to vaccine rollouts, particularly amid a surge in cases due to the more transmissible mutations that have taken hold. Still, Germany has recorded fewer cases than many of its neighbors, recording just over 2 million infections to date. The death toll stands at 47,958.

For both the U.K. and EU, a key issue is that supply cannot meet current demand for vaccines, and Germany has been no exception, with early reports of people struggling to get vaccination appointments amid a shortage of doses. But vaccine makers have promised to scale-up production and deliver millions more doses to be delivered in the next few weeks and months.

In the meantime, however, the “doses secured for immediate use are insufficient,” Kaufmann noted.

“Whilst so-called vaccination centers have been established all over Germany, there is currently a lack of vaccines for rapid maximum vaccination coverage in these centers. (The) hope is that the process will be accelerated once the difficult and time consuming vaccination (at nursing homes) has been accomplished,” he said, noting that the speed of Germany’s vaccination drive “would have been faster if more doses from BioNTech and Moderna would have been secured.”

“In my opinion, everything needs to be done to secure more doses for immediate or short-term use. This is even more important because of the rising incidences of mutant strains which could evade vaccine-induced immune responses,” he warned.

Political criticism

Germany is not alone in seeing a sluggish start to its vaccination drive. There has been EU-wide criticism of the European Commission for not procuring enough vaccines for the bloc to begin with.

Florian Hense, European economist at Berenberg, told CNBC that the approval and procurement process meant that the EU had been at the back of the line, or at least behind other countries including the U.K. and U.S., when it came to receiving vaccine supplies.

“Inasmuch the EU negotiated with pharma companies and approved vaccinations on the behalf of its member states, Germany’s vaccination drive was always going to be ‘un-German’, regardless of what you associate with that term,” he told CNBC Monday.

Elderly people who had just been inoculated against COVID-19 wait briefly in case of side effects before departing at the vaccine center at the Messe Berlin trade fair grounds on the center’s opening day during the second wave of the coronavirus pandemic on January 18, 2021 in Berlin, Germany. The center is the third to open in Berlin. Three more are to open in coming weeks once shipments of the Pfizer/BioNTech and Moderna vaccines pick up pace.

SEAN GALLUP | AFP | Getty Images

“I suspect that the EU’s later approval delayed the start of vaccinations and ever since has limited the pace of vaccinations per day as the vaccinations have been arriving in the EU at a slower pace than they have (per capita) in the U.K., the U.S.”

Needless to say, there has been criticism from other parliamentarians of the government’s overall strategy.  Dr. Janosch Dahmen, a doctor and German parliamentarian with the Green party, told CNBC that he was “very concerned because Germany is already behind.”

“The progress of the vaccination campaign is far too slow and one of the reasons is the supply shortage, but the more urgent problem is that the vaccination infrastructure reveals multiple problems, most of all staff shortages, distribution problems in the federal states and a far too-much centralized approach,” he said.

“As a doctor and a politician, I’m very concerned about the situation over here and aside from all the effort we need to put into a more effective, nationwide vaccination campaign, we need to build bridges due to testing, self-testing and we need to put up more effort in the sector of contact tracing, which is another important part to fighting this pandemic,” Dahmen said.   

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