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Europe's biggest economy is heading into lockdown. Will recession follow? – CNN

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A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here.
What’s happening: Chancellor Angela Merkel said Sunday that Germany will go into a “hard” lockdown starting this week and continuing through the Christmas period. Non-essential shops and schools will be shut starting on Wednesday, and Christmas gatherings will be reduced from 10 people to only five from two different households.
The announcement comes after Germany recorded nearly 30,000 new coronavirus infections and almost 600 deaths within 24 hours on Friday, surpassing records.
Economy Minister Peter Altmaier said in an interview Monday that he thinks the country can avert another recession thanks to government support measures. Reuters reports that the number of people that will work reduced hours and have wages subsidized by the state is expected to rise.
“It is possible, if we act wisely, to once again preserve the economic substance of the country,” Altmaier said. But he stressed that this “depends very decisively on the further course of events.”
Given the extent of new restrictions, economists are worried.
“Germany must brace itself for a second recession,” Dr. Jörg Krämer, Commerzbank’s chief economist, told clients Monday.
Big picture: Germany isn’t the only country grappling with a spiraling health situation. South Korea has also sounded the alarm about rising cases and could announce new social distancing measures. And London’s mayor is asking the government to close schools for the holidays earlier than planned given a surge in infections in the city.
In the United States, as medical workers prepare to distribute the first doses of the Pfizer-BioNTech Covid-19 vaccine, the outlook for infections and hospitalizations remains extremely concerning. The country is nearing 300,000 deaths after hitting the 200,000 mark in September.
It’s a reminder that while the rollout of vaccines is an important moment in a devastating pandemic, it won’t be an immediate cure for the twin health and economic crises.
“After being the relative European success story in wave one, Germany has struggled over the last few weeks,” Deutsche Bank’s Jim Reid said in a research note Monday. The new lockdown, he said, would deal a short-term “blow to activity and confidence, even if the damage will be limited by knowledge of the imminent vaccine rollout.”

‘Blank check’ companies have billions to spend in 2021

On Wall Street, 2020 has become known as the year of the SPAC.
Special purpose acquisition companies, or so-called “blank check” firms tasked with cutting deals, have been all the rage. These companies raise funds from investors by going public, and then have two years to put that money to work.
According to Goldman Sachs, 206 SPACs have raised a record $70 billion in IPO proceeds this year, a fivefold increase from 2019. A record number of SPACs also announced or closed merger deals.
Remember: Companies like DraftKings and electric truck maker Lordstown Motors went public in 2020 by merging with SPACs, a faster route than a traditional IPO. Shares of both companies have skyrocketed since then, helping to drum up interest in the process.
The momentum is expected to continue into 2021, with a wall of capital still waiting to be deployed.
Goldman estimates that $61 billion in equity IPO proceeds raised by 205 SPACs “is currently searching for acquisition targets.” That cash needs to find a home in 2021 or 2022, or it will have to be returned to investors.
So far, electric and autonomous car companies have been among the most popular SPAC targets. But there’s only so many of those firms out there, which means the scope of interest will need to widen.
“[There’s an] imbalance between supply and demand, with more capital being raised and less obvious targets,” Dirk Albersmeier, JPMorgan’s co-head of global mergers and acquisitions, told me.
As competition for US takeover targets heats up, more of that money could head to Europe and Asia, Albersmeier noted.
Watch this space: Massive demand for high-growth companies is already reigniting conversation about whether valuations are too stretched and heading for a fall. Demand among SPACs may only feed those fears.
With so many SPACs focused on technology, and with a limited time frame to deploy capital, would-be buyers could end up “bidding themselves up,” Albersmeier said.

Pfizer and Moderna will cash in on vaccine sales

The authorization of Pfizer (PFE) and BioNTech’s Covid-19 vaccine in the United States is a momentous occasion for science, the economy and humanity. It’s also a big moneymaker for the companies that developed the vaccines, my CNN Business colleague Matt Egan reports.
Wall Street analysts project that Pfizer and Moderna (MRNA) — whose vaccine is next in line to be reviewed by regulators — will generate $32 billion in Covid-19 vaccine revenue next year alone.
That doesn’t take into account the goodwill boost these companies will receive by helping bring an end to the worst pandemic in a century. The effect is magnified for Moderna, a young biotech company that few people had heard of before 2020.
Investor insight: Pfizer’s stock is up just 10.7% this year, trailing the S&P 500’s 13.4% gain. But shares of German partner BioNTech, which trade in New York, have jumped more than 275%, valuing the company at $30.7 billion.
Moderna’s stock has skyrocketed 702% this year, giving the firm a market cap of $62.1 billion. Investors see the efficacy and safety results for its coronavirus vaccine as a validation of Moderna’s entire pipeline of products. They’re increasingly confident it won’t be the company’s only blockbuster.
But profits from vaccine sales are also drawing criticism. More than 1.6 million people have now died of Covid-19 globally.
“It is absolutely wrong for drug companies like Pfizer and Moderna to profiteer, and for their executives to make egregious personal fortunes, off of Covid-19 vaccines that have been so heavily subsidized and supported by American taxpayers,” said Eli Zupnick, a spokesman for Accountable.US, a progressive watchdog and patient advocacy group.
OPEC is due to release its monthly report after producers agreed to start pumping more oil in January.
Coming tomorrow: The European Commission is expected to publish sweeping new regulations targeting Facebook (FB), Google (GOOGL), Amazon (AMZN) and Apple (AAPL).

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A timeline of events in the bread price-fixing scandal

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Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.

Here’s a timeline of key events in the bread price-fixing case.

Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.

Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.

Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.

Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).

Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.

June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.

Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”

Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.

July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.

Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 250 points, U.S. stock markets also higher

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TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.

The S&P/TSX composite index was up 254.62 points at 23,847.22.

In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.

The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.

The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.

The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

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VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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