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Vaccine news is great. It won't help the economy much this winter – 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.
This just in: Moderna (MRNA) has announced that per early results, its Covid-19 vaccine is 94.5% effective.
Stocks — which jumped dramatically when Pfizer said its vaccine was more than 90% effective last Monday — are rallying again. Futures of the S&P 500, which hit an all-time high on Friday, are up sharply. The Dow is also in record territory.
Breaking it down: Wall Street sees positive vaccine developments as a major confidence booster, firming up expectations for a big economic rebound next year. If companies have faith that vaccine distribution can begin in late 2020 or early 2021, they can start to make more concrete plans for the future.
Unfortunately, vaccines won’t prevent an extremely tough winter. Many European countries are still under modified lockdowns, and the United States surpassed 11 million coronavirus cases on Sunday. At least 45 states have reported more new infections this past week than the previous week, according to Johns Hopkins University.
“The good news on vaccines is tempered by the fact that they won’t come soon enough to prevent a difficult winter for many economies,” Neil Shearing, group chief economist at Capital Economics, said in a note to clients on Monday.
The contraction in activity between October and December expected in Europe won’t be as bad as what countries experienced this spring.
“Clearly the lockdowns this time around are much less stringent than they were earlier in the year,” Ben May of Oxford Economics told me, noting that schools mostly remain open.
He also pointed to a lower fear factor, which is likely to boost the economy through decreased voluntary social distancing, and a healthier environment for exports.
Oxford Economics now predicts that global growth will come in around 0.7% for the fourth quarter, compared to roughly 7% between July and September.
“The pace of growth in [the fourth quarter] has fallen back very sharply,” May said.
The global situation is made better by the recovery in China, which said Monday that industrial production in the world’s second-largest economy rose nearly 7% last month. Retail sales rose by slightly more than 4% — the fastest pace this year.
Big picture: News on the vaccine front does change the outlook for 2021, however. “It’s possible to believe that life will start to become a bit more normal next year,” Shearing said.
May said that indications there will be viable vaccines firms up expectations for a sizable rebound in activity by the middle of next year. Per Shearing, if all goes well with immunization, top economies could “return to pre-virus levels of output around six months earlier” than expected.

PNC to buy US business of Spain’s BBVA for $11.6 billion

PNC (PNC) is spending billions to cement its place among America’s largest banks.
The Pittsburgh-based lender is buying the American unit of Spanish financial group BBVA for $11.6 billion, the companies said Monday. The tie-up will create the fifth-largest US retail bank by assets, PNC said.
The all-cash deal will be the second-biggest banking sector merger since the global financial crisis, coming nearly two years after BB&T bought SunTrust for $28 billion to create Truist. Shares in BBVA surged as much as 16% in London.
PNC said in a statement that the transaction “significantly accelerates” its national expansion strategy. BBVA’s US subsidiary has over $100 billion in assets, and operates more than 630 branches in Texas, Alabama, Arizona, California, Florida, Colorado and New Mexico.
“When combined with PNC’s existing footprint, the company will have a coast-to-coast franchise with a presence in 29 of the 30 largest markets in the US,” PNC said.
Scoreboard: The combined entity will have more than $560 billion in assets, placing it behind only JPMorgan Chase, Bank of America, Wells Fargo and Citigroup when ranking US retail banks by size.
Investor insight: The deal comes amid a trying year for US banks, which have been weighed down by rock-bottom interest rates. They’ve also had to set aside billions of dollars to cover bad debts stemming from the coronavirus recession.
But Wall Street analysts, buoyed by hopes for Covid-19 vaccines, are increasingly confident that US bank stocks can turn it around in the coming months. The KBW Bank Index, which tracks US lenders, jumped 11.5% last week for its best performance since June.

Unilever’s plan to conquer home ice cream delivery

In the world of ice cream, one company reigns supreme. Unilever, whose brands include Klondike, Ben & Jerry’s and Magnum, sells ice cream in 63 countries around the world. The Anglo-Dutch firm commands almost a fifth of global ice cream sales, a bigger share than its next four competitors combined, according to market research firm Euromonitor.
Now, as the coronavirus pandemic rages on, the company is plotting to conquer one final frontier: ice cream delivered to your home on demand, my CNN Business colleague Hanna Ziady reports.
Ice Cream Now, the company’s home delivery business, has boomed during the pandemic. What began as a pilot program in 2016 at Deliveroo’s London headquarters with a single freezer is now available in more than 100 cities.
“As an ice cream gang we’re a bit messianic,” said Matt Close, the company’s executive vice president for global ice cream. “We believe that people want it, we’ve just got to find a way to get it to them.”
Through partnerships with the likes of Uber Eats and Domino’s Pizza, customers can get ice cream delivered within 30 minutes. The company has even teamed up with Terra Drone Europe to explore delivery by air.
The plan is working: The growth of ice cream at home is on track to more than offset the collapse in its out-of-home ice cream revenue this year, which includes sales to restaurants and catering companies. Looks like Ben & Jerry’s picked a good year to launch a flavor called Netflix & Chilll’d?
Casper Sleep (CSPR), JD.com (JD) and Tyson Foods (TSN) report results before US markets open. Baidu (BIDU) and SmileDirectClub (SDC) follow after the close.
Also today: The Empire State manufacturing index for November posts at 8:30 a.m. ET.
Coming tomorrow: Home Depot (HD), Kohl’s (KSS) and Walmart (WMT) report earnings as more US shoppers take advantage of curbside pickup and online shopping.

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The worsening pandemic raises the stakes for Biden's economic program – CNN

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“You have to right the market a little bit,” the former vice president told me. “The middle class is getting killed.”
Within weeks, the coronavirus hit and worsened the toll — literally and figuratively. That steepens the challenge President-elect Biden faces when he replaces President Donald Trump in January.
For at least a half century, multiple economic forces have exacerbated disparities within American society. By 2016, a Pew Research Center analysis recently found, the most affluent 5% possessed 248 times the wealth of the least affluent 40%. Wealth improves health; on average, the richest 1% of Americans live more than 10 years longer than the poorest 1%, a study in the Journal of the American Medical Association has found.
Covid has deepened both dismal grooves. Blacks and Hispanics, who lag behind Whites in wealth and income, die from the virus more than five times as often, according to the Institute for Health Metrics and Evaluation at the University of Washington.
The economic dislocations of the pandemic have largely spared more affluent Americans. Buoyant financial markets and home values have protected their wealth, and their ability to work from home has protected their jobs.
Low-paid service workers, by contrast, have been devastated. Many of those who have been lucky enough to avoid being laid off must report to job sites as “essential workers,” heightening their risk of exposure.
Others have faced layoffs due to plummeting demand, and the prospect of permanent job loss from sectors such as leisure travel or in-person retailing that won’t recover soon if ever. While higher-wage employment has risen back to pre-pandemic levels, the number of jobs paying $27,000 or less remains down 19%, according to Harvard’s Opportunity Insights Economic Tracker.
“For people who can work remotely, all this is slightly inconvenient,” observed Massachusetts Institute of Technology economist David Autor. “For many others, they’re going to have to change their livelihoods.”

‘A lot of people have been left behind’

Responding to all this won’t require Biden to rewrite the economic plans he’d already developed, because of who they were always intended to help.
“The agenda was really crafted with the core insight in mind that a lot of people have been left behind for a long time,” noted longtime Biden economic adviser Jared Bernstein.
In the name of rebalancing for fairness and equity, his campaign proposed trillions in tax increases on the affluent to finance trillions in spending on health care, infrastructure, education and other programs.
But Covid raises the stakes for getting his proposals enacted, and suggests subtle shifts of emphasis.
For example, higher minimum wages work best in tight labor markets. So elevated unemployment has diminished the urgency of Biden’s call for doubling the federal minimum to $15, according to Autor.
Yet pushing any tax increases through Congress will be difficult, especially if Republicans keep control of the Senate after Georgia’s runoff elections in January. But Biden’s proposed payroll tax hike on incomes over $400,000 has grown more important. That’s because a significant number of older Americans who’ve lost jobs are expected seek Social Security earlier than previously planned, adding new strains to the program’s finances.
Workers cast off by suddenly declining industries face a more immediate need for the job training upgrades Biden has proposed. Those responsible for young children and aging parents have grown more desperate for the kind of help Biden’s proposed caregiving subsidies would provide.
The inadequacy of virtual learning required by Covid elevates the importance of his higher proposed school funding levels. Without remedial education programs, low-income families less able to compensate with technology or tutoring will fall farther behind than they already are.
“The learning deficits are going to be so deep we don’t know if they’ll ever be able to overcome them,” said Melissa Kearney, a University of Maryland economics professor who specializes in inequality. “I want to be an optimistic person, but I am so disheartened at this moment.”

Congress remains stalled on more relief

One source of her discouragement: the inability of the lame-duck Congress and Trump White House to agree on a new Covid-relief package, which Republicans and Democrats alike call necessary. Without year-end action, millions face impoverishment from expiring unemployment benefits, eviction from their homes and business failures.
The stalemate augurs poorly for passing a major new economic stimulus once Biden and the new Congress take office in 2021. Mark Zandi, the chief economist for Moody’s, calls a large infrastructure program, to help stave off a backslide into recession, the most potent single step the new president could take to reduce economic disparities.
Democrats say Biden can make some progress without Congress, including possible executive action to relieve some student loan debts. His expected choice for Treasury Secretary, Janet Yellen, is a labor market expert deeply familiar with fiscal and monetary tools from her past work as Federal Reserve chair and a Clinton White House economist.
Incoming White House chief of staff Ron Klain brings expertise in pandemics from his work overseeing President Barack Obama’s successful response to Ebola. Taming the coronavirus would at least help the new administration prevent economic disparities from widening any further.
A year later, that issue remains Biden’s target.
“The middle-class and working-class people are being crushed,” the President-elect told NBC last week. “That’s my focus.”

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Families ‘facing hardest period in five decades’ as Britain's economy stalls – The Guardian

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Families ‘facing hardest period in five decades’ as Britain’s economy stalls  The Guardian



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How this ocean-to-table operation is helping the N.L. economy by keeping it local – CBC.ca

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Through late summer and early fall, Tim Ball spent as much time as possible underwater in his dive gear, scouring the seabed off the Burin Peninsula for scallops. 

It’s an ocean-to-table operation that sees his hand-harvested scallops quickly making their way to dinner plates in the downtown of St. John’s. 

“I try to keep it all local,” said Ball about his business philosophy. 

With a provincial economy that’s in dire straits and in need of reversing its course, Ball thinks every little bit can help— especially if the focus is keeping as many of those little bits as possible in the province. 

Tim Ball says dive harvesting is a scalable industry that would benefit rural Newfoundland and Labrador. (Adam Walsh/CBC )

For Ball, that means, among other things, using locally made bags and boxes for packing his scallops and using a Burin Peninsula cab company for sending his catch into St. John’s. 

“Because this is a primary industry … we are in, and we are getting the actual resources from the bottom, this is creating new money for the economy,” Ball said. “If the money is staying in Newfoundland, then great.”

Terre Restaurant in St. John’s is one of the destinations for Ball’s scallops. Before the season ended last month they could be found listed on the menu as “Seared Diver Scallops.”

Matthew Swift is the chef at Terre Restaurant in St. John’s. (Adam Walsh/CBC )

“They’re amazing,” said head chef Matthew Swift. 

“Anywhere else in the world … the idea of marketing day boat scallops is sort of a pipe dream. If I were to tell friends in other places that Tim gets out of the water, and I get the scallops in as long as it takes to drive in from Burin? It’s insane,” he said. 

On top of the quality, it’s Ball’s business recipe that also interests Swift. 

“Just in terms of having a diverse and smaller economy, where we can support people on a more individual level,” he said. 

This is the end of the line for Tim Ball’s hand-harvested scallops — seared and served on a plate at Terre Restaurant in downtown St. John’s. (Adam Walsh/CBC)

This way of thinking is something that also strikes a chord with John Schouten — Memorial University’s Canada Research Chair in Social Enterprise.

Schouten says Ball’s operation means more than just local spending on his supply chain. There’s also a spillover effect which would also see Ball spend money at local businesses in and around Garnish, where he fishes from. 

“So every hundred dollars that passes from me, to you, to somebody else here locally, that $100 is working the whole time in our favour here in the province,” said Schouten in an interview last month.

Patch the bucket

It may be a small example, but there’s a bigger lesson in it for the provincial government, said Schouten. He thinks the government should treat the economy like a leaky bucket, where money comes in and goes out. 

“If the government could, using that metaphor, start patching the bucket to keep the money in the province longer, working harder for local businesses, local people, people who are making a living wage — that would do wonders for the stability of the economy here,” he said. 

John Schouten is the Canada Research Chair in Social Enterprise at Memorial University. (Adam Walsh/CBC)

Speaking of helping the economy, Ball thinks what he’s doing is scalable. In addition to scallops, Ball also hand harvests sea urchin, but he thinks there’s more that can be harvested as well —  including kelp, sea cucumbers and periwinkles. 

For that to happen, there would have to be consistent licensing periods from the federal government and more divers with commercial dive training. 

Eventually Ball would like to see a special school that trains up to a dozen divers a year for this type of work.

If a community had a handful of divers, Ball said, the economic spin-off is easy to see — you need people shucking scallops and spotting the divers, gear needs repairing, supplies need to be bought. 

“I think it’s just a win-win situation for small communities,” he said. “It could be a good economic boon.”

Read more articles from CBC Newfoundland and Labrador

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