Daily Update: February 12, 2021

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The global coronavirus vaccine rollout is sputtering. Will economies be able to keep up with COVID-19 variants spreading across the world?

Of the roughly 152 million immunizations that have been administered worldwide as of Feb. 11, wealthy countries—namely Israel, the United Arab Emirates, the United Kingdom, and the United States—have dominated the distribution, according to the University of Oxford-based data research organization Our World In Data. Advanced economies across the European Union have been beleaguered with delayed rollouts, largely due to a lack of available doses. The race to vaccinate the global population depends on providing jabs to the most vulnerable populations across emerging economies. Such nations have suffered most from the crisis due to poorer economic conditions that hinder abilities to swiftly secure supplies, and experts believe they are likely to be devasted by strong and more contagious COVID-19 mutations without early and widespread immunization.

“Large populations sometimes living in settings with less developed health care infrastructure will make vaccination programs a more complex exercise, especially in emerging markets,” S&P Global Ratings said in a Feb. 11 report on EU immunization. “The global immunization program needs to be accelerated to reduce the risk of more aggressive strains of the coronavirus emerging from countries unable to procure the necessary vaccine.” 

The E.U. can achieve its goal of rapidly vaccinating 70% of adults across the bloc’s population by late July if production and distribution are ramped up, according to an S&P Global Ratings analysis. Likewise, the U.S. can achieve herd immunity by the second half of this year if logistics improve, manufacturing capacity is increased, and new vaccines are approved. Currently, according to S&P Global Ratings, the country’s rollout is behind schedule to meet this milestone.

“Wealthier countries such as the U.S. were the first to roll-out COVID-19 vaccines. Many of these countries provided funding for the research and development of the vaccines and placed tens or hundreds of millions of orders for the vaccine before they were approved,” S&P Global Ratings said in a Feb. 11 report on the U.S. vaccination rollout. “This could make it difficult for lower-income countries and disadvantaged communities to access or afford vaccines.”

Despite the World Health Organization’s recommendation this week that the Oxford-AstraZeneca vaccine should be administered worldwide regardless of the prevalence of COVID-19 mutations, South Africa halted its distribution. AstraZeneca’s vaccine is less expensive and doesn’t require complex storage, like Pfizer and Moderna’s vaccines. However, the African nation—which has recorded the most infections and deaths of all economies in the continent —shifted its strategy to prioritize the Johnson & Johnson candidate after a small study indicated AstraZeneca’s COVID-19 vaccine poorly prevented severe disease spurred by the contagion. A coronavirus variant spreading through South Africa and now elsewhere in the world has been found to be more transmissible and resistant to vaccine efficacy.

The race speeds on. Mene Pangalos, AstraZeneca’s executive vice president of biopharmaceuticals R&D, said on Feb. 11 that the company began creating candidates to fight virus variants, including South Africa’s, months ago and hopes to deploy the vaccines by the autumn, according to S&P Global Market Intelligence.

“A slow rollout [in less developed countries] could limit the efficacy of the EU's and other developed countries' vaccination programs. The virus will likely continue to mutate and possibly multiply in those populations with no or limited access to vaccines. This raises the risk that as developed economies seek to fully reopen their economies, including to international travel, new vaccine resistant mutations could take hold, causing renewed spikes in infections, severe illness, and excess deaths,” S&P Global Ratings said.

Today is Friday, February 12, 2021, and here is today’s essential intelligence.

The Future of Credit

Remote Working Is Testing U.S. Office Landlords' Credit Quality

The COVID-19 pandemic has accelerated the adoption of remote working and S&P Global Ratings thinks tenants downsizing their footprint is a growing risk, pressuring demand for office real estate.

—Read the full report from S&P Global Ratings

Market Volatility

Regulators Zero In On Payment For Order Flow In Gamestop Aftermath

Wall Street is facing renewed skepticism from Washington, D.C. in the wake of the GameStop Corp. saga over the practice of payment for order flow, which has become a key revenue source for some retail brokerages.

—Read the full article from S&P Global Market Intelligence

The U.S. Retail Trading Surge: Who's Coming Up Short?

Retail trading has surged in the U.S. since November 2019, when Charles Schwab slashed commissions on U.S-listed stocks and equity options to zero. With millions of individuals confined at home, the pandemic has amplified this trend.

—Read the full report from S&P Global Ratings

Former U.S. Mint Director Expects Gold To Hit New Highs Within 'Next Year Or 2'

Fundamentals point to new records for gold prices ahead, according to Ed Moy, chief investment strategist at Valaurum Inc. and former director of the United States Mint.

—Read the full article from S&P Global Market Intelligence

Banking Sector Under Pressure

The Future Of Banking: Bank Cloud Adoption Goes From Blue Sky Thinking To Economic Necessity

Banks are keenly aware of the digital potential of the public cloud—in which they contract an on-demand third-party provider over the public internet to get computing services and infrastructure that are managed by the provider and shared with multiple organizations.

—Read the full report from S&P Global Ratings

ESG in the Time of COVID-19

The ESG Pulse: 2021 Lookahead

ESG's rising importance is also reflected in the rise in sustainable debt issuance, which S&P Global Ratings thinks could surpass $700 billion in 2021. This is up by one-third from last year and double the 2019 level. Underpinning S&P Global Ratings’ expectation is the acceleration in green-labeled bond issuance and the building momentum for social and sustainability instruments.

—Read the full article from S&P Global Ratings

China Battery Metals Outlook 2021: Lithium Prices To Rise On Strong EV Sales

China's demand for battery grade lithium carbonate and hydroxide is expected to increase in 2021 on stronger electric vehicle sales, pushing domestic prices higher, according to S&P Global Platts' China Battery Metals Outlook for 2021.

—Read the full article from S&P Global Platts

U.S. Corporate Renewable Power Buyers Procure 10.6 GW Of Capacity In 2020

Tech giant Amazon procured 3.163 GW of renewable energy capacity in 2020, leading all large buyers who collectively procured 10.6 GW of contracted capacity despite coronavirus pandemic-related challenges, and this highlights corporate commitment to addressing climate change, the Renewable Energy Buyers Alliance said Feb. 10.

—Read the full article from S&P Global Platts

Renewables, Gas Generators Seen As Winners In Green Hydrogen-Tinged Future

Electric utilities and independent power producers are positioned as key players to help speed cost reductions for green hydrogen, a fuel predicted to become pivotal in decarbonizing the U.S. economy, experts said Feb. 10.

—Read the full article from S&P Global Market Intelligence

Analysis: Draft Amendments To IMO Carbon Rules To Shake Up Freight Markets

Draft amendments to the International Maritime Organization's mandatory rules on reducing carbon in existing ships by 2023 are likely to result in new clauses in charter party agreements that could make hiring ships challenging.

—Read the full article from S&P Global Platts

The Future of Energy & Commodities

Fuel Oil Markets Show Resilience After Twin Challenge Of IMO 2020 And Pandemic

Global fuel oil markets weathered choppy waters in 2020, contending with the monumental change brought by the International Maritime Organization's global sulfur cap, but also demand destruction on the back of the coronavirus pandemic.

—Read the full article from S&P Global Platts

Analysis: Lunar New Year Holidays Fail To Lift Asian Jet Fuel Market

The Year of the Ox has failed to ring in Lunar New Year festivities for the Asian jet fuel market as a recent resurgence in COVID-19 infections led local governments to tighten border controls and reimpose containment measures, forcing regional airlines to scale back operations during one of the busiest travel periods.

—Read the full article from S&P Global Platts

Section 232 Tariffs On Aluminum Expected To Remain In Near Term: Panel

It is unlikely the Section 232 tariffs and quotas on US aluminum imports will be stripped by President Joe Biden in the near term, but exactly how and when the new administration goes about changing US metals trade policy is unclear, a panel of industry experts said Feb. 10.

—Read the full article from S&P Global Platts

Fuel Oil Markets Come Back Into Focus As Global Demand Returns

For fuel oil markets, 2020 was a strange year, as the global pandemic overshadowed implementation of the landmark IMO 2020 regulation. With global demand slowly returning, these grades are back in focus.

—Listen and subscribe to Oil Markets, a podcast from S&P Global Platts

Written and compiled by Molly Mintz.