Will the second wave of covid-19 reach Latin America?
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(CNN Business) ––
Germany, the world's fourth-largest economy, is heading for national lockdown that could lead to another recession.
This is an important warning as countries like the United States try to combat an increase in coronavirus cases during the winter.
What's Happening: Chancellor Angela Merkel said on Sunday that Germany will go into "hard" lockdown starting this week.
Also, that it will continue during the Christmas period.
Non-essential stores and schools will close starting this Wednesday.
And the Christmas gatherings will be reduced from 10 people to just 5 who belong to two different households.
MIRA: Germany will enter national confinement during Christmas to stop the increase in covid-19 cases
Germany, between coronavirus and recession
The announcement comes after Germany recorded nearly 30,000 new coronavirus infections and nearly 600 deaths in 24 hours on Friday.
Figures that broke records.
Economy Minister Peter Altmaier said in an interview on Monday that he believes Germany can avoid another recession because of the government's supportive measures.
Reuters reported that the number of people who will work reduced hours and receive state-subsidized wages is expected to increase.
"It is possible that, if we act wisely, we will once again preserve the economic substance of the country," said Altmaier.
But he emphasized that this "depends very decisively on the future course of events."
Given the scope of the new restrictions in Germany, economists are concerned at the prospect of a recession.
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"Germany must prepare for a second recession," Dr Jörg Krämer, Commerzbank's chief economist, informed his clients on Monday.
LEE: Germany records its deadliest day during the covid-19 pandemic
The big picture: Germany is not the only country facing a spiraling health situation.
South Korea has also raised alarms about the increase in cases and could announce new social distancing measures.
And the mayor of London called on the government to close schools on holiday earlier than planned due to the increase in infections in the city.
In the United States, health personnel are preparing to distribute the first doses of the Pfizer-BioNTech vaccine against covid-19.
However, the prospects for infections and hospitalizations remain extremely worrying.
The country is approaching 300,000 deaths after hitting the 200,000 mark in September.
This is a reminder that while vaccine distribution is an important time in a devastating pandemic, it will not be an immediate cure for economic and health crises.
"After being the relative success story in Europe during the first wave, Germany has struggled in recent weeks."
This was highlighted by Jim Reid of Deutsche Bank in a research note on Monday.
The new lockdown, he said, would be a "hit to activity and confidence in the short term, even if the damage will be limited by knowledge of the imminent launch of the vaccine."
'Blank check' companies have billions to spend in 2021
On Wall Street, 2020 is known as the year of the SPAC.
Special Purpose Acquisition Companies (SPACs) are also known as "blank check" companies.
They are in charge of closing deals and they are all the rage.
These companies raise funds from investors by going public, and then they have two years to put that money to work.
According to Goldman Sachs, 206 SPAC companies have raised a record $ 70 billion in earnings from initial public offerings (IPOs) this year.
This represents a five-fold increase compared to 2019. In addition, a record number of SPAC companies also announced or closed merger agreements.
Remember: companies like DraftKings and electric truck maker Lordstown Motors went public in 2020 by merging with SPAC companies.
This route is faster than a traditional IPO.
Shares of both companies have skyrocketed since then, helping to generate interest in the process.
The momentum is expected to continue in 2021, with a capital wall waiting to be deployed.
Goldman estimates that $ 61 billion in IPO share proceeds raised by 205 SPAC "are currently pursuing acquisition targets."
That cash needs to find a destination in 2021 or 2022, or it will have to be returned to investors.
So far, autonomous and electric car companies are among the most popular targets of SPAC companies.
But there are only a limited number of such companies, which means that the scope of interest will need to be broadened.
"[There is a] imbalance between supply and demand, with more capital being raised and less obvious targets," said Dirk Albersmeier, co-head of global mergers and acquisitions at JPMorgan.
As competition for US acquisition targets increases, more of that money could go to Europe and Asia, Albersmeier noted.
Look at this space: the massive demand from high-growth companies reignited the conversation about whether valuations are under too much pressure and headed for a dip.
Demand among SPAC companies can only fuel those fears.
With so many SPAC companies focused on technology and with a limited time frame to deploy capital, potential buyers could end up "making a superior offer," Albersmeier said.
Pfizer and Moderna to benefit from vaccine sales
Vaccines will generate US $ 32 billion for these companies 1:00
The authorization in the United States of the vaccine against covid-19 developed by Pfizer and BioNTech is a momentous moment for science, the economy and humanity.
It's also a great source of revenue for the companies that developed the vaccines, reported Matt Egan of CNN Business.
Wall Street analysts project that Pfizer and Moderna - whose vaccine will be the next to be evaluated by regulators - will generate $ 32 billion in revenue from the Covid-19 vaccine next year alone.
That doesn't take into account the goodwill boost these companies will get in helping to end the worst pandemic in a century.
The effect is magnified for Moderna, a young biotech company few people had heard of before 2020.
Investor outlook: Pfizer shares rose just 10.7% this year, behind the 13.4% gain on the S&P 500. But the shares of its German partner BioNTech, which are listed in New York, rose more 275%, bringing the company's value to $ 30.7 billion.
Moderna keeps covid vaccine location secret 0:40
Moderna's shares soared 702% this year, giving the company a market capitalization of $ 62.1 billion.
Investors view the efficacy and safety results of their coronavirus vaccine as validation of Moderna's entire product line.
They are increasingly sure that it will not be the only success of the company.
But the profits from the sale of vaccines are also drawing criticism.
More than 1.6 million people died from covid-19 worldwide.
"It is absolutely wrong for pharmaceutical companies like Pfizer and Moderna to make a profit, and for their executives to make huge personal fortunes from the covid-19 vaccines that have been so heavily subsidized and supported by American taxpayers," said Eli Zupnick, spokesman for Accountable.US, a progressive patient advocacy and watchdog group.
What's coming
OPEC is due to release its monthly report after producers agreed to start pumping more oil in January.
Tomorrow: The European Commission is expected to publish sweeping new regulations targeting Facebook, Google, Amazon and Apple.
