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There’s good economic news on the horizon, and that’s rattling markets. Wait, what?

There’s good economic news on the horizon, and that’s rattling markets. Wait, what?

The first signs that the world is winning the battle with COVID-19 has sparked great news for the global economy as the number of people vaccinated grows and the death rate falls.

Once shops and factories reopen, once people trapped working from home are finally set free to spend on restaurant meals and travel, sharing the savings they couldn’t spend during lockdown, that recirculation of money is the very thing that will make economies strong.

So it is fair to ask why stock markets tumbled last Thursday — the Dow and the Toronto market were down again Friday — if the economy is recovering.

As Jim Reid, research strategist at Deutsche Bank told the Financial Times last week, it “proved to be nothing short of a rout in global markets, with the sell-off in sovereign bonds accelerating as investors looked forward to the prospect of a strengthening economy over the coming months.”

A global rout in markets, a sell-off in bonds, all due to the prospect of a strengthening economy? The explanation involves the uncertainty of where interest rates go from here if a post-COVID-19 economy gets cooking. 

The market not the economy

But the first step in understanding the paradox is remembering that “the stock market isn’t the economy,” as now-U.S. Treasury Secretary Janet Yellen once said.

Over the long haul, there is no question that a strong and growing economy adds to the value of the companies that operate within it. A study of 17 advanced economies by researchers at the University of Bonn showed that over the long term, total stock market values climb with gross domestic product.

U.S. Treasury Secretary Janet Yellen departs the White House. The stock market is not the economy, she once said. (Tom Brenner/Reuters)

But as we clearly saw last year when the U.S. stock markets hit record highs even as GDP shrank more than it had in 70 years, that relationship is not perfectly in sync.

In both Canada and the U.S., central banks have expressed confidence that the economy will grow strongly this year and next. Not only that, but to help put people back to work, both Bank of Canada governor Tiff Macklem and Fed Chair Jerome Powell have promised to keep interest rates low until there are clear signs the employment and business activity have recovered.

So everyone seems to agree the economy will grow stronger. But while central banks try to hold rates down, there are increasing signs that the private investors in the bond market are anticipating rates will rise, making existing bonds worth less.

Interest rates rising?

Bonds are not generally the subject of supper table conversation in Canadian households, but the interest rates set in bond markets affect Canadians in many ways, including the rate you pay for your mortgage. According to mortgages brokers Rate Spy there are early signs that mortgage prices may be following bond yields up.

The key point to understand the role of bonds in the rising economy is one of the things people often find most confusing about them: existing bonds fall in value as interest rates rise. (For more explanation of how that works and why bonds matter, this previous column serves as a primer.)

As Reuters reported on Friday, “from the United States to Germany and Australia, government borrowing costs on Friday were set to end February with their biggest monthly rises in years as expectations for a post-pandemic ignition of inflation gained a life of their own.”

Bank of Canada Governor Tiff Macklem says he expects any rise in inflation to be temporary, but bond traders seem to disagree. (Blair Gable/Reuters)

Economists are divided over whether low interest rates set by central banks and large injections of cash into the economy announced by governments will lead to inflation. Macklem has offered a pretty firm “no” but it appears that last week, the mass of global bond traders appeared to disagree with the Bank of Canada governor and voted with their money. On Friday some suggested the shift in bonds was actually due to technical factors.

Confusingly, the bond market’s anticipation of inflation — if that’s what it is — is a vote of confidence in the future, because traders think consumers and businesses will want to buy more goods and services, driving up their prices.

Speculation vs. fundamentals

As to why stocks fell in response, there are a number of possible reasons, especially in a market where some fear a growing stock bubble. One is that higher bond prices increase the cost of borrowing for companies that raise money in the bond market. Another is that companies must compete with bonds in the money they pay out in dividends. Both cut into profits.

But perhaps most interesting is the idea that stock markets are going through a transition from speculative casino-style investing, where people buy more because they see prices go up (and vice versa) to one based on actual return.

“Markets are increasingly dominated by price action. The more price falls, the more they sell,” James Athey, an investment manager with Aberdeen Standard Investments told the Wall Street Journal last week. “The problem is that not every investor is a fundamental investor.”

In a market where traders have been making bets on bitcoin with no earnings at all or companies that have so far failed to cover their costs, a switch to “fundamental” investing where valuations are based on what a company is likely to earn in a surging economy could lead to greater market stability in the longer term. But there may be a rough patch first.

Follow Don Pittis on Twitter @don_pittis

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English health authority says vaccines 80% effective at preventing hospitalisations in over-80s

English health authority says vaccines 80% effective at preventing hospitalisations in over-80s

The Pfizer and vaccines are more than 80% effective at preventing hospitalisations from COVID-19 in those over 80 after one dose of either shot, Public Health England (PHE) said on Monday, citing a pre-print study.

PHE said the real world study, with data generated from Britain’s vaccine rollout, also found that protection against symptomatic COVID in those over 70 ranged between 57-61% for one dose of Pfizer-BioNTech’s vaccine and between 60-73% for the Oxford-AstraZeneca one four weeks after the first shot.

“These results may also help to explain why the number of COVID admissions to intensive care units among people over 80 in the UK have dropped to single figures in the last couple of weeks, which is something I know that we all welcome,” health minister Matt Hancock said at a news conference.

“This is seriously encouraging.”

PHE added that evidence for the Pfizer vaccine suggested it leads to an 83% reduction in deaths from COVID-19. There was not equivalent data on mortality effect of the AstraZeneca vaccine, which began to be administered at a later date.

PHE Head of Immunisations Mary Ramsay said that while more work needed to be done to understand the impact on vaccines in reducing transmission of the coronavirus, the effect of the rollout was already apparent.

“This adds to growing evidence showing that the vaccines are working to reduce infections and save lives,” she said.

“While there remains much more data to follow, this is encouraging and we are increasingly confident that vaccines are making a real difference.”

Another PHE official said that more work needed to be done to establish the efficacy of vaccines against the so-called Brazilian variant of the coronavirus.

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SC refuses to extend bail of prisoners freed due to Covid | India News

SC refuses to extend bail of prisoners freed due to Covid | India News

NEW DELHI: Prisoners who were released last year to decongest jails in Delhi due to the outbreak of Covid-19 will now have to return to prison as the Supreme Court on Monday refused to extend their bail.
A bench of Justices L Nageswara Rao and S Ravindra Bhat said the situation is now improving and the pandemic seemed to be under control and prisoners can go back to jail. It granted them 15 days to surrender before jail authorities.
There are over 2,600 prisoners who were granted bail by the Delhi high court or lower courts in view of the pandemic and their bail was extended from time to time.
Though the prisoners contended that jails in Delhi are still overcrowded as there are 17,000 inmates against the sanctioned strength of 10,000, the bench, however, said it would examine how to deal with the problem of overcrowding in future while refusing to grant them relief.
The trial court had granted bail to 2318 undertrials and the high court had released 356 inmates last year on interim bail.
The apex court passed the order on a petition challenging the Delhi HC order which had in October directed the prisoners to surrender by November 13. Earlier, the SC stayed the HC order and agreed to hear the prisoners’ plea for more time to surrender. The court, however, said the prisoners are at liberty to move the respective courts for getting bail and the court will decide their plea on the merits of the case.

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License more manufacturing sites in developing nations to produce vaccines: WTO DG

License more manufacturing sites in developing nations to produce vaccines: WTO DG

World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala has called for the member countries to work with companies to license more manufacturing sites in developing countries and technology transfer citing “serious supply scarcity”.

Addressing the WTO General Council after taking office on March 1, she said that the world has a normal capacity to produce 3.5 billion doses of vaccines and now it seeks to manufacture 10 billion doses.

“This is just very difficult, so we must focus on working with companies to open up and license more viable manufacturing sites now in emerging markets and developing countries,” Okonjo-Iweala said.

Her statement assumes significance in the wake of a joint proposal by India and South Africa, that now is supported by 57 WTO members, seeking a temporary waiver in global intellectual property agreements to ensure uninterrupted flow of vaccines amid the ongoing pandemic.

The proposal calls for a waiver for all WTO members of certain provisions of copyrights, industrial designs, patents and protection of undisclosed information in the Trade Related Intellectual Property Rights (TRIPS) agreement for prevention, containment or treatment of Covid-19.

“We have a demand for a TRIPS waiver by a growing number of developing countries and the dialogue is intensifying,” she said, adding that simultaneously focus should be on the immediate needs of poor countries that have yet to vaccinate a single person.

Okonjo-Iweala said there will soon be a world manufacturing convention wherein a dialogue and information exchange between the WTO members and representatives of manufacturers associations from developing and developed countries, can be initiated.

“This will be an interim solution whilst we continue the dialogue on the TRIPS waiver,” she said.

S&DT, new initiatives

The director-general asked the members to sharpen the approach to special and differential treatment as it crucial to the policy space of Least Developed Countries in particular.

“For the rest, let us review the work on e-commerce, investment facilitation, Services Domestic Regulation, MSMEs, Women in Trade, and Trade and Climate to see what aspects of these important work programs we can advance at MC12,”

she said.

Okonjo-Iweala suggested that three or four clear deliverables be finalised before the twelfth ministerial conference (MC12) of the WTO and work programmes for the rest to be agreed at MC12.

“I have noticed that more and more of the work and decision making that should be undertaken at the WTO is being done elsewhere because there is an increasing loss of confidence in the ability of the WTO to produce results. But there is hope. If we all accept that we can no longer do business as usual, that will help us create the parameters for success,” she said.

The WTO MC12 will take place in November in Geneva. It was originally scheduled to take place in June 2020 in Kazakhstan but was postponed due to the Covid-19 pandemic.

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Exclusive Interview: Yami Gautam opens up about an accident that left her with a permanent injury | Hindi Movie News

Exclusive Interview: Yami Gautam opens up about an accident that left her with a permanent injury | Hindi Movie News

Through all of last year, while many actors found their own path to be the fittest version of themselves, actress Yami Gautam took to practising yoga, a form of fitness that she had struggled with in the past. The reason? It’s an accident that dates back to her college days, which caused a neck injury that’s been a part of her life ever since. In August 2020, she even shared a detailed post about how she managed to overcome the odds. “This lockdown, I got to explore something which I couldn’t before! Every time I would try practising Yoga, I would be left more in pain owing to my condition, hence my experience never encouraged me to continue.. but this time, I self-tutored my way through and allowed my body to heal itself inside out and it has worked like never before! This lockdown was not about ‘looking fit’ or ‘workout of the day’ … it was the time where I listened and just went with the flow (sic),” she wrote.

The Bala actress spoke to Bombay Times about the hit-and-run accident that left her with this neck injury, which she has rarely ever spoken about. Recounting that chapter of her life, Yami says, “It happened one morning when I was heading to the university in Chandigarh. I was on the highway riding my two-wheeler when the car ahead gave the wrong signal. The driver signalled that she would be going right, but instead, turned left and knocked me down. The car sped away without stopping. It was very quick and too sudden to register what had happened. I am thankful that I was wearing my helmet. I was unable to move and could have been run over by another passing vehicle. However, a man pulled over and helped me get back on my feet.”

About the injury, she elaborates, “This accident happened during winter, and you know, up north we have to wear many layers of clothes. Thanks to the weather, I was wearing multiple layers, and thus, it saved me from any external injuries. I had no scars and bruises, however, the accident left me with an internal injury. The doctors told me it was a fracture in the neck. At that point, I realised how serious the injury was, especially when they told me that I would never be able to work out in my life. Back then, I wanted to be an IAS officer.”

Being in the profession that she is in today, which requires her to be extremely active and follow a fitness regime, the injury has resurfaced multiple times. “The minute you had to be in five-inch heels and run around too much, the pain would resurface. I obviously want to be professional, be on my toes and be able to do all kinds of activities, so through the years, I have been taking precautions to avoid a relapse,” says Yami, who utilised the time during the lockdown to practise yoga to heal the injury for a longer term. “With yoga, I am indeed getting better,” she says.

About taking to social media and opening up about the incident, Yami elaborates, “I want to tell people that they should not judge anyone on the basis of their physical appearance. Someone might appear fit, but you don’t know whether they are deficient in something. Everybody has their own battles to fight. Subjects like these are something that we are very scared of addressing. We are all apprehensive of sharing such things, but I took a step ahead. I want people to read it and connect with it. No one wants to know what is going on within, but it is fine to open up about your flaws and show that they can be worked upon.”

Given what she has experienced in the past, Yami gets worried whenever she sees someone riding a two-wheeler without a helmet. “When I was in college, a few classmates would tease me over my helmet, but I felt lucky that I had it on at the time of the accident. I always wore a helmet. Today, I see girls wearing a scarf over their heads to save their skin and hair and an oversized shirt to save their outfits from the dust while riding bikes, but come on, hair, skin, clothes are secondary — safety comes first!”

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Canadian women to conclude with toughest test as Olympic basketball schedule unveiled

Canadian women to conclude with toughest test as Olympic basketball schedule unveiled

It’s been 85 years since Canada won an Olympic basketball medal. By Aug. 7, that drought could be over.

FIBA released the basketball schedule for the Tokyo Olympics on Monday, with three Canadian women’s round-robin games set in stone: July 26 against No. 8 Serbia (4:20 a.m. ET), July 29 against No. 19 Korea (9 p.m. ET) and Aug. 1 against No. 3 Spain (9 p.m. ET).

Canada placed eighth at the 2012 Games and followed up with seventh in 2016. Now, the team’s stated goal is to reach the podium — despite having not been together in person since qualifying for Tokyo last February.

Twelve teams qualified for Tokyo, with the top eight from group play advancing to the quarter-finals on Aug. 4. The semifinals take place two days later, with the gold-medal game slated for Aug. 8 at 10:30 p.m. ET.

In the quarters, the top-four teams are placed in one group, the bottom four in another, and a random draw determines the matchups and ensuing bracket.

WATCH | North Courts: The road to Tokyo: 

Vivek Jacob, Meghan McPeak, and Jevohn Shepherd cover Canada basketball at all levels in North Courts, a truly Canadian basketball show. 14:44

Canadian men would conclude group play against U.S.

The Canadian men, meanwhile, have yet to qualify for Tokyo — their last-chance qualifier begins June 29 in Victoria, B.C., featuring five other teams including contenders like Greece and Turkey. Only the winner of that tournament will move on to the Olympics.

Should Canada, ranked 21st, claim that spot on home court, it’ll begin the tournament with a matchup against No. 23 Iran on July 25 at 9 p.m. ET. But things would only get harder from there, as No. 6 France awaits July 28 at 8 a.m. ET.

After that, Canada would get its first-ever best-on-best Olympic showdown against the U.S. on July 31 at 8 a.m. ET.

Canada’s men haven’t gone to the Olympics since 2000, when they came just five points shy of upsetting France, which would up with silver, in the quarters.

The Canadian men won the country’s lone Olympic medal at the 1936 Berlin Games when it took home bronze. That tournament was played on an outdoor dirt court, and there was no women’s equivalent.

The playoff format for the men is the same as the women’s, with the gold-medal game scheduled for Aug. 7 at 10:30 p.m. ET.

Outside of Canada, the marquee men’s game will take place on the first day of the tournament when the U.S. plays France on July 25. That game will occur three days after a possible Game 7 of the NBA Finals.

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US agents seize 277 pounds of banned bologna at Mexico border

US agents seize 277 pounds of banned bologna at Mexico border

New Mexico border officers seized 277 pounds of “prohibitedmeat at the Mexican border on Sunday.

U.S. Customs and Border Protection officers stopped a vehicle at around 6:30 p.m. at the Santa Teresa Port of Entry. A vehicle inspection revealed 30 rolls of pork bologna hidden beneath floor mats and car seats.

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