Thought Of The Week
Fed Stays Put, Corporate Earnings Report
The Federal Reserve finished its two-day policy meeting on Thursday and expectedly did nothing on policy. Fed Chair Powell said it was not time to talk about scaling back on bond buying and acknowledged that “these one-time increases in prices are likely to have only transitory effects on inflation”. Not surprisingly, the status quo left stocks relatively flat, and the meeting was seen more as a message to market participants to sit back and observe as the economic recovery continues to unfold.
Meanwhile, investors kept themselves busy with the earnings season as more than 50% of the S&P 500 has reported. Despite the strong average earnings growth and action under the surface, that did not translate to index-level moves since expectations were already high. S&P closed flat for the week. Asian stocks retreated Friday as China’s antitrust crackdown weighed on technology firms, while Treasuries and the U.S dollar held steady.
India Overtakes As Pandemic Hotspot
Despite being home to the world’s largest vaccine manufacturer (Serum Institute of India Ltd.), India is not only running short of doses but is setting daily records for new infections as a second wave overwhelms hospitals and crematoriums.
When India launched its vaccination drive in January, the chances of success looked high as it could produce more shots than any country in the world and had decades of experience inoculating pregnant women and babies in rural areas. That initial promise has since evaporated, and the government’s plans are in disarray.
Instead of supporting vaccine production and scaling up its health system, Modi’s government was focused on making a show of India’s ability to help the world while political parties were more interested in holding mass rallies for the state elections. India’s million-strong army of trained health workers, Accredited Social Health Activists (ASHAs), was also not deployed to rural areas – the strategy that made its polio vaccination such a success, and an over-reliance on an app-based technology made it hard for its poor and rural citizens to sign up. In addition, there was no coordination on how the vaccination policy will work and now states are left to fend for themselves.
Private hospitals that started at a fixed price of $3 a dose are currently charging $8-$16, making it more costly for the remaining 98% of its 1.3 billion population to be inoculated. Former chief economic adviser, Arvind Subramanian also tweeted that “there should be one price for vaccine jabs all over India. That price should be zero.”
Chart Of The Week
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