[Yahoo News/Bloomberg] Europe's vaccine blunders are alarming some of the world's top investors, who see economic growth imperiled by a slow pace of business reopenings.Vaccine issues? Vaccine rollout issues? Or reopening issues?
While the region's stocks are riding the global rally and faring well against the selloff in U.S. big tech, prolonged lockdowns threaten the economic recovery. Investors are taking notice. European equity funds have recorded three weeks of outflows, with Bank of America Corp. and BlackRock Investment Institute warning that the continued virus outbreak could hurt trading strategies in the single-currency bloc.
So the issue is lockdowns?
"The Europeans desperately need to accelerate the pace of their vaccine rollout if they want to get a handle on the virus," said Seema Shah, the London-based chief strategist at Principal Global Investors Ltd., which manages $544 billion. "Bureaucracy and confused messaging from governments has weighed on the process."
Faster vaccinations would speed up reopenings?
Principal prefers U.S. equities over Europe, citing President Joe Biden's $1.9 trillion pandemic relief bill as economic fuel. Europe's recovery fund "pales in comparison," she said.
Go Joe!
Plagued by political infighting, supply disruptions and public resistance, continental Europe is far behind in distributing the vaccine. The EU has administered 8 doses per 100 people, compared with 33 for the In the eyes of investors, that could still be too late. "These are the critical summer months," wrote Bank of America strategists including Athanasios Vamvakidis. "Losing a second tourist season is a risk for the EU."
There is some progress. In Germany, the infection rate in people over the age of 80 has plummeted by about 80% since late December as doctors prioritize giving shots to the elderly. Thanks to new supply pacts and increased production, the EU may be able to vaccinate 75% of its adult population by the end of August, about two months earlier than previously forecast, according to London-based research firm Airfinity Ltd.
August is when the Euros vacation, so that's probably toast, too.
The bank expects the euro to weaken to $1.15 by year-end from a current level of $1.19, citing "American exceptionalism" as the driving force.
American ... What?? That is so 19th century!
The U.S. is vaccinating people faster and its total fiscal support is up to six times greater than the EU's recovery fund. Plus, American shoppers have saved more money to spend after the pandemic, Bank of America strategists said.