Global Investment Outlook

Since we last published this note, our latest quarterly Global Investment Outlook has been released. You can watch video interviews, browse excerpts or read the full report. The economy-specific article begins on page 13.

Overview

Since we last published three weeks ago, positives include:

• Vaccinations are now seriously underway.
• The COVID-19 daily infection numbers appear to be stabilizing in many countries.
• The U.S. struck a major fiscal stimulus deal.
• The U.K. and European Union (EU) finally agreed upon a Brexit deal.
• The Eurozone economy appears to be recovering sooner than expected.

Conversely, negatives include:

• The recent stabilization of COVID-19 infections may be in part a function of under-testing over the holidays, and thus artificial.
• A new, more contagious variant of COVID-19 is menacing the world.
• The pace of vaccinations thus far has undershot expectations.

Virus figures

Global improvement or holiday blip?

At the global level, the number of new COVID-19 infections each day has approximately stabilized over the past month, as has the number of fatalities (see next chart).

Global COVID-19 cases and deaths

As of 01/03/2021. 7-day moving average of daily new cases and new deaths. Source: WHO, Macrobond, RBC GAM

This improvement is fairly broadly based, as demonstrated by transmission rates below one in most of the countries we track (see next chart).

Transmission rate over one means COVID-19 accelerating

As of 01/03/2021. Transmission rate calculated as a 7-day change of underlying 7-day moving average smoothed by a 14-day moving average of new daily cases. Source: ECDC, Macrobond, RBC GAM

A key question is whether these figures might be artificially depressed due to the holiday season, much as the U.S. numbers temporarily appeared to improve over Thanksgiving, before reverting to their prior trend afterward. The U.S. testing rate has indeed declined somewhat over the holidays. It is notable that non-Christian countries such as Japan and Israel have continued to deteriorate even as traditionally Christian countries have appeared to stabilize.

As such, we suspect some part of the improvement is holiday-specific. Some countries will probably suffer rising daily infection numbers over the next few weeks, both as they catch up with prior undercounting, and as holiday socializing helps the virus spread.

But we wouldn’t say that the entirety of the recent improvement is artificial. The drop in testing has not been extreme. Furthermore, there is also an improvement in emerging market countries, many of which are less oriented toward the Christmas holidays (see next chart). The fact that some countries are reporting that fatalities have stopped rising is less obviously skewed by the holidays.

COVID-19 EM v. DM infections

As of 01/03/2021. Calculated as the 7-day moving average of daily infections. Source: WHO, Macrobond, RBC GAM

Finally, we note that our (new!) measure of global stringency shows that the world’s nations are continuing to incrementally tighten their rules, albeit still not to the restrictiveness of last spring (see next chart). Our lockdown severity metric for several developed countries shows a significant decline in mobility, which could explain much of the stabilization in infection numbers (see subsequent chart).

Global Stringency Index

As of 01/04/2021. Global Stringency Index measuring the strictness of lockdown policies that restrict mobility, calculated as stringency index of 50 largest economies. Sources: University of Oxford, IMF, Macrobond, RBC GAM

Severity of lockdown varies by country

Based on latest data available as of 12/27/2020. Deviation from baseline, normalised to U.S. and smoothed with a 7-day moving average. Source: Google, University of Oxford, Macrobond, RBC GAM

Comparing apples with apples

It is useful to regularly review the severity of COVID-19 through a different lens: the rate of infection, after adjusting for different national populations (see next chart). Everyone knows that the U.S. has more infections than any other country, but how does it stack up when its relatively greater population is adjusted for?

The main conclusions: the U.S. has spent most of the pandemic period with the most new infections on a per capita basis. Several European nations temporarily claimed that mantle over the fall – first Spain, then France, then Italy. But the U.S. is now back to the most infections, though it has yet to suffer as many as France briefly encountered in October and November. Throughout, Canada has sailed along at the bottom of the list.

COVID-19 cases on a population adjusted basis

As of 12/14/2020. 7-day moving average of daily new cases per one million residents. Source: ECDC, Macrobond, RBC GAM

Canada tentatively stabilizes

As with many developed countries, Canada appears to have stabilized over the past month (see next chart). Some part of this may be a holiday lull. But while Ontario and Quebec are still setting records, Alberta and British Columbia are actively improving. This suggests that it is not merely a holiday phenomenon. It is promising that both Ontario and Quebec further tightened their rules in December, but Quebec’s changes were now a full month ago, suggesting they have not sufficed. Ontario’s big change was roughly two weeks ago, so could yet turn the tide. However, the fact that no tightening occurred in the parts of the province with the biggest problems is not promising.

COVID-19 cases and deaths in Canada

As of 01/03/2021. 7-day moving average of daily new cases and new deaths. Source: WHO, Macrobond, RBC GAM

United Kingdom still deteriorates

The U.K. is struggling greatly, setting new daily infection records and experiencing a rising fatality rate once again (see next chart). This is disappointing given that three-quarters of the country are now under the strictest of four lockdown levels. A new tier of restrictions appears necessary. A central problem is that a new strain of the virus has taken hold in the U.K., and it may be significantly more transmittable – a subject discussed later in this report.

COVID-19 cases and deaths in the U.K.

As of 01/03/2021. 7-day moving average of daily new cases and deaths. Source: WHO, Macrobond, RBC GAM

It is notable that South Africa – the other country inundated by a new strain of the virus – is also experiencing surging infections and fatalities (see next chart). The experience of the U.K. and South Africa hint at what other countries may experience if this strain becomes more widespread.

COVID-19 cases and deaths in South Africa

As of 01/03/2021. 7-day moving average of daily new cases and new deaths. Source: WHO, Macrobond, RBC GAM

Europe stable

Europe’s COVID-19 numbers – briefly the worst in the world – remain fairly steady. France is no longer improving, but neither is it deteriorating (see next chart).

COVID-19 cases and deaths in France

As of 01/03/2021. 7-day moving average of daily new cases and new deaths. Source: WHO, Macrobond, RBC GAM

Germany – long one of Europe’s best performers – is now struggling more than most, but finally appears to be on a substantially improving trend after it again tightened its restrictions in mid-December (see next chart).

COVID-19 cases and deaths in Germany

As of 01/03/2021. 7-day moving average of daily new cases and new deaths. Source: WHO, Macrobond, RBC GAM

U.S. may be bouncing

Thirty-four states significantly tightened their restrictions in November or December. Nevertheless, the sheer number of new infections remains mind-boggling – still at or above 200,000 daily. In addition, a temporary decline in infections during the holidays now appears to be reversing (see next chart).

COVID-19 cases and deaths in the U.S.

As of 01/03/2021. 7-day moving average of daily new cases and new deaths. Source: WHO, Macrobond, RBC GAM

While not a brand new development, significant numbers of infections are being reported in nearly every state in this wave. For instance, whereas New York learned hard lessons in the first wave such that it was able to skip the second wave altogether, it has nevertheless been significantly caught up in this third wave (see next chart).

COVID-19 new cases in the State of New York

As of 01/03/2021. 7-day moving average of daily new cases used as trend line. Positive rate calculated as 3-day moving average of new cases/new tests. Source: The COVID Tracking Project, Macrobond, RBC GAM

Virus science

New mutation

A key piece of bad news over the past month is that a significant new variant of COVID-19 has been detected in the U.K. and now represents about 60% of the country’s active cases. The same variant has now been found in other counties, albeit to a more limited extent.

Preliminary analysis argues that the new mutation is 56% more contagious. This is consistent with the observation that the U.K. has suffered a particularly severe recent acceleration in its infections. Epidemiological data suggests that children may be more susceptible to infection from the mutated version than from the original. This bad scientific news may help to explain the recent retreat in the news sentiment index that we track (see next chart). Fortunately, it doesn’t appear that the new strain is any more deadly.

Daily News Sentiment Index in the time of COVID-19

As of 12/27/2020. Source: Federal Reserve Bank of San Francisco, Macrobond, RBC GAM

We were initially suspicious that this new mutation might have gone undetected and could perhaps explain why the second wave of the virus has been so challenging to control over the entirety of the fall. Yet there are too few such cases being detected outside the U.K. to make this a plausible explanation.

South Africa’s problematic new strain appears to have arisen independently, but contains a similar mutation. This argues that the new form enjoys a genuine advantage in how it attaches to cells.

Fortunately, vaccine makers are confident that their vaccines will succeed in quelling all variations of the virus. In a worst-case scenario requiring a new vaccine, one manufacturer indicated this could be developed in just six weeks (though one wonders about the timing of testing).

Vaccinations

Vaccine development news

The U.K. recently approved the Oxford-AstraZeneca vaccine, making it the third developed-world vaccine to receive emergency usage approval. Recall that the Oxford vaccine has a lower efficacy rate than the others (62%). But it is much cheaper, has less challenging storage requirements, and can be produced in far greater numbers.

Additionally, China’s Sinopharm has now been granted commercial approval for the use of its vaccine within China. The vaccine enjoys a 79% efficacy rate (for context, Moderna and Pfizer have reported efficacy rates of 95%). Sinopharm and another Chinese vaccine have been in emergency usage since last summer, reportedly inoculating millions of Chinese citizens.

China has already inoculated a further 73,000 people in the two days since commercial approval was granted to Sinopharm. The target is to inoculate 50 million people over the first month alone. The timing is of particular urgency given the approach of Chinese New Year on February 12 and the mass travel and socializing that occurs around that date.

Vaccine nationalism

Countries continue to jockey for preferential access to vaccines. While vaccine makers appear to be distributing their vaccines on a reasonably fair basis, factoring in such variables as order size, order date and perhaps the population of each country, there remains the distinct concern that some countries will bully their way to the front of the line. After all, there is little stopping a country that physically manufactures vaccines from preventing their export until the domestic population has been inoculated.

For this reason, some vaccine makers concentrate their manufacturing efforts in small countries that can easily be sated, releasing the remaining supply more quickly to the rest of the world.

Nevertheless, India makes around 60% of the vaccines used in the developing world. It now appears to be venturing into vaccine nationalism. The country just announced it will not permit the export of the Oxford/AstraZeneca vaccine for several months despite contracts to that effect, preferring to inoculate its own citizens. As such, the remainder of the world’s developing nations will have to wait for the billion doses India has been contracted to manufacture. There is a chance that other countries with manufacturing facilities will do something similar. However, the fact that so many doses have already crossed borders suggests that most other countries are not actually pursuing this tactic.

Vaccine distribution

Recriminations have already begun as many of the vaccines manufactured so far have sat on shelves rather than been immediately deployed. Logistical issues have apparently been challenging, and some jurisdictions opted to pause over the holidays. The vaccines require two inoculations, and many jurisdictions initially held back half of their supply to be sure that they could complete the necessary protocol a month later. Most have since backtracked, opting to use as many doses as possible now, trusting that manufacturers will resupply them.

Whereas the U.S. had originally targeted 20 million vaccinations in December, the actual number achieved was just 3 million, despite having a supply of 12 million doses. As such, it would appear that reality undershot expectations in both relevant regards:

• the actual supply was smaller than expected, and
• the ability to deploy the supply was also worse than expected.

While we are ultimately fairly optimistic with regard to the rate at which vaccinations can occur and the extent to which the world can subsequently normalize, government forecasts have tended to be too optimistic. For example:

• The U.S. has since increased its tally to 4.2 million inoculations as of January 4. This amounts to 1.3% of the country’s population.
• The U.K. is at a similar point, with 1.4% of the country inoculated.
• Canada lags these nations notably, at 0.3%, leaving it roughly in line with Germany and China.
• France has so far been an embarrassment, with a 0.0% rate that corresponds to just 516 inoculations.

Israel easily leads the way by this measure, with a remarkable 14.1% of its population already inoculated, including more than half of those deemed to be at a high risk. Its success has been attributed to its small, dense population and to a highly digital health care system that aids in the logistics of selecting candidates. It would seem that the country also managed to secure an enormous initial vaccine shipment relative to its population, as most countries would be well short of a 14.1% rate even if they had deployed all of their available supply. That said, Israel is apparently inoculating people so fast that it is likely to run out of supply and so slow its progress.

Be warned that the statistics for all countries are likely to become blurry over the next month as people begin to receive their second inoculation. Each such event will be counted as a second inoculation. Theoretically, then, this double-counting means that countries should be aspiring to inoculation rates that are above 120% (meaning more than 60% of the population has been inoculated).

Much may change in these national rankings over the coming month. Countries that were slow to begin may ultimately prove capable of inoculating quickly once their systems are properly set up. And others, like Israel, may slow significantly as they encounter supply constraints.

Rate of normalization

A central goal of vaccinating people is to achieve herd immunity. This is the point at which a sufficient share of the population is protected from the virus (perhaps 60% to 70%). Each sick person infects less than one other person and the pandemic grinds to a halt.

Forty-three percent of forecasters believe 200 million Americans will be inoculated by the middle of 2021. This represents 61% of the population, and an even larger fraction of those eligible for the vaccine (given that children are presently excluded from inoculations). A further 52% of forecasters expect this milestone to be reached by the end of the third quarter of 2021. As such, something approaching herd immunity is not unreasonable over the summer in the U.S.

There are some predictions that the U.S. will achieve herd immunity well in advance of other countries. However, it isn’t clear why this would be the case, given that:

• the U.S. is not particularly notable in the number of doses it has ordered on a per capita basis, and
• the current distribution plans of vaccine manufacturers.

As such, we assume most developed countries will reach the herd immunity finish line within a few months of one another. Each incremental step along the journey toward herd immunity is also useful in its own right.

Round one: fatalities fall

Because seniors and other high-risk groups are being inoculated first, COVID-19 fatalities should peak long before COVID-19 infections do. Remarkably, the average age of death from COVID-19 is over 80, and just 3.9% of Americans are aged 80 or older. Inoculating this tiny group would go a long way toward minimizing deaths.

In fact, only 15% of the population is aged 65-plus, and this group is collectively responsible for 80% of all U.S. COVID-19 deaths. A fairly expansive definition of “high risk” might amount to 25% of the population – making for a longer journey – but nevertheless emphasizes that the virus should become much less problematic long before it disappears.

This group may well be inoculated before the end of February, and in turn the fatality rate could fall by a factor of five or more and the hospitalization rate should also fall significantly. However, the infection rate probably won’t change that much and the economy won’t get to revive by much.

Round two: transmission falls

The second round of inoculations – loosely, for those who are front-line workers in a non-medical capacity or have living arrangements that preclude social distancing – should be the round that substantially reduces the number of new infections and hospitalizations. This is the group disproportionately passing the virus to one another: workers in warehouses, factories, farms, food processing facilities, and so on. This group is of unclear size but is likely larger than the first group.

Some have argued that a more efficient approach would be to target high mobility people first, regardless of their employment or living situation – conceivably measuring this via cell phone activity – but that would reward people who have been violating social distancing orders and also violate privacy laws. The idea has largely been dismissed.

This cohort can be inoculated by the end of April, or thereabouts. After that, the rate of transmission – all else equal – should be considerably lower. It is hard to speak with precision as governments will no doubt be re-opening activities such that the transmission rate may not actually fall. But it would have fallen without the offsetting measures. The economy should enjoy a boost from this achievement.

Round three: life returns to normal

That leaves the third and final round of people to be inoculated – those who are young, healthy and disproportionately working remotely.

This large final group will presumably take several months or longer to inoculate – hence the aforementioned forecasts that the majority of the population will be inoculated by the summer. This group doesn’t really move the needle on fatalities or infections. But they will be able to live life more normally afterward, government restrictions can ease further, and economic activity can revive further.

Economic developments

Gauging European damage

We have been watching the European economy with particular interest to better understand how much damage the region’s substantial COVID-19 lockdowns inflicted. The official answer still won’t be known for a few more months given that traditional data is released with a lag. But we have been pleasantly surprised by the leading indicators so far.

The Eurozone Services Business Activity Index for December has now been released and shows a modest revival off November lows (see next chart). Furthermore, the November lows weren’t particularly low when compared to the spring of 2020. As a result, we are gaining confidence in our view that while Eurozone GDP may have declined in the fourth quarter, this decrease was likely only slight. The U.K. Services Purchasing Managers’ Index (PMI) also managed to rise in December despite an ongoing lockdown there.

Services sector in Eurozone hit less severely during second wave 

As of Dec 2020. Source: Markit, Haver Analytics, RBC GAM

Watching for North American damage

We expect any economic damage from the latest round of restrictions to be notably milder in North America than in Europe. However, it is nevertheless an open question as to how much damage will occur.

Real-time indicators suggest some suffering is occurring in the U.S. For instance, our real-time Economic Activity Index has been in modest decline since November (see next chart).

U.S. economic activity has shifted to low gear

As of 12/26/2020. Economic Activity Index is the average of 10 high-frequency economic data series measuring the year-over-year percentage change. Source: Bank of America, Goldman Sachs, OpenTable, Macrobond, RBC GAM

A survey of U.S. business orders and sales retreated slightly in December, remaining roughly flat over the past five months (see next chart).

New orders and sales of U.S. businesses hammered by COVID-19

As of Dec 2020. Estimated as weighted average of % change in new orders or sales for all respondents. Surveys conducted weekly before October 2020. Source: COVID-19 Business Outlook Survey, Federal Reserve Bank of Philadelphia, RBC GAM

The number of hours worked by hourly workers in the U.S. appears to be collapsing. However, we believe most of this to be a function of Christmas distortions. The true trend to watch is the gradual decline between the holiday punctuation marks.

Percentage change of hours worked by hourly workers in the U.S.

As of 12/29/2020. Impact compares hours worked in a day vs. median for the same day of the week in January 2020. 7-day moving average used. Source: Homebase, RBC GAM

Some traditional economic indicators also point to U.S. economic weakness:

• U.S. personal income fell 1.1% in November and personal spending declined by 0.4%.
• November new home sales dropped 11% relative to the prior month.
• The December survey of the National Association of Home Builders descended from an unheard-of 90 to a still-great 85.
• The two main U.S. consumer confidence measures both retreated moderately in December. The composite Markit PMI for the U.S. fell from an excellent 58.7 to a good 55.7.

It would thus appear that the U.S. economy has at least decelerated. It may have been in slight decline in November and December. But we cannot say this with certainty, especially since the Markit PMI remains well above the 50 threshold. While jobless claims are no longer advancing as before, the spike from a few weeks ago has since been largely reversed (see next chart). Furthermore, core capital goods orders managed to squeak higher in November.

U.S. jobless claims no longer improving

As of the week ending 12/26/2020. Shaded area represents recession. Source: DOL, Haver Analytics, RBC GAM

Real-time indicators are similarly equivocal. For every decline in hours worked or stagnation in reported sales, there is a New York Fed Weekly Economic Index that continues to happily ascend (see next chart), or a Redbook Retail Sales measure that claims a notable revival (see subsequent chart).

United States, Federal Reserve Bank of New York, Weekly Economic Index

For the week ended 12/26/2020. Source: Federal Reserve Bank of New York, Macrobond, RBC GAM

U.S. retail sales improving though department stores still lag

As of the week of 12/26/2020. Department stores series includes traditional department stores and a small percentage of apparel stores. Shades area represents recession. Source: Redbook Research, Haver Analytics, RBC GAM

Canadian data holds up

Canadian economic data tends to be released with a greater lag than in the U.S. It is no great surprise that the country managed to grow way back in October. But it is nevertheless a welcome development, as confirmed by increases in the official readings for GDP, retail sales, manufacturing and wholesale trade. It would appear that the country’s housing market remains red hot, with November housing starts up from 215K to a big 246K on an annualized basis. Finally, the Canadian Federation of Independent Business (CFIB) indicator of small business sentiment rose unexpectedly in December from 55.7 to 58.2. This is scant information to go on, and we are still suspicious that the U.S. and Canadian economies may not have grown in December in particular. But Canada’s recent data has been more good than bad.

U.S. political news

Fiscal stimulus delivered
With mounting expectations pitted against diminishing time, the U.S. signed into law a new fiscal package on December 27. The timing was tight, as a number of stimulus programs had been set to expire at the end of the year, and the U.S. needed a budget to avoid a government shutdown.

The new fiscal stimulus package costs a whopping $900 billion, including:

• a $600 cheque to every American (phased out at higher income levels)
• an extra $300 per week for unemployment insurance recipients
• forgivable loans to small businesses
• extended business tax credits.

The package also delivers major spending for child care, schools, testing and tracing, vaccines, airlines, small banks, entertainment venues, farmers, transit systems, and the U.S. postal service.

Most of the money is expected to be delivered over the first four months of 2021. At roughly 4% of GDP, this should provide considerable economic support, helping to bridge the gap between now – when significant economic restrictions are in place in an effort to control the pandemic – and the spring, when the virus should be in serious retreat after a large fraction of Americans have been inoculated via vaccine. We would still flag the potential for the incoming Biden administration to deliver more fiscal stimulus. But much depends on whether the Democrats manage to win the Senate this week (discussed in the next section).

Trump’s $2,000

President Trump pushed for the $600 cheques to be increased to $2,000, and received Democratic Party support for the proposal. However, the Republican-led Senate was not persuaded, so this initiative appears dead for the moment. The extra money would undeniably boost the economy. However, it would likely be an inefficient use of financial resources to the extent that most recipients remain gainfully employed and would probably opt to save rather than spend the money.

Military funding

In an unusual act, President Trump opted to veto defense spending legislation that had already been passed by both chambers of Congress. His objections related to:

• the rate at which the military is withdrawing troops from conflict zones
• the proposed renaming of Confederate monuments on military bases
• the nature of free speech protection enjoyed by social media companies.

But a bipartisan vote of 80 to 12 in the Senate ultimately overcame his veto and shepherded the legislation into law.

New Congress

The new U.S. Congress was sworn in on January 3, with President-elect Biden scheduled to take control on January 20.

Senate run-offs

Two U.S. Senate run-off elections are scheduled for January 5. The two races have narrowed considerably over the past few months. At present, betting markets point to just a 53% chance that the Republicans hang onto the Senate – meaning that they win at least one of the two run-off elections. The Democratic Party candidates are now actually the slight favorites in both races. But the party must win both to take control of the Senate, hence the lower overall probability.

It is unclear how financial markets would take a Democratic Senate. It would fulfill the widespread expectation of a “Blue Wave” at the time of the November 3 elections, but nevertheless deviate from expectations over the intervening two months.

A Blue Wave, albeit one with a razor-thin margin of victory in the Senate, would allow Democrats much greater control over judicial and administrative appointments. It would also permit the possibility of limited legislation. It might also push Biden significantly further to the left from a political vantage point, as Democrat voters would expect significant action given the rare political alignment across the Senate, House of Representatives and White House.

From an economic standpoint, one might expect additional fiscal stimulus (positive). However, it would also raise the possibility of tax increases and greater regulation (negative), including more aggressive anti-trust efforts against tech giants.

From a stock market perspective, it is a tough call. Historically, businesses have been fairly happy to operate with a divided Congress, as this limits the extreme tendencies of either party. As such, a Democratic Party sweep might be a bad thing. However, leading up to the election the stock market seemed fairly pleased with the idea of major fiscal stimulus coming from such a configuration. To the extent that a sizeable fiscal package has already been delivered, we suspect a Democrat sweep would now be viewed moderately negatively by the stock market. By extension, it might push bond yields up by less than one would have otherwise imagined.

Finally, a Brexit deal

In a similar fashion to the U.S. fiscal package, a Brexit deal was happily struck at nearly the last possible moment, on Christmas Eve. Key disagreements with regard to fisheries and competition policy were resolved in the 1,200 page document, and the U.K. and EU now have an agreement that eliminates tariffs on the exchange of goods. Altogether, we would describe it as a limited free-trade deal. British parliament voted 521 to 73 in favour of the new deal. It will now take some time for the deal to wend its way through the many European parliaments.

What changed as of January 1 now that the transition arrangement of 2020 has expired?

• Workers and people can no longer opt to live in the other jurisdiction.
• Service sector transactions between the two parties will now be subject to tariffs and restrictions.
• There will be something of a customs border between Northern Ireland and the rest of the U.K. in the Irish Sea.
• The U.K. is no longer bound by European legislation.

The list goes on, but those are some of the larger ones from an economic perspective.

While some hiccups were reported at ports at the start of 2021, the new era of customs processing has so far gone surprisingly smoothly.

Citi estimates economic damage to the U.K. from the new arrangement at 2% of GDP in 2021 alone. We wonder if it might be somewhat smaller given the long period of anticipation over the past four years since the vote. Over the long run, the U.K Treasury has estimated that a limited free-trade deal such as the one just struck will reduce the size of the country’s economy by 6.7% over the span of 15 years, with much of this coming from diminished immigration.

Brexit also leaves serious fractures within the U.K. For example, Scotland continues to call for another independence referendum, though fascinatingly polls now suggest that more than 50% of Scots have come around to supporting Brexit. Wales and Northern Ireland are also not pleased.

Finally, we should expect the U.K. and the EU to remain hard at work seeking to strike a deal on the exchange of services, including financial services. This remains the glaring omission in the original deal, and the source of much of the expected economic damage.

-With contributions from Vivien Lee and Kiki Oyerinde