Daily Brief: Just Vaccinate The World And Inflation Should Go Back To Normal, Says The OECD

Daily Brief: Just Vaccinate The World And Inflation Should Go Back To Normal, Says The OECD

about 2 years ago3 mins

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The OECD upped its inflation forecast for 2022 on Wednesday, but the economic organization thinks there’s a simple thing we can do to fix things: just vaccinate the whole planet.

What does this mean?

There’s good news and bad news. Good news: the OECD admitted that the economic recovery had been much stronger than it anticipated this year. Bad news: the organization reckons the inflation rate across 20 of the biggest economies will hit 4.4% in 2022 – up from its September forecast of 3.9%. And here’s some more bad news for good measure: the OECD said the new Omicron variant might just exacerbate matters, threatening the global recovery even more.

OECD inflation

Why should I care?

The bigger picture: Didn’t your parents teach you to share?

The best way to keep the global recovery on track, the OECD argues, is pretty straightforward: get vaccines in arms around the world. After all, there’s a growing gap in economic growth between rich countries that have comprehensive access to vaccines and the poor ones that don’t. But there’s hope yet: the organization said on Wednesday that it could cost as little as $50 billion to vaccinate the whole world – a drop in the ocean when you consider the $10 trillion that the world’s 20 biggest economies have spent offsetting the pandemic’s impact.

Zooming out: The Fed holds its hands up.

The OECD’s US inflation forecast for 2022 was one of the biggest jumps from September, going from 3.1% to 4.4%. Fitting, then, that the Federal Reserve finally admitted earlier this week that higher prices could be around for longer than it thought. That might be why it’s thinking about fully winding down its bond-buying economic support program a few months earlier than it had been planning, in a move that should push up the cost of borrowing and deter spending.

Vaccinations

Keep reading for our next story...

Salesforce Reported Better-Than-Expected Earnings

Salesforce image

Salesforce reported better-than-expected earnings earlier in the week, so now the Slack-owner can get back to doing what it does best: speculating baselessly about its colleagues’ lives.

What does this mean?

Turns out the world’s still crazy for cloud-based software solutions, even now that workers have started heading back into offices. Just look at Salesforce: revenue from its main product – a tool that helps salespeople track leads – was 17% higher last quarter than the same time last year, while revenue from its cloud customer support platform grew 20%. The software company might be glad it bought Slack in July too: the number of customers spending over $100,000 on the platform jumped 44%.

Salesforce earnings
Source: The Wall Street Journal, Salesforce

All in, Salesforce’s total revenue was up by a better-than-expected 27% last quarter. But it wasn’t all good news: the company seems worried that Covid flare-ups might lead cautious customers to wind back their spending, which might be why its profit outlook for this quarter came in worse than expected.

Why should I care?

For markets: Expectations are getting harder to hit.

Investors sent Salesforce's stock down 6% after the update, but it’s not the only corporate software maker that’s been struggling to meet their ambitious growth expectations. In fact, data from JMP Securities showed that only 5 of the 35 tracked business software companies saw their share prices rise after they reported their latest quarterly results. And since those same stocks have fallen 13% on average since their updates, Salesforce’s 6% drop-off could be just the start...

Salesforce stock
Source: Google Finance

Zooming out: Goldman baits its line.

That hasn’t put Goldman Sachs off, mind you: the investment bank announced plans earlier this week to launch its own cloud software business, offering clients access to its market data and software tools. Goldman – which is working with Amazon on the project – is hoping it’ll help institutions save time on trend analysis and more, and ultimately attract more clients to take up its services.

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