U.S. Stocks Drop on New Risks – Wall Street Journal, 1/11/2021

• A slide in shares of technology giants weighed on the broader market Monday as investors grew wary of heightened regulation tied to the market’s most enduring winners.
• Technology heavyweights underperformed the broader market as they slashed access to some of President Trump’s favorite megaphones after the storming of the Capitol by his supporters.
• The riot, planned and discussed on social media, is expected to spur Congressional efforts to regulate big tech.
• Facebook has indefinitely suspended President Trump, while Apple, Amazon.com and Alphabet’s Google slashed support for the social-media app Parler.
• Shares of Twitter fell 7.5% on concern that the social-media company may face a backlash from regulators or users after it banned Mr. Trump’s personal account, citing the risk of further incitement of violence.
• Facebook shares lost 2.8% in early trading, while Apple dropped 1.6%.
• Stocks had rallied in recent days on bets that a Democrat-controlled Congress will increase government spending, bolstering an economic recovery that stagnated recently.
• On the political front, House Speaker Nancy Pelosi (D., Calif) said the House may move to impeach President Trump as soon as this week. That is prompting concern that fresh rancor in Washington may diminish support for other important measures.
• The expectation of additional stimulus has pushed government-bond yields higher in recent days as investors bet that on an uptick in economic growth and inflation.
• There is also a growing expectation that the government will issue more notes to pay for additional stimulus.

Coronavirus Live Updates: U.S. Hospitalizations, Newly Reported Cases, Deaths Edge Downward – Wall Street Journal, 1/11/2021

• Newly reported Covid-19 cases, as well as deaths and hospitalizations related to the disease, were down from recent highs, but that doesn’t necessarily indicate a downward trend.
• The nation reported more than 213,000 new cases for Sunday, according to data compiled by Johns Hopkins University, down from 264,830 reported for Saturday and 292,521 for Friday.
• Newly reported cases each day tend to be lower at the beginning of the week and higher toward the end, as fewer people are tested on weekends.
• There were 1,814 deaths reported Sunday in the U.S., according to Johns Hopkins data.
• That was down from 3,253 reported Saturday and a high of 4,194 reported Thursday.
• But as with newly reported cases, the number of deaths reported each day tends to be lower at the beginning of the week.
• There were 129,229 people hospitalized on Sunday, according to the Covid Tracking Project, the first time since Jan. 4 that the number has been below 130,000. There were 23,625 people in intensive-care units, the lowest number since Jan. 5.
• But in especially hard-hit areas, such as Southern California, hospitals are overwhelmed. State data from Friday show 52,636 new cases, with 695 deaths—the most in a single day.
• Saturday brought 49,685 new cases and 468 deaths, bringing the total state deaths to 29,701.
• The flood of cases has pushed the hospital system in Southern California to the brink, with officials reporting 0% capacity for intensive-care units across the region.
• Los Angeles County over the weekend reported more than 100,000 new Covid-19 cases in the past week, with nearly 8,000 people hospitalized with the disease and 22% in intensive care as of Sunday.
• London Mayor Sadiq Khan warned on Friday that the capital’s hospitals risked being overwhelmed by a surge of admissions as the new variant of the virus, first detected in England, continued to spread.
• Nearly 55,000 people were reported to have been infected in the U.K. on Sunday, with more 560 deaths.
• A leading epidemiologist in France, meanwhile, said the country should assess whether to close its borders with the U.K. and Ireland to prevent the spread of the new variant.
• Japan said it found a new variant of the coronavirus in four travelers from Brazil and that the variant includes a mutation earlier seen in South Africa that may allow the virus to fight off antibodies more effectively.

Indonesia Plane Crash Search Finds Human Remains, Life Vests and Aisle Sign – Wall Street Journal, 1/11/2021

• Authorities believe they have identified the location of the two so-called black boxes of the Sriwijaya Air jet that crashed into the Java Sea carrying 62 people.
• Crews using helicopters, fixed-wing aircraft and search-and-rescue ships spent the day looking for and retrieving debris from the Boeing 737-500 that went down minutes after taking off from the capital, Jakarta, on Saturday afternoon.
• Shortly after it was airborne, it made an unexpected turn, flying northwest, prompting air-traffic control to ask the plane to report its direction, the transportation ministry said.
• Seconds later, the aircraft disappeared from the radar, at 2:40 p.m. local time.
• Sriwijaya Air Chief Executive Jefferson Irwin Jauwena on Saturday said the aircraft was in good condition when it made the flight. It was 26 years old.
• A relatively small number of Boeing 737-500s remain in operation around the world. Since 1993, there have been four other fatal crashes among the total of nearly 400 such jets Boeing delivered around the globe, according to the Aviation Safety Network, a database associated with the nonprofit Flight Safety Foundation.

Gilead raises 2020 profit forecast on remdesivir strength – Reuters, 1/11/2021

• Gilead Sciences raised its full-year profit forecast on Monday, as a recent resurgence in COVID-19 cases boosted demand for its COVID-19 treatment, remdesivir.
• Gilead said it was raising its total product sales forecast to the range of $24.30 billion to $24.35 billion, reflecting increased sales of remdesivir.
• The U.S. drugmaker expects adjusted earnings for 2020 in the range of $6.98-$7.08 per share, compared with the earlier forecast of $6.25- $6.60 per share.

Twitter shares dive 7% after Trump account suspension – Reuters, 1/11/2021

• Shares of Twitter slumped 7% on Monday, on course to knock off about $2.5 billion from the market value of the social media company after it permanently suspended the account of U.S. President Donald Trump.
• The slide came as some Republicans hit out over the weekend at the platform for gagging one of its most watched participants, with traders also pointing to signs that the affair was further fueling calls for greater regulation of Big Tech.
• Trump’s account had more than 88 million followers and had been retweeted billions of times.
• U.S. media also reported San Francisco police were bracing for a possible protest by pro-Trump supporters outside Twitter’s headquarters on Monday.

Parler Shuts Down After Amazon Kicks Site Off Its Servers – Wall Street Journal, 1/11/2021

• Social-media service Parler vanished just before midnight Sunday Pacific time, when Amazon.com followed through on its threat to stop hosting the public-messaging platform that has exploded in popularity among supporters of President Trump.
• Amazon had said in a letter to Parler over the weekend that it had seen a steady increase in violent content on the site and said Parler’s efforts to remove it were inadequate.
• Parler’s effective disappearance came shortly after Apple and Alphabet’s Google removed the Parler app for mobile devices from their app stores—making it difficult for new users to download—without shutting down the service.
• Parler Chief Executive John Matze didn’t respond to an email sent to his parler.com email address, or to a message sent via his LinkedIn profile. But he said in a post on Parler on Saturday that it was possible the service would be unavailable for as long as a week while it found new hosting services.
• “This was a coordinated attack by the tech giants to kill competition in the marketplace,” Mr. Matze wrote.

Ford, Other Auto Makers Cut Output, Idle Workers on Chip Shortage – Wall Street Journal, 1/11/2021

• A chip shortage that has disrupted vehicle production in other parts of the globe is reaching U.S. shores, stifling output for major car companies and dimming prospects for a smooth recovery from the pandemic.
• Ford Motor is planning to idle a Louisville, Ky., factory for a week starting Monday, because of parts shortages stemming from limited supplies of semiconductors now vital to everything from display screens to transmissions.
• The move will lead to the temporary layoffs of about 3,900 workers at the plant, which builds two popular SUVs, the Ford Escape and Lincoln Corsair.
• Honda Motor, Fiat Chrysler Automobiles and others are also wrestling with the shortage, leading them to reduce output on everything from big pickup trucks to compact sedans.

Money markets ramp up bets on U.S. interest rate hikes by 2023 – Reuters, 1/11/2021

• Judging by trading in U.S. money markets, investors are starting to ramp up expectations for a rise in U.S. interest rates by the second half of 2023 on the prospects of more fiscal stimulus and higher inflation.
• Eurodollar futures contracts maturing in September 2023 on Monday were pricing more than one rate hike by the U.S. Federal Reserve by then, compared with barely one increase last week.
• Those bets have gathered steam in the opening days of 2021 as the promise of more fiscal stimulus following the Georgia Senate run-off race last week sent U.S. Treasury yields soaring despite weak economic data.
• President-elect Biden has promised “trillions” in extra spending.

U.S. bank quarterly profits expected to fall again from pre-COVID levels – Reuters, 1/11/2021

• When the biggest U.S. banks begin reporting fourth-quarter results on Friday some of the headlines could show profits plunged by as much as 40% from a year earlier, before the pandemic struck.
• Analysts have been ratcheting up 2021 estimates, but as of Friday, they showed Citigroup reporting a 42% fourth-quarter profit decline and Wells Fargo & Co posting a 39% drop. Estimates for JPMorgan Chase suggest a more moderate 5% fall.
• Morgan Stanley is expected to be up 1% and Goldman Sachs is expected to show a 43% increase on the strength of share of the booming capital markets businesses.
• But investors will be focused on digging out clues to the earnings rebound expected in 2021.
• From those low points, banks could see profits more than double in first and second quarters of 2021, according to Refinitiv’s IBES estimates.
• Bank stocks have risen 35% since early November. Since then, effective COVID-19 vaccines started being distributed, Democrats took power in Washington, promising more economic stimulus, and the Federal Reserve said it would allow banks to repurchase stock again, which will increase earnings per share.