Daily Market Report | Jan. 14, 2021
Stocks Climb Ahead of Biden’s Stimulus Speech – Wall Street Journal, 1/14/2021
- U.S. stocks climbed Thursday as investors awaited details of the incoming Biden administration’s plans for a fresh coronavirus relief package.
- President-elect Joe Biden is expected later Thursday to unveil details on his proposed spending package to support households and businesses. Many investors are counting on additional stimulus to help the economy recoup wide-ranging losses stemming from the coronavirus pandemic and restrictions put in place to fight it.
- Jobless claims data Thursday showed that 965,000 people applied for unemployment insurance in the week ended Jan. 9, more than economists had expected.
- Among individual stocks, Delta Air Lines rose 2.7% after it said it ended 2020 at a loss but expected to have access to up to $19 billion of liquidity in the first quarter.
- Tesla shares slipped 1.3% after regulators asked the car maker to recall about 158,000 vehicles over safety concerns.
- Among major European shares, Fiat Chrysler led decliners, falling 9.4% ahead of the distribution of a special dividend.
- China’s biggest tech companies climbed after The Wall Street Journal reported that the U.S. is expected to let Americans continue to invest in them, after weighing a ban. Alibaba gained 5% and Tencent Holdings climbed 5.6%.
- Newly reported coronavirus cases in the U.S. remained above 200,000 for the ninth day in a row, while hospitals continued to see large numbers of Covid-19 patients.
- The U.S. reported more than 224,000 new coronavirus cases for Wednesday, according to data compiled by Johns Hopkins University. The nation’s death toll grew by more than 3,800 Wednesday, lower than the record of more than 4,000 fatalities the previous day, but still higher than daily levels recorded last year.
- Hospitalizations due to the disease topped 130,000 Wednesday for the second consecutive day, while 23,877 patients required treatment in intensive-care units, according to the Covid Tracking Project.
- Italy late Wednesday extended a state of emergency imposed since the beginning of the pandemic until the end of April, as infections continue to spread across the country.
- At the same time, it also expanded a number of existing restrictions to curb the pandemic. Non-essential travel across regions is banned until mid-February.
- Spain reported a record 39,000 new infections on Wednesday, as people’s activity and gatherings during the Christmas holiday season appeared to have taken a toll.
- Some Spanish officials are also blaming the circulation of a new strain of coronavirus that first emerged in the U.K. months ago and appears to be spreading more rapidly.
- Germany on Wednesday recorded 1,244 Covid-19-related deaths, according to the Robert Koch Institute for infectious diseases, an all-time record, bringing the total number of fatalities to 43,881. The country also registered 25,164 new infections on the day, little change from a week ago.
- China’s most severe coronavirus outbreak in months is worsening, as authorities race to contain infections before the travel-heavy Lunar New Year holidays next month.
- Chinese health authorities reported 124 locally transmitted symptomatic cases for Wednesday, with 81 in the northern province of Hebei, which surrounds Beijing, and 43 in northeastern Heilongjiang province.
- One death was reported in Hebei, the first coronavirus death in China in 242 days, according to Chinese state media.
- In the Hebei cities of Langfang, Shijiazhuang and Xingtai, authorities have reintroduced lockdowns and are carrying out mass-testing campaigns, seeking to curb the rapidly developing outbreak, in which hundreds of infections have been reported since early January.
- The government of Heilongjiang declared a state of emergency this week after new infections emerged and spread to neighboring Jilin province and Shandong province.
- BlackRock’s quarterly profit rose 19% as investors turned to the money-management giant’s funds through election uncertainty, vaccine breakthroughs and a year-end rally.
- The investment company posted fourth-quarter profit of $1.5 billion, or $10.02 a share, up from $1.3 billion, or $8.29 a share, a year earlier. BlackRock’s revenue rose 13% to about $4.5 billion in the final three months of 2020.
- The company brought in $126.9 billion in new investor money, down slightly from $128.8 billion in the year-earlier quarter.
- The firm hit a new milestone of $8.68 trillion in assets under management.
- BlackRock’s iShares funds that trade on exchanges and mirror markets took in $79 billion in new flows in the fourth quarter, up from $75.2 billion in the year earlier period.
Delta Looks Toward Recovery After Dark Pandemic Winter – Wall Street Journal, 1/14/2021
- Delta Air Lines said it is hunkering down for a long, dark winter as the coronavirus pandemic drags on but still expects air-travel demand to turn a corner this year.
- Delta on Thursday reported a net loss of $755 million for the fourth quarter, compared with a profit of $1.1 billion in the same period a year earlier.
- That brought the airline’s 2020 losses to nearly $12.4 billion, making it the company’s worst year ever and marking its first annual loss since 2009.
- In the first quarter, Delta still anticipates revenue will be down as much as 65% from pre-pandemic levels.
- Delta President Glen Hauenstein said in a statement that the airline believes 2021 will come in three phases: a first few months characterized by choppy demand recovery, followed by an inflection point.
Cisco Agrees to New Deal to Buy Acacia for $115 a Share – Wall Street Journal, 1/14/2021
- Cisco Systems on Thursday said it has struck a new deal to buy Acacia Communications, boosting the purchase price by 64%.
- Networking-equipment giant Cisco said it would now pay $115 a share for Acacia in a deal that values the Maynard, Mass.-based maker of optical interconnect technologies at about $4.5 billion on a fully diluted basis.
- San Jose-based Cisco in 2019 agreed to pay $70 a share for Acacia, which last week moved to terminate the deal, claiming that Cisco hadn’t received timely approval from Chinese regulatory authorities.
- Cisco said it expects to complete the acquisition of Acacia by the end of the first calendar quarter.
- The U.S. government is expected to let Americans continue to invest in Chinese technology giants Alibaba, Tencent and Baidu, after weighing the firms’ alleged ties to China’s military against the potential economic impact of banning them.
- The U.S. no longer plans to add the three firms, which have about $1.4 trillion in combined market capitalization, to the list.
- Nine other Chinese companies will be added, as well as more than 100 subsidiaries of companies already on the list, the people said.
- The decision caps off a weekslong battle that pit Treasury officials, who feared widespread selloffs and economic fallout, against State Department and Pentagon officials seeking a tougher line against Beijing.
- In the end, Treasury Secretary Steven Mnuchin prevailed.
- Global appetite for oil will remain subdued in the first quarter of 2021 due to coronavirus lockdown measures and rising infection rates, the Organization of the Petroleum Exporting Countries said Thursday.
- In its monthly report, OPEC maintained its forecast that world oil demand in 2021 won’t recover to the levels seen before the pandemic.
- Global demand took a 10% hit last year and the cartel expects it to rebound to 95.9 million barrels a day this year, but remain 4% below 2019 levels.
- While OPEC left its non-cartel supply forecast for the year unchanged in its January report, it expects stronger production forecasts for the U.S. this year to be counterbalanced by weaker output from Russia, resulting in non-OPEC production growth of 800,000 barrels a day in 2021.
Car-Safety Regulators Urge Tesla to Recall Around 158,000 Vehicles – Wall Street Journal, 1/14/2021
- Federal regulators are asking Tesla to recall about 158,000 vehicles over safety concerns in what would amount to one of the biggest safety actions by the electric-vehicle maker.
- The National Highway Traffic Safety Administration asked Tesla in a Jan. 13 letter to recall some Model S luxury sedans and Model X sport-utility vehicles.
- NHTSA asked for the recall because the cars’ touch screens can fail after a few years of use, affecting safety functions such as defogging and back-up cameras.
- Tesla doesn’t have to recall the vehicles, though NHTSA said in the letter that if the car maker doesn’t take the action it has to provide an explanation for its decision.
- The agency can then escalate the matter to a public hearing and eventually seek to force a recall through the courts.
- Social media platform Parler, which has gone dark after being cut off by major service providers that accused the app of failing to police violent content, may never get back online, said its CEO John Matze.
- As a procession of business vendors severed ties with the two-year-old site following the storming of the U.S. Capitol last week, Matze said in an interview with Reuters on Wednesday that he does not know when or if it will return.
- “It could be never,” he said. “We don’t know yet.”
- Matze said that Parler was talking to more than one cloud computing service but refused to disclose names, citing the likelihood of harassment for the companies involved. He said the best thing would be if Parler could get back on Amazon.com.
- Parler, which claims it had over 12 million users, on Monday filed a lawsuit against Amazon’s cloud computing division.
US ECONOMY & POLITICS
COVID-19, renewed benefits boost U.S. weekly jobless claims – Reuters, 1/14/2021
- The number of Americans filing first-time applications for unemployment benefits surged last week, confirming a weakening in labor market conditions as a worsening COVID-19 pandemic disrupts operations at restaurants and other businesses.
- Initial claims for state unemployment benefits increased 181,000 to a seasonally adjusted 965,000 for the week ended Jan. 9, the highest since late August. Economists polled by Reuters had forecast 795,000 applications in the latest week.
- Unadjusted claims shot up 231,335 to 1.151 million last week. Economists prefer the unadjusted number because of earlier difficulties adjusting the claims data for seasonal fluctuations due to the economic shock caused by the pandemic.
- Including a government-funded program for the self-employed, gig workers and others who do not qualify for the regular state unemployment programs 1.4 million people filed claims last week.
- The claims report showed the number of people receiving benefits after an initial week of aid increased 199,000 to 5.271 million during the week ending Jan. 2. At least 18.4 million were on unemployment benefits on all programs in late December.
U.S import prices accelerate on higher energy costs – Reuters, 1/14/2021
- U.S. import prices increased more than expected in December, boosted by higher prices for energy products and a weak dollar, suggesting inflation could pick up in the near term.
- The Labor Department said on Thursday import prices jumped 0.9% last month after rising 0.2% in November.
- Economists polled by Reuters had forecast import prices, which exclude tariffs, accelerating 0.7% in December.
- In the 12 months through December, import prices slipped 0.3% after dropping 1.0% in November.
- The report also showed export prices surged 1.1% in December rising 0.7% in November. Prices for agricultural exports increased 0.6% while nonagricultural exports jumped 1.3%. Export prices rose 0.2% on a year-on-year basis in December.
Biden to unveil plan to pump $1.5 trillion into pandemic-hit economy – Reuters, 1/14/2021
- President-elect Joe Biden will unveil a stimulus package proposal on Thursday designed to jump-start the economy during the coronavirus pandemic with an economic lifeline that could exceed $1.5 trillion and help minority communities.
- The stimulus package has a price tag above $1.5 trillion and includes a commitment for $1,400 stimulus checks, according to a source familiar with the proposal, and Biden is expected to commit to partner with private companies to increase the number of Americans getting vaccinated.
- Biden plans to introduce his package during a prime-time address on Thursday evening, underscoring the seriousness of the topic, but he will have to compete for attention with the political drama in Washington.
- Biden may face additional opposition from Republicans to his efforts, but he will be helped by the fact that his fellow Democrats will control both the House and the Senate.
Republican Voters Stick by Trump as Some Lawmakers Seek Distance – Wall Street Journal, 1/14/2021
- Republican elected officials who have criticized President Trump following a mob attack on the Capitol are trying to navigate distancing themselves from the commander in chief as some GOP voters say they don’t want a clean break.
- Ten Republicans in the House voted with Democrats Wednesday to impeach Mr. Trump after he encouraged supporters protesting his election loss to march to the Capitol last week.
- A Quinnipiac University poll conducted Jan. 7-10, after the violence in Washington, found that 52% of Americans thought Mr. Trump should be removed from office.
- But just 10% of Republicans felt that way, and 71% of GOP voters said they approved of the way Mr. Trump was handling his job as president.
- Senate Majority Leader Mitch McConnell (R., Ky.) said Wednesday he hadn’t decided how he would vote if Mr. Trump’s impeachment case reached the Senate.
- He also reiterated that any vote in his chamber on the issue would happen after Mr. Biden becomes president on Jan. 20, as the Senate will remain in recess until Jan. 19.
EUROPE & WORLD
- The coronavirus dealt a blow to global trade in 2020, but not in China, where exports rose last year to their highest level on record, officials said Thursday, positioning it as the only major world economy to grow during the pandemic-scarred year.
- For the full year, Chinese exports rose 3.6% from a year earlier to a record $2.6 trillion, according to data from China’s General Administration of Customs.
- China’s robust economic recovery also propped up demand for imports, which fell by just 1.1% in 2020, resulting in a $535.03 billion trade surplus for the year—the biggest since 2015.
- China’s export strength has proved impervious to a rising Chinese yuan, which gained 6.1% against the U.S. dollar over the course of 2020, making many made-in-China goods more expensive on the global market.
- Two members of a World Health Organization mission to China to study the origins of the coronavirus failed to clear Beijing’s health-screening procedures and were blocked from traveling to the country on Thursday, according to people familiar with the matter.
- Chinese officials involved in the screening process blocked the two delegation members from boarding their plane to the central Chinese city of Wuhan after both tested positive for Covid-19 antibodies in blood-based serology tests during transit in Singapore, the people said.
- The rest of the 15-member delegation arrived on Thursday as planned in Wuhan, the original center of the Covid-19 pandemic.
- The early snag adds a further complication to a mission already fraught with political sensitivities, as Beijing has waged a broad campaign to cast doubt on the origins of a pathogen that was first discovered in central China.
- The WHO and Beijing have spent months negotiating the terms of the mission, which has been delayed several times, and the United Nations agency’s researchers say they don’t have a clear understanding of the progress that Chinese scientists have made in what is meant to be a collaborative effort.
- Samsung Electronics on Thursday unveiled the first Galaxy S smartphone with a stylus for on-screen work called the S Pen, more than a month ahead of its usual annual release schedule for models of its flagship compact phone.
- Analysts have said offering a stylus within the Galaxy S21 series might signal the South Korean tech giant will merge the S line with its other premium smartphone range, the Note, already equipped with a note-taking stylus.
- That could free up resources for Samsung to push its separate range high-end foldable phones as key mass products rather than niche devices.
- In the U.S., the Galaxy S21 price starts at $799.99, S21 Plus at $999.99, and S21 Ultra at $1,199.99.
- The series will be widely available starting Jan. 29 through Samsung.com, carriers and retailers online, Samsung said.
- Chinese President Xi Jinping encouraged Starbucks’ former chairman Howard Schultz and the coffee company to play an active role in promoting U.S.-China trade cooperation and bilateral ties, state media reported on Thursday.
- State broadcaster CCTV said Xi made the remarks in a message when replying to Schultz, who also holds the honorary title of Starbucks’ chairman emeritus.
Subaru to cut output at plants in Japan, U.S. due to global chip shortage – Reuters, 1/14/2021
- Japanese automaker Subaru said on Thursday it would cut output this month by “several thousand” vehicles at plants in Japan and the United States, citing a global shortage of semiconductors.
- A spokesman said Subaru will adjust production at factories in Gunma, Japan and Indiana, reducing output by several thousand vehicles at each, without specifying exactly how many fewer cars will be made.
- Subaru’s competitor Nissan said it planned to reduce production of the Note, a hybrid electric car, at its Oppama Plant in Kanagawa prefecture, Japan, while Honda also said on Jan. 8 its domestic output could be affected by a shortage of chips.
Factmonster – TODAY in HISTORY
- The United States ratified treaty with England ending the Revolutionary War. (1784)
- President Roosevelt and Prime Minister Churchill meet at the Casablanca Conference. (1943)
- The Simpsons premiered on television. (1990)
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