Tech Stocks Add to Last Week’s Gains – Wall Street Journal, 1/25/2021

• Surging technology stocks boosted the Nasdaq Composite, putting it on track for a fresh record, while shares of pandemic-sensitive companies slid amid fears of disruption to coronavirus vaccine supplies.
• Pharmaceutical giant Merck scrapped its plans to develop a Covid-19 vaccine after trials yielded disappointing results, pulling a major player out of the coronavirus vaccine race and sending its shares down 0.8%.
• This came after AstraZeneca warned on Friday that its vaccine deliveries to the European Union would lag projections.
• Meanwhile, investors were focused on a big week for corporate earnings, expected to show which corporations are thriving and which are struggling amid the Covid-19 pandemic.
• More than one-fifth of the broad S&P 500 index and a third of Dow components are scheduled to release earnings this week.
• Starbucks, Verizon and Microsoft are slated for Tuesday.
• Other major tech firms are reporting later in the week, including Apple, Tesla and Facebook on Wednesday.
• The spread of new coronavirus variants has prompted retightened lockdown measures around the world and more uncertainty around the timeline of a return to normal, which may translate to another boost in demand for tech.
• Energy stocks and financials were among Monday’s underperformers.
• Chevron shares fells 2.2%, while Goldman Sachs dropped 2.4%, weighing on the Dow.
• Overseas, the pan-continental Stoxx Europe 600 fell 0.7%, which analysts attributed to reports that the U.K. and France were heading toward tighter lockdown measures.
• In Asia, most major stock benchmarks rose. The Shanghai Composite Index added 0.5% and Hong Kong’s Hang Seng Index climbed 2.4%, buoyed by the rally in tech shares.

Coronavirus Live Updates: Hospitalizations, Newly Reported Cases Decline – Wall Street Journal, 1/25/2021

• The number of people hospitalized in the U.S. due to Covid-19 fell to the lowest level since mid-December, while newly reported cases continued to decline.
• More than 110,000 people in the U.S. were hospitalized as of Sunday due to the disease, the lowest total since Dec. 15, according to the Covid Tracking Project.
• The number of patients requiring treatment in intensive care units, however, remained elevated at more than 21,000.
• The U.S. reported more than 130,000 new cases for Sunday, the eighth consecutive day the daily total was below 200,000, according to data compiled by Johns Hopkins University. The data may update later.
• The nation’s death toll rose by more than 1,700 on Sunday, pushing the total to more than 419,000, according to Johns Hopkins.
• Anthony Fauci, who is serving as President Biden’s chief medical adviser for the Covid-19 pandemic, on Sunday reiterated warnings that the new coronavirus variant first identified in Britain could be more deadly.
• On Monday, Mr. Biden plans to ban most non-U.S. citizens from traveling into the country if they have recently been in South Africa, where a new variant of the coronavirus is driving a second wave of infections.
• He will also restore a ban on most travel into the U.S. from Europe, the U.K. and Brazil, reversing an effort by former President Donald Trump to lift those restrictions in his closing days in office.
• China is facing multiple coronavirus outbreaks, putting authorities on high alert as millions of people gear up to travel ahead of next month’s Lunar New Year holiday, despite government warnings.
• China reported 263 locally transmitted coronavirus cases for Saturday and Sunday, 81 of which were asymptomatic.
• In Tonghua, a city of about 2.3 million people in northeastern Jilin province, municipal authorities abruptly announced a lockdown for part of the city before the start of the weekend, according to state-run Xinhua news agency.
• Video footage published by Xinhua on Friday showed local officials sealing doors to prevent residents from going out.

U.K. Covid-19 Variant Could Be More Deadly, British Officials Say – Wall Street Journal, 1/22/2021

• British officials warned Friday that a coronavirus variant first identified in the U.K. might be more lethal as well as more transmissible than previous versions of the pathogen.
• The conclusions of scientists advising the British government are still highly uncertain. But British Prime Minister Boris Johnson said in a televised address that the variant—which has caused Covid-19 infections across the U.K. to spike and is spreading rapidly in the U.S.—could result in higher death rates.
• The government’s chief scientific adviser, Patrick Vallance, cautioned that the data about the death rates associated with the variant were still highly uncertain.
• Out of 1,000 60 year-olds with the new variant, some 13 to 14 would be expected to die, compared with around 10 deaths per 1000 with the old variant, according to Mr. Vallance.
• Mr. Vallance said so far vaccines appear to neutralize the new variant, which government scientists estimate spreads 30% to 70% faster than previous versions.

Moderna Developing Vaccine Booster Shot Against Virus Strain First Identified in South Africa – Wall Street Journal, 1/25/2021

• Moderna said Monday its Covid-19 vaccine appeared to be protective against emerging variants of the coronavirus in laboratory tests, but as a precaution it will start testing whether a booster shot improves immune responses and is developing a new vaccine targeting the strain first identified in South Africa.
• Moderna said its vaccine induced antibody production against the strain first identified in the U.K., known as B.1.1.7, at levels comparable to prior variants. Yet antibodies decreased sixfold against the strain first identified in South Africa, known as B.1.351.
• Even with the decrease, Moderna said, the vaccine-induced antibody response against the B.1.35 variant remained above levels that are expected to be protective.
• The company said it expects its standard, two-dose vaccine to be protective against the emerging strains to date.
• It will test, however, whether adding a booster dose of its original vaccine can boost antibody levels against emerging viral strains.
• The company plans to start within a couple of months a Phase 1 study of the booster shot aimed at the South African variant.

GameStop Stock Hits New Record – Wall Street Journal, 1/25/2021

• GameStop shares surged after the opening bell Monday, in the latest sign that frenetic trading by individual investors is leading to outsize stock-market moves.
• Class-A shares of the Texas-based games retailer popped 37% to around $90 a share in hectic early trading. Earlier, shares approached $100 in the premarket, as more than two million shares traded hands, far above the average.
• By the close of Friday—when trading in GameStop’s shares was briefly halted due to volatility—the stock had more than tripled in 2021, exceeding its previous record high from 2007.
• The rally has been fueled by individual investors, encouraging each other on social media to pile into GameStop shares and options. The buying pressure has led money managers to switch out of substantial bets that the stock would fall, analysts said.
• The tussle over the company, with a modest market value of about $5 billion and four years of declining sales, exemplifies the increased sway of retail investors. Many poured into the market during the coronavirus lockdown, congregating on online platforms to swap trading ideas and to boast about winning bets.

U.S. corporate buybacks are on the rise, lifting investor hopes – Reuters, 1/25/2021

• U.S. corporate share buyback levels are slowly increasing after last year’s pandemic-driven drop-off in spending, and investors are eager to see how much buybacks may support market gains.
• Buybacks are not likely to return this year to pre-pandemic levels, but recent buyback talk from companies has lifted investor hopes that repurchase trends have turned the corner, thanks to optimism over the rollout of vaccines to fight COVID-19.
• S&P Dow Jones Indices projects share repurchases for S&P 500 companies to have totaled about $116 billion in the fourth quarter of last year, up from $102 billion in the third quarter.
• That’s still far below the $182 billion in the 2019 fourth quarter, and the record $223 billion in the last quarter of 2018.
• S&P 500 buybacks are projected to rise to $651 billion in 2021 from an estimated $505 billion last year, based on S&P’s data.

Oil prices steady as lockdowns curb U.S. stimulus optimism – Reuters, 1/25/2021

• Oil prices were steady on Monday as support from U.S. stimulus plans and jitters about supplies competed with worries about the impact on demand from renewed coronavirus lockdowns.
• U.S. lawmakers are set to lock horns over the size of a $1.9 trillion pandemic relief package proposed by President Joe Biden. The stimulus would support the economy and fuel demand.
• European nations, major consumers, have imposed tough restrictions to halt the spread of the virus, while China reported a rise in new COVID-19 cases, casting a pall over demand prospects in the world’s largest energy consumer.
• Barclays raised its 2021 oil price forecasts, but said rising cases in China could contribute to near-term pullbacks.
• Supply concerns have offered some support. Indonesia said its coast guard seized an Iranian-flagged tanker over suspected illegal fuel transfers, raising the prospect of more tensions in the oil-exporting Gulf.

Cuomo Proposes Airbnb Collect Sales Tax on New York Stays – Wall Street Journal, 1/25/2021

• People booking vacation rentals in New York on sites like Airbnb could soon start paying sales taxes that home-sharing companies would collect under a proposal included in Gov. Andrew Cuomo’s $193 billion budget.
• Aides to the Democratic governor say the proposal could generate an additional $10 million for the state in the fiscal year that starts April 1, and $18 million in subsequent years.
• Roughly the same amount of money would also flow to local governments around the state, which also levy their own surcharges on top of the state’s 4% sales tax.
• Mr. Cuomo’s proposal doesn’t address registration or change the state’s multiple-dwelling law, which prevents someone from renting an apartment in a building with three or more units for fewer than 30 days unless the apartment’s tenant is also present.