Daily Market Report | Mar. 1, 2021
U.S. Stocks Climb as Bond Markets Calm – Wall Street Journal, 3/1/2021
- S. stocks surged Monday as a weekslong advance in government bond yields stalled, easing investors’ jitters over rising interest rates.
- The Dow Jones Industrial Average soared 645 points, or 2.1%, after the opening bell.
- The S&P 500 gained 2%, while the technology-heavy Nasdaq Composite jumped 1.9%.
- Monday’s broad advance came as the yield on 10-year Treasury notes, the benchmark borrowing cost in global debt markets, slipped to 1.42% from 1.459% Friday. Yields fall when bond prices rise.
- Shares of Johnson & Johnson rose 1.6%.
- The company’s Covid-19 vaccine received a green light from the Centers for Disease Control (CDC) and Prevention Sunday.
- The U.S. Food and Drug Administration (FDA) authorized use of the single-dose shot on Saturday.
- New data showed robust growth in activity at U.S. factories last month.
- The Institute for Supply Management’s (ISM) February manufacturing index came in at 60.8 in February, up from 58.7 in January and beating economists’ expectations of 58.9. Any level above 50 indicates an expansion of activity.
Coronavirus Live Updates: Newly Reported U.S. Cases, Deaths and Hospitalizations Fall – Wall Street Journal, 3/1/2021
- Newly reported Covid-19 cases in the U.S. fell from a day earlier, as did deaths and hospitalizations, a day after the U.S. approved a single-shot vaccine from Johnson & Johnson for use against the disease.
- The nation reported more than 51,000 new cases for Sunday, according to data compiled by Johns Hopkins University and published early Monday morning Eastern time.
- Sunday’s number was down from 64,286 on Saturday and 56,495 a week earlier.
- There were more than 1,200 deaths recorded across the country for Sunday, according to Johns Hopkins data, down from 1,536 a day earlier.
- Hospitalizations in the U.S. continued their steady decline, with 47,352 logged for Sunday, the second day in a row the number was less than 50,000 after crossing that threshold on Nov. 3.
J&J Covid-19 Vaccine to Start Arriving as Soon as Tuesday, U.S. Administration Says – Wall Street Journal, 3/1/2021
- Johnson & Johnson’s single-dose Covid-19 vaccine is expected to reach states and vaccination sites as early as Tuesday, the Biden administration said.
- The Food and Drug Administration’s authorization of the vaccine would lead to an initial supply of nearly 4 million doses delivered as early as Tuesday morning, administration officials said Sunday.
- The administration said it expects about 20 million doses to be delivered by the end of March.
- J&J has said it expects output will quickly increase, enabling it to deliver a total of 100 million doses for use in the U.S. by the end of June.
- The company said it has begun shipping the vaccine to the federal government, which is managing allocation and distribution.
- As of Saturday afternoon, 48.4 million Americans—14.6% of the population—had received one or more doses of the two previously approved Covid-19 vaccines, according to the Centers for Disease Control and Prevention.
Buffett upbeat on U.S. and Berkshire, buys back stock even as pandemic hits results – Wall Street Journal, 3/1/2021
- Warren Buffett’s enthusiasm for the future of America and his company Berkshire Hathaway has not been dimmed by the coronavirus pandemic.
- Buffett used his annual letter to investors to assure he and his successors would be careful stewards of their money at Berkshire, where “the passage of time” and “an inner calm” would help serve them well.
- The letter breaks an uncharacteristic silence for the 90-year-old Buffett, who has been almost completely invisible to the public since Berkshire’s annual meeting last May.
- Berkshire on Saturday also reported net income of $35.84 billion in the fourth quarter, and $42.52 billion for the year, both reflecting large gains from its stocks.
- Operating income, which Buffett considers a more accurate measure of performance, fell 9% for the year to $21.92 billion.
- However, Buffett bemoaned fixed income as an investment, saying that “bonds are not the place to be these days.”
- “Fixed-income investors worldwide – whether pension funds, insurance companies or retirees – face a bleak future,” the letter said.
United orders another 25 Boeing 737 MAX jets to prepare for recovery – Reuters, 3/1/2021
- United Airlines Holdings has ordered 25 new Boeing 737 MAX aircraft to receive in 2023 and moved up the delivery of others as it prepares to replace aging jets and meet expected post-pandemic growth in demand, the company said on Monday.
- S. airlines have parked and retired aircraft as the coronavirus pandemic sapped demand but are beginning to position their business for a recovery as more vaccines are distributed across the country and globally.
- In addition to the new Boeing order, United said it has moved up delivery of 40 previously ordered MAX aircraft to 2022 and 5 to 2023, meaning it will have 94 new aircraft in its fleet over those two years.
Saudia plans to order 70 Airbus, Boeing jets: report – Reuters, 3/1/2021
- State-owned Saudi Arabian Airlines (Saudia) plans to order 70 airliners from Airbus and Boeing, Saudi news outlet Maaal reported on Monday, citing unidentified sources.
- Saudia is in talks with local banks to raise 11.5 billion riyals ($3.07 billion) to partly finance an order for Airbus A321 narrow-bodied jets and Boeing 777 and 787 Dreamliner wide-bodies, Maaal said.
- The report did not breakdown how many aircraft of each type Saudia was planning to purchase.
- Company documents reviewed by Reuters showed that the airline received at least $7 billion in direct payments and other financial support in 2019 and 2020 from the government, as the carrier struggles with losses and the impact of the pandemic.
China moving ‘step by step’ in recertifying Boeing 737 MAX – Reuters, 3/1/2021
- China’s aviation regulator said on Monday its major safety concerns with the Boeing 737 MAX had to be “properly addressed” before conducting flight tests but it was studying a plan with U.S. planemaker for clearing aircraft to fly.
- The Civil Aviation Administration of China (CAAC) conducted comprehensive and in-depth technical scrutiny of the Boeing 737 MAX, the agency’s vice head Dong Zhiyi said, giving the regulator’s stance on the plane which China grounded in early 2019.
- China was the first country to ground the 737 MAX in March 2019 following two fatal crashes. At the time, more of the planes had been operating in China than anywhere else in the world.
- China makes up about a quarter of MAX sales.
CAE to Buy L3Harris’s Military-Training Business – Wall Street Journal, 3/1/2021
- CAE agreed to buy L3Harris Technologies’ military-training division for $1.05 billion, the companies said Monday, in a move that would expand the Canadian aerospace company’s defense business.
- The unit includes three main businesses: Link, which provides military training in the U.S.; Doss Aviation, which provides flight training to the U.S. Air Force; and AMI, which designs and makes simulator hardware.
- Saint-Laurent, Quebec-based CAE expects the deal to be accretive to earnings per share and forecasts cost savings of roughly 35 million to 45 million Canadian dollars a year in the second year post-close.
- It is to be funded by a private placement of roughly C$700 million, equivalent to about $549.4 million.
Twilio nears deal to invest up to $750 million in Syniverse: WSJ – Reuters, 3/1/2021
- Cloud-communications firm Twilio is in talks to invest as much as $750 million in Syniverse Technologies, the Wall Street Journal reported on Sunday.
- The investment will be announced on Monday, which could be followed by a merger between telecommunications services company Syniverse and a special-purpose acquisition company to take it public, the report said, citing people familiar with the matter.
- There is no guarantee that Syniverse, backed by private-equity firm Carlyle Group will go public, either through a SPAC deal or an IPO, the Journal added.
U.S. investigates nearly 1.9 million Toyota RAV4s over fire risks – Reuters, 3/1/2021
- S. auto safety regulators on Monday said they have opened an investigation into nearly 1.9 million Toyota RAV4 sport-utility vehicles over potential fire risks.
- The National Highway Traffic Safety Administration (NHTSA) said the preliminary evaluation looking at 2013-2018 RAV4 vehicles comes after 11 reports of fires.
- One report said that a RAV4 caught fire in Lyons, Colorado, after the owner of a 2017 Toyota RAV4 hybrid was driving 50 miles per hour when the check-engine light came on and then white smoke emerged from beneath the hood.
Indian mobile retailers call for Amazon probe, cap on online smartphone sales – Reuters, 3/1/2021
- An Indian trade group representing 150,000 mobile phone stores on Monday urged Prime Minister Narendra Modi to investigate Amazon’s business practices in the country and impose a daily cap on a single seller’s online smartphone sales.
- In a letter sent to Modi, the group cited a Reuters special report published last month that revealed Amazon has for years given preferential treatment to a small group of sellers on its Indian platform, using them to circumvent the country’s strict foreign investment regulations.
- “We were already aware of Amazon’s thought process and strategy,” the All India Mobile Retailers Association (AIMRA) wrote in the letter.
- The documents, the letter said, “have revealed that Amazon is doing business in India with the strategy of deftly dodging the regulators and politicians”.
- Indian retailers, a crucial part of Modi’s support base, have long alleged that Amazon and Walmart’s Flipkart flout federal regulations and that their business practices hurt small traders.
Senate Democrats to Drop Plan for Wage Increases in Covid-19 Aid Bill – Wall Street Journal, 3/1/2021
- Senate Democrats will drop a plan to raise workers’ wages through tax penalties and tax incentives that lawmakers had explored as a replacement for raising the minimum wage, according to three people familiar with the matter, while lawmakers race to pass a $1.9 trillion coronavirus relief package in the coming weeks.
- Democrats are aiming to complete the relief package before March 14, when federal unemployment benefits expire.
- The bill would fund vaccine distribution, enhance and extend federal unemployment benefits, and send direct checks of $1,400 to many Americans and $350 billion to state and local governments, among other measures.
- Abandoning the wage effort likely will inflame tensions between the Democratic Party’s progressive wing and its leadership.
- Raising the minimum wage to $15 an hour has been a priority for liberal Democrats, and the parliamentarian’s ruling this week prompted some to call for the Senate to alter its rules and approve the wage increase anyway.
- With Republicans lining up against the package, Democrats must contend with keeping their members in line, thrusting the minimum-wage issue into the center of the conversation.
- The Senate is divided 50-50 between Democrats and Republicans, with no GOP lawmakers expected to vote for the package.
U.S. manufacturing sector at three-year high, cost pressures mounting: ISM – Reuters, 3/1/2021
- S. manufacturing activity increased to a three-year high in February amid an acceleration in new orders, but factories continued to face higher costs for raw materials and other inputs as the pandemic drags on.
- The Institute for Supply Management (ISM) said on Monday its index of national factory activity rebounded to a reading of 60.8 last month from 58.7 in January. That was the highest level since February 2018.
- The ISM’s forward-looking new orders sub-index increased to a reading of 64.8 last month from 61.1 in January.
- The survey’s manufacturing employment gauge rose to 54.4, the highest reading since March 2019, from 52.6 in January.
- But the year-long pandemic has gummed up the supply chain, boosting production costs for manufacturers. The survey’s measure of prices paid by manufacturers jumped to a reading of 86.0, the highest since July 2008, from 82.1 in January.
- This follows data last month showing a surge in consumers’ near-term inflation expectations, and fits in with views that inflation will accelerate in the months ahead.
Millions of Tenants Fall Further Behind on Rent as They Await Federal Covid-19 Assistance – Wall Street Journal, 3/1/2021
- Tenants who are behind on their rent are still waiting for $25 billion in assistance that Congress appropriated in December, as millions of households and landlords fall deeper into debt.
- An analysis by the Urban Institute, a Washington think tank, found that the amount of unpaid rent could exceed $52 billion.
- It estimated that the average delinquent household owed $5,586.
- According to a Census Bureau survey conducted last month, about 17% of renters are now behind on their payments—three times the typical rate.
Trump Teases 2024 Run as He Hits Biden’s Early Moves – Wall Street Journal, 3/1/2021
- Donald Trump took aim at President Biden’s early moves on immigration and Covid-19, left open the prospect of another run at the presidency and cast himself as the GOP standard-bearer in the former president’s first major public remarks since leaving office.
- Trump teased that he may run again in 2024 during his speech, repeating his unfounded claim that he won the November election. “I may even decide to beat them for a third time,” he said.
- The party is without control of the White House, Senate and House for the first time since 2010.
- Aides said Mr. Trump may not reach a final decision on running in 2024 until after the 2022 midterm elections, in which Mr. Trump intends to play a key role handpicking candidates and punishing those who voted to impeach him.
- On Friday, Mr. Trump endorsed a challenger to Ohio Rep. Anthony Gonzalez, one of 10 House Republicans who sided with Democrats.
- Trump also mentioned by name House Republicans who voted to impeach him and Senate Republicans who voted to convict him, including Sens. Lisa Murkowski of Alaska, Bill Cassidy of Louisiana, Susan Collins of Maine and Rep. Liz Cheney of Wyoming.
- “Get rid of them all,” Mr. Trump said. “The RINOs that we’re surrounded with will destroy the Republican Party,” he said, referencing the term for “Republicans in Name Only.”
EUROPE & WORLD
Logitech sees pandemic-driven growth continuing, hikes 2021 guidance – Reuters, 3/1/2021
- Computer goods maker Logitech International increased its 2021 guidance on Monday and issued a 2022 forecast, saying growth trends in remote work, video collaboration, esports and digital content creation would continue beyond the 2021 boom.
- The company’s Switzerland-listed shares were up 3.2% at 0850 GMT after it raised its 2021 sales growth forecast to about 63% in constant currencies, up from the 57%-60% range it previously expected.
- Logitech said sales for fiscal 2022, measured in constant currency terms, would be flat to plus or minus 5%.
- Operating income for fiscal 2022, measured under non-Generally Accepted Accounting Principles (non-GAAP), is expected to be $750 million to $800 million, the Swiss-U.S. company said, down from the $1.1 billion it now expects for fiscal 2021 and a fraction up from a previous estimate of $1.05 billion.
- The company also said on Monday its expectations of long-term sales growth in constant currency had increased to 8% to 10%, up from high-single digits and its non-GAAP operating margin target had improved to between 14% and 17%, up from 11% to 14%.
Iran Rejects Offer of Direct U.S. Nuclear Talks, Ratcheting Up Tension with West – Wall Street Journal, 3/1/2021
- Iran rejected a European Union offer to hold direct nuclear talks with the U.S. in the coming days, risking renewed tension between Tehran and Western capitals.
- Senior Western diplomats said Iran’s response doesn’t quash the Biden administration’s hopes of reviving diplomatic efforts to restore the 2015 nuclear deal, struck between Iran and six world powers and abandoned by the Trump administration in 2018.
- But they said it seemed to set a deadlock: Iran wants a guarantee it wouldn’t walk away from a meeting with the U.S. without some sanctions relief, which Washington has so far ruled out.
- With Tehran escalating its nuclear activities in recent months in breach of the 2015 nuclear deal, the U.S. conducting airstrikes on Iranian-backed militias in Syria, and Iranian presidential elections in June, diplomats have warned that opportunities to ease tensions might now be imperiled.
Myanmar’s Aung San Suu Kyi Faces New Charges After Bloody Crackdown – Wall Street Journal, 3/1/2021
- Police in Myanmar have filed two new charges against Aung San Suu Kyi, the ousted civilian leader who has been detained in her home since the country’s military seized power from her government a month ago.
- The move follows a bloody crackdown against demonstrators in cities across Myanmar on Sunday. At least 18 people were killed, according to the United Nations, marking a sharp escalation in the use of force by police since protests began more than three weeks ago.
- Protesters are demanding that Ms. Suu Kyi be released and her democratically elected government be restored to power.
Factmonster – TODAY in HISTORY
- Yellowstone became the world’s first National Park. (1872)
- The 20-month-old son of Charles Lindbergh was kidnapped. (1932)
- President John F. Kennedy signed a signed an executive order establishing the Peace Corps. (1961)
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