Tech Shares Start Week Higher – Wall Street Journal, 3/22/2021

• U.S. stocks climbed on Monday, as gains in technology stocks powered the Nasdaq Composite higher.
• The tech-heavy index rose 0.8% in morning trading, recovering some ground after it declined last week. The S&P 500 gained 0.4%, while the Dow Jones Industrial Average inched up 0.1%.
• Investors continued to train their attention on bond markets after a drop in the price of U.S. government debt last week. Ten-year Treasury notes recovered some ground Monday, sending yields down to 1.698%, from 1.729% Friday. Yields fall when bond prices rise.
• Many investors expect bond yields to keep rising as the economy picks up speed, posing a challenge to tech stocks that powered the broader market higher in 2020.
• In corporate news, Railroad Kansas City Southern rallied 14% after agreeing to be bought by Canadian Pacific Railway in a transaction valued at about $25 billion. New York-listed shares of Canadian Pacific fell 2.4%.
• In currencies, Turkey’s lira slumped about 9% to trade at 7.93 per dollar after the replacement of the country’s top central banker late last week.
• Asian markets were mixed. China’s Shanghai Composite Index rose 1.1%, while Hong Kong’s Hang Seng Index fell 0.4% and Japan’s Nikkei 225 dropped 2.1%.

Covid-19 Live Updates: Newly Reported U.S. Cases Fall Below 40,000 – Wall Street Journal, 3/22/2021

• Newly reported coronavirus cases in the U.S. fell below 40,000 for the first time in a week, as vaccine production gains momentum.
• The U.S. reported more than 33,000 new cases for Sunday, according to data compiled by Johns Hopkins University that was published early Monday. Sunday’s figure was a decline from the 55,285 cases reported the previous day and also down from the more than 38,000 new cases reported a week earlier.
• The country reported 430 Covid-19 fatalities for Sunday, the lowest daily death toll since Oct. 12. The country’s total death toll topped 542,000, according to Johns Hopkins data.
• Nearly a quarter of the U.S. population has received at least one dose of a Covid-19 vaccine and an average of 2.5 million doses a day were administered over the past week, according to a Wall Street Journal Analysis of data from the Centers for Disease Control and Prevention.
• The German government is holding an emergency meeting with state authorities on Monday to discuss new confinement measures after a steep rebound in Covid-19 cases.
• The country has been in various flavors of lockdown since early November but while new cases began falling in January, they started rising again rapidly three weeks ago and are now growing exponentially.
• Germany registered 7,709 new cases on Sunday, over a thousand more than a week ago. Hospitalizations have also rebounded.
• The development is likely to put an abrupt end to a tentative relaxation of lockdown restrictions that started last week, with a limited reopening of some shops. Many schools that have reopened are now expected to close again.
• According to a draft document seen by The Wall Street Journal, the government is also proposing a nightly curfew for the first time.
• Elsewhere in continental Europe, cases are also rising as new virus variants spread rapidly. On Friday, the French government announced a new lockdown for Paris and 15 other areas in the country.

Railroads Strike a $25 Billion Merger – Wall Street Journal, 3/22/2021

• Canadian Pacific Railway agreed to acquire Kansas City Southern in a transaction valued at about $25 billion that would create the first freight-rail network linking Mexico, the U.S. and Canada.
• The combination, which faces a lengthy regulatory review, is a long-term wager on an interconnected North American economy.
• It marks the third major U.S. railroad that the Canadian company has targeted in its quest to create a transcontinental network. Canadian Pacific abandoned the two prior efforts—in 2014 and 2016—amid resistance from the takeover targets themselves as well as opposition from rivals, shippers and U.S. regulators.
• If approved by regulators, the deal would unite the two smallest of the seven major North American freight carriers, linking factories and ports in Mexico, farms and plants in the Midwestern U.S. and Canada’s ocean ports and energy resources.
• The combined company, to be renamed Canadian Pacific Kansas City, would have about $8.7 billion in annual revenue and employ nearly 20,000 people.

Renesas Chip-Plant Fire Spreads Concerns About Global Auto Production – Wall Street Journal, 3/22/2021

• A fire at a factory of one of the world’s leading auto chip makers has added to the troubles of car makers that already have slashed production because of a semiconductor shortage.
• The fire Friday left a swath of charred equipment in the factory owned by a subsidiary of Renesas Electronics in Hitachinaka, northeast of Tokyo. The company said it would take at least a month to restart the damaged operations.
•  It said two-thirds of the chips made at the fire-affected factory were automotive chips.
• Renesas’s chief executive, Hidetoshi Shibata, said Sunday the impact on global chip supplies would be significant. Mariko Semetko, a credit analyst at Moody’s Japan, said the fire was likely to damp the recovery of global auto production this year, while auto makers said they were still assessing the impact.

Stellantis pickups hit, Ford cuts production due to global chip shortage – Reuters, 3/20/2021

• The impact of the global semiconductor shortage on the auto industry spread on Saturday, as Stellantis warned its highly profitable pickup trucks were hit, while Ford Motor said it would cut more U.S. production.
• Stellantis, the world’s fourth largest automaker, said it will build and hold for final assembly its Ram 1500 Classic trucks at its Warren, Michigan, and Saltillo, Mexico, assembly plants.
• The action will last “a number of weeks,” a Stellantis spokeswoman said, declining to reveal how many trucks would be affected.
• Ford said Saturday it will idle its Ohio assembly plant next week, while its Kentucky Truck Plant in Louisville will only work two of three shifts. Both plants will return to full production the week of March 29.
• On Thursday, Ford said it would assemble its flagship, highly profitable F-150 pickup truck as well as Edge SUVs in North America without certain parts and then hold them “for a number of weeks” until they can be completed and shipped, affecting “thousands” of vehicles.

Apple, Epic Games CEOs on list of witnesses in Fortnite case – Reuters, 3/20/2021

• Apple and Epic Games have listed their chief executive officers as potential witnesses in a case between the iPhone maker and the video game developer over the App Store payment system, court documents showed.
• Apple and Epic Games, creator of the popular game Fortnite, have been in a legal battle since last year, when Epic Games tried to avoid a 30% App Store fee by launching its own in-app payment system.
• In addition to CEO Tim Cook, Apple also named software chief Craig Federighi and App Store Vice President Matt Fischer on a tentative list of witnesses submitted to the U.S. District Court Northern District of California Oakland Division, a copy of which was seen by Reuters.
• Epic Games listed its founder and CEO Tim Sweeney, its game store manager Steve Allison, and Thomas Ko, head of online business strategy, among its own witnesses for the trial.

ESG Disclosure Rules From Europe Challenge U.S. Fund Managers – Wall Street Journal, 3/22/2021

• Scores of U.S. fund managers are being forced to comply with sweeping new European rules on climate and other sustainable-finance issues, requiring them to disclose the potential harm their investments could do to the environment and society.
• Fund companies including Vanguard Group, BlackRock and State Street that sell investment products in the European Union come under the new rules that took effect this month, though details are still being finalized.
• Surging investor appetite for green investments means that rules on disclosure, both for traditional funds and those that call themselves sustainable, will become increasingly important.
• In the U.S., the Biden administration is taking the first tentative steps toward imposing similar rules. The Securities and Exchange Commission already is focusing on climate-related disclosures by companies. While any big changes will take years, they could change the way companies disclose information about diversity, carbon emissions and worker pay.

U.S. air travelers top 1.5 million for first time since March 2020 – Reuters, 3/22/2021

• The number of U.S. air passengers screened topped 1.5 million Sunday for the first time since March 2020, as air travel continues to rebound from a pandemic-related drop, the U.S. Transportation Security Administration (TSA) said Monday.
• COVID-19 devastated air travel demand, with U.S. airline passengers down 60% in 2020. But with a growing number of Americans getting vaccinated, demand and advanced bookings have started to rise in recent weeks.
• TSA said it screened 1.54 million people Sunday, the highest single day since March 13, 2020 and the 11th consecutive day screening volume exceeding 1 million per day.

IMF sees signs of stronger global recovery, but significant risks remain – Reuters, 3/22/2021

• The No. 2 official at the International Monetary Fund on Saturday pointed to emerging signs of a stronger global economic recovery, but warned that significant risks remained, including the emergence of mutations of the coronavirus.
• IMF First Deputy Managing Director Geoffrey Okamoto said that in early April the Fund would update its January forecast for global growth of 5.5% to reflect additional fiscal stimulus spending in the United States, but gave no details.
• In a speech to the China Development Forum, Okamoto raised concerns about the growing divergence between advanced economies and emerging markets, with some 90 million people seen falling below the extreme poverty threshold since the pandemic began.
• The IMF projects that cumulative income per capita in emerging and developing countries, excluding China, between 2020 and 2022 will be 22% lower than it would have been without the pandemic, which will push more people into poverty, he said.
• The overall outlook remained “exceptionally” uncertain, Okamoto said, adding that it was unclear how long the pandemic would last and access to vaccines remained very uneven, across both advanced and emerging economies.