U.S. Stocks Rise Ahead of Busy Earnings Week – Wall Street Journal, 4/26/2021
- U.S. stocks ticked up Monday as investors weighed the outlook for the global economy and major companies’ earnings this year.
- The S&P 500 climbed 0.2% after the opening bell, putting it on track for another closing high.
- The Dow Jones Industrial Average advanced 0.2%, while the technology-heavy Nasdaq Composite gained 0.1%
- Stocks have been jittery in recent days after a flare-up of Covid-19 cases in India and Japan triggered concerns about the pace of the global economic recovery.
- Money managers’ risk appetite was also jolted by worry that the Biden administration may boost taxes.
- This week, the corporate earnings season is poised to pick up steam, with the focus on blue-chip companies to report profits and offer guidance that can justify stocks’ high valuations.
- Bond investors are also on alert for any change in tone and outlook from the Federal Reserve at its policy meeting this week following a spate of strong U.S. economic data.
- The 10-year U.S. Treasury yield fell to 1.568%, from 1.590% on Friday.
- It had climbed as high as 1.749% at the end of March but has fallen for four of the past five weeks. Yields drop as prices gain.
- Investors are also watching to see if corporate earnings justify rich valuations for technology stocks. Tesla, which has been one of investors’ most favored stocks, is slated to report quarterly earnings Monday after markets close.
- In cryptocurrencies, bitcoin jumped more than 7% over the past 24 hours to $53,949, according to CoinDesk.
- The digital currency has rebounded since falling below $50,000 late last week, though it is still down more than 15% from the all-time high it reached earlier this month.
- Overseas, the pan-continental Stoxx Europe 600 was up 0.3% in recent trading.
- In Asia, Japan’s Nikkei 225 added 0.4%, while the Shanghai Composite Index contracted almost 1%.
Covid-19 Live Updates: Vaccination Rate Slows Down – Wall Street Journal, 4/26/2021
- The U.S. vaccination campaign against Covid-19 continued to make gains, but at a slower pace than earlier in the month, as health officials urged more people to get vaccinated.
- The U.S. administered an average of 2.8 million doses a day over the past week, according to a Wall Street Journal analysis of data from the Centers for Disease Control and Prevention, down averages of about 3.2 million a day earlier this month.
- Some 28.6% of the U.S. population has now been fully vaccinated, and 42.2% of people have received at least one dose.
- The U.S. reported just under 32,000 new coronavirus cases for Sunday, according to data compiled by Johns Hopkins University that was published early Monday. The data may update later. Sunday’s figure was down from the 53,363 reported the previous day.
- The country reported 280 fatalities due to the disease for Sunday, as the total death toll stood at 572,200, according to Johns Hopkins data.
- French drugmaker Sanofi will help Moderna make up to 200 million doses of its Covid-19 vaccine, the latest deal increasing manufacturing capacity for the U.S.
- Moderna plans to deliver a cumulative total of 300 million doses of its Covid-19 vaccine for use in the U.S. by the end of July, which is expected to help meet President Biden’s goal of vaccinating the majority of American adults by summer.
Drop in Toilet-Paper Demand Prompts Kimberly-Clark’s Worst Sales Decline in a Decade – Wall Street Journal, 4/23/2021
- Kimberly-Clark delivered its worst sales performance in at least a decade, hit by supply-chain disruptions, continued business shutdowns and fallout from last year’s toilet paper hoarding amid the pandemic.
- Revenue was down 5% at $4.74 billion, compared with $5.01 billion a year ago.
- The maker of Huggies diapers and Cottonelle toilet paper reported an 8% decline in organic sales, which strips out deals and currency moves, for the quarter ended March 31.
- Sales in its consumer-tissue segment, which includes toilet paper, Scott paper towels and Kleenex tissue, fell 14%.
- Consumer-tissue sales last year rose 14%.
- Net income attributable to the company was $584 million, compared with $660 million in last year’s first quarter.
- The company lowered its forecasts for 2021. It now expects flat to 1% organic sales growth, down from 1% to 2%.
- The company predicts net sales growth of 3% to 5%, down from 4% to 6%, and adjusted earnings per share of $7.30 to $7.55, down from $7.75 to $8.00.
Apple to Build New Campus in North Carolina – Wall Street Journal, 4/26/2021
- Apple said it would build a new campus and engineering hub in North Carolina as part of a series of investments planned in the U.S. over the next five years.
- The technology giant said Monday the move would create at least 3,000 jobs in machine learning, artificial intelligence, software engineering and other fields in the Raleigh-Durham metropolitan area.
- Those new jobs were part of a pledge to add 20,000 jobs in the U.S. by 2026, up from the roughly 95,000 people employed currently. Apple said in January 2018 it had 84,000 people in its U.S. workforce.
- In all, Apple said it planned to spend more than $430 billion through 2026 with American suppliers, data-center investments, capital expenditures and dozens of Apple TV+ productions.
- Part of the spending will also go toward next-generation silicon development and 5G technology, the company said.
Copper Jumps to Highest Since 2011 as Demand Bets Reignite Rally – Bloomberg, 4/26/2021
- Copper surged to the highest in a decade on expectations supply will tighten as the global economic recovery gains traction.
- Prices have climbed amid a broad rally across industrial commodities from iron ore to aluminum.
- Economic bellwether copper has been boosted by prospects for rebounding growth as the global vaccine rollout gathers paces, the dollar weakens, and on expectations that a years-long era of low inflation in major economies may be coming to an end.
- Copper on the London Metal Exchange rose 1% to $9,650 a ton by 11:18 a.m. in Shanghai.
SPAC Insiders Can Make Millions Even When the Company They Take Public Struggles – Wall Street Journal, 4/26/2021
- Investors who bought into a special-purpose acquisition company that took a healthcare-services company public last year in an $11 billion deal have suffered steep losses. Promoters of the SPAC still stand to make millions.
- The paper gains for insiders, even as shares of MultiPlan fall, result from the unique incentives given to SPAC creators, also known as sponsors.
- They are allowed to buy 20% of the company at a deep discount, a stake that is then transferred into the firm the SPAC takes public.
- Those extremely cheap shares let the creators make, on average, several times their initial investment. They also let the SPAC backers make money even if the company they take public struggles and later investors lose money, a source of criticism for the process.
Restaurants Serve Up Signing Bonuses, Higher Pay to Win Back Workers – Wall Street Journal, 4/26/2021
- Restaurants spent much of the past year trying to win back customers. Now, they are struggling to win back employees.
- Nationwide chains and independent eateries alike said they can’t hire enough workers to staff kitchens and dining rooms, just as Covid-19 restrictions relax and more consumers want to eat out again.
- Fast-food operators, including owners of Jimmy John’s Gourmet Sandwiches restaurants, are offering signing bonuses for recruits. Chipotle Mexican Grill is offering free college tuition to employees who work at least 15 hours a week after four months on the job.
- Taco Bell is giving paid family leave to company-store managers. McDonald’s owners are assessing what pay and benefits its U.S. employees most want, to better pitch the Golden Arches as an employer.
- Supplemental federal unemployment benefits of $300 a week for laid-off workers this year are a barrier to bringing back employees, some restaurant owners and economists said.
- Federal and average state unemployment payments can surpass the weekly pay of an employee working 40 hours at $15 an hour. The median hourly wage for a fast-food worker in mid-2020 stood at $11.47, Labor Department data show.
U.S. Durable-Goods Orders Rebound Following Dip – Wall Street Journal, 4/26/2021
- Orders for long-lasting goods resumed growth in March as the U.S. recovery stoked manufacturing demand that has been building since last fall.
- New orders for durable goods—products designed to last at least three years, such as computers and machinery—increased 0.5% to a seasonally adjusted $256.3 billion in March when compared with February, the Commerce Department said Monday.
- New orders for nondefense capital goods excluding aircraft—so-called core capital-goods orders, a closely watched proxy for business investment—rose 0.9% in March from the previous month. That was up from a 0.8% decline the previous month.
- Excluding transportation, a category that can be particularly volatile, overall durable-goods orders increased 1.6% in March. Growth was slowed by a decline in aircraft orders, with new orders for nondefense aircraft and parts dropping 46.9%.
Centrist Senators Signal Progress on Infrastructure Talks – Wall Street Journal, 4/26/2021
- Two centrist senators key to negotiations over infrastructure spending signaled progress in talks but made clear they don’t support President Biden’s expansive $2.3 trillion proposal.
- Sen. Joe Manchin (D., W.Va.) said Sunday he wants the focus to be on conventional infrastructure like highways and bridges and that spending should be split off from broader items in Mr. Biden’s proposal, such as $400 billion to help care for the aging and those with disabilities.
- Republican Sen. Shelley Moore Capito, also from West Virginia, said she had received positive feedback from the White House after she helped craft a $568 billion infrastructure proposal, which was cast as a starting point for bipartisan negotiations.
- Despite flickers of bipartisanship, the parties remain far apart on infrastructure and other issues as Mr. Biden nears his 100th day in office and seeks to press his agenda, including a next wave of spending on antipoverty and education programs he wants to be paid for by higher taxes on the wealthy.
- A person familiar with the plan said Sunday it will cost about $1.8 trillion, which could fuel Republican criticism about spending by Democrats.
Biden’s 1970s-Era Taxes on Rich Collide With GOP and SALT Rebels – Bloomberg, 4/26/2021
- President Joe Biden is poised to unveil a plan that would raise taxes on the income, investments and estates of the wealthiest Americans to levels not seen in more than four decades, a move that will trigger intense debate in Congress about whether and how to address income inequality.
- To pay for a bill that could top $1 trillion, Americans earning over $400,000 will face higher marginal income tax rates. Those taking in $1 million or more will get hit with a levy of up to 43.4% on their capital gains. The last time rates got close to that, Jimmy Carter was president.
- Republicans counter that higher rates would depress economic activity. While they’re open to talks on a slimmed-down, targeted infrastructure package, a group of them last week suggested offsetting the cost with fees and repurposing unspent Covid-19 relief money.
- A bigger constituency Biden will need to woo is a group of House lawmakers largely representing districts in New York, New Jersey and California, who demand an expansion of a tax deduction that Trump limited in 2017. More than 20 Democrats have said they won’t vote for Biden’s plan unless the $10,000 cap on state and local tax, or SALT, deductions is addressed.
Some Democrats Push for Permanent Expansion of Unemployment Benefits – Wall Street Journal, 4/26/2021
- Democrats on Capitol Hill are pushing for the White House to propose more generous and long-lasting jobless benefits on a permanent basis as part of the antipoverty package President Biden is expected to roll out next week.
- In a letter sent to the White House Friday, nearly 40 Democrats said President Biden should propose implementing a series of new federal standards of unemployment insurance programs, which are largely run by states.
- They proposed increasing the amount of jobless payments, extending the duration of the weekly benefit, expanding the pool of eligible workers, and implementing a system that would more closely tie the payments to economic conditions.
- Sen. Ron Wyden (D., Ore.), the chairman of the Senate Finance Committee, and Sen. Michael Bennet (D., Colo.) put out an unemployment insurance plan last week that would require that states offer 26 weeks of jobless benefits that replace at least 75% of workers’ wages, among other steps.
- Democrats in the House, including Reps. Don Beyer (D,. Va.) and Suzan DelBene (D., Wash.), have also advocated for changes.
EUROPE & WORLD
China Starts Probe Into Meituan as Internet-Industry Crackdown Widens – Wall Street Journal, 4/26/2021
- China is investigating delivery giant Meituan over suspected antitrust practices, the latest move by Beijing to tighten its grip on the country’s increasingly powerful tech industry.
- China’s top market regulator, the State Administration for Market Regulation, on Monday said it had launched a probe into Hong Kong-listed Meituan for suspected monopolistic behaviors, including the practice of so-called “er xuan yi,” or “choose one over two.” The practice prevents merchants from selling their goods on multiple platforms.
- Meituan, which acts as an online marketplace for restaurants and other merchants, said it would actively cooperate with the investigation and seek to improve its compliance management. It added that its various businesses are currently operating normally.
- The investigation comes after dozens of China’s largest technology companies, including Meituan, earlier this month publicly pledged to comply with antimonopoly laws after Beijing blocked the initial public offering of Ant Group and hit tech giant Alibaba with a record $2.8 billion fine.
EU Sues AstraZeneca Over Covid-19 Vaccine Shortfall – Wall Street Journal, 4/26/2021
- The European Union is suing AstraZeneca for failure to deliver on its Covid-19 vaccine contract, a sharp escalation in a long-simmering dispute over supplies of the shot and a sign of how desperate governments are to secure scarce doses.
- The suit was filed on Friday in a Brussels court, said a spokesman for the European Commission, the EU’s executive arm. Commission officials have said their goal is to receive their contracted doses, not to punish the company.
- Of 120 million doses agreed on for delivery in the first quarter, the EU received about 30 million, said the commission spokesman. For the current quarter, the two sides had contracted for 180 million doses. Almost a month in, deliveries are in the single-digit millions.
- John Wilkes Booth, Lincoln’s assassin, was surrounded by federal troops in a barn in Virginia. He was shot and killed, either by the soldiers or by his own hand. (1865)
- The worst nuclear power plant accident in history occurred at Chernobyl, near Kiev, U.S.S.R. (1986)
- The first multi-racial elections were held in South Africa. (1994)
- Vermont Governor Howard Dean signed the nation’s first bill allowing same-sex couples to form civil unions. (2000)