Daily Market Report | May 24, 2021
Covid-19 Live Updates: U.S. Case Averages at 11-Month Lows – Wall Street Journal, 5/24/2021
- The average number of newly reported Covid-19 cases in the U.S. has fallen below 30,000 and are steadily decreasing, as more of the nation gets vaccinated against the deadly illness.
- There were 12,853 new Covid-19 cases reported in the U.S. for Sunday, according to the latest Johns Hopkins data.
- That was down from 16,864 a week earlier. About a third of states don’t report cases or deaths on the weekends.
- There were 190 deaths reported, Johns Hopkins data show, down from 262 a week earlier. The latest daily figures bring the overall number of cases reported in the U.S. to more than 33.1 million, and the death toll to nearly 590,000.
- The seven-day average was 25,270 as of Sunday, according to a Wall Street Journal analysis of data compiled by Johns Hopkins University, and the 14-day average was 29,241. It was the second day in a row that both figures were lower than 30,000–the first time they have been at that level since last June.
- At least four states, including Vermont, Massachusetts, Maine and Connecticut, have more than half of their populations fully vaccinated, according to a Wall Street Journal analysis of data from the Centers for Disease Control and Prevention. Nationally, more than 39% of people have been fully vaccinated and over 49% have had at least one vaccine dose.
- Three researchers from China’s Wuhan Institute of Virology became sick enough in November 2019 that they sought hospital care, according to a previously undisclosed U.S. intelligence report that could add weight to growing calls for a fuller probe of whether the Covid-19 virus may have escaped from the laboratory.
- The details of the reporting go beyond a State Department fact sheet, issued during the final days of the Trump administration, which said that several researchers at the lab, a center for the study of coronaviruses and other pathogens, became sick in autumn 2019 “with symptoms consistent with both Covid-19 and common seasonal illness.”
- The disclosure of the number of researchers, the timing of their illnesses and their hospital visits come on the eve of a meeting of the World Health Organization’s decision-making body, which is expected to discuss the next phase of an investigation into Covid-19’s origins.
- U.S. shale drillers Cabot Oil & Gas and Cimarex Energy said Monday that they plan to merge in an all-stock deal, combining companies that had a market capitalization of about $14 billion as of Friday.
- The combination of Cimarex, an operator in Texas, Oklahoma and New Mexico primarily focused on oil, and Cabot, a natural-gas producer in the Northeastern U.S., brings together two firms operating in different regions and extracting different commodities.
- It follows a string of tie-ups between American fracking companies as the energy industry emerges from the Covid-19 pandemic. Recent deals have mostly paired up rivals in the same or similar regions.
IATA’s Walsh says airline industry will be smaller after crisis – Reuters, 5/24/2021
- The head of global airline body IATA expects the industry to emerge from the coronavirus crisis smaller and more cautious, doubting airlines will try to expand through acquisitions.
- The airline industry has been crippled by the pandemic, which continues to leave many aircraft around the world grounded or flying near-empty as demand limps towards a recovery.
- Walsh, the former chief executive of British Airways owner IAG, said that spending “valuable cash resources” would be “too risky” but he believes there will be consolidation through airlines shrinking their operations and some failing.
Issuance of Bundles of Risky Loans Jumps to 16-Year High – Wall Street Journal, 5/24/2021
- Sales of securities backed by bundles of risky corporate loans are hitting records, lifted by a recovering economy and demand from yield-starved investors.
- Issuance of new collateralized loan obligations, which buy up loans to companies with junk credit ratings and package them into securities, totaled over $59 billion as of May 20, according to data from S&P Global Market Intelligence’s’ LCD.
- That is the highest ever figure for that period in data going back to 2005.
- The prospect of rising inflation and a shift away from the Federal Reserve’s easy money policies are making bonds tied to so-called CLOs attractive to a wider range of investors, analysts said.
- Many are expecting strong growth to prompt Fed tightening, eroding returns on corporate bonds. Yields on CLO bonds typically rise with interest rates.
White House pares infrastructure proposal to $1.7 trillion, Republicans balk – Reuters, 5/24/2021
- The White House said on Friday it had pared down its infrastructure bill to $1.7 trillion from $2.25 trillion, with cuts to investments in broadband and roads and bridges, but Republicans dismissed the changes as insufficient for a deal.
- The White House effort represented a desire by President Joe Biden to engage with the opposition party on an issue that the Democratic president has made a priority in his early days in office.
- A White House memo showed Biden’s new proposal would reduce spending on broadband to $65 billion, down from an initially proposed $100 billion.
- Spending on roads, bridges and major infrastructure projects would drop to $120 billion, down from Biden’s initial proposal of $159 billion but well above Republicans’ desired $48 billion.
- Psaki said that because the overall cost of the package had come down, the need for “pay-fors” would also be reduced. Biden remained committed to not raising taxes on people making less than $400,000 a year, she said.
No Bridge in Sight for Biden Infrastructure Plan – Wall Street Journal, 5/24/2021
- Prospects look dim for bipartisan agreement on an infrastructure-spending bill as lawmakers argue over the basic questions of what should be included, how large it should be and how to pay for it.
- The bipartisan discussions have had a soft Memorial Day deadline, perhaps leading to another week of back-and-forth before Democrats start trying to assemble votes on their own.
- Sen. Susan Collins (R., Maine), a key Republican whose vote would likely be needed for any bipartisan deal, said the administration’s insistence on social spending makes an infrastructure bill difficult to reach.
- The latest White House offer reduced the cost, but part of that came by moving some items to other legislation. And the administration is insisting on items such as renewable-energy tax credits, worker training, environmental cleanups and funding for veterans’ hospitals.
Fed’s Brainard says central bank stepping up exploration of digital dollar – Reuters, 5/24/2021
- Growing digital currency options could lead to a “fragmentation” of the payment system that poses financial risks for households and businesses, Federal Reserve Governor Lael Brainard said on Monday in a speech that outlined the major policy questions the Fed will need to address as it explores the potential development of a digital version of the U.S. dollar.
- As the holder of the world’s reserve currency, the United States must be highly involved as digital payments become more common and other countries develop digital currencies that can be used to send money across borders, Brainard said.
- Fed officials are making it clear that the U.S. central bank plans to take an active role in developing standards as more countries research and develop central bank digital currencies.
- Fed Chair Jerome Powell said last week that the Fed will release a paper this summer looking at how CBDCs could affect payments.
EUROPE & WORLD
G7 is close to agreement on taxation of world’s largest companies – FT – Reuters, 5/24/2021
- Group of Seven countries are close to reaching agreement on the corporate taxation of multinationals, clearing the way for a global deal later in the year, the Financial Times reported.
- After the United States agreed to accept a minimum rate of at least 15%, France, Germany and Italy said the new proposal was a good basis for sealing an international deal by July.
- A G7 deal could be agreed as early as Friday after progress was made among top officials in recent days, the FT said.
- Nearly 140 countries aim to reach broad agreement this summer to rework rules for taxing multinational groups and big technology companies, such as Alphabet and Facebook.
- The chief executive of Ryanair Holdings PLC said the airline believes members of Belarus’ secret service were aboard one of its airliners when the plane was forced by a Belarus jet fighter to divert to the country’s capital Minsk on Sunday, calling the incident “a case of state-sponsored hijacking” and further raising global aviation industry alarm over the rerouting.
- Belarusian President Alexander Lukashenko scrambled the fighter, which forced the Ryanair commercial aircraft to land as it was passing through Belarus airspace.
- Authorities there then arrested a prominent journalist and opposition activist, before allowing the plane to continue its journey.
- The incident has sparked an international outcry and raised questions over the legality of the plane’s grounding and the ramifications for the airline industry.
- Michael O’Leary, the CEO of Dublin-based Ryanair, told Ireland’s Newstalk radio channel that “it appears the intent of the authorities was to remove a journalist and his traveling companion… we believe there were some KGB agents offloaded at the airport as well,” he said, referring to the Belarus secret service. The airline wouldn’t comment further.
Hyundai raises hydrogen game as new trucks roll into Europe – Reuters, 5/24/2021
- South Korea’s Hyundai Motor plans to ship a new series of fuel-cell trucks to Europe later this year, turning up the heat on rivals in a battle to test the viability of hydrogen-powered heavy goods transport.
- A new class of the Xcient Hyundai truck, equipped with more efficient fuel cells with longer life-span, is due to arrive in Europe in the fourth quarter, said Mark Freymueller, CEO of Hyundai Hydrogen Mobility (HHM).
- HHM, a joint venture between Hyundai and Swiss hydrogen company H2 Energy, has been renting out “green” hydrogen trucks to commercial clients in Switzerland since last October in the world’s most advanced pilot in the field.
Factmonster – TODAY in HISTORY
- Samuel Morse transmitted the first telegraph message, in which he asked, “What hath God wrought?” (1844)
- T. McCullough of Boston, Mass., opened the first public garage. One could rent space for selling, storing and repairing vehicles. (1899)
- Israeli troops pulled out of Lebanon after 18 consecutive years of occupation. (2000)
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