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Daily Market Report | June 24, 2021

US FINANCIAL MARKET

Stocks Rise After Drop in Jobless Claims – Wall Street Journal, 6/24/2021

  • U.S. stocks climbed after fresh data showed a drop in jobless claims and a rise in orders for durable goods.
  • The S&P 500 added 0.6% shortly after the opening bell, on track for a closing record. The Dow Jones Industrial Average gained 226 points, or 0.7%. The tech-heavy Nasdaq Composite rose 0.8%, also on track for a high.
  • The S&P 500’s tech sector outperformed the broader market on Thursday, adding 0.9% in recent trading.
  • The latest data on weekly jobless claims, a proxy for layoffs, showed that 411,000 people applied for unemployment benefits. That was slightly less than the prior week’s 418,000, which stemmed from an unexpected increase.
  • Orders for durable goods rose 2.3% in May, albeit at a slower pace than economists expected. Orders slipped in April, partly because the global computer-chip shortage caused backlogs in the auto industry.
  • In bond markets, the yield on the 10-year U.S. Treasury note hovered around 1.480%, down from 1.486% on Wednesday.
  • Overseas, the pan-continental Stoxx Europe 600 rose 0.9%, while the U.K. benchmark FTSE 100 edged up 0.6%.
  • Hong Kong’s Hang Seng Index edged up 0.2% by the close of trading, while Japan’s Nikkei 225 ended the day flat.

Carnival posts $2 billion quarterly loss on prolonged cruise suspension – Reuters, 6/24/2021

  • Carnival on Thursday reported a quarterly loss of more than $2 billion, as a 15-month-long suspension of voyages due to the COVID-19 pandemic hammered its business.
  • Net loss was $2.07 billion for the second quarter ended May 31, compared with $4.37 billion a year earlier.
  • Carnival has said that 42 ships in its 91-strong global fleet will be sailing by November, representing 52% of its total capacity.
  • The cruise operator’s European brands, Aida and Costa Cruises, have already resumed operations.
  • Carnival ended the second quarter with $9.3 billion in cash and short-term investments, down from $11.5 billion at the end of the first quarter, as it spent heavily to prepare its ships for voyages as curbs on sailing ease.

Visa Buys Swedish Fintech Tink for More Than $2 Billion – Wall Street Journal, 6/24/2021

  • Visa agreed to pay more than $2 billion for Tink, a Swedish startup whose digital services connect more than 3,400 banks and financial institutions in Europe.
  • Banks and consumer-facing financial startups use Tink’s services to create apps and other tools that let customers manage accounts at different institutions in one place.
  • The banks and financial institutions that Tink connects have more than 250 million customers in Europe.
  • Through Tink, banks can access aggregated financial data, initiate payments, verify account ownership and build personal-finance management tools. Tink, founded in 2012, has 400 employees.

JPMorgan Buys Stake in Robert Kraft’s Sports-Data Company – Wall Street Journal, 6/24/2021

  • JPMorgan Chase has bought a stake in the analytics company that helped make New England Patriots owner Robert Kraft a sports mogul.
  • The unusual partnership signals the growth potential JPMorgan sees in sports ownership for its wealthiest clients.
  • The idea is to use the heaps of data that flows from legal sports betting, mobile ticketing and concession sales, among other things, to advise clients looking to buy and owners trying to wring more profit out of their teams.
  • The Kraft Analytics Group, or KAGR, has more than 20 clients, including the National Football League, teams in all five major American sports leagues, and college athletic programs.
  • JPMorgan is its first strategic investor. The parties declined to discuss the financials of the deal.

Google, Facebook Pressure Falls Short as Antitrust Measures Advance in House Committee – Wall Street Journal, 6/24/2021

  • A House committee approved far-reaching legislation to curb the market dominance of tech giants, including Alphabet’s Google and Facebook, but much of the effort faced intensive lobbying by affected firms that slowed the committee’s work and foreshadowed a pitched battle in the Senate.
  • The centerpiece of the six-bill package, a measure to bar big tech companies from favoring their own products in a range of circumstances on their platforms, was approved early Thursday by a vote of 24 to 20.
  • Known as the American Choice and Innovation Online Act, the legislation would prohibit big platforms from engaging in conduct that advantages their own products or services, or disadvantages other business users, or discriminates among similarly situated business users.
  • Another measure, passed late Wednesday, requires that the largest internet platforms make it easier for users to transport their data to other platforms and even communicate with users on other platforms.
  • The bill—known as the Augmenting Compatibility and Competition by Enabling Service Switching, or Access, Act—would give the Federal Trade Commission extensive new powers to set individualized standards for the tech giants. It passed, 25-19.
  • Two other less-controversial bills also were adopted, one raising federal fees on corporate merger reviews and another aiding state attorneys general in procedural battles in antitrust court cases.
  • The panel will consider a final bill in the package when it reconvenes Thursday at 11 a.m.

Google Delays Cookie Removal to Late 2023 – Wall Street Journal, 6/24/2021

  • Google said Thursday it would delay its plan to scrap a widely used technology to track web-browsing habits amid scrutiny from regulators and resistance from the advertising industry and privacy advocates.
  • Under the new timeline, the Alphabet unit said its Chrome internet browser will stop supporting a user-tracking technology called third-party cookies by late 2023, nearly two years later than its initial time frame of early 2022.
  • Google had announced the removal of cookies, which many companies in the advertising sector use to track individuals’ and target ads, under pressure from privacy regulators and advocates.
  • Google said the delay will give it more time to get publishers, the ad industry and regulators comfortable with the new technologies it is developing and testing to enable targeted ads in cookies’ wake.

US ECONOMY & POLITICS

Downward U.S. Jobless Claims Trend Stalls Out – Wall Street Journal, 6/24/2021

  • Worker filings for jobless benefits last week held nearly steady at 411,000, stalling at a level reached in recent weeks as the labor market gradually recovers.
  • The Labor Department reported Thursday that initial unemployment claims, a proxy for layoffs, moved lower last week to 411,000 from an upwardly revised 418,000 the prior week, when claims rose.
  • The four-week average, which smooths out volatility in the weekly figures, rose slightly off a pandemic low to 397,750.
  • Half of U.S. states have said they would end the supplement prior to the scheduled, nationwide expiration in September.
  • Four U.S. states ended it on June 12, with the others to follow in the weeks through early July, according to data compiled by Jefferies.

Infrastructure Negotiators Agree to Framework for Package – Wall Street Journal, 6/24/2021

  • Members of a bipartisan group negotiating a roughly $1 trillion infrastructure proposal said they had crafted a framework for an agreement, and lawmakers plan to meet with President Biden on Thursday to try to complete a deal.
  • The Democrats and Republicans emerged from a meeting with top White House officials Wednesday saying work would continue on some unresolved details.
  • Recent talks have focused on how to finance the package, which drafts showed would spend $579 billion above expected federal levels for a total of $973 billion over five years and $1.2 trillion if continued over eight years.
  • People familiar with the agreement said Wednesday night that the funding in the framework resembled levels in the drafts, with some putting the five-year new-spending proposal at $559 billion, because $20 billion in broadband funding would be repurposed from Covid-19 relief.
  • The package is expected to include funding for improvements to roads, bridges, transit, airports and enhanced infrastructure for broadband, water and electric vehicles, but exclude large investments in housing, home care, and workforce development Mr. Biden proposed in his initial $2.3 trillion infrastructure plan.
  • Senate Majority Leader Chuck Schumer (D., N.Y.) indicated Wednesday night that he and House Speaker Nancy Pelosi (D., Calif.) would support the framework.

Yellen Says U.S. Could Breach Debt Limit Deadline in August if Congress Doesn’t Act – Wall Street Journal, 6/24/2021

  • The U.S. could run out of room to keep paying the government’s bills some time during Congress’s August recess unless lawmakers raise or suspend the federal borrowing limit before then, Treasury Secretary Janet Yellen said Wednesday.
  • Testifying before a Senate panel, Ms. Yellen emphasized that the pandemic has created uncertainty around the size and timing of government payments, making it difficult to estimate when the Treasury might exhaust those measures.
  • Without congressional action to suspend or raise the limit after July 31, the government could begin to miss payments on its obligations, triggering a default on government debt, which Ms. Yellen called unthinkable.

U.S. Mortgage Rates Jump Above 3% for First Time Since April – Bloomberg, 6/24/2021

  • The average for a 30-year loan was 3.02%, up from 2.93% last week and the highest since April 15, Freddie Mac said Thursday.
  • “As the economy progresses and inflation remains elevated, we expect that rates will continue to gradually rise in the second half of the year,” Sam Khater, chief economist at Freddie Mac, said in a statement. “For those homeowners who have not yet refinanced – and there remain many borrowers who could benefit from doing so – now is the time.”
  • Mortgage rates, which hit a record low of 2.65% in January after plunging during the pandemic, have been hovering near 3% for several weeks.
  • The cheaper borrowing costs have fueled the housing market, boosting buying power for Americans looking for properties.

U.S. Goods-Trade Gap Widens More Than Forecast as Imports Rise – Bloomberg, 6/24/2021

  • The U.S. merchandise-trade deficit widened more than forecast in May as the value of imports rose to near-record levels and exports declined.
  • The deficit increased to $88.1 billion from a revised $85.7 billion in April, according to Commerce Department data released Thursday. The median estimate in Bloomberg survey of economists had called for a $87.5 billion shortfall last month.
  • Imports rose 0.8% to $232.4 billion, while exports declined 0.3% to $144.3 billion.
  • The value of inward-bound consumer-goods shipments climbed to $63.8 billion.
  • Overall, the value of U.S. exports plus imports climbed to $376.7 billion in May, signaling a continued rebound in trade as the world recovers from the pandemic.
  • Wholesale inventories climbed 1.1%, while retail inventories retreated for a third month, dropping 0.8%.

U.S. core capital goods orders dip in May; shipments increase solidly – Reuters, 6/24/2021

  • New orders for key U.S.-made capital goods unexpectedly fell in May, likely held back by shortages of some products, but a solid increase in shipments suggested business spending remained strong in the second quarter.
  • Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, dipped 0.1% last month, the Commerce Department said on Thursday. These so-called core capital goods orders jumped 2.7% in April.
  • Shipments of core capital goods increased 0.9% after advancing 1.0% in April. Core capital goods shipments are used to calculate equipment spending in the government’s gross domestic product measurement.
  • Orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, rebounded 2.3% in May after falling 0.8% in April. They were lifted by a 7.6% rise in orders for transportation equipment.

EUROPE & WORLD

Siemens raises growth target with digital drive – Reuters, 6/24/2021

  • Siemens unveiled targets on Thursday to outpace the market by combining its core engineering business with digital expertise in the first strategic blueprint under new Chief Executive Roland Busch.
  • The German engineering company aims to expand beyond its traditional industrial customers by boosting its digital offering used to improve the performance of their factories, trains and buildings.
  • Under the plan, Siemens raised its target for increasing its comparable annual revenue at a rate of 5%-7%, above global market growth and Siemens’s own previous target. Both ran at 4%-5%.
  • Digital technology is expected to lead, with a faster growth rate of 10% per year from the 5.3 billion euros ($6.33 billion) of revenues Siemens made in the area in 2020.
  • The company also hiked the profit margin targets for its mobility and smart infrastructure businesses, in the goals that will apply from October 2021, the start of Siemens’s 2022 business year.
  • Accompanying the targets will be a new 3 billion euro ($3.58 billion) share buyback, starting in October to run until 2026.
  • The buyback is a slowdown from the company’s two 3 billion euro repurchases over the last five years.

Volvo’s electric XC90 SUV to include lidar as standard equipment next year – Reuters, 6/24/2021

  • Volvo Cars plans to make lidar sensors standard equipment in a new generation of its XC90 SUV next year as part of a strategy to deploy more advanced safety and automated driving technology that relies on precise images of the world around the vehicle.
  • The decision by Volvo Cars to fold lidar sensors into the base price of its vehicle is a bet that customers will pay for the additional capability. It has been called a “watershed moment” by some in the industry.
  • Self-driving car sensor startup Luminar Technologies will supply Volvo Cars with its Iris lidar and Sentinel software in combination with software from Volvo in the electric XC90 SUV that will be built in South Carolina and go on sale in 2022, the companies said.

Apple Daily Exits From Hong Kong Telling Readers ‘Until We Meet Again’ – Wall Street Journal, 6/24/2021

  • After 22 years in Apple Daily’s newsroom, Norman Choy said he felt like he was the obituaries editor during his final shift Wednesday as he handled article after article about the demise of his own newspaper, the latest casualty of China’s campaign to crush dissent in the Chinese territory.
  • After midnight, on Thursday, Apple Daily’s presence all but vanished from the Internet: Its website thanked readers and showed instructions on how to cancel their subscriptions on the Google app. It closed its Twitter and Facebook accounts.
  • As the presses rolled on the final edition, supporters gathered in the rain outside the building in a waterfront industrial area, cheering on the journalists, who shouted thank you and shone phone flashlights back at the crowd before police came and tried to clear the well-wishers away.
  • Across the city, people of all ages formed lines from around midnight and through the morning to buy copies from convenience stores and newsstands before the paper disappeared forever.

Factmonster – TODAY in HISTORY

  • Henry VIII was crowned king of England. (1509)
  • The 22nd and 24th president of the United States, Grover Cleveland, died in Princeton, N.J. (1908)
  • The Soviet Union began a blockade of Berlin. Allied forces responded with what would be known as the Berlin Airlift flying in more than 2 million tons of supplies over the next year. (1948)
  • Lonesome George, the last known Pinta Island Tortoise, died at a Galapagos National Park, making the subspecies extinct. (2012)

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