US FINANCIAL MARKET
U.S. Stocks Edge Lower as Covid-19 Cases Rise – Wall Street Journal, 12/7/20
- The Dow Jones Industrial Average slipped Monday, after hitting a record last week, as investors worried that elevated Covid-19 infection levels could weigh on economic growth through the winter months.
- New restrictions intended to slow the spread of the virus in California went into effect Sunday night, after the number of people hospitalized in the U.S. because of Covid-19 hit another record.
- Data released Friday showed that U.S. job growth slowed sharply in November, suggesting the labor-market recovery is losing steam amid the surge in coronavirus cases and new business restrictions.
- The rising case levels and faltering economic recovery could encourage Congress to pass a new fiscal-stimulus package, investors said. An expanding, bipartisan group of lawmakers has been trying to settle on a coronavirus-relief agreement to help businesses and families through March. Lawmakers and aides said Sunday that they hoped to have legislative text ready early this week.
- Overseas, the pan-continental Stoxx Europe 600 slid 0.5% as talks between the European Union and the U.K. over a trade deal entered a crucial stage. The British pound fell 0.8% against the dollar following reports suggesting that negotiations have broken down between the two sides.
- Shares of some companies that the U.S. government says supports China’s military fell in Hong Kong and Chinese trading, after index compiler FTSE Russell said it would drop eight Chinese stocks from major indexes.
Coronavirus Live Updates: Hospitalizations Hit Another Record – Wall Street Journal, 12/7/20
- The U.S. reported more than 175,000 new coronavirus cases as several states saw record daily levels of infections.
- The number of people hospitalized in the U.S. because of Covid-19, meanwhile, hit another record on Sunday, climbing to 101,487, according to the Covid Tracking Project.
- Intensive-care units are under increasing pressure, with the number of patients in ICUs around the country topping 20,000 for the first time since the pandemic began.
- The U.S. daily tally of infections, while still elevated, was lower than the peaks reached last week, when the nation saw four consecutive days of newly reported cases above the 200,000 mark, according to data compiled by Johns Hopkins University.
- Data last week was affected by the Thanksgiving holiday. Holidays and weekends often see a drop in reported infections, followed by a rise in new cases.
- In California, newly reported cases hit a record of more than 28,000 for Sunday. New restrictions intended to slow the spread of the virus in the state went into effect Sunday night for tens of millions of Californians.
- Southern California—including the major metro areas of Los Angeles and San Diego—and the San Joaquin Valley will be under stay-at-home orders through the Christmas holiday.
- On Twitter, California Gov. Gavin Newsom pointed to the potential of new vaccines to end the pandemic.
- New Jersey, Virginia and West Virginia also reported record numbers of newly reported infections on Sunday, according to Johns Hopkins data.
- The nation’s death toll topped 282,000, with more than 1,100 fatalities reported for Sunday.
- More than 17,000 new cases were reported in Britain and Northern Ireland Sunday, up from around 15,500 the previous day, showing how the virus is continuing to spread widely, though not as quickly as in early November, when a lockdown was enforced in England.
- Italy recorded nearly 19,000 new infections Sunday, down from 21,000 Saturday, while France saw just over 11,000 new confirmed cases on Sunday—down from nearly 13,000 on Saturday, but still some distance from its target of reducing new infections to 5,000-a-day by mid-December.
- The country is unlikely to reach that figure, one of France’s leading virus experts said, which could set back the French government’s plans to ease more lockdown restrictions ahead of the Christmas holidays.
- The virus is continuing to circulate at a high rate in Turkey, meanwhile. Authorities recorded over 30,000 new cases on Sunday, compared with a high of nearly 33,000 on Friday prompting its government to declare a lockdown over the weekend.
Covid-19 Vaccine Rollout Faces Public Concerns Over Safety – Wall Street Journal, 12/7/20
- Governments are accelerating toward approving the first vaccines to contain Covid-19, but public anxiety over the safety of the doses is threatening to undermine those efforts.
- A survey from the University of Hamburg showed the percentage of people hesitant or unwilling to get a Covid-19 vaccine ticking up in November to around 40% of respondents across seven European countries.
- An October poll by market researcher Ipsos found that nearly a third of Japanese and almost half of French respondents said they wouldn’t get inoculated for the coronavirus.
- Only 7% of Japanese respondents in a November survey by ad company Dentsu Inc. said they planned to get vaccinated right away, while nearly 80% said they would wait and see.
- At the University of Hamburg in Germany, health-care management professor Jonas Schreyögg estimates 70% or more of a population has to achieve immunity in order for coronavirus transmission to stall.
Bob Dylan Sells Entire Songwriting Catalog – Wall Street Journal, 12/7/20
- The 79-year old legendary pioneer of modern rock music, and the only songwriter to win a Nobel Prize for Literature, has sold his entire publishing catalog—more than 600 copyrights spanning 60 years—to Universal Music Publishing Group, according to the company.
- While terms of the deal weren’t disclosed, it is likely worth hundreds of millions of dollars—rivaled in value and influence only by the Beatles.
- Fleetwood Mac’s Stevie Nicks last month closed a deal to sell a majority stake in her publishing catalog, valuing it at $100 million, according to people familiar with the matter.
Chick-fil-A Sues Poultry Suppliers, Alleging Price-Fixing – Wall Street Journal, 12/7/20
- Chick-fil-A, the leading U.S. chicken chain, sued major poultry producers, accusing them of price-fixing that the Atlanta-based company says led to inflated prices for billions of dollars worth of its chicken purchases.
- The chicken-sandwich giant alleged in a lawsuit filed Friday in a federal court in Illinois that top chicken suppliers, including Tyson Foods, Pilgrim’s Pride, Sanderson Farms and Perdue Farms, coordinated pricing for meat supplies and collectively reduced production to push up prices.
- Chick-fil-A is seeking unspecified damages and to recoup legal fees, according to the lawsuit.
- The lawsuit adds one of the U.S. poultry industry’s biggest customers to a four-year legal battle over alleged collusion among companies that produce the bulk of the roughly 37 billion pounds of chicken consumed annually in the U.S.
J.C. Penney’s retail and operating assets to exit Chapter 11 – Reuters, 12/7/20
- J.C. Penney said on Monday its retail and operating assets would exit Chapter 11 as two of its biggest landlords, Simon Property Group and Brookfield Asset Management, have acquired nearly all such assets.
- The iconic 118-year-old department store had filed for bankruptcy in May after the COVID-19 pandemic forced it to temporarily close its then nearly 850 stores.
- J.C. Penney will continue to operate the properties and distribution centers moved into the property holding companies.
- With the completion of the sale, the company will have access to about $1.5 billion in new financing, it said.
Watchdog for U.S. Agency That Brokered Controversial Kodak Loan Deal Finds No Wrongdoing – Wall Street Journal, 12/7/20
- A government watchdog agency found no wrongdoing in the process that created a now-halted U.S. loan to Eastman Kodak to produce drug ingredients for the Covid-19 response, according to a copy of the assessment reviewed by The Wall Street Journal.
- The inspector general of the agency that brokered the deal, the U.S. International Development Finance Corp., provided his assessment last week to Sen. Elizabeth Warren (D., Mass.), who had called for the investigation after the one-time photo giant landed a potential $765 million government loan in July.
- In his response, the DFC’s inspector general, Anthony Zakel, said he found no evidence that employees of the agency had any conflicts of interest in the plans, nor did he find “any evidence of misconduct on the part of DFC officials.”
US ECONOMY & POLITICS
U.S. Congress closes in on COVID-19 aid bill as funding deadline looms – Reuters, 12/7/20
- Members of the U.S. Congress are expected as early as Monday to unveil bipartisan legislation to send a long-awaited infusion of federal aid to American families and businesses reeling from the resurgent coronavirus pandemic.
- A group from the Democratic-led House of Representatives and Republican-run Senate is expected to roll out the formal text of a $908 billion COVID-19 relief bill to blunt the health and economic impact of the virus into the early days of President-elect Joe Biden’s administration.
- House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell hope to attach a new coronavirus aid package to an emerging $1.4 trillion omnibus spending bill that Congress must pass by Friday when funding for U.S. government agencies expires.
- It would set new emergency assistance for small businesses, unemployed people, airlines and other industries during the pandemic. But lawmakers have opted not to include stimulus checks to individuals out of concern that a higher price tag could delay passage.
Trump-Era Tax Rule Benefiting Some Multinationals May Get Revised Under Biden – Wall Street Journal, 12/7/20
- A Trump administration regulation that cut the tax bills of companies such as Philip Morris International Inc. and Sealed Air Corp. could be poised for reversal in 2021 as the Biden administration tries to deliver on its campaign promise to raise taxes on corporations.
- The rule, which gives some corporations a path out of a U.S. minimum tax on foreign earnings, has drawn criticism from progressives, including Sen. Ron Wyden of Oregon, the top Democrat on the Finance Committee.
- If Democrats don’t take control of the Senate after Georgia’s runoff elections in January, regulatory changes present the clearest paths to one of President-elect Joe Biden’s campaign promises: higher taxes on U.S. companies’ foreign operations.
- The Biden transition team declined to comment.
- It would likely take months for the new administration to hire Treasury Department officials, make a decision and follow the procedures needed to revise or repeal the regulation.
Biden to Nominate Xavier Becerra as Health and Human Services Secretary – Wall Street Journal, 12/7/20
- President-elect Joe Biden plans to nominate California Attorney General Xavier Becerra to lead the Department of Health and Human Services, according to people familiar with the decision, selecting a legal advocate who has waged battles to preserve the Affordable Care Act.
- Mr. Becerra led a coalition of 20 states and Washington, D.C., in a legal defense of the ACA after Republican-led states brought a lawsuit seeking to invalidate the Obama-era health law.
- The U.S. Supreme Court last month heard arguments in the case.
- The Trump administration has asked the court to strike down swaths of the ACA.
- Mr. Becerra, 62 years old, served in the House of Representatives from 1993 to 2017.
- A spokeswoman for Mr. Becerra didn’t immediately return an email seeking comment.
EUROPE & WORLD
China Exports Generate Record Trade Surplus – Wall Street Journal, 12/7/20
- China’s trade surplus widened to a record in November, as global demand for the country’s goods grew even more robust.
- November exports were up 21% from a year earlier, the General Administration of Customs reported Monday, accelerating from October’s 11.4% and beating economists’ 12% forecast.
- Imports were up 4.5%, slowing slightly from October’s 4.7% and short of the 5.3% expected by economists.
- The resulting $75.42 billion trade surplus topped the record set in May, when a drop in imports was the major factor.
- China’s November shipments to the Association of Southeast Asian Nations and the U.S., its No. 1 and No. 3 trading partners, respectively, were up 10% and 46% from a year earlier, beating October’s pace.
- Exports to the European Union, its No. 2 trading partner, were up 8.6% after being down 7% in October, according to calculations made by The Wall Street Journal.
EU tells Johnson to decide as time runs out for Brexit deal – Reuters, 12/7/20
- British and European Union negotiators made a last-ditch effort on Monday to bridge stubborn differences standing in the way of a post-Brexit trade deal, but they had at best 48 hours left to avoid a disorderly parting of ways at the end of this month.
- “EU-UK negotiations have entered the endgame, time is running out quickly,” said an EU diplomat after the bloc’s chief negotiator Michel Barnier gave member states’ envoys to Brussels a downbeat assessment of the state of play. “It is for the UK to chose between … a positive outcome or a no deal outcome.”
- With growing fears of “no-deal” chaos after London finally leaves the EU’s orbit on Dec. 31, talks resumed before British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen review the situation in a call at 1600 GMT.
- Irish Prime Minister Micheal Martin, whose country would be the hardest hit of the 27 EU states if there is no trade accord, put the chances of a deal at 50-50. Investment bank JPMorgan said its odds on a no-deal had risen to one third from 20%.
Seeking end to 5G ban, Huawei says ready to accept terms Sweden may set – Reuters, 12/7/20
- Huawei is willing to meet any requirement the Swedish government may set on 5G network equipment and take other measures to mitigate concerns, a senior executive said, after a ban in the country delayed spectrum auctions.
- In a surprise move in October, Sweden’s telecom regulator PTS banned the use of equipment from China’s Huawei and ZTE by telecom operators taking part in the 5G auctions. Huawei won a court injunction and an appeal by PTS is pending.
- European governments have tightened controls on Chinese-built 5G networks following pressure from Washington, which alleges Beijing could use Huawei equipment for spying. Huawei has denied being a national security risk.
LG shakes up loss-making phone business, to outsource lower-end models – Reuters, 12/7/20
- LG Electronics said on Monday it had reorganized its mobile phone division to increase outsourcing of its low to mid-end smartphones, which analysts said represented an attempt to cut costs and compete with Chinese rivals.
- LG’s mobile communications business, which has reported an operating loss for 22 consecutive quarters, has created a new management title for original design manufacture (ODM), a spokeswoman for the South Korean company said.
- It has also abolished some research and production positions and reshuffled others, the spokeswoman said, as part of an effort to focus its in-house R&D and production on premium smartphones, with low and mid-end ones to be produced by ODM.
- Although ranked No. 3 in global smartphone market in the first quarter of 2013 by Strategy Analytics, LG is not even among the top seven in the third quarter of this year after losing ground to Chinese smartphone makers like Huawei, Xiaomi, Oppo and Vivo, research firm Counterpoint says.
- The Japanese attacked Pearl Harbor. (1941)
- Iraq formally declared to the UN that it had no weapons of mass destruction. (2002)
- Hamid Karzai was sworn in as Afghanistan’s first popularly elected president. (2004)