Wall Street gains on Apple, stimulus hopes as Fed takes center stage – Reuters, 12/15/20
- U.S. stock indexes rose on Tuesday as progress toward a massive government spending bill and COVID-19 relief measures kept spirits high, while investors awaited new economic cues from the Federal Reserve’s final meeting of the year.
- Apple was the top boost to the Dow and the Nasdaq, rising 4% to a more than three-month high after a report said it plans to increase iPhone production by 30% in the first half of 2021.
- Talks in Congress were underway to agree on a bill to avert a government shutdown, with Democrat and Republican leaders appearing more upbeat about including a fresh round of coronavirus aid, the first new relief measure since April.
- But concerns over the timing of the bill, as well as a spike in the U.S. coronavirus death toll pushed the S&P 500 to a four-day losing streak on Monday, despite optimism over the launch of a nationwide vaccination program.
- The Fed is expected to signal easy monetary policy for the foreseeable future in its two-day meeting starting Tuesday.
- The recent coronavirus vaccine roll-out is also expected to improve the central bank’s 2021 outlook.
- Moderna’s shares fell 3.2%, even as U.S. Food and Drug Administration staff members did not raise any new concerns over data on the drugmaker’s COVID-19 vaccine.
- A report said the vaccine will gain emergency use approval on Friday.
Covid-19 Live Updates: Reported U.S. Cases Tick Up – Wall Street Journal, 12/15/20
- The U.S. reported more than 193,000 new coronavirus cases, as the first doses of the Pfizer-BioNTech vaccine were administered across the country.
- The nation’s tally of new cases for Monday was slightly higher than the previous day’s total, but down from peaks of more than 200,000 reached earlier this month, according to data compiled by Johns Hopkins University. California, which hit a record of more than 36,000 new cases for Sunday, reported just over 26,000 infections for Monday.
- The country reported more than 1,400 fatalities from Covid-19 for Monday, bringing the total death toll to more than 300,400.
- Nationally, the average number of daily deaths over a seven-day period has risen sharply in recent weeks, from 824 on Nov. 1 to over 2,400 as of Sunday, according to Johns Hopkins.
- Hospitalizations hit a record for the ninth day in a row Monday, with 110,549 people in hospitals across the country due to Covid-19, according to the Covid Tracking Project. Intensive-care units were also under strain with 21,456 patients in ICUs, another all-time high.
- Germany and the Netherlands enter new Covid-19 lockdowns this week to curb rising infection rates as a debate intensifies in Britain over government plans to relax restrictions over Christmas.
- The Dutch government imposed its strictest lockdown since the start of the pandemic to run through Jan. 19, closing all stores except for food and other essentials, as well as consumer services and public venues including restaurants, hairdressers and theaters. Most secondary education will move online.
- Germany, whose mild restrictions since Nov. 2, only managed to stabilize daily case numbers, will go into a strict lockdown on Wednesday after a sharp rise in new confirmed infections and Covid-19 related deaths last week.
- Most non-essential shops and all schools will now close, with some regions facing curfews and bans on alcohol consumption in public.
- The new measures will stay in place until Jan. 10 but government officials on Sunday said they would likely be extended since January and February normally mark a peak in seasonal respiratory infections.
- In the U.K., London goes into a more restrictive lockdown on Wednesday. The city and its environs have seen rapidly increasing cases, which the government attributed on Monday to a new strain of the virus.
- Across the U.K., case numbers rose 21.6% in the week to Monday over the week before. Hospitalizations also rose 14.2% while Covid-19 related deaths leveled off at an average 426 daily, after declining in preceding weeks.
FDA Finds Moderna Covid-19 Vaccine Highly Effective – Wall Street Journal, 12/15/20
- The Food and Drug Administration said Tuesday that the Covid-19 vaccine developed by Moderna is “highly effective,” suggesting the vaccine could soon be added to the arsenal against the pandemic.
- Moderna’s documents posted by the FDA included new data suggesting that its vaccine begins to prevent asymptomatic infections after the first dose.
- Some 16.5% of vaccine recipients had systemic adverse reactions—such as fever and fatigue—with a severity of at least grade 3, versus 3.7% among placebo recipients. Severe fatigue was more common after the second dose than after the first dose.
- The findings from Moderna and the FDA will go before an independent panel Thursday.
- The second major U.S. coronavirus vaccine could be shipped by this weekend.
- Moderna has said it expects to have 20 million doses available for the U.S. to ship by the end of 2020, enough to inoculate 10 million people with the two-shot regimen.
- Moderna, with its own manufacturing plant and working with contract manufacturers, expects to produce between 500 million and 1 billion doses in 2021 for global use.
Tech Giants Face New Rules in Europe, Backed by Huge Fines – Wall Street Journal, 12/15/20
- European officials want new powers to oversee internal workings at large tech companies such as Facebook, backed by threats of multibillion-dollar fines, in a bid to expand their role as global tech enforcers.
- The European Union’s executive arm Tuesday proposed two bills—one focused on illegal content, the other on anticompetitive behavior—that would empower regulators in some cases to levy fines of up to 6% or 10% of annual world-wide revenue, or break up big tech companies to stop certain competition abuses.
- One of the EU’s two proposed bills, the Digital Services Act, would require large tech platforms that reach more than 10% of the EU’s population to actively look for and mitigate risks from illegal content and goods available via their services.
- It requires yearly external audits and imposes new transparency requirements toward users and regulators.
- The other EU bill, the Digital Markets Act, would pre-emptively block companies with large numbers of business customers and consumers from a blacklist of actions deemed to be anticompetitive, such as forcing a company wanting access to one core platform service to subscribe or pay for another such service.
- At the same time, the U.K., which has exited the bloc, said Tuesday that it is advancing similar legislation covering what it calls Online Harms.
- It would create a duty of care requiring social-media companies and search engines to take measures to prevent a range of illegal or potentially harmful material from being distributed on their platforms, or face fines of up to 10% of annual global revenue.
Twitter Fined for Breaking EU Privacy Law in First for U.S. Tech Firm – Wall Street Journal, 12/15/20
- Two-and-a-half-years after going into effect, the European Union’s new privacy law has its first fine for a U.S. tech company in a cross-border case—an overdue development, critics say.
- Ireland’s Data Protection Commission said that it is fining Twitter €450,000 for failing to document or properly notify the regulator within 72 hours of learning of a data breach disclosed in January 2019 that exposed some users’ private tweets.
- The case is a bellwether because it is the first in a long pipeline of privacy cases involving big U.S. tech companies in Ireland, involving companies such as Facebook, Apple and Alphabet’s Google.
- Ireland’s data commission leads enforcement of the EU’s General Data Protection Regulation, or GDPR, for those and other U.S. companies that have their regional headquarters in the country.
- From start to finish, it has taken nearly two years for Ireland’s data commission to arrive at a decision in the Twitter case, including nearly five months for the commission and its counterparts in other EU countries to squabble over jurisdiction, investigatory scope and the amount of the fine.
FTC Demands Social-Media, Operations Data from Big Tech Companies – Wall Street Journal, 12/15/20
- The Federal Trade Commission on Monday ordered nine prominent social-media and internet companies to provide a litany of data about their operations as part of a wide-ranging study into their business practices.
- The orders demand the companies turn over detailed, private business information about how they track Americans’ online activities and how they use that data.
- Companies receiving letters included Amazon.com, Facebook and its subsidiary WhatsApp, Reddit, Snap, Twitter, Alphabets YouTube, Discord and TikTok owner ByteDance, which is based in Beijing.
- The announcement isn’t a law-enforcement action and doesn’t carry any immediate penalties, though the information gathered could form the basis for future action by the FTC.
- The agency has broad legal authority to seek information from U.S. companies and is also empowered to police unfair and deceptive business practices.
Boeing Widens 787 Dreamliner Inspections After Finding More Assembly-Line Defects – Wall Street Journal, 12/15/20
- Boeing has expanded inspections of newly produced 787 Dreamliners after finding a previously disclosed manufacturing defect in sections of the jet where it hadn’t been initially detected, according to industry and government officials.
- Boeing engineers and U.S. air-safety regulators agree the newly discovered problem doesn’t pose an imminent safety hazard, the officials said. But the new issue is likely to ramp up a Federal Aviation Administration review of 787 production safeguards sparked earlier this year by other defects, one of these officials said.
- The defects in question are spots where the surface of the 787’s carbon-composite fuselage isn’t as smooth as it is should be, a Boeing spokesman said. Such areas can create tiny gaps where fuselage sections are linked together and could lead to premature structural fatigue, which can require extensive repairs.
Facing year-end cut off, U.S. banks scramble to extend COVID accounting relief – Reuters, 12/15/20
- U.S. banks are scrambling to persuade Washington policymakers to extend the Dec. 31 expiry of an accounting waiver that has allowed lenders to give struggling borrowers more leeway on their loans, several bankers and lobbyists said.
- If Congress fails to extend the relief as part of a new stimulus package being discussed by lawmakers, many lenders are likely to curtail loan modification programs, they said, making life much tougher for as many as 12 million Americans whose unemployment benefits are due to expire at around the same time.
- Of the banks which S&P Global covers, the median proportion of loans in forbearance, as of the third quarter, was 2.5%, down from about 8% in the second quarter. That downward trend indicates borrower stress has been declining since the end of June.
- But if the economy performs poorly, borrowers who have exited forbearance may face new stress, S&P Global warned.
- Roughly 12 million Americans face a jobless benefit cliff when emergency stimulus runs out on Dec. 26, according to estimates by think tank The Century Foundation.
U.S. solar industry surges despite pandemic fallout, study finds – Reuters, 12/15/20
- U.S. solar installations are expected to soar 43% this year, just shy of a pre-pandemic forecast, as the industry has recovered more quickly than expected from a virus-related slowdown, according to a report by the top solar trade group.
- The sector is now expected to install more than 19 gigawatts of solar this year, enough to power more than 3.6 million homes, according to the U.S. Solar Energy Industries Association (SEIA) and energy research firm Wood Mackenzie.
- Last year it installed 13.3 GW of capacity.
- Solar energy also accounted for 43% of new U.S. power capacity additions through the third quarter, compared with less than a third for wind and natural gas.
- Even so, just 3% of U.S. electricity is now generated by the sun.
- SEIA hopes that will rise to 20% over the next decade.
US ECONOMY & POLITICS
Manufacturing, Mining Drive November Increase in Industrial Production – Wall Street Journal, 12/15/20
- U.S. industrial production continued to bounce back from a decline early in the coronavirus pandemic, advancing in November from the prior month on increased manufacturing and mining output.
- Industrial production, a measure of factory, mining and utility output, increased a seasonally adjusted 0.4% in November, the Federal Reserve said Tuesday. Economists surveyed by The Wall Street Journal expected a 0.2% rise.
- The rise in output followed a revised 0.9% rise in October, compared with a 1.1% initial estimate.
- Manufacturing output, the biggest component of industrial production, increased 0.8% in November from the prior month. That was the seventh straight month of gains, according to the Fed, as production of motor vehicles and parts rose 5.3% last month.
- Mining output rose 2.3% over the month, but was 12.5% lower than November 2019.
- Utilities output fell 4.3% in November from the prior month.
- Capacity utilization, which reflects how much industries are producing compared with what they could potentially produce, rose to 73.3% in November from a revised 72.8% in October. Economists expected a 73.0% reading for November.
No Agreement on Covid-Aid Liability Reached – Wall Street Journal, 12/15/20
- A bipartisan group came up short Monday in reaching a broad compromise on Covid-19 liability protections, increasing the chances that Congress will need to narrow the scope of any relief deal in a year-end package.
- GOP leaders had already signaled that they wanted to proceed with a bill that excluded the two thorniest issues: the legal protections they had sought and funding for state and local governments, a priority for Democrats.
- The top two Democratic leaders, House Speaker Nancy Pelosi (D., Calif.) and Senate Minority Leader Chuck Schumer (D., N.Y), hadn’t signaled Monday evening if they were ready to proceed with a smaller package focused on items with broad bipartisan support, but they hadn’t ruled it out.
- Earlier Monday, Mrs. Pelosi declined to answer whether she would hold out for a package this week that included state and local funding. “We are in negotiations,” she said.
- While the bipartisan group said it reached consensus on state and local funding, Sen. Joe Manchin (D., W.Va.) was the only Democrat in the rank-and-file group to sign onto a GOP proposal creating a nationwide gross negligence standard in coronavirus-related lawsuits.
- Sen. John Cornyn of Texas, a member of GOP leadership, said he expected congressional leaders would leave out those two components “to reach consensus, knowing we’re going to have to revisit this again next year. That seems like the glide path to me.”
Majority of small U.S. businesses see worst coronavirus impact still ahead -poll – Reuters, 12/15/20
- Most small business owners in the United States believe the worst of the coronavirus pandemic is still ahead of them, with half saying their operations would permanently close within a year unless the business environment improves, the U.S. Chamber of Commerce said on Tuesday.
- A new U.S. Chamber-MetLife poll of small businesses taken from Oct. 30-Nov. 10 showed that 74% of the owners said they need further government assistance to weather the pandemic. That percentage rises to 81% for minority-owned businesses.
- The quarterly poll found that the 62% of small business owners fear that the worst is still to come with COVID-19’s economic impact. Only 40% said they believe their small businesses can operate indefinitely during the current business environment.
- Neil Bradley, the Chamber’s chief policy officer, said the quarterly survey found that 14% of small businesses are currently planning to cut staff, up from 9% in July and September. Staff reduction plans are back up to the 13% level that the survey saw in April during the pandemic’s first peak, he said.
Joe Biden Officially Captures Enough Electoral Votes to Win Presidency – Wall Street Journal, 12/15/20
- The Electoral College on Monday formalized Joe Biden’s victory in last month’s presidential election, as meetings in state capitals nationwide affirmed the Democrat had amassed more than the 270 votes needed to take office in a little more than a month.
- The voting prompted some congressional Republicans, many of whom had for weeks resisted recognizing Mr. Biden’s win, to acknowledge that the Democrat would be the next president.
- Mr. Biden, in remarks Monday evening in Wilmington, Del., pointed to his tally of 306 electoral votes, which was comparable to the president’s victory in 2016.
- “At the time, President Trump called his Electoral College tally a landslide,” Mr. Biden said. “By his own standards, these numbers represented a clear victory then, and I respectfully suggest they do so now.”
- The Electoral College meetings took less than an hour in most states, and there were no electors who didn’t back the total-vote winner of their state.
William Barr to Resign as Attorney General – Wall Street Journal, 12/15/20
- Attorney General William Barr will resign just before Christmas, President Trump said Monday, ending a tenure during which Mr. Barr long marshaled the Justice Department to the president’s personal and political agenda before falling afoul of him in recent months.
- The resignation comes after the disclosure of the extensive efforts that the nation’s top law-enforcement official made for months to shield federal investigations into Hunter Biden, President-elect Joe Biden’s son, from public view during the heated election campaign.
- That was one of a number of actions Mr. Barr had taken in the lead up to the election that put him at odds with Mr. Trump, who associates said had spoken privately about firing Mr. Barr in recent days.
- Mr. Barr took more steps than previously reported to insulate the Hunter Biden investigations, despite calls from President Trump and Republican allies to announce a probe involving the president-elect’s son.
- Mr. Barr instructed prosecutors and senior colleagues to prevent word of investigations into Hunter Biden from becoming public and to keep the Justice Department out of campaign politics, according to people familiar with the matter.
Fleeing New Yorkers resulted in an estimated $34 billion in lost income -study – Reuters, 12/15/20
- Millions of people have moved out of New York City during the pandemic, but at the same time, millions of others with lower incomes have taken their place, according to a study released on Tuesday.
- All told, a net 70,000 people left the metropolitan region this year, resulting in roughly $34 billion in lost income, according to estimates from Unacast, a location analytics company.
- About 3.57 million people left New York City this year between Jan. 1 and Dec. 7, according to Unacast, which analyzed anonymized cell phone location data.
- Some 3.5 million people earning lower average incomes moved into the city during that same period, the report showed.
EUROPE & WORLD
China’s Economy Continues Broad Recovery Despite Covid-19 Surge Elsewhere – Wall Street Journal, 12/15/20
- China’s economic activity extended its momentum in November with an across-the-board recovery, putting the world’s second largest economy on stronger footing as it approaches the end of a tumultuous year.
- China’s industrial output rose 7.0% in November from a year earlier—its highest level in more than two years, China’s official National Bureau of Statistics said.
- China’s fixed-asset investment, which includes spending on manufacturing, property and infrastructure projects, rose 2.6% in the January-November period compared with last year, according to data from the statistics bureau.
- China’s urban jobless rate fell for the fourth straight month to 5.2% in November, compared with 5.3% in October, said the statistics bureau.
- China’s retail sales, a key gauge of consumer spending, rose 5.0% year over year in November, up from 4.3% in October. Still, it was lower than the 5.5% increase expected by surveyed economists, suggesting China has work to do to shore up growth longer term.
H&M’s fourth quarter sales hit by second coronavirus wave – Reuters, 12/14/20
- H&M, the world’s second-biggest fashion retailer, said on Tuesday that local-currency sales fell 10% in its fourth quarter, with a pronounced slowdown in the final month as the second wave of coronavirus restrictions curbed spending.
- H&M said sales in the quarter fell to 52.5 billion Swedish crowns ($6.25 billion) from 61.7 billion a year earlier, although the local-currency drop from the beginning of September to Oct. 21 was only 3% versus a year earlier.
- “Between 22 October and 30 November sales decreased by 22 percent compared with the corresponding period last year, as the recovery transitioned into a new slowdown as a result of the pandemic’s second wave,” H&M said in a statement.
- H&M issues its full fourth quarter report on January 29.
- The Bill of Rights took effect with Virginia’s ratification of it. (1791)
- Sioux Indian chief Sitting Bull was killed by Native American police. (1890)
- Animated-cartoon pioneer and movie producer Walt Disney died in Los Angeles. (1966)