1. S&P 500 Rallies to Close the Year at Record High
The S&P 500 Index and Dow Jones Industrial Average turned positive yesterday afternoon and ended at all-time highs. Volume was about 15% below average. Financial companies were among the best performers, while energy producers slumped. European stocks dipped. Markets in Japan, Germany and South Korea were shut for New Year’s Eve. In Asia, China’s benchmark CSI 300 Index closed at a five-year high as officials gave the green light to its first coronavirus vaccine for general public use and data showed a steady economic recovery. The offshore yuan strengthened to the highest since June 2018.
The S&P 500 Index rose 0.6% as of market close in New York.
The Stoxx Europe 600 Index fell 0.3%.
The MSCI Asia Pacific Index was little changed.
The MSCI Emerging Market Index rose 0.1%.
2. Pandemic Exits 2020 With Record Cases Across Globe
One year after a mysterious pathogen first revealed itself in Wuhan, China, the Covid-19 pandemic enters 2021 with no signs of slowing down. Global daily deaths reached record highs this week, while U.S. infections approached 20 million, almost twice as many as second-worst hit country India. Countries from Japan to South Africa ended 2020 with record daily cases. In the U.S., New York state and Florida shattered their previous case records, while Texas saw a new high for hospitalizations. The U.S. added 227,616 cases on Dec. 31. China and Brazil became the latest to report infections of the new, highly transmissible virus strain.
3. Britain Leaps Into Unknown With Split From EU at Critical Moment
The U.K. completed its divorce from the European Union, leaving the bloc’s single market and customs regime more than four years after voting for Brexit and with the country gripped by a deepening crisis. The end of the transition period at 11 p.m. in London on New Year’s Eve launched the U.K. on a new path on its own, free from EU laws, able to strike trade agreements around the world and to reshape its economy. “This is an amazing moment for this country,” Prime Minister Boris Johnson said in his New Year’s message. “We have our freedom in our hands and it is up to us to make the most of it.” Yet many areas — including the critical financial services industry — still need to be agreed to, while in the background the coronavirus pandemic is engulfing more people than ever and another lockdown is weighing on the nation.
4. NYSE to Delist Chinese Telco Giants on U.S. Executive Order
The New York Stock Exchange said it will delist three Chinese corporations to comply with a U.S. executive order that imposed restrictions on companies identified as affiliated with the Chinese military. China Mobile Ltd., China Telecom Corp Ltd., China Unicom Hong Kong Ltd. will be suspended from trading between Jan. 7 and Jan. 11, and proceedings to delist them have started. The three Chinese companies have separate listings in Hong Kong. All generate the entirety of their revenue in China and have no meaningful presence in the U.S. Their shares are also thinly traded on the NYSE compared to their primary listings in Hong Kong, making this NYSE delisting more of a symbolic blow amid geopolitical friction between the U.S. and China.
5. Faster-Spreading Covid Strain Affects Young the Most
The new coronavirus variant that emerged in the U.K. is more transmissible and appears to affect a higher proportion of people under 20. The mutation of concern has “a substantial transmission advantage” and is linked to “epidemic growth in nearly all areas,” the scientists wrote. It can raise the virus’s reproduction rate, which indicates how many people one patient infects, by as much as 0.7. “This will make control more difficult and further accentuates the urgency of rolling out vaccination as quickly as possible,” said Neil Ferguson, a professor at Imperial who has worked on modelling the outbreak. Social distancing measures that worked against earlier strains of the virus were insufficient to control the spread of the new variant. The government had previously said the new strain was as much as 70% more transmissible than other versions.
6. Huawei Removes Tencent Games in Dispute Over Cooperation
Huawei Technologies Co. removed Tencent Holdings Ltd.’s games from its app store as some terms of cooperation are changing between the two technology giants. The action was taken after Tencent made a “big change” on Dec. 31 to how the companies work with each other. While most smartphones in China use Google’s Android operating system, the U.S. company’s Play Store isn’t available and apps are instead sold by mainland manufacturers and others. Huawei was the biggest smartphone maker in the country during the September quarter with 43% of shipments. Huawei said its decision followed an assessment by its legal team and was based on the premise that Tencent is unilaterally asking to halt cooperation.
7. Millions of Americans Are Calling In Sick, Stunting the Recovery
Amid the surge in the ranks of the unemployed during the pandemic, another crucial problem in the labour market has gone mostly overlooked: Workers are calling out sick in record numbers this year. Whether it’s because they have Covid-19 themselves, are worried about getting it or are taking care of someone who already has it, the number of workers who’ve missed days on the job has doubled in the pandemic. What’s more, unlike the jobless rate, which has steadily declined from its April peak, the rate of absenteeism has remained high. Almost 1.8 million workers were absent in November because of illness, nearly matching the record 2 million set back in April.
8. Tesla Sets Price of China-made Model Y SUV Below Competitors
Tesla will start deliveries of its China-made Model Y SUV this month to customers in the country, as it set the vehicle at a price below some of its rivals to maintain a competitive edge. The Model Y starts from 339,900 yuan ($52,074), while the Model Y Performance car will be from 369,900 yuan. Tesla Chief Executive Officer Elon Musk has said the Model Y has the potential to outsell all other vehicles it makes. Tesla also launched a modified Model 3 sedan which remained at a post-subsidy price of 249,900 yuan for the basic version. The Model 3 qualifies for China’s national subsidy for electric vehicles, while the Model Y doesn’t. China is Tesla’s largest market after the U.S., with sales topping 120,000 units in 2020.
9. Oman Plans 2021 Borrowing as Oil Price, Virus Batter Economy
Oman’s government will finance most of its budget shortfall in 2021 by borrowing to plug a fiscal gap battered by a decline in oil prices and the coronavirus pandemic. The Persian Gulf state is looking into borrowing that will cover 73%, or 1.6 billion rials ($4.2 billion), of the country’s 2.2 billion-rial shortage, with the remaining 600 million rials to be drawn from its reserves. The government based its 2021 budget plan on an oil price of $45 per barrel. Oman has taken measures such as reduced spending and plans to impose a 5% value-added tax in 2021.
10. Singapore and Malaysia Terminate High-Speed Rail Project
The two countries were unable to reach an agreement on the project after Malaysia sought changes because of the pandemic’s economic impact. Malaysia will have to compensate Singapore for costs already incurred. The announcement came just after a Dec. 31 deadline for the second and final extension of the suspension of the project, which was first mooted a decade ago and given the green light in 2013. The on-again, off-again 350 kilometres (218 miles) high-speed rail link would have cut travel time between the centres down to about 90 minutes versus more than four hours by car. The service was due to start in 2026.