1. U.S. Futures Rise on Vaccine Hopes

U.S. equity futures rose and the dollar weakened on signs of progress toward a Covid-19 vaccine, with AstraZeneca saying its shot prevented illnesses in most people. Pfizer Inc. and Moderna Inc. climbed in pre-market trading after a U.S. government official said immunizations may start soon. Vaccine successes lately have added to a risk-on mood in markets and investors have snapped up assets that could benefit from the end of lockdowns and travel restrictions. Energy companies posted the biggest gain among European stock sectors.

Futures on the S&P 500 Index increased 0.4% as of early morning New York time.

The Stoxx Europe 600 Index rose 0.7%.

The MSCI Asia Pacific Index gained 0.6%.

The MSCI Emerging Market Index increased 1.7%.

2. U.S. Cases Rise 110,000 a Day Since Last Month

The U.S., which recorded 177,552 new infections yesterday, is now averaging almost 110,000 more daily cases than a month ago. Vaccinations against Covid-19 in the U.S. will “hopefully” start in less than three weeks, according to the head of the federal government’s program to accelerate a vaccine. “We have patients gasping for breath, needing a ventilator to survive and too often dying,” some 2,000 employees of the University of Wisconsin health system wrote in an open letter pleading for residents to help stop the virus’s spread. British ministers will weigh the next round of pandemic restrictions on Sunday, while the French government plans a three-phase easing of lockdown measures from December. Italy is also considering a pre-holiday easing.

3. China to Take Oil-Refining Crown Held by U.S. Since 19th Century

America has been top of the refining pack since the start of the oil age in the mid-nineteenth century, but China will dethrone the U.S. as early as next year, according to the International Energy Agency. In 1967, the U.S. had 35 times the refining capacity of China. The rise of China’s refining industry is reverberating through the global energy system. Oil exporters are selling more crude to Asia and less to long-standing customers in North America and Europe. And as they add capacity, China’s refiners are becoming a growing force in international markets for gasoline, diesel and other fuels. The Covid crisis has hastened a seismic shift in the global refining industry as demand for plastics and fuels grows in China and the rest of Asia, where economies are quickly rebounding from the pandemic. In contrast, refineries in the U.S and Europe are grappling with a deeper economic crisis while the transition away from fossil fuels dims the long-term outlook for oil demand. 

4. JPMorgan Sees Possible $300 Billion Rebalancing Flow Out of Stocks

Rebalancing flows may lead to an exodus of around $300 billion (INR 22.2 lakh cr) from global stocks by the end of the year, according to JPMorgan Chase & Co. Large multi-asset investors may need to rotate money into bonds from stocks after strong equity performance so far this month.  If the stock market rallies into December, there could be an additional $150 billion of equity selling into the end of the month pension funds that tend to rebalance on a quarterly basis.

5. Dollar Falls to 2018 Lows

The dollar dropped to a two-and-a-half-year low as the prospect of vaccine roll-outs added to headwinds for the world’s reserve currency. A vaccine that offers adequate protection against infection could help power a rebound in global growth and add momentum to a rally in equities and other riskier investments. That outlook is undermining the dollar, which tends to benefit in times of heightened uncertainty. According to Citigroup Inc., the dollar is likely to drop as much as 20% in 2021 should Covid-19 vaccines become widely distributed and help revive global trade and economic growth. Morgan Stanley recommends selling the dollar in favor of stocks and credit.

6. U.S. Moves to Ban Tech Exports to 89 Chinese Firms

The Trump administration is close to issuing a list of 89 Chinese aerospace and other companies that would be unable to access U.S. technology exports due to their military ties, a move that could escalate tensions as the Biden administration prepares to take over. Such a declaration would restrict the companies from buying American goods and technology. The move could fuel already-heightened tensions between the U.S. and China on fronts ranging from trade and Taiwan to the handling of the coronavirus as President-elect Joe Biden prepares to take over from Donald Trump.

7. Europe’s Virus Lockdowns Push Economy Into Another Contraction

The widespread imposition of curbs across the 19-nation bloc means the economy is set to shrink for a third-quarter this year. The situation could worsen, and even push the region into a double-dip recession if governments are forced to extend or expand the clampdown on businesses and movement. Governments have kept up financial aid to help companies and workers, and the European Central Bank has said it’s ready to do more.  The latest lockdowns aren’t as severe as those implemented during the first wave of the pandemic, which means the contraction this quarter is expected to be limited to 1.7%. That compares with a drop of almost 12% in the three months through June. However, employment fell for a ninth straight month in November, with the services sector the worst hit.

8. India Flags Investment From Hong Kong Amid China Border Row

India is subjecting foreign investment proposals from Hong Kong at par with China as part of a new policy that makes approval mandatory for plans from countries that share a land border. Nearly 140 investment proposals valued at over $1.75 billion, mostly from China and Hong Kong — China’s special administrative region — have been put on hold pending scrutiny. Amid a border stand-off with China, the Indian government tightened rules for foreign direct investment from all nations sharing a land border, making scrutiny mandatory for such investments — a restriction that was earlier applicable only to Pakistan and Bangladesh. The delays may complicate deal-making and impact the flow of capital from private equity firms and hedge funds, which often include investors domiciled in China or Hong Kong. This may starve Indian companies of investment in the midst of the pandemic-induced economic contraction.

9. World’s Supplier of Nurses to Limit Sending New Hires Abroad

The Philippines will cap the number of newly-hired nurses and other health professionals it annually sends abroad to 5,000 starting in 2021, President Rodrigo Duterte’s spokesman said. Duterte has approved the limit, taking into account the demand for nurses and doctors in the Philippines and abroad. The Philippines is battling the second-worst coronavirus outbreak in Southeast Asia. The Philippines, which sends thousands of medical practitioners to work overseas, has lifted a ban on deployment of health workers imposed earlier this year. About 13,000 nurses leave the Philippines for work abroad annually.

10. Visa Stalls Plans to Raise Fees for Some In-Store Retailers

Visa Inc. is delaying plans to raise the swipe fees paid by certain U.S. merchants each time a customer uses a credit card in-store as the coronavirus pandemic continues to crimp commerce across the country. The network told merchants this month it will leave consumer credit card-present retail rates unchanged, citing the pandemic’s effects on in-store shopping. Visa had planned to make the biggest changes to swipe fees in a decade this year, with higher rates planned for transactions on e-commerce sites. Some retailers, such as those in real estate or education were set to see such fees decline. The network opted to delay the changes as the pandemic took hold across the U.S., forcing consumers to stay inside and crimping transactions on the firm’s network. The planned changes will now happen in April 2021.

Curated from Bloomberg.com