1. U.S. Futures Drop as Treasuries Extend Selloff
Stock futures fell as a spike in Treasury yields added to concern overstretched equity valuations amid an uneven economic recovery from a pandemic-induced recession. The dollar rose. Gains in S&P 500 contracts started to fade after data showed the number of employees at U.S. businesses rose in February by less than expected, underscoring the labour market’s struggle to rebound. As Treasuries tumbled, stock futures erased their earlier advance. Futures on the Nasdaq 100 underperformed, following Tuesday’s rout in big tech.
Futures on the S&P 500 Index dipped 0.3% as of 9:20 a.m. New York time.
The Stoxx Europe 600 Index decreased by 0.2%.
The MSCI Asia Pacific Index gained 1.2%.
The MSCI Emerging Market Index advanced 1.5%.
2. Consumers Savings of $2.9 Trillion to Drive the Global Recovery
Consumers in the world’s largest economies amassed $2.9 trillion in extra savings during Covid-related lockdowns, a vast cash hoard that creates the potential for a powerful recovery from the pandemic recession. Households in the U.S., China, U.K., Japan and the biggest euro-area nations socked money away when forced by the coronavirus to stay home and out of the shops. They are likely continuing to do so as restrictions remain and governments dole out stimulus. Half that total — $1.5 trillion and growing — is in the U.S. alone.
3. Bitcoin Jumps Above $50,000 in Recovery from Last Week’s Rout
Bitcoin rallied back above $50,000, surpassing the key psychological level as bullish momentum returned after last week’s selloff. The digital token climbed 8% to trade around $51,500 in early U.S. trading, reaching the highest level in a week. The cryptocurrency has been volatile. Prices plunged 21% last week and have recovered with the broad bounce back in equities. The swings in Bitcoin and Ethereum give the impression that they are a general barometer of risk sentiment.
4. Sunak to Hike Business Tax to Pay Off U.K.’s Vast Covid Debts
Rishi Sunak extended emergency tax cuts to help the British economy recover from the coronavirus but warned he will ask profitable businesses to help pay the huge bill for the U.K.’s pandemic support. With the country mired in a third national lockdown, the chancellor of the exchequer has made clear that safeguarding jobs is his priority in the short term. He said he’s adding another 65 billion pounds ($90.7 billion) of pandemic support to help the country recover this year and next year. But Sunak sketched out a plan to start plugging the deficit, with an increase in corporation tax to 25% from the current 19%, taking effect in 2023. “The government is providing businesses with over 100 billion pounds of support to get through this pandemic, so it is fair and necessary to ask them to contribute to our recovery,” Sunak said in Parliament on Wednesday.
5. Tokyo Olympics to Decide on Overseas Spectators This Month
Organizers of the Tokyo Olympics will decide later this month whether to allow spectators from overseas, while limits on domestic fans will be determined in April, Organizing Committee President Seiko Hashimoto said at a press conference on Wednesday. Following a five-party meeting that included the International Olympic Committee and the Tokyo government, an agreement was reached to make a decision by March 25 when a nationwide torch relay will start, Hashimoto said. Hotels and tourism companies have asked for a decision at an early stage, she said.
6. Samsung Details Plans for $17 Billion Chip Facility in the U.S.
Samsung Electronics Co. revealed additional details about its plans to build a cutting-edge semiconductor facility in the U.S. in a filing with the Texas government, making the disclosure as the Biden administration vows to make the security of the U.S. chip supply a national priority. The South Korean company plans to invest about $17 billion in its Project Silicon Silver and create about 1,800 jobs over the first ten years. Some $5.1 billion would go into buildings and property improvements, while $9.9 billion would be spent on machinery and equipment.
7. Korean Battery Battle Has Global Carmakers Urging Swift Peace
The pressure is mounting on two South Korean companies that are the world’s largest manufacturers of electric-vehicle batteries to ensure their U.S. legal dispute doesn’t disrupt automaker plans to electrify their fleets. SK Innovation is facing a 10-year ban on U.S. imports of its batteries, after losing a trade dispute with LG Energy Solution last month. SK Innovation is lobbying the Biden administration to overturn the ban even as Ford and Volkswagen — which both plan to buy SK Innovation batteries — urge the companies to settle the case quickly. The import ban goes into effect in mid-April unless President Joe Biden takes the unusual step of overturning it on public policy grounds.
8. Goldman Swell to Record Size in Singapore With 100 Tech Hires
Goldman Sachs Group plans to add about 100 staff in Singapore, taking its headcount in the Southeast Asian financial hub to a record, following a tumultuous period in the region. All of the new positions will mainly be in technology, and the appointments will take the number of employees in the city to more than 1,000. About 60% of existing staff work in support and technology roles. Part of the tech hiring will support the bank’s cash management operations, a new area of business for Goldman Sachs. The firm also plans to hire more investment bankers as it faces its “strongest deal pipeline for many years”. Singapore is becoming the focus of Goldman Sachs’ regional strategy after the fallout from a corruption scandal involving Malaysia’s 1MDB sovereign wealth fund tarnished its image in Asia and further afield.
9. A $21 Trillion Bonds Mystery Is Troubling Global Markets
Last week’s startling gyrations in U.S. Treasury yields may offer fresh backing for that mantra, and prompt another bout of soul-searching in a $21 trillion market that forms the bedrock of global finance. While stocks are prone to sudden swings, such episodes are supposed to be few and far between in a government-debt market that sets the benchmark risk-free rate for much of the world. Yet jarring moves occur periodically in bond yields, forming a bit of a mystery as no two events have been the same. Last week, when the gap between bid and offer prices for 30-year bonds hit the widest since the panic of March 2020. The latest events are a stark reminder of what happens when liquidity suddenly vanishes in the deepest, largest bond market.
10. Citi’s $900mn Mistake Prompts Banks to Seek New Safeguards
Wall Street banks are seeking new legal protections to help avoid a repeat of Citigroup’s accidental $900 million payment to Revlon lenders. After last month’s surprise court ruling that let certain Revlon creditors keep $500 million of the mistaken transfer, banks began inserting new language into loan deals that would require investors to return the money if such an error occurred again. The provisions, which were in the works before the decision, aim to strengthen the hand of administrative agents that oversee interest distributions and repayment schedules.
Curated from Bloomberg.com