1. Stocks Drop With U.S. Futures as Virus Cases Rise
Global stocks slid for a second day and U.S. futures fell, with investors focusing on a rise in virus infections and tougher restrictions. Travel shares led declines in Europe, following a slump in Asia after Hong Kong announced it would start implementing some of its strictest social distancing measures since the pandemic began. Oil fell toward $45 a barrel in New York on speculation that near-term demand is at risk. The pound pared losses after the U.K. agreed to withdraw law-breaking clauses in the government’s Brexit bill.
Futures on the S&P 500 Index decreased 0.4% as of early morning New York time.
The Stoxx Europe 600 Index declined 0.3%.
The MSCI Asia Pacific Index decreased 0.1%.
The MSCI Emerging Market Index dipped 0.1%.
2. All Eyes on U.K. for Western World’s First Covid Shots
The U.K.’s National Health Service launched what it has called the biggest immunization campaign in its history, starting Covid vaccinations across the country. People over 80 are at the front of the line for the shot made by Pfizer Inc. and BioNTech SE on Tuesday, with tens of thousands expected to get vaccinated in the coming days. The U.K. is the first western nation to begin its program, having approved the vaccine last week. Margaret Keenan was the first person to get the vaccine at about 6:30 a.m., according to a statement. Receiving a shot at a hospital in Coventry was “the best early birthday present I could wish for,” said Keenan, who’s due to turn 91 next week, because it meant she’d be able to spend time with her family and friends in the new year after being on her own for most of 2020.
3. U.K. Scraps Law-Breaking Clauses in Deal Boost: Brexit Update
The U.K said it will withdraw the controversial clauses in its Internal Market Bill which would have given ministers the power to unilaterally override the Brexit divorce treaty, bringing to an end a dispute that threatened to derail negotiations on a future trade deal. Talks over the future trading relationship between the U.K. and the European Union remain deadlocked, with an agreement hanging in the balance. The Internal Market Bill may help ease the talks on trade. British Prime Minister Boris Johnson said he still wants and hopes for a trade deal but warned the time may be coming to recognize that the negotiations have failed.
4. Gates Calls India’s Digital Finance Approach a Global Model
Tech pioneer Bill Gates praised India’s policies for financial innovation and inclusion, saying his philanthropic foundation is working with other countries to roll out open-source technologies modelled on the country’s implementation. Indian digital payments took off after the government pushed demonetization in 2016, invalidating most of the country’s high-value banknotes. The Unified Payments Interface, or UPI, has been aided by booming smartphone use and wireless data rates that are among the lowest in the world. India mandates that companies use its UPI platform so payments can be sent easily among all services. Zero user fees are also required. Gates said those policies have drastically reduced the cost and friction of distributing aid to the poor, especially during the pandemic.
5. Thailand Approves $748 Million Plan to Boost Consumer Spending
Thailand’s cabinet approved a new phase of fiscal stimulus program to boost consumer spending worth 22.5 billion baht ($748 million). The program will allow 15 million people to spend money on consumer goods and services, with the government covering 50% of the bill, and is expected to add about 45 billion baht to the economy in the first quarter of next year. The current phase of the program, which lasts through the end of this month, and the upcoming phase will boost the gross domestic product growth by 0.32 percentage point.
6. China’s Financial Markets Start to Price In Deleveraging
China is bucking the global trend of greater economic stimulus amid the coronavirus, preferring instead to refocus on controlling its record debt burden. Multiple interest-rate cuts and cash injections from the central bank have helped keep Chinese companies afloat this year. But the quick buildup of leverage — on track for the biggest increase in five years — also poses a significant risk to the financial system. China’s big banks have been unwilling to lend to smaller financial firms after a string of defaults at some of the country’s safest borrowers. While deleveraging has been a key priority for President Xi Jinping since 2016, previous attempts were interrupted by the trade war and the crippling economic impact of this year’s global health crisis.
7. Tesla Raising Up to $5 Billion in Third Share Sale This Year
Tesla is taking advantage of its surging shares by going back to the capital markets for the third time in ten months and raising as much as $5 billion of common stock. The sale through an “at-the-market” offering program, according to a regulatory filing, meaning the stock will be sold over time at prevailing market prices. The raise could lead Tesla’s cash balance to approach $20 billion. Chief Executive Officer Elon Musk is again seizing on a rally that started as the maker of the Model 3 began to post quarterly profits in the second half of last year. The opening of a plant near Shanghai, the addition of the Model Y crossover to the lineup, advances in battery technology and anticipation of inclusion into the S&P 500 Index has led investors to assign Tesla a much richer valuation than any other auto manufacturer in the world.
8. Global Investors Keep Pouring Money Into Asia’s Red Hot Markets
Be it stocks, bonds or almost any other asset class, foreign cash is pouring into Asia on bets it will be the fastest-growing region as the world recovers from the coronavirus pandemic. The MSCI Asia Pacific Index rose to a record last week and a Bloomberg Barclays bond index is close to its highest in four years. The region’s currencies are, on aggregate, the strongest since 2018 and commodities are also climbing. The positive aftermath of the U.S. election, encouraging progress on vaccines, abundant liquidity and an “improving growth pulse” in Asia has driven demand for the region’s assets.
9. Abu Dhabi Wealth Fund Targets Africa, Renewables to Lift Returns
Abu Dhabi’s top sovereign wealth fund is looking to Africa and renewable energy to generate greater returns while relying more on artificial intelligence to mine data and spot new investment opportunities. With an abundance of natural resources and young, growing and increasingly educated populations, African countries are among those offering the greatest potential for long-term investors. The $710 billion fund, known as ADIA, this year started a climate-change equity portfolio aimed at boosting its green-economy exposure and is a shareholder in sustainable-energy projects that generate more than 20 gigawatts of power.
10. UAE Business Conditions Worsen for Second Straight Month
Business conditions in the United Arab Emirates deteriorated for a second straight month in November amid subdued demand. Non-oil private sector activity in the Gulf nation worsened last month partly due to the first decline in output since May, weak market conditions and lower customer numbers. Its Purchasing Managers’ Index was unchanged from October at 49.5, staying below the 50 mark that separates contraction from growth. The sector continued to suffer from weak demand which, despite partly recovering during the summer, is reportedly still much softer than prior to the Covid-19 pandemic.