1. Stocks Climb Toward Record With Stimulus in Focus
Stocks rose toward a record a day after violence rocked the U.S. Capitol, with investors firmly focused on the prospect for more economic stimulus and the likelihood that calm will prevail as Joe Biden takes the presidency. The S&P 500 extended gains into a third day, led by financial companies. Treasury yields held above 1%, while the dollar advanced. Democrats are set to take control of the U.S. Senate, House and presidency, paving the way for Biden to bring his legislative agenda to life and reshape the American economy. He was recognized by Congress as the next president early Thursday.
The S&P 500 rose 0.7% as of early morning New York time.
The Stoxx Europe 600 Index gained 0.4%.
The MSCI Asia Pacific Index climbed 0.8%.
2. Biden Reaps Best Georgia Prize: Democrats Get Senate
Joe Biden won a huge boost with Democrats securing control of the Senate by the narrowest of margins, giving the president-elect a smoother path for advancing his nominees and legislative agenda. But the wins in two Georgia runoff elections came on a day when rioters backing President Donald Trump stormed the U.S. Capitol during the joint session of Congress that certified Biden’s Electoral College win. Lawmakers sheltered under their desks as security officers drew weapons and barricaded the members in the chamber with whatever furniture they could find.
3. Global Food Prices at Six-Year High and Climbing
Global food prices reached a six-year high in December and are likely to keep rising into 2021, adding to pressure on household budgets while hunger surges around the world. Food prices has jumped 18% since May, as adverse weather, government measures to safeguard supplies and robust demand helped fuel rallies across agricultural commodities. Prices will likely climb further, the UN’s Food & Agriculture Organization said. The spike threatens to push up broader inflation, making it harder for central banks to provide more stimulus to shore up economies. It’s bad news for consumers whose incomes have been hurt by the Covid-19 crisis and adds to concerns about global food security that’s being affected by conflicts and weather shocks.
4. U.S. Vaccine Rollout Hindered by Faulty Coordination, Messaging
As the U.S. grapples with record hospitalizations and deaths from the Covid-19 pandemic, a crucial vaccination rollout campaign is being impeded by inconsistent messaging and myriad state strategies as a new variant of the virus drive up infection rates, according to public health experts. The missteps have put the number of vaccinations well behind targets set by the Trump administration’s U.S. Operation Warp Speed effort. Only 5.46 million doses have been administered in the U.S. since mid-December against a goal of 20 million by the end of 2020. Vaccination rates have ranged significantly across states, with South Dakota using 69% of the doses sent to it and Georgia just 22%.
5. U.S. Trade Gap Widened to Second-Biggest Record in November
The U.S. trade deficit widened to the second-largest on record in November as merchandise imports reached a more than one-year high in the midst of the holiday shopping season, causing the shortfall in goods to climb to the highest yet. The gap in the trade of goods and services expanded to $68.1 billion in November from $63.1 billion in October. Total imports increased 2.9% to $252.3 billion, with inward-bound shipments of goods climbing to $214.1 billion, the highest value since May 2019. The merchandise-trade deficit increased 6.2% to $86.4 billion, the biggest on record, while the nation’s surplus in services to $18.2 billion, the lowest since August 2012.
6. Tokyo in State of Emergency; China Locks Down City: Virus Update
Japan’s Prime Minister Yoshihide Suga declared a state of emergency for Tokyo and the surrounding areas, trying to stem infections that hit a daily record in the capital. China banned all vehicles and people from leaving the city of Shijiazhuang to the south of Beijing after confirming almost 200 coronavirus infections. More than 10 million people will now be tested for the virus. Accelerating caseloads across Europe prompted a call from the World Health Organization for stricter measures across the continent. The U.S. reported a record 3,844 deaths from Covid-19, while confirmed cases globally climbed by an all-time high of 776,435 to more than 87 million.
7. Alibaba, Tencent Shares Drop as U.S. Weighs Investment Ban
Alibaba and Tencent led a technology stocks selloff as the Trump administration considers barring investments in China’s two most valuable companies. Alibaba fell 3.9% and Tencent dropped 4.7% in Hong Kong trading on Thursday, tracking losses in their New York-listed securities. Imposing a ban on the two companies would mark the most dramatic escalation yet by President Donald Trump’s administration, given the sheer size of the two firms and the difficulty unwinding positions. At $1.3 trillion, the combined market value of their primary listings together accounts for about 11% of the weighting for MSCI emerging markets benchmark.
8. Abu Dhabi’s Mubadala Wants to Take Crack at Top 10 Sovereign Wealth Funds
Abu Dhabi’s Mubadala Investment is overhauling its structure and deploying capital to double in size to nearly half a trillion dollars in the next decade, a plan that will vault it into the top ranks of the world’s sovereign wealth funds. With stakes in businesses from Reliance Industries Ltd.’s retail unit to private equity firm Silver Lake, Mubadala was among a few sovereign investors that last year seized on opportunities from a dislocation in markets caused by the coronavirus pandemic. The focus will be on technology, infrastructure, life sciences and other “future-oriented asset classes,” alongside continued investment in renewables and other clean technologies.
9. India’s GDP Set to Drop 7.7%, Biggest Contraction Since 1952
India’s economy is set for its biggest annual contraction in records going back to 1952 as the rapid spread of coronavirus cases and measures to contain them hurt businesses and households. The gross domestic product will shrink 7.7% in the financial year ending March 2021, the statistics ministry said in its first advance estimate published on Thursday. That’s steeper than a 7.5% drop forecast by the Reserve Bank of India. The estimates may undergo sharp revisions due to disruptions caused by steps to contain the pandemic, said the statistics office, which had suspended data collection coinciding with a nationwide lockdown.
10. U.S. Initial Jobless Claims Remain Elevated Heading Into 2021
Applications for U.S. state unemployment benefits were little changed at elevated levels in the final week of 2020, indicating the labour market remains battered with the pandemic dragging on. Initial jobless claims in regular state programs fell by 3,000 to 787,000 in the week ended Jan. 2, Labor Department data showed Thursday. Continuing claims for state programs — a rough approximation of the number of people receiving those benefits — declined by 126,000 to 5.07 million in the week ended Dec. 26. While initial claims dropped for a third consecutive week, the figures underscore a labour-market rebound that remains fragile, with Friday’s jobs report forecast to show a sharp slowdown in December hiring. The surge in Covid-19 cases sparked a wave of renewed restrictions on businesses and activity, spurring businesses to cut jobs.