1. U.S. Stocks Rise Ahead of Bond Auctions; Oil Rises
U.S. stocks rose as steady bond yields helped boost confidence ahead of closely watched Treasury auctions. Oil climbed after the Suez Canal was blocked by a giant container ship. The S&P 500 Index advanced, boosted by Federal Reserve Chairman Jerome Powell’s assurances that inflation risks are under control. Intel rose after it unveiled a plan to make chips for other companies amid a global shortage. Small-cap shares outperformed on bets that economic growth will take off as pandemic restrictions ease. The dollar edged higher. Treasury auctions scheduled for Wednesday and Thursday will be closely watched after last month’s disastrous seven-year auction sparked a global selloff in bonds.
The S&P 500 Index increased 0.5% as of 9:44 a.m. New York time.
The Stoxx Europe 600 Index decreased 0.1%.
The MSCI Asia Pacific Index dipped 1.7%.
The MSCI Emerging Market Index dipped by 1.3%.
2. Suez Canal Stays Blocked Despite Efforts to Free Stuck Ship
Efforts to dislodge a giant vessel from the Suez Canal continued, with rescue teams trying to get traffic moving again in one of the world’s most important waterways. The Ever Given, a container ship longer than the Eiffel Tower that ran aground in the southern part of the canal in Egypt, is still stuck across the waterway despite efforts to release it. The incident is a reminder of how much international trade is channelled through so-called chokepoints — geographically constrained waterways that include the Strait of Hormuz and Panama Canal.
3. Oil Climbs After Strong Europe Data and Suez Canal Blockage
Oil climbed after the release of better-than-expected European manufacturing figures, while the Suez canal remained blocked by a giant container ship. Futures in New York were 2.5% higher. Efforts are continuing to refloat the ship that ran aground in the Suez Canal, its manager said. The vessel remains stuck, said an executive for port-agent services provider GAC, reversing an earlier statement that the container had been partially moved. Crude was also buoyed by strong European economic data, with a record increase in factory output masking fresh concerns across the region about surging coronavirus infections.
4. Tencent Waves Off Impact of Revamp Into Financial Holding Firm
Tencent Holdings expects a “neutral” impact to its operations were it to fold its fintech business into a financial holding company, stressing it’s been compliant with regulations. Tencent’s fintech operations haven’t been affected much by a slew of rules rolled out in past months that curbed everything from online lending to interest rates and customer age-limits, President Martin Lau said during a post-earnings press conference Wednesday. China’s largest company faces more scrutiny of its fintech operations as regulators step up supervision of a fledgeling but sprawling industry that could pose systemic risks. As one of the largest operators in the sector along with Jack Ma’s Ant Group, Tencent’s businesses face the same stringent measures that have dented Ant’s breakneck growth.
5. Drought Forces Taiwan to Cut Water Supply for Chipmakers
Taiwan stepped up its fight against its worst drought in decades, further reducing water supplies to areas including a key hub of semiconductor manufacturing in the central part of the island in an effort to stop reserves from running dry. The government issued its first red alert on water supply in six years on Wednesday, warning that reservoirs in several parts of central Taiwan are running dangerously low. Authorities will cut the water supply to companies in two major science parks in Taichung by 15%, economics minister Wang Mei-hua said at a briefing in Taipei.
6. EU Tightens Curbs on Vaccine Exports Amid Third Infection Wave
The European Union extended its power to stop Covid vaccine exports to the rest of the world, setting the stage for an escalation of tensions with allies and manufacturers as it faces a resurgence of cases. In strengthening its existing export rules, the bloc will demand that countries that received doses from the EU also allow shots to be sent back. It will also consider a nation’s vaccination rate and pandemic situation when deciding whether to green-light shipments. The mechanism won’t be automatic but will be used on a case-by-case basis. The move coincides with the coronavirus situation in Europe getting bleaker as governments face pressure over why their citizens aren’t being vaccinated as quickly as those elsewhere. The EU is finding itself in disputes with drug makers and other countries faring better.
7. Hang Seng Enters Correction as Vaccination Halt Worsens Selloff
Hong Kong’s benchmark stock gauge slumped into a technical correction as the city’s temporary suspension of BioNtech vaccinations fueled worries over the pace of its recovery from the pandemic. The Hang Seng Index lost 2% amid a broad selloff in Asia on Wednesday, capping the fourth day of losses and taking its decline from a Feb. 17 peak to 10%. Stocks in the commerce and industry sector as well as financials were the biggest losers on the gauge. All but three stocks on the measure fell. The Hang Seng’s recent slide has come as traders rush to sell pricey stocks amid rising bond yields. As one of Asia’s largest and most open equity markets, Hong Kong is particularly sensitive to shifts in global liquidity. China’s CSI 300 Index entered a technical correction earlier this month on concerns over lofty valuations and potential liquidity tightening.
8. China Considers Creating State Company to Oversee Tech Data
China’s government has proposed establishing a joint venture with local technology giants that would oversee the lucrative data they collect from hundreds of millions of consumers. The preliminary plan, which is being led by the People’s Bank of China, would mark a significant escalation in regulators’ attempts to tighten their grip over the country’s internet sector. It envisions the creation of a government-backed entity along with some of China’s biggest e-commerce and payments platforms. The online firms would be initial shareholders in the joint venture, though top executives would need to be approved by the regulator. The proposal is among a slate of options being considered to crystallize Beijing’s goal of gaining greater control over the data amassed by online behemoths from Alibaba Group and Tencent to up-and-comers like ByteDance and Meituan.
9. Singapore Says Concerned About ‘Very Tight’ Vaccine Supplies
Singapore said it is closely watching the supply of vaccines, as the city-state remains committed to inoculating its adult population by year-end amid snags in rollouts around the world. Even though there haven’t been significant disruptions so far, “we remain concerned about the supplies, the continuity of supplies, and that is why we are encouraging Singaporeans to get vaccinated as soon as possible,” Gan Kim Yong, the country’s health minister, said at a briefing on Wednesday. The government is monitoring developments in Europe and around the world, and is in close discussions with vaccine manufacturers and suppliers, he said.
10. Pfizer Begins Human Trials of New Pill to Treat Coronavirus
Pfizer said it has begun human safety testing of a new pill to treat the coronavirus that could be used at the first sign of illness. If it succeeds in trials, the pill could be prescribed early in an infection to block viral replication before patients get very sick. The drug binds to an enzyme called a protease to keep the virus from replicating. Protease-inhibiting medicines have been successful in treating other types of viruses, include HIV and Hepatitis C. “Given the way that SARS-CoV-2 is mutating and the continued global impact of Covid-19, it appears likely that it will be critical to have access to therapeutic options both now and beyond the pandemic,” said Mikael Dolsten, Pfizer’s Chief Scientific Officer, in a statement.
Curated from Bloomberg.com