1. Yields Jump, Tech Declines Amid Dot Plot Anxiety
Treasury yields climbed to more than one-year highs and growth stocks favoured under the so-called reflation led U.S. equity declines amid concern Federal Reserve officials could revise forecasts for when they see a liftoff from near-zero rates. The tech-heavy Nasdaq 100 slumped for the first time in three trading sessions as U.S. central bankers meet for a second day. The S&P 500 also declined, while the Dow Jones Industrial Average erased earlier gains. WTI crude oil reversed a gain after the International Energy Agency said markets aren’t on the verge of a new price supercycle.
The S&P 500 Index sank 0.6%.
The Dow Jones Industrial Average declined 0.1%.
The Nasdaq 100 Index declined 1%.
The Stoxx Europe 600 Index decreased by 0.6%.
2. Astra Gets WHO Support; CDC Finds Vaccine Inequity
AstraZeneca’s embattled Covid-19 vaccine was defended by the World Health Organization, which said the shot’s benefits outweigh its risks and advised resuming immunizations after more than a dozen European countries suspended them on concerns about blood clots. Vaccination coverage was lower in U.S. counties with the most socially vulnerable residents, according to a report by the Centers for Disease Control and Prevention. Mexico and Canada are at the top of President Joe Biden’s list of countries to eventually receive exports of U.S.-made coronavirus vaccines.
3. U.S. Warns Banks Over Ties With Sanctioned Chinese Officials
The U.S. added more than a dozen Chinese officials to a list of people that banks must avoid, putting global financial institutions on notice that they risk running afoul of American sanctions. The State Department added 14 Chinese lawmakers, including a member of the Communist Party’s ruling Politburo, to a blacklist under the Hong Kong Autonomy Act. While all the officials had been already designated for sanctions by the Treasury Department in December, the latest action could lead to greater penalties for banks that have any business with them. Chinese Foreign Ministry spokesman Zhao Lijian denounced the action as inappropriate interference in the country’s domestic affairs.
4. Samsung Warns of Severe Chip Crunch; Delays Key Phone
Samsung warned it’s grappling with the fallout from a “serious imbalance” in semiconductors globally, becoming the largest tech giant to voice concerns about chip shortages spreading beyond the automaking industry. Samsung, one of the world’s largest makers of chips and consumer electronics, expects the crunch to pose a problem to its business next quarter. The company is also considering skipping the introduction of a new Galaxy Note — one of its best-selling models — this year. The fear is the crunch, which first hit automakers hard, may now disrupt the much larger electronics industry.
5. Goldman, Citi Lead U.S. Banks Plowing Billions Into China
Goldman Sachs led U.S. banks plowing billions of fresh cash into China last year, undeterred by political turmoil as the world’s second-largest economy further opens its $50 trillion financial markets. The bank’s “cross-currency outstandings” rose 33% to $17.5 billion last year in China, covering a broad array of cash and financing to companies and government entities, according to an annual filing. Together with Citigroup, JPMorgan Chase, Bank of America and Morgan Stanley, the five big U.S. banks had $77.8 billion in exposure, up 10% from 2019. China’s financial markets are a potent lure for the world’s biggest banks, with billions of profits on the line in investment banking and wealth management. But they also face an opaque regulatory environment and a tense political climate that has deteriorated over the past years and that’s unlikely to see major improvements under the Joe Biden administration.
6. Baidu Raises $3.1 Billion From Second Listing in Hong Kong
Chinese search engine Baidu raised HK$23.9 billion ($3.1 billion) in its Hong Kong share sale, sealing the latest in a string of blockbuster equity offerings in the financial hub. Nasdaq-listed Baidu follows online car-sales website Autohome Inc. in seeking a trading foothold in Hong Kong, after a wave of such share sales in 2020 which saw some $17 billion raised. Other companies looking at selling shares in the city include Tencent Music Entertainment Group and video site Bilibili Inc.
7. KKR Enters SPAC Frenzy With Flat Debut After $1.2 Billion IPO
The first special purpose acquisition company from private-equity giant KKR & Co. Inc. opened flat in its debut session on Wednesday. KKR Acquisition Holdings I Corp. raised $1.2 billion in an upsized initial public offering that priced Tuesday after the market closed. The vehicle will now search for acquisition targets in the consumer and retail industries. The search will be led by Chief Executive Officer Glenn Murphy, chairman at Lululemon Athletica Inc. The listing arrives amid a record wave of issuance by SPACs, but performance has been muted in the aftermarket. Blank-check vehicles that went public this year are trading just 1.7% above their IPO price on average.
8. Biden Agrees Putin Is Killer, Says He’ll Pay for Meddling
President Joe Biden agreed that Russian President Vladimir Putin is a “killer,” and said in an interview with ABC News that Russia would pay for alleged interference in U.S. elections. His comments, recorded Tuesday, came the same day as a U.S. intelligence community report that Putin ordered influence operations to hurt Biden’s candidacy, favouring former President Donald Trump just as the intelligence community says the Russian leader did in 2016 against then-Democratic presidential candidate Hillary Clinton. Putin “will pay a price” for the interference, Biden said. In a “long talk” with the Russian leader, Biden said he told him, “I know you and you know me. If I establish this occurred, then be prepared.”
9. Saudi Arabia Pays More Aramco IPO Fee: Wall Street Misses Out
Saudi Arabia recently paid around $50 million of extra fees to banks on the record-breaking listing of state oil company Aramco, with most of the cash going to local underwriters after Wall Street firms were sidelined. The discretionary incentive fee — doled out to reward banks for the number of orders they brought in — was transferred to arrangers of the 2019 share sale in the last couple of months. The payments totalled about 0.25% of the money raised from institutional investors. The additional money brings the sum that the kingdom paid to the banks on the $29.4 billion IPO to just over $100 million.
10. Saudi Arabia Implements Expat Labor Reforms With Caveats
Saudi Arabia added conditions to a new package of labour reforms for foreign workers that could curtail the greater freedom of movement the changes had promised. The reforms are meant to help level the playing field for overseas workers and citizens in a bid to reduce domestic unemployment while continuing to draw foreign talent. It’s a major shift away from the kingdom’s controversial “kafala” or sponsorship system, criticized by human rights groups as allowing employers to trap and exploit foreign workers. And indeed, non-Saudis no longer need their employer’s permission to change jobs, travel abroad or leave the country permanently.
Curated from Bloomberg.com