1. Futures Steady After S&P Record; Dollar Rebounds

A more sober mood settled on markets Friday amid fresh U.S.-China tensions and little progress on a federal spending deal in Washington. The dollar rose for the first day in five. S&P 500 futures steadied after the index closed at an all-time high on Thursday, as Congress rushed to complete a pandemic-relief deal. In a sign of renewed friction between Washington and Beijing, the U.S. Commerce Department announced it’s blacklisting Semiconductor Manufacturing International Corp. and more than 60 other Chinese companies “to protect U.S. national security.” U.S. stocks may also be more volatile than usual today with options and futures on indexes and equities set to expire.

Futures on the S&P 500 Index were little changed at early morning New York time.

The Stoxx Europe 600 Index dipped 0.1%.

The MSCI Asia Pacific Index sank 0.4%.

The MSCI Emerging Market Index declined 0.3%.

2. U.S. Blacklists More Than 60 Chinese Firms, Including SMIC

The U.S. Commerce Department announced it’s blacklisting Semiconductor Manufacturing International Corp. and more than 60 other Chinese companies “to protect U.S. national security.” “This action stems from China’s military-civil fusion doctrine and evidence of activities between SMIC and entities of concern in the Chinese military-industrial complex,” the Commerce Department said in a statement. Commerce Secretary Wilbur Ross confirmed the move in a Friday morning interview with Fox Business. It was reported first by Reuters overnight. Shares in China’s top chipmaker slid 5.2% Friday in Hong Kong on the news.

3. Global Investors Are Dumping Indian Bonds Like Never Before

Even when viewed in isolation, the $14 billion outflows from India’s bond market in 2020 is remarkable: Foreign investors have never sold so much in a single year. That they did so at a time when Chinese bonds are attracting record foreign inflows underscores just how frustrated some money managers have become with the pace of capital-market reforms by Narendra Modi’s government. While China’s steady progress on bond-market liberalization has earned it a spot in benchmark indexes and helped lure $119 billion of inflows this year, India still has some of Asia’s toughest restrictions on foreign funds. The country’s failure thus far to join China in global debt indexes is adding to investor concerns about meagre inflation-adjusted yields and a widening fiscal deficit.

4. EU Gives Johnson Fishing Ultimatum as Brexit Reaches Climax

The European Union’s chief Brexit negotiator, Michel Barnier, warned British Prime Minister Boris Johnson that he will have to accept limits on access to the single market in return for greater control overfishing — or face no deal. After his British counterpart issued a statement on Thursday night describing the talks as “blocked,” Barnier said a deal could be struck if both sides make “a real effort.” But, in a speech to the European Parliament on Friday, he gave a stark assessment of the ultimatum the EU is giving to the British: access to the EU’s single market will be conditional on keeping British fishing waters open to boats from the bloc.

5. Lloyds Bank Scraps All Bonuses for 2020 After Pandemic Hammers Profit

Lloyds Banking Group is cancelling bonuses for all staff this year as the Covid-19 pandemic weighs heavily on its earnings. A spokesperson for the bank confirmed it will not pay out any group performance share awards in light of expected profitability in 2020. Lloyds expects to set aside at least 4.5 billion pounds ($6 billion) this year for loans likely to fail in the economic turmoil that’s accompanied the pandemic. While it swung to a profit in the third quarter, full-year net income is set to be sharply lower at about 1.1 billion pounds, compared to 2.5 billion pounds in 2019. The lender had already said its group executive committee had given up their bonus entitlements for the year.

6. Finablr Uncovers $1 Billion in Hidden Debt as NMC Scandal Widens

Finablr, the listed owner of two foreign-exchange businesses, uncovered about $1 billion of debt hidden from its board that may have been used for purposes outside of the company, compounding a scandal that pushed its sister firm NMC Health into administration. The London-listed company and its creditors found that Finablr Group’s overall debt was about $1.3 billion, excluding the debt of its Travelex Holdings Ltd. unit and “materially above” its last reported figure, according to a statement. Finablr had $334 million of debt at the end of June, according to a statement at the time. Chairman B.R. Shetty resigned in the wake of this corruption scandal. The announcement of Shetty’s departure was followed by news that Britain’s tax authority intends to shut down Finablr’s UAE Exchange UK and Xpress Money Services.

7. Chinese E-Commerce Newcomers Doubles Amid IPO Frenzy

Two Chinese stocks that started trading in New York this week more than doubled Thursday amid an end-of-year frenzy for newly listed companies. Oriental Culture, a provider of e-commerce services for the collectibles and art market, climbed as much as 324%. And online organic food retailer Wunong Net Technology rose as much as 147%, adding to the 440% jump in its second trading session Wednesday. Both stocks triggered a handful of volatility halts on Thursday. 

8. Bank of Japan to Extend Covid Programs Amid Virus Surge

The Bank of Japan is widely expected Friday to extend its special funding measures for pandemic-hit businesses amid a resurgence of the virus that earlier this week forced the government to suspend domestic travel incentives. Some 66% of 38 economists surveyed said the bank will lengthen the duration of crisis programs that include increased purchases of corporate bonds and commercial paper and $1.1 trillion in funding tools to support bank lending to struggling firms. The programs are currently set to expire in March. All the analysts said the BOJ will likely keep its key interest rate and main asset purchases unchanged at the meeting.

9. Mandatory Covid-19 Vaccines for Travel Would ‘Kill the Sector’

The rollout of vaccines against Covid-19 has intensified the debate about whether they should be made mandatory, with the head of a major tourism lobby saying that doing so would cause irreparable harm to the struggling sector. “I don’t think governments will require vaccination next year” for travel, Gloria Guevara, head of the World Travel and Tourism Council, said at a press conference Thursday. “If they do that they will kill their sector.” Those first in line to get the jabs include the elderly and vulnerable, who “are the last people who will travel,” she said. Instead, rules for virus testing before departure are likely to be bolstered. So far, no country has made vaccination compulsory for people crossing borders.

10. Saudi Wealth Fund Put 2008 Crisis Lessons to Use in 2020

The fund received a $40 billion transfer from the nation’s reserves in March so it could take advantage of the crash in markets, buying stakes in companies including Citigroup, Facebook and cruise-ship operator Carnival. By the end of June, it had sold most of those stakes and switched to holding about $7 billion in exchange-traded funds. The $350 billion sovereign wealth fund is a key lever for Crown Prince Mohammed bin Salman to revive growth. He is seeking to get his economic master plan, known as Vision 2030, back on track after what may be the deepest recession the world’s largest crude exporter has experienced in decades.

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