1. Stocks Slump, Dollar Rebounds Amid Risk-Off Mood
Investors are winding up the week doing risk-off trades, with U.S. stimulus talks hung up and coronavirus developments weighing on sentiment. The dollar rose the most in a month. European stocks fell 1% as record virus deaths in Germany prompts discussion about whether to impose a hard lockdown over the holiday season. The pound slumped 1% as a key European official warned a no-deal split with the U.K. was the likeliest outcome by Dec. 31. U.S. equity futures sank in the wake of stimulus talks stalling over whether to shield companies from virus lawsuits.
Futures on the S&P 500 Index dipped 0.7% as of early morning New York time.
Nasdaq 100 Index futures decreased 0.7%.
The Stoxx Europe 600 Index dipped 1.1%.
The MSCI Emerging Market Index advanced 0.1%.
2. Hyundai Motor Buys 80% of Robotics Firm Boston Dynamics
Hyundai Motor Group agreed to buy a controlling stake in Boston Dynamics in a deal that values the mobile robot firm at $1.1 billion. Hyundai Motor Group, along with some associated companies, will acquire an 80% interest in the U.S. robotics company from SoftBank Group, leaving the Japanese firm with a 20% share. South Korean conglomerate Hyundai Motor Group has been beefing up its research in robotics as it expands further into electric and autonomous vehicles. It is also exploring practical uses for industrial robots.
3. FDA Vows Fast Pfizer Vaccine Action Amid Political Pressure
The U.S. Food and Drug Administration said it’s working toward rapid emergency-use authorization of Pfizer Inc.’s Covid-19 vaccine that was backed Thursday by a panel of agency advisers. The drug regulator has “notified the U.S. Centers for Disease Control and Prevention and Operation Warp Speed, so they can execute their plans for timely vaccine distribution,” the FDA said Friday in a statement. The FDA statement comes as the agency is under tremendous political pressure from President Donald Trump and his administration to clear the vaccine, which has already been approved by the U.K. and Canada. Weary Americans are also eager for an end to a pandemic that has killed nearly 300,000 and dealt a crippling blow to the economy.
4. Sri Lanka Debt Concerns Mount After Downgrade Deeper Into Junk
Markets are showing mounting concern about Sri Lanka’s ability to manage debt loads, amid financial deterioration that sparked a downgrade deeper into junk Friday. Prices of the country’s dollar bonds show that while traders expect securities next year to be repaid, they’re increasingly uneasy about dwindling cash reserves for debt bills down the line. Notes due in 2021 are indicated at about 88 cents on the dollar. That’s a level that shows some misgivings yet not alarm. But securities maturing in 2023 are at about 66 cents, while it’s even worse for ones due 2030 at 57 cents.
5. Hong Kong Buys 15 Million Vaccine Doses From Pfizer, Sinovac
The Chinese company with the rights to market the Pfizer-BioNTech coronavirus vaccine in Hong Kong is preparing to seek approval of the shot soon after the U.S. clears it. Shanghai Fosun Pharmaceutical Group. is getting ready to submit paperwork to the drug regulator in Hong Kong for review as soon as next week. The development comes as Hong Kong on Friday announced it has struck deals for 15 million doses of shots from Pfizer-BioNTech and Chinese developer Sinovac Biotech Ltd., with the first vaccines to be received next month.
6. Sweden Explores Moving to a Digital Currency
Sweden’s government will start exploring the feasibility of having the country move to a digital currency, marking another step into the unknown for the world’s most cashless society. Sweden is among the first countries in the world to consider introducing a digital currency. Its central bank is already running a pilot project with Accenture to introduce an electronic krona based on the same blockchain technology that underpins digital currencies like Bitcoin. From the point of view of the government, Bolund said that “it’s crucial that the digitalized payments market functions safely, and that it’s available to everybody.”
7. Johnson and EU Warn of No Deal as Deadline Nears
Prime Minister Boris Johnson and European Commission President Ursula von der Leyen both warned that a no-deal Brexit is looming on Dec. 31 as they continued last-ditch talks to try to reach a deal before Sunday. Johnson said on Friday that a no-deal Brexit at the end of the year now looks “very, very likely.” His pleas for European Union leaders to step in and salvage the faltering negotiations were frustrated as summit talks overran on Thursday night, pushing Brexit to the fringes. On Friday, von der Leyen spent just 10 minutes briefing government leaders on the subject. Both sides have said they will continue discussions until Sunday, but officials concede that, without fresh political direction, the negotiating teams will have little to talk about.
8. Gold Declines as Investors Weigh Stimulus and U.S. Job Woes
Gold declined as the dollar strengthened amid weak risk sentiment while fading prospects for a U.S. stimulus deal and poor jobs data raised questions over the economic recovery. European stocks and U.S. equity futures fell as investors wound up the week with risk-off trades, amid a worsening of the coronavirus pandemic. German cases and deaths rose the most since the outbreak began, while Indonesia reported record deaths. The dollar strengthened the most in almost two weeks, putting pressure on gold. U.S. efforts to draw up a coronavirus relief package hit another roadblock as Senate Majority Leader Mitch McConnell’s top lieutenants said key portions of a compromise proposal aren’t likely to get backing from most Republicans. Meanwhile, applications for U.S. unemployment benefits surged last week, topping estimates with the highest level since September, casting a shadow over the strength of the recovery.
9. Malaysia’s Ringgit Erases Covid-19 Losses to Rise to Strongest Since 2018
Malaysia’s ringgit climbed to the strongest since July 2018, erasing its virus-fueled losses for the year. The currency rose as much as 0.3%. The gains came amid weakness in the greenback and a recent advance in crude prices. The ringgit has climbed with Asian peers this quarter as the dollar weakened and risk assets were boosted by Covid-19 vaccine developments. An easing of domestic political tension also helped, after Prime Minister Muhyiddin Yassin survived a key test to his leadership.
10. Aramco Hires Moelis to Raise Billions From Asset Sales
Saudi Arabia is looking to emulate neighbouring Abu Dhabi by using its state energy firm to raise billions of dollars from investors, as the kingdom seeks cash to counter a severe recession. Saudi Aramco, the world’s biggest oil company, has hired Moelis & Co. to devise a strategy for selling stakes in some subsidiaries. The plan includes raising around $10 billion from a stake sale in Aramco’s pipelines, said the people, who asked not to be identified because the matter is private. Saudi Arabia has been hammered this year by coronavirus lockdowns and the slump in crude prices. The economy will contract 5.4% in 2020, the most since the 1980s, according to the International Monetary Fund. The budget deficit could widen to 12% of gross domestic product.