1. Global Equity Rally Slows After Days of Consecutive Rises
The rally that’s added $6 trillion to global stocks this month slowed on Thursday, as investors assessed whether markets had overheated amid a deteriorating coronavirus situation in many large economies. European stocks headed toward their first drop of the week on disappointing earnings reports tied to the pandemic. Tech shares outperformed, as some investors perceive them to be defensive. Fears that an intensifying pandemic will curb the economic rebound threaten this month’s almost 10% surge in global equities. The International Energy Agency on Thursday cut forecasts for global oil demand amid new lockdown measures.
Futures on the S&P 500 Index dipped 0.5% as of early morning New York time.
Nasdaq 100 Index futures climbed 0.1%.
The Stoxx Europe 600 Index dropped 1%.
The MSCI Asia Pacific Index was little changed.
2. China and 14 Asian Nations to Sign World’s Biggest Free-Trade Deal
Fifteen Asia-Pacific nations including China aim to clinch the world’s largest free-trade agreement this weekend, the culmination of Beijing’s decade-long quest for greater economic integration with a region that accounts for nearly one-third of the global GDP. The Regional Comprehensive Economic Partnership (RCEP), which includes countries stretching from Japan to Australia and New Zealand, aims to reduce tariffs, strengthen supply chains with common rules of origin, and codify new e-commerce rules. Its passage may disadvantage some U.S. companies and other multinationals outside the zone. Following the withdrawal of India from RCEP negotiations last year, the remaining 15 nations sought to announce the agreement by the end of this week’s ASEAN Summit, which Vietnam is hosting virtually.
3. Merkel Warns Germany’s Curbs May Get Extended Through Christmas
Chancellor Angela Merkel opened the door to extending coronavirus restrictions into December as Germany struggles to regain control of the pandemic. While rapid increases in new cases have slowed, levels are still too high, Merkel said on Thursday. Germany is looking to reduce cases to 50 per 100,000 people over seven days from 138 currently. Germany is in the midst of a partial lockdown, with bars, restaurants and gyms closed in a bid to regain control of the outbreak while keeping most of the economy operating. Merkel had raised hopes that the measures could be eased again in time for Christmas.
4. U.S. Initial Jobless Claims Decline by the Most in Five Weeks
Applications for U.S. state unemployment benefits fell by the most in five weeks, signalling the gradual improvement in the labor market is continuing despite a record surge in Covid-19 infections. Initial jobless claims in regular state programs totaled 709,000 in the week ended Nov. 7, down 48,000 from the prior week, Labor Department data showed Thursday. On an unadjusted basis, the figure decreased by about 21,000. Continuing claims — the total number of Americans claiming state unemployment assistance for multiple weeks — fell by 436,000 to 6.79 million in the week ended Oct. 31.
5. UK economy rebounds 15.5% in third quarter
Britain’s economy rebounded by 15.5% in the third quarter, emerging from a historic recession as initial coronavirus lockdown measures were relaxed. The economy, however, was still 9.7% smaller than before this year’s coronavirus-induced recession after a massive contraction in the second quarter. Output in services, the production and construction sectors increased by record amounts in the third quarter, but the reports cautioned that they were still below their pre-pandemic levels seen late last year. The nation entered a painful recession after shrinking by a record 19.8% in the second quarter after 2.5% in the first.
6. Netherlands lender Rabobank is set to close half its branches to cut costs
Netherlands-based lender Rabobank will close roughly half its local branches in coming years to cut costs. There will be an unspecified number of job cuts, but most employees will be relocated. Rabobank, best known internationally as an agriculture lender, did not immediately respond to a request for comment. In 2016, the company said it would trim 9,000 jobs, or a fifth of its workforce as part of cost-cutting measures. The number of local branches will be reduced from around 335 to “100 to 150” in coming years, the newspaper said. It said the decision was prompted by prolonged low-interest rates, digital banking and the COVID-19 pandemic. In July, leading Dutch bank ING said it would close a quarter of its bank branches in the Netherlands as the pandemic has accelerated the switch to digital banking.
7. Saudi Red Sea project plans 16 hotels by 2023 to boost tourism
Saudi Arabia’s flagship tourism project, The Red Sea Development Co (TRSDC), plans to have 16 hotels ready by the end of 2023, two more than initially planned in the first phase. The project’s chief executive, John Pagano, said that he expects a V-shape recovery in global tourism once the coronavirus pandemic abates. Owned by a Saudi sovereign fund, and backed by Crown Prince Mohammed bin Salman, the multibillion-dollar project entails developing luxury resorts on 50 islands off the coral-fringed Red Sea coast, where tourists can dive, visit a nature reserve and see heritage sites. TRSDC plans to finalise a 15-year loan from banks worth 14 billion riyals (INR 28,000 cr) by the end of the year to partly fund its 30bn-riyal capital spending by 2023, and it expects to end 2020 with around 15 billion riyals worth of committed contracts.
8. Moderna Poised to Take Vaccine Spotlight With Data Due
The same U.S. explosion of Covid-19 cases that helped Pfizer get results for its vaccine trial earlier this week is helping speed along Moderna’s trial. Moderna said Wednesday its study has accumulated more than 53 infections, allowing a preliminary analysis of the shot’s effectiveness to begin. The shares jumped. Moderna didn’t predict how long it could take an independent monitoring committee to analyze the data but said the company could get the data to the committee within days. The company said it is still blinded to the data. The bet among top experts in the field is that Moderna’s therapy, which uses a similar mRNA technology to Pfizer’s, will likely prove to be highly effective, perhaps mirroring Pfizer’s announcement earlier this week that its shot appears to be more than 90% effective.
9. Xi Challenges Biden With Move to Snuff Out Hong Kong Dissent
President Xi Jinping effectively defeated the most democratic institution under China’s rule, sending a message to Joe Biden that no amount of pressure will prompt him to tolerate dissent against the Communist Party. China’s top legislative body on Wednesday passed a resolution allowing for the disqualification of any Hong Kong lawmakers who aren’t deemed sufficiently loyal. Chief Executive Carrie Lam’s government immediately banished four legislators, prompting the remaining 15 in the 70-seat Legislative Council to resign en masse.
10. Singapore to Introduce New Visa to Draw Top Global Tech Talent
Singapore is rolling out the red carpet for top talent, launching a program to initially attract 500 individuals with a proven track record of contributing to the global technology ecosystem. Under the so-called “Tech.Pass” program, qualified individuals will be able to secure a new type of visa allowing them to start and operate more than one company and become an investor, consultant or mentor for local startups. This offers more flexibility than current government regulations, which require companies to sponsor an employment pass for workers they want to bring in. The two-year visa isn’t designed for mid-tier tech workers who might compete with locals for jobs, a political issue that has prompted the government to tighten its framework for issuing employment passes to foreigners this year. It’s targeted at highly accomplished entrepreneurs and technical experts who can bring in capital, networks and knowhow, as Singapore aims to become the region’s technology and innovation hub.