1. Global Stocks Extend Rally as Tech Leads Gains
The rally in global stock markets extended into a third day as companies from Amazon.com to Vodafone Group posted strong results and the retail-trading frenzy subsided. Tech was firmly back in favour in the U.S., with Nasdaq 100 contracts climbing as earnings from Alphabet and Amazon impressed investors, while futures on the Russell 2000 Index of small-cap stocks dipped. Treasury yields rose after Senate Democrats put President Joe Biden’s $1.9 trillion stimulus plan on a fast track to passage. The Stoxx 600 Index climbed 0.6%, with most sectors in the green as corporate results rolled in. Italian stocks and bonds surged after Mario Draghi, the former European Central Bank president, was tapped to be the country’s next prime minister.
Futures on the S&P 500 Index climbed 0.4% as of 8:23 a.m. New York time.
The Stoxx Europe 600 Index gained 0.5%.
The MSCI Asia Pacific Index advanced 0.9%.
The MSCI Emerging Market Index increased 0.5%.
2. Jeff Bezos to Step Down as CEO: Opens a New Age for Amazon
Bezos said he will resign as chief executive officer of Amazon.com and become executive chairman later this year. He will hand day-to-day control to Andy Jassy, his longtime head of Amazon Web Services, a swiftly growing division that has almost single-handedly changed the way companies buy the technology that powers their businesses. With that comes at least a partial end to one of the most epic runs in modern business history. Over the last 25 years, the Amazon founder, now 57, led the company through perhaps the most fertile period of any American business ever. Over the last decade, he has piloted Amazon to a $1.7 trillion market capitalization, where it currently occupies the same rarified trillion-dollar air as Microsoft and Apple.
3. Ant Reaches Agreement With China Regulators on Overhaul
Ant Group and Chinese regulators have agreed on a restructuring plan that will turn Jack Ma’s fintech giant into a financial holding company, making it subject to capital requirements similar to those for banks. The plan calls for putting all of Ant’s businesses into the holding company, including its technology offerings in areas like blockchain and food delivery. One of Ant’s early proposals to regulators had envisioned putting only financial operations into the new structure. An official announcement on the overhaul could come before the start of China’s Lunar New Year holiday next week.
4. Tesla Puts China Supercharger Plant Into Production
Tesla Inc. will start making superchargers in a newly built plant in Shanghai, the American electric automobile maker said in a statement on Wednesday. The move marks Tesla’s latest effort to grow its business in the world’s most populated country. The 42-million-yuan ($6.5 million) plant will make up to 10,000 supercharger poles annually, the statement said. China has built more than 410 charging stations for Tesla in 2020, the statement said.
5. Yellen Summons Regulators to Discuss Financial Market Volatility
Treasury Secretary Janet Yellen has summoned U.S. financial regulators to discuss recent volatility in financial markets, in her first public effort to address the tumult involving GameStop shares and broker-dealer Robinhood. Yellen called a meeting with the Securities and Exchange Commission, the Federal Reserve Board, the Federal Reserve Bank of New York and the Commodity Futures Trading Commission. “Secretary Yellen believes the integrity of markets is important and has asked for a discussion of recent volatility in financial markets and whether recent activities are consistent with investor protection and fair and efficient markets,” the department said.
6. Reddit Stocks Lose $167 Billion as Crowd Preaches Defiance
The 50 stocks that Robinhood originally put on its restricted list had added $276 billion in value from the end of 2020 to the height of the recent mania. But now, $167 billion has been wiped out in just a matter of days, and there’s little sign the pain is easing. GameStop plummeted 60% Tuesday to $90 a share, bringing its two-day loss to 72%. If anything, the last few days have served as a reminder that in spite of a popular mantra that they do, stocks don’t always go up.
7. U.S. Plans Record Debt Sale; No Changes Before New Stimulus
The U.S. Treasury held steady its planned issuance of longer-dated securities at a quarterly debt auction next week as the department awaits the result of the Biden administration’s push for a fresh coronavirus relief package. The Treasury already boosted its so-called quarterly refunding in each of the last three quarters, and its stockpile of cash remains near an all-time high. With the outcome of President Joe Biden’s push for a $1.9 trillion stimulus bill uncertain, the department held off on tweaking its issuance of longer-dated securities. The Treasury will sell $126 billion in long-term debt next week.
8. U.K. Offers to Help Save Eurostar, Says France Must Take Lead
The U.K. said it’s ready to pitch in with state funding to help rescue Eurostar International if France takes the lead on bailing out the Channel Tunnel rail business that’s been savaged by pandemic travel restrictions. British Transport Secretary Grant Shapps said options including the Bank of England’s coronavirus loans and the U.K.’s export finance regime could be available to help London-based Eurostar, which operates a passenger train link with the continent. But he insisted that the primary responsibility for the bailout remains with France, which controls the company via state railway SNCF. The coronavirus crisis has wiped out 95% of Eurostar’s passenger traffic and SNCF has warned that there is a real risk to the business’s survival without government aid.
9. Kuwait Taps Into Wealth Fund as Cash Dries Up
Kuwait’s government has transferred the last of its performing assets to the country’s sovereign wealth fund in exchange for cash to plug a monthly budget deficit of $3.3 billion, leaving one of the world’s richest nations with few options to pay its bills. Fitch on Wednesday cut Kuwait’s outlook to negative from stable, citing “the imminent depletion of liquid assets” in the absence of parliamentary authorization for the government to borrow.” The rating was affirmed at AA. The assets include stakes in Kuwait Finance House and telecoms company Zain. State-owned Kuwait Petroleum Corp. was also transferred from the government’s treasury to the $600 billion Future Generations Fund, meant to safeguard the Gulf Arab nation’s wealth for a time after oil.
10. UAE Job Market Improves as Vaccine Rollout Boosts Confidence
Business activity in the Arab world’s two largest economies improved at the start of 2021, with the United Arab Emirates seeing growth in its job market for the first time in over a year. Non-oil private sector activity in Saudi Arabia soared during January as new work levels increased and operating conditions improved marginally in neighbouring UAE, helped by an expansion in new orders and output. Purchasing Managers’ Index surveys last month for the two Gulf nations were above the threshold of 50 that separates growth from contraction. The rapid roll-out of Covid-19 vaccines in the UAE should help to restore confidence in markets over the first half of 2021, although firms were still relatively downbeat about future growth in January.