1. Nasdaq Sinks to Two-Month Low as Bond Yields Jump
The renewed bout of Treasury volatility spurred a surge in bond yields on Wednesday, dragging down stocks as investors grappled with concern overstretched valuations. A selloff in high-flying giants such as Apple and Amazon.com outweighed gains in banks and energy producers. The Nasdaq 100 slumped to a two-month low, bringing its losses from a February peak to about 8%. The S&P 500 extended its slide into a second day, while the Dow Jones Industrial Average outperformed. Benchmark U.S. government yields approached 1.5%, with bonds pricing in the highest five-year inflation expectations since 2008.
The S&P 500 slid 1.3% as of 4 p.m. New York time.
The Stoxx Europe 600 Index was little changed.
The MSCI Asia Pacific Index increased by 1.1%.
The MSCI Emerging Market Index advanced 1.4%.
2. Senate Final Vote on U.S. Stimulus Likely Pushed Into Weekend
The Senate enters the final stages of debating President Joe Biden’s $1.9 trillion pandemic relief bill on Thursday, with passage in the chamber likely pushed off until the weekend. Senate Majority Leader Chuck Schumer had planned to kick off the process Wednesday night but lacked an official cost estimate on the latest version of the bill, which has been trimmed down from the House-passed measure. In addition to stripping out a minimum-wage increase to comply with Senate rules, Biden agreed to moderate Democrats’ demands for tightening eligibility for $1,400 stimulus checks.
3. Initial Claims for U.S. Jobless Benefits Rose Slightly Last Week
Applications for U.S. state unemployment insurance rose slightly last week, underscoring the pandemic’s lingering restraint on the labour market recovery. Initial jobless claims in regular state programs totalled 745,000 in the week ended Feb. 27, up 9,000 from the prior week. The latest data underscore a labour market still in the grips of a health crisis that’s reducing economic activity across many industries. At the same time, infection rates are declining and more Americans are getting vaccinated against Covid-19, suggesting fewer layoffs in coming months as the economy picks up steam.
4. Brexit Antagonism Escalates as EU, U.K. Go Another Round
When the U.K. and European Union shook hands on a trade deal late last year, few expected the new relationship to be plain sailing. Among the most sensitive issue is Northern Ireland, and tensions ramped up considerably this week when the U.K. announced it will ignore some crucial obligations under the Brexit deal and the EU responded with a dramatic threat of legal action. With Johnson already under pressure from members of his own party to rip up the Northern Ireland deal, the risk is a further escalation that erodes relations. That could have spillovers far beyond politics, and the ongoing saga is a frustration for business. The U.K.’s huge finance industry, for example, is seeing the potential for beneficial trade agreements being slowly whittled away by endless political spats.
5. China Moves to Curb Hong Kong Opposition’s Role in Elections
Chinese lawmakers will advance a proposal to overhaul Hong Kong’s electoral system, pushing ahead with a controversial plan to limit the opposition’s ability to win public office in the Asian financial centre. The National People’s Congress will review a draft resolution on “improving Hong Kong’s electoral system” in the coming days, according to an agenda published Thursday. The rubber-stamp parliament is slated to begin a week-long series of annual meetings Friday in Beijing, meaning the measure could pass as soon as next week. The action is the latest step by Chinese President Xi Jinping’s government to curb dissent in the former British colony following historically large and sometimes violent pro-democracy protests in 2019.
6. ByteDance Said to Invest in Chinese Self-Driving Startup QCraft
Chinese social media titan ByteDance Ltd. is investing in local autonomous driving startup QCraft, another sign of the blurring of boundaries between car companies and Big Tech. The owner of Tiktok is investing in QCraft’s latest fundraising round of at least $25 million, said the people. QCraft’s technology is being trialled in minibuses in parts of China. The deal, which may be announced as early as next week, follows a spate of similar investments and tie-ups between technology firms and car manufacturers, particularly in China. Both conventional and electric automakers are rushing to gain an edge as features like autonomous driving and smart-mobility solutions transform vehicles.
7. Singapore Won’t Allow New Diesel Cars and Cabs From 2025
Singapore won’t allow diesel-powered cars and taxis to be registered from 2025, five years ahead of previously scheduled, as part of its push to reduce emissions and encourage the adoption of electric vehicles. About 2.9% of passenger cars in Singapore run on diesel, while the proportion is as high as 41.5% for taxis, according to Land Transport Authority figures. Most goods vehicles and buses in the city-state run on diesel and won’t be affected by the new rule, announced Thursday by the government.
8. Germany To Lift Debt Spending to Help Tackle Virus
Finance Minister Olaf Scholz said Germany will need to increase debt spending this year to help tackle the impact of the coronavirus crisis on Europe’s largest economy. Merkel’s administration will present its 2022 budget proposal and a medium-term financing plan on March 24. The final decision on public spending beyond this year will be left to the new parliament after September’s elections. The government will likely have to spend aggressively next year as well. Scholz, who is running for chancellor for the Social Democrats, plans to propose a draft 2022 budget that will call for suspending constitutional borrowing limits for a third straight year.
9. Brazil Reports Record Deaths; N.Y. Eases Limits: Virus Update
For the second consecutive day, Brazil reported a record number of deaths from the coronavirus. AstraZeneca’s and Pfizer’s vaccines protected the elderly after a single dose in a new study that validates giving both shots to older people and spacing out injections. An experimental vaccine developed by India’s Bharat Biotech showed 81% efficacy in an interim clinical trial. U.K. Chancellor of the Exchequer Rishi Sunak extended emergency tax cuts to help the British economy recover but warned he will ask profitable businesses to shoulder some of the bills for the country’s pandemic support.
10. Dubai Risks Driving Out Investors as Public Companies Delist
Betting on Dubai to deliver uninterrupted success as a tourism and entertainment hub is turning into a costly business for some stock investors. For the second time in less than three months, one of the emirate’s leading companies said it will effectively delist one of its units for about two-thirds of its original public-offering price. Emaar Properties, which built the city’s iconic Burj Khalifa tower, announced Tuesday it plans to buy back a 15% stake in its Emaar Malls unit at a 36% discount to the 2.9 dirhams a share at which it sold it in 2014. The move has a number of repercussions for a market that’s struggling to sustain interest following a pandemic-triggered selloff last year that was exacerbated by Dubai’s status as a global travel hub.
Curated from Bloomberg.com