1. U.S. Stocks Slump as Oil Tumbles, Bonds Advance
U.S. equities slumped as rising virus cases and a lockdown in Germany sparked concerns the global reopening will be delayed. The S&P 500 Index edged lower amid signs that progress against the pandemic is stalling as worldwide deaths and cases creep higher. The small-cap Russell 2000 fell 2% as beneficiaries of the reopening trade including Carnival Corp. and TripAdvisor Inc. declined after Germany announces a hard lockdown over Easter to try to defuse another wave of coronavirus infections. European shares slumped. The dollar strengthened, while the 10-year U.S. Treasury yield slid for a second day. Oil dropped below $60 a barrel on concerns the market is oversupplied.
The S&P 500 Index fell 0.3% as of 10:40 a.m. New York time.
The Stoxx Europe 600 Index decreased by 0.2%.
The MSCI Asia Pacific Index decreased by 0.8%.
The MSCI Emerging Market Index fell 0.9%.
2. Oil Slumps With Bearish Market Flashing Demand Trouble
Oil dropped sharply in London on concerns about the demand outlook and as the futures curve flipped into a structure indicating near-term weakness. Brent futures slumped as much as 5%. There are concerns over the prospects for consumption with Covid-19 cases surging in India and threatening the economy’s recovery from recession. Germany will extend its curbs and impose an Easter lockdown, while in the U.S., New York City’s mayor urged a pause on reopening. At the same time, West Texas Intermediate fell below its 50-day moving average for the first time since November.
3. China’s Stock Benchmark Falls Back to Key 5,000 Support Level
China’s equity benchmark edged back toward its 2021 low, briefly piercing through a key support level as traders sold everything from electronic cigarette stocks to raw-materials firms amid broader concerns over earnings and valuations. The CSI 300 Index fell 1%, extending its decline from this year’s peak to nearly 14% just days after the benchmark notched its longest weekly losing streak since early 2016. Foreign investors sold a net $1.1 billion worth of mainland stocks through trading links, the most since March 8. Traders said they were concerned about earnings growth not living up to the expectations that drove a buying frenzy before the Lunar New Year break.
4. Microsoft in Talks to Buy Discord for More Than $10 Billion
Microsoft is in talks to acquire Discord, a video-game chat community, for more than $10 billion. Discord has been talking to potential buyers and software giant Microsoft is in the running, but no deal is imminent. Discord is more likely to go public than sell itself. Representatives for Microsoft and Discord declined to comment. VentureBeat reported earlier on Monday that Discord was engaged in sales talks. San Francisco-based Discord is best known for its free service that lets gamers communicate by video, voice and text, and people stuck at home during the pandemic have increasingly used its technology for study groups, dance classes, book clubs and other virtual gatherings. It has more than 100 million monthly active users.
5. Germany to go into Hard Lockdown for Easter
Chancellor Angela Merkel ordered a five-day lockdown over Easter in one of Germany’s toughest moves since the start of the pandemic, highlighting the sudden deterioration in Europe’s efforts to contain the coronavirus. Just a few weeks after the spread appeared under control, a new spike in infections and sputtering vaccinations have led to France and Italy expanding lockdowns. The Netherlands will likely extend curbs later on Tuesday while in Hungary, hospitals are calling for help from untrained volunteers. The region’s darkening outlook will be reflected in a joint statement by European Union leaders on Thursday when they discuss the pandemic, which has taken a turn for the worse because of aggressive Covid-19 strains.
6. China Lashes Out at U.S. Allies in Bid to Thwart Biden Strategy
This week Joe Biden made good on his campaign promise to work more with allies to pressure China, coordinating with U.S. partners to impose sanctions over alleged human-rights abuses in Xinjiang. China wasted no time Monday night immediately retaliating with reciprocal sanctions against European Union officials while summoning the bloc’s ambassador to China. Those hit included politicians in a range of countries, one of the main EU bodies formulating foreign policy and Europe’s largest research institute focused on China.
7. Hong Kong Ruins Business Leaders’ Hopes for Loose Covid Rules
Hong Kong’s government has dashed business leaders’ hopes for a near-term easing of the city’s Covid quarantine measures, signalling in a private meeting that any relaxation would require a dramatically higher vaccination rate and prolonged drop in local cases. Policymakers led by Chief Secretary of Administration Matthew Cheung reiterated a target of vaccinating 50% of the population before any major loosening. As of Monday, about 5% of the financial hub’s residents had received their first vaccine shots. Policymakers also downplayed prospects for travel bubbles or a reopening of the border with China any time soon. The government didn’t offer a clear road-map for reopening despite requests to do so from multiple business groups.
8. U.K. Immigrant Worker Population Declines Less Than Feared
The U.K. may have lost fewer immigrants during the coronavirus crisis than previously feared, according to government data. The pandemic has made it hard to count people entering and leaving the U.K., and some economists had calculated that more than 1 million foreign-born workers may have left the country last year. That was based on responses to a survey regularly carried out by the Office for National Statistics. But in an article published Tuesday, the ONS said that real-time tax data suggest that the reduction may have been overstated. While the Labour Force Survey indicates the number of non-U.K. nationals in employment in the U.K. was 15% lower in the fourth quarter of 2020 than a year earlier, real-time information puts the decline at just 4%.
9. Citigroup CEO Bans Friday Zoom Calls, Encourages Vacations
Citigroup Inc. Chief Executive Officer Jane Fraser has barred internal video calls on Fridays and encouraged vacations in an effort to combat workplace malaise brought on by the coronavirus pandemic. Fraser, who replaced Michael Corbat earlier this year, said the final day of the working week shall be known as “Zoom-Free Fridays,” according to an internal memorandum obtained by Bloomberg. She also designated May 28 as a firmwide holiday to be known as “Citi Reset Day.” Staff at Citi, one of the world’s biggest lenders, are also encouraged to avoid scheduling meetings outside of what was normal working hours before the outbreak of Covid-19 kept most of its workers home, according to the memo.
10. Goldman CEO Vows to Protect Junior Bankers’ Saturdays Off
Goldman Sachs Group Inc.’s David Solomon vowed his firm would try harder to ensure junior bankers get at least one day off a week after a group of analysts raised an alarm about increasing burnout among the group. In a voice memo sent to workers on Sunday, the chief executive officer said the firm would strengthen enforcement of its so-called Saturday rule, which states junior bankers should not be expected to be in the office from 9 p.m. Friday to 9 a.m. Sunday. A group of 13 first-year analysts surveyed themselves and prepared a presentation for their managers that showed some were working hundred-hour weeks and feeling the effects of declining physical and mental health. The presentation was making the rounds on social media last week and Solomon on Sunday commended the analysts for speaking their mind.
Curated from Bloomberg.com