1. Stocks Edge Higher as Yields Steady; Dollar Gains
Stocks ticked higher with U.S. equity futures and bonds halted their recent slide as corporate earnings rolled in. The dollar rose. S&P 500 futures were steady, while European stocks drifted upwards amid a mixed bag of company results. The pound erased a loss as Bank of England policy-makers said inflation is expected to rise sharply while voting to keep the key rate at 0.1% and the bond-buying target unchanged. Oil continued its ascent with OPEC+ saying it will keep pushing to quickly clear the surplus left behind by the pandemic. Bond yields steadied after those on 30-year benchmarks climbed to their highest level in a year.
Futures on the S&P 500 Index climbed 0.1% as of 7:16 a.m. New York time.
The Stoxx Europe 600 Index increased 0.1%.
The MSCI Asia Pacific Index fell 0.6%.
The MSCI Emerging Market Index declined 0.5%.
2. SoftBank-Backed Auto1 Soars in Debut After $2.2 Billion IPO
Online used-car dealer Auto1 Group surged as much as 49% in its Frankfurt trading debut after its initial public offering raised 1.8 billion euros ($2.2 billion), the first in what is shaping up to be a busy year for German listings. The stock’s jump at the open is the biggest in Europe among $1 billion-plus listings since Polish retailer Allegro.eu started trading 51% above its IPO price in October. Shares in Auto1, which is backed by SoftBank Group, climbed 39% to 52.75 euros at 9:47 a.m., compared with the IPO price of 38 euros. This is the largest offering in Germany since TeamViewer AG’s in September 2019.
3. Winner From Modi’s Protectionist Policy Now Has Global Goals
Amber Enterprises India, one of the biggest potential beneficiaries of Prime Minister Narendra Modi’s ambitious self-reliance program, forecasts higher overseas sales aided by government incentives. The Gurgaon-based firm, which manufactures parts for air conditioners, washing machines and other appliances produced by the likes of LG Electronics Inc., Hitachi Ltd. and Voltas Ltd., aims to earn 10%-15% of revenue from exports in five years, up from almost nothing right now. It is building two new factories and predicts Modi’s administration will use non-tariff measures such as banning the import of such components to boost local manufacturing,
4. Vaccination Rates Are Driving Many Currencies
The stop-start pace of vaccine rollouts around the world is handing investors a new route to profit in the $6.6 trillion-a-day currency markets. Of the five countries leading the fight against Covid-19, all but one saw their currencies gain versus the dollar in January. The U.K.’s inoculation progress offset elevated case rates enough to propel the pound higher, while the European Union’s chaotic distribution has weighed on the euro. These moves have blurred the picture for the dollar, which lies on the other side of these trades and has defied expectations that it would weaken even as the U.S. itself grapples with varied infection and vaccination rates.
5. Shell Deepens Big Oil’s Disappointment With Earnings Miss
Royal Dutch Shell deepened the disappointment of Big Oil’s fourth quarter, reporting net income that fell short of expectations and weak cash flow. The company added to the evidence from its peers that much of the industry is still living beyond its means, even after large cuts to dividends and spending. Oil prices have recovered from last year’s lows — rising to a one-year high this week — but Covid-19 lockdowns in countries around the world are still depressing fuel sales and refining margins.
6. Kuaishou Surges 181% in Hong Kong Gray Market Trading
Kuaishou Technology surged in Hong Kong’s gray market trading, in a sign that one of the city’s biggest initial public offerings in years is off to a good start. The short-video startup, backed by Tencent Holdings, advanced by as much as 181% to HK$322.80 on Thursday on an over-the-counter retail platform operated by Phillip Securities Group. If the stock rises by as much during its debut on Friday, it would become the second-best debut for an IPO over $1 billion in Hong Kong on record. Kuaishou’s shares were more than 1,200 times covered in the retail segment, making it the most popular IPO over $1 billion in the city in history.
7. Freight-Cost Pain Intensifies as Pandemic Rocks Ocean Shipping
Soaring freight rates and delivery delays have sparked a global backlash by companies frustrated about the destructive mix of deteriorating service and higher ocean shipping costs. Trade associations in China have raised antitrust concerns with the government, while similar pressure is simmering in Brussels, where the European Shippers’ Council petitioned the European Commission to address “outrageous price hikes” by cargo carriers. The problems in the U.S. go beyond the cost burdens: Overwhelmed ports and container shortages along key transpacific routes are causing delays and lost business for exporters. Some store chains and manufacturers — reliant on international supply lines — are being forced to cut other expenses or rethink that strategy altogether.
8. Australia Seeks UN Probe Into New China Uighur Abuse Claims
Australia has called for a United Nations investigation into allegations of human rights abuses in China’s Xinjiang region, where Beijing’s treatment of minority Muslim Uighurs has drawn sustained international criticism. Former detainees and a guard said they experienced or witnessed systematic rape and torture inside China’s so-called re-education camps where the UN says anywhere from tens of thousands to “upwards of 1 million” Uighurs have been detained. Australia urged China to allow international observers, including the UN High Commissioner for Human Rights Michelle Bachelet, to be given immediate and unfettered access to Xinjiang. The U.S. has previously accused China of committing genocide.
9. Oil Moves Ever Closer Toward $60 With Inventories in Retreat
Oil prices continued their surge in the world’s major trading centres, fortified by shrinking stockpiles and continued investor optimism the market will strengthen in the coming months. Brent crude, which was about $35 a barrel as recently as three months ago, surged to $59.04 on Thursday. Multiple trading gauges suggest a market that’s getting tighter, a move with global ramifications including boosting oil-rich economies and lifting gasoline prices at the pump. Crude inventories at a key storage hub in the U.S. are now below their five-year average, and nationwide inventories continue to slump, an early indication that Saudi Arabia and allied producers are succeeding in their efforts to eliminate a glut.
10. Gulf Nations Impose More Restrictions to Fight Virus Spread
Saudi Arabia, Kuwait and Qatar announced more restrictions to slow the spread of coronavirus, joining other Gulf countries battling a fresh wave of infections. The countries announced limits on public gatherings overnight and Kuwait plans to bar foreigners from entering for two weeks. The surge in infections is most acute in the United Arab Emirates, where it’s already forced Dubai to reintroduce curbs on hotels and air travel. While cases have been rising, inoculation programs have also been picking up. The UAE has one of the highest rates of vaccinations per 100 people and has administered almost 3.7 million shots in a population of about 10 million.