1. U.S. Futures Dip; Pound Slides on Brexit Angst
Futures on U.S. equity indexes slipped a day after closing at record highs and European shares edged lower as investors struggled to find fresh catalysts to add more risk. Pro-cyclical sectors including auto and travel shares dragged the Stoxx Europe 600 Index modestly lower. Britain’s pound slumped after the European Union’s chief Brexit negotiator Michel Barnier reportedly told envoys the outcome of any deal is still too close to call. Salesforce.com fell more than 4% in pre-market trading after agreeing to buy software maker Slack. for $27.7 billion. Pfizer climbed after its Covid-19 shot was cleared for deployment in the U.K. as soon as next week.
Futures on the S&P 500 Index decreased 0.2% as of early morning New York time.
Nasdaq 100 Index futures declined 0.2%.
The Stoxx Europe 600 Index fell 0.2%.
The MSCI Asia Pacific Index increased 0.2%.
2. The U.K. Approves Pfizer’s Vaccine, Roll-out Next Week
Now that Britain has become the first western country to approve a Covid-19 shot, the spotlight shifts to the high-stakes rollout. Vaccinating the country’s roughly 6.7 crore people won’t happen overnight. The U.K. has ordered enough doses of the two-shot Pfizer-BioNTech vaccine to immunize 2 crore people. The government plans to prioritize as it begins to deploy the vaccine, starting with residents and staff in care homes, then moving to people over 80 years old and health-care workers. Britain will immunize people throughout the wider population next, based on age and risk. The shot is expected to be available from next week.
3. Barnier Voices Caution as Brexit Negotiators Race to a Deal
British and European Union officials are racing to strike a post-Brexit trade deal before the start of next week, with EU chief negotiator Michel Barnier telling envoys the outcome is still too close to call. While intensive, round-the-clock talks in London are making progress, genuine disagreement remains on the two biggest obstacles, meaning it’s impossible to predict an outcome with any certainty. A third issue — how the deal would be enforced — can only be overcome at the end. However, two officials said the general mood on both sides is one of optimism.
4. OPEC+ Works Silently to Repair Crack at Oil Coalition’s Core
After failed talks exposed a dangerous fissure at the alliance’s core, OPEC and its partners are quietly working to repair the damage. Key players in the 23-nation alliance are making diplomatic efforts to resolve a dispute — centred around Saudi Arabia and the United Arab Emirates — over how much crude to pump in the new year. On Monday, differences between the Saudis and the UAE prevented the cartel from reaching a clear agreement on whether to delay a planned production increase. Traditionally stalwart allies, a fissure has emerged between the two Persian Gulf exporters as Abu Dhabi pursues a more independent oil policy.
5. Global Bank Job Cuts Reach Five-Year High
Banks around the world have announced the most job cuts in five years as the pandemic adds further pressure to business models upended by the digital revolution. ABN Amro Bank and Banco de Sabadell disclosed plans to eliminate as many 4,600 positions between them this week, taking the total to 85,540 globally, according to data compiled by Bloomberg. That’s the most since 2015, when deep overhauls of several major lenders called for a combined 91,448 positions to be axed. These moves are a reminder that Europe is at the epicenter of the industry’s job cuts, with its lenders facing record-low and even negative interest rates.
6. Grab, Gojek Close In on Terms for Merger
Grab and Gojek have made substantial progress in working out a deal to combine their businesses in what would be the biggest internet merger in Southeast Asia. The region’s two most valuable startups have narrowed their differences of opinion, though some parts of the agreement still need to be negotiated. The final details are being worked out among the most senior leaders of each company with the participation of SoftBank Group’s Masayoshi Son, a major Grab investor.
7. SoftBank Is Winding Down Options Bets After Investor Fallout
SoftBank Group is quietly winding down its controversial derivatives strategy after a sustained backlash from investors. The Japanese conglomerate is letting its options expire, instead of maintaining its positions. About 90% of the contracts will close out by the end of December because they are short-term. SoftBank will hold on to its underlying portfolio of big tech stocks, which included Amazon and Facebook. SoftBank shareholders balked after SoftBank’s foray into derivatives trading was first disclosed in September, cutting the company’s market value by as much as $17 billion. Investors have questioned the rationale of a company known for its years-long bets on technology startups dabbling in public securities, especially derivatives. They have also criticized founder Masayoshi Son for taking a personal stake in the trading.
8. HSBC’s Loyal Hong Kong Investors Find Redemption in 51% Rally
Europe’s biggest lender is up 51% in Hong Kong since touching its 25-year low in September and is the best-performing stock on the Hang Seng Index this quarter. Just two months ago, investors were fretting over how mounting regulatory and economic pressures would squeeze the firm’s key businesses in Asia. But a lot has changed since then. British regulators have signalled they would consider softening their stance on a dividend ban imposed on banks in March at the height of the pandemic. Also, HSBC recorded better-than-expected third-quarter results on cost savings while investors have piled into financial stocks as part of a sector rotation.
9. After Aramco, Plenty More IPOs rain in Saudi Arabia
One year on from oil giant Saudi Aramco’s record-busting initial public offering in Riyadh, the exchange has continued to enjoy a steady stream of listings. Deals are already lining up for 2021. For years, the twists and turns leading up to Aramco’s listing dominated Saudi Arabia’s IPO market. The decision to float on Riyadh’s Tadawul exchange and to largely forgo international investors sparked concerns that the $29 billion deal would soak up all the available local liquidity for years. That fear has turned out to be unfounded. This year, four companies have gone public on the Saudi exchange, raising a combined $1.5 billion. That’s more than the $1.3 billion worth of IPOs in Germany, though far behind the Aramco year of 2019.
10. Australia’s economy bounced back in the third quarter
Australia’s economy rebounded sharply in the third quarter from a coronavirus-induced recession as consumer spending surged, though the country’s top central banker signalled monetary policy will stay supportive of growth for a while. The latest data show that the 2-trillion Australian dollar ($1.5 trillion) economy expanded at a faster-than-expected rate of 3.3% in the September quarter, following a 7% contraction in June, as the country largely brought COVID-19 under control. The rebound was led by household spending, which rose 7.9%, driven by aggressive fiscal and monetary stimulus programmes since March.