1. Stocks Rise, Bonds Slip Before Yellen Hearing
U.S. stocks pushed toward all-time highs on the final full day of Donald Trump’s presidency, with Wall Street looking to Treasury Secretary nominee Janet Yellen’s confirmation hearing. The S&P 500 Index rebounded from Friday’s selloff after a three-day weekend that brought little by means of fresh macro news. Asian stocks notched strong gains, while moves in Europe were more muted. Ten-year Treasury yields climbed back to 1.1% and the dollar weakened. Yellen is expected to speak before the Senate Finance Committee at 10 a.m. in a discussion likely to cover topics including President-elect Joe Biden’s $1.9 trillion Covid-19 relief plan.
The S&P 500 Index jumped 0.7% as of early morning time in New York.
The Stoxx Europe 600 Index increased 0.1%.
The MSCI Asia Pacific Index increased 1.2%.
The MSCI Emerging Market Index increased 1.3%.
2. VW Competes With Tesla in China With New Electric SUV
Volkswagen has set the starting price of its first locally built all-electric sports-utility vehicle with its Chinese partner FAW Group at 199,900 yuan ($30,800) after subsidy, descending into the mass market as a growing number of players jostle for share. The ID.4 Crozz is built on VW’s MEB electric vehicle manufacturing platform, which is also used in some models of Audi and Skoda. The car is cheaper than Tesla’s recently launched Model Y crossover, which starts at 339,900 yuan and isn’t eligible for subsidies. The vehicle can run as far as 400 kilometers (249 miles) on a single charge. VW is also selling a version with a range of 550 kilometers, starting at 219,900 yuan. China is a critical market for Germany’s VW; its sprawling Chinese operations account for about 40% of global vehicle deliveries and a large chunk of profits.
3. Homeless Danes Get Early Vaccination in EU’s Fastest Program
Denmark has added homeless people to the list of those set to be vaccinated against Covid-19 early on, as the country barrels ahead of the rest of the European Union in inoculating its population. Almost 3% of Danes have now received at least one immunization shot since the program started shortly after Christmas. Denmark, like many other countries, is grappling with the U.K. variant of the virus, which has proved to be considerably more contagious. The reproduction rate of the new strain is 1.16, according to a report published by Danish authorities on Tuesday. That’s almost twice the overall transmission rate of the virus, which has dropped to 0.6.
4. Trump Leaves Town an Outcast, Trailed by Pandemic, Job Losses
Donald Trump departs Washington on Wednesday with Americans more politically divided and more likely to be out of work than when he arrived, while awaiting trial for his second impeachment — an ignominious end to one of the most turbulent presidencies in American history. Trump intends to leave in the morning for his Mar-a-Lago club in Palm Beach, Florida, arriving before President-elect Joe Biden is inaugurated. There, the ex-president will begin his post-presidency life attended at least temporarily by a handful of former White House staffers.
5. BofA Clients With $561 Billion Say Bitcoin Is Most Crowded Trade
For the first time since 2017, Bank of America clients with $561 billion combined say Bitcoin is the world’s most crowded trade as speculative euphoria hits Wall Street. Investors surveyed by the investment bank this month see signs that long positions in the largest digital currency are reaching unprecedented levels, while retail traders and institutional names join the crypto boom. The survey also shows investor positioning is booming across reflation strategies from small caps and value companies to emerging markets.
6. GM, Microsoft Lead $2 Billion in Funding for Driverless Startup
General Motors and Microsoft are leading a $2 billion investment round in self-driving car startup Cruise in a deal that will bring the software giant’s cloud and edge-computing capabilities to the venture. The new funds will raise Cruise’s post-investment valuation to an estimated $30 billion, up from $19 billion when T. Rowe Price Associates Inc. invested in the company in 2019. Cruise partner Honda Motor Co. and other institutional investors are also participating in the new round. The partnership with Microsoft gives Cruise the Azure cloud-computing platform to manage its self-driving vehicle network. Azure will handle data and mapping, as well as enable cars to communicate with Cruise’s back office and customer-facing app for ride-hailing.
7. Goldman Sachs Dealmakers Drive Highest Profit in a Decade
Goldman Sachs Group’s dealmakers capped their record year with a fourth-quarter revenue jump that helped the bank double its profit. Investment-banking revenue climbed 27% from a year earlier as fees from equity underwriting nearly tripled. The firm’s stock traders delivered a 40% revenue increase, making up for fixed-income trading that fell short of analyst estimates. “Our people responded admirably to a series of professional and personal challenges, while working from home or in offices that were reshaped dramatically,” Chief Executive Officer David Solomon said in a statement Tuesday. For Solomon, the last few months have presented the most hopeful sign yet of investors embracing his strategy pivot, with last quarter’s 31% gain marking the stock’s best period since he took the top job at Goldman Sachs in October 2018.
8. Dubai, Pandemic Party Haven, Faces Its Biggest Surge
Since becoming one of the world’s first destinations to open up for tourism, Dubai, in the United Arab Emirates, has promoted itself as the ideal pandemic vacation spot. It cannot afford otherwise, analysts say, as the virus shakes the foundations of the city-state’s economy. Masks off the minute you step inside. Bars packed and pulsing like it’s 2019. Social media stars waving bottles of champagne. DJs spinning party tunes through multi-hour brunches. Now, reality is catching up to the big-dreaming emirate. With peak tourism season in full swing, coronavirus infections are surging to unprecedented heights. Daily case counts have nearly tripled in the past month, forcing Britain to slam shut its travel corridor with Dubai last week. But in the face of a growing economic crisis, the city won’t lockdown.
9. London Metal Exchange Wants to Close Its Iconic Trading Floor
The London Metal Exchange is proposing to permanently close its open-outcry trading floor, putting an end to the century-old practise of setting the world’s metals prices in a daily shouting match. The iconic trading floor known as “the Ring” is one of the last of its kind in the world, where deals take place face-to-face, in a chaotic daily ritual of barked commands and arcane hand gestures. It has been closed since the U.K.’s first Covid-19 lockdown in March when the LME switched to an electronic system for establishing the world’s benchmark prices for industrial metals including copper, aluminium and zinc. The closure of the Ring would end 144 years of trading history, dealing a blow to the companies that specialize in trading on it, as well as the brokers, clerks and others whose jobs depend on the ecosystem that has grown up around the LME’s floor.
10. Office Depot Open to a Staples Deal But Not the Regulatory Risk
The parent of Office Depot said it’s open to a potential tie-up with Staples, but only if it can avoid the regulatory pushback that derailed their last merger attempt. ODP sent a letter Tuesday to Sycamore Partners, the private-equity owner of Staples, rejecting Staples’ original offer and suggesting some alternative directions. ODP would be open to either a joint venture or a deal where Staples buys only its retail and consumer-facing e-commerce operations, noting that Staples’ unsolicited offer to acquire it for $40 a share would bring too much regulatory risk.