1. Futures Drop With Stocks; Bond Yields Rise
American equity futures slid along with stocks in Europe Friday amid lingering concerns about volatile retail-trader speculation in the U.S. and a cash squeeze in China. Treasury yields ticked higher and the dollar erased gains. S&P 500 futures dropped after the U.S. gauge rebounded Thursday from its worse loss since October. Crude oil inched higher and gold rose. The Stoxx Europe 600 index declined, though it pared losses after data from three of the euro area’s largest economies suggested the region can avoid a deeper recession, while still facing headwinds from extended coronavirus lockdowns.
The Stoxx Europe 600 index dropped 0.8% by 7:04 a.m. in New York.
S&P 500 futures slipped 0.6%.
The MSCI Asia Pacific index fell 1.4%.
The MSCI Emerging Markets index dropped 0.9%.
2. Oil Holds Steady Amid Economic Data, Fears Over Demand
Oil steadied amid surprisingly robust economic data from Europe, while the spread of a new Covid-19 variant and lockdowns raised concerns about the near-term recovery in fuel demand. WTI futures held above $52 a barrel after the biggest decline in almost a week on Thursday. Three of the euro area’s four largest economies — Germany, France and Spain — rounded off the pandemic year suggesting the region can avoid a deeper recession. The virus variant identified in South Africa has reached the U.S. just as Europe is set to tighten its rules on the export of vaccines. Stay-at-home orders to combat the spread of the disease have hit travel and crimped consumption of fuels from China to Los Angeles. India’s demand for diesel, the country’s most-used fuel, is also struggling to shake off the pandemic’s crippling effects on its economy. The crawl back to pre-virus levels will be slow.
3. Biden Covid Team Derides Trump Plan Using Its Old Playbook
President Joe Biden and his top advisers have derided the Trump administration’s playbook for distributing coronavirus vaccines, but so far have made only modest changes to the plan that’s meeting their target pace of more than one million shots a day. Biden has said vaccine distribution was in “worse shape than we anticipated.” White House Chief of Staff Ron Klain said a Trump administration plan “did not really exist.” Adviser Cedric Richmond said they “didn’t leave a plan.” Xavier Becerra, Biden’s choice for health secretary, said it was like taking over a plane in a nosedive. But while Biden’s approach to the virus — frank warnings about the pandemic, mask mandates on federal property — is a reversal from Trump’s policies, his administration’s distribution of vaccines so far looks little different from that of its predecessor.
4. Bitcoin Investors May Lose Everything, Central Banker Warns
Bitcoin investors need to be prepared to “lose all their money,” European Central Bank governing council member Gabriel Makhlouf said, the latest warning from a central banker on the cryptocurrency. Makhlouf’s comments echo scepticism from ECB leaders. The cryptocurrency is a “highly speculative asset,” President Christine Lagarde said this month. Bitcoin prices have more than doubled since November and topped $40,000 earlier this month. Large movements in its value are common, with four daily swings of more than 5% in the past nine days.
5. Robinhood Raises $1 Billion in Dash for Cash After Trader Revolt
New York markets had just fired up, and the investing world was tuning in for Thursday’s episode of the continuing drama: Legions of Robinhood Markets investors versus hedge-fund Goliaths. But within minutes, a shock wave invisible to the outside world rattled the mechanics of Wall Street — sending Robinhood rushing for more than $1 billion of additional cash. The stock market’s central clearing hub had demanded large sums of collateral from brokerages including Robinhood that for weeks had facilitated spectacular jumps in shares such as GameStop. The Silicon Valley venture with the wildly popular no-fee trading app came to a crossroads. It reined in the risk to itself by banning certain trades and unwinding client bets — igniting an outcry from customers and even U.S. political leaders. By that night, word was emerging that Robinhood had raised more than $1 billion from existing investors and drawn hundreds of millions more from bank credit lines to weather the storm.
6. Mexico Deaths Surpass India’s; WHO Team in Wuhan: Virus Update
Mexico overtook India as the country with the third-highest number of fatalities after the U.S. and Brazil. The virus variant identified in South Africa reached the U.S. with two cases found in South Carolina. Struggling to keep up in the vaccination drive, the European Union is poised to tighten rules on vaccine exports, while European Commission President Ursula von der Leyen slammed AstraZeneca for cutting the number of doses it would deliver to the bloc in the first quarter. In China, a team from the World Health Organization began meetings in Wuhan to try to understand the genesis of the coronavirus.
7. GameStop Shows Rising Power of Retail Traders: Reddit CEO
Reddit Inc. Chief Executive Officer Steve Huffman said on Thursday that the WallStreetBets forum is “by no means perfect but they’ve been well in the bounds of our content policy.” He said anyone who thinks the users of the forum are “idiots” should spend more time reading the discussions. “It’s this idiot swagger that masks what I think is this charming intelligence,” Huffman said. The forum’s unprecedented influence on GameStop’s stock shows that markets must adapt to a world where retail investors are gaining some of the power big financial firms have long held, according to Alexis Ohanian, co-founder of the online forum.
8. Taiwan’s GDP Growth Outpaces China’s for After 30-Year Gap
Taiwan’s economic growth outpaced that of China’s for the first time in 30 years, helped by its early control of the virus and stellar export performance. Gross domestic product expanded 2.98% last year, compared with China’s 2.3% rise. Taiwan was able to avoid the strict lockdowns last year that brought most other economies to a halt. With a few exceptions, Taiwanese businesses, offices and schools stayed open throughout the year and there was something of a boom in domestic travel as people opted to vacation at home rather than head overseas.
9. Pfizer, BioNTech Covid Vaccine Safe for the Elderly, EMA Says
Pfizer and BioNTech’s vaccine for Covid-19 is safe for older people, a Europe-wide review found, with no link between the shot and the deaths of elderly vaccinated people. The review found no new side effects as the vaccine has been rolled out. The European Medicines Agency’s safety panel analyzed deaths in light of other medical conditions the people had, as well as the fatality rate for corresponding age groups in the general population, the EMA said in a statement. Reports of deaths in Norway earlier this month caused concern around the world, with people watching for signs of potential side effects from the vaccines being introduced with unprecedented speed.
10. U.K. Bans Flights From Dubai, Rest of UAE to Stop New Strain
The U.K. banned direct passenger flights from the United Arab Emirates to stop the spread of a new virus strain originally identified in South Africa, putting one of the world’s busiest international air routes on ice. Starting 1 p.m. U.K. time, passengers who’ve been in or transited through the UAE in the previous 10 days will also no longer be allowed to enter the country. Visitors from Burundi and Rwanda in Africa are barred as well. Exemptions usually in place, including for business travel, will no longer apply.