1. U.S. Stocks Halt Rally; Dollar Drops as Bonds Rise

U.S. stocks fell for the first time in seven days as investors debated whether commitments by the Federal Reserve and the Biden administration to let the economy run hot will spark destabilizing inflation. The S&P 500 Index edged lower, taking a break from a rally fueled by signs the Biden administration intends to pass a sizable aid bill while the central bank promises to keep rates pinned near zero. Treasuries advanced and the dollar fell for a third straight session. In Europe, the Stoxx 600 Index drifted lower despite positive results.

Futures on the S&P 500 Index decreased 0.3% as of 9:30 a.m. New York time.

The Stoxx Europe 600 Index fell 0.2%.

The MSCI Asia Pacific Index advanced 0.4%.

The MSCI Emerging Market Index gained 0.3%.

2. WHO Rejects Virus Lab Theory, Saying Animals Likely Source

A World Health Organization investigation in China found that the coronavirus most likely jumped to humans through an animal host or frozen wildlife products, finding that it’s “extremely unlikely” it came from a laboratory leak. No further research is needed to look into the theory about a leak, Peter Ben Embarek, a WHO official, told reporters Tuesday at a joint briefing with China in Wuhan. That speculation has been promulgated by former U.S. President Donald Trump and some others. The virus could have been introduced to the Huanan wet market in Wuhan, which many of the first Covid patients were linked to, by a person who was infected or by a product that was sold there, Ben Embarek said.

3. Apple Partner Wistron to Restart Riot-Hit iPhone Factory in India

Apple’s manufacturing partner Wistron will hire workers and restart operations in its Narasapura factory outside Bangalore after a violent protest shut the iPhone-manufacturing facility last December. Apple’s teams and independent auditors have been working with Wistron over the past eight weeks to put the necessary systems and processes in place. However, the Taiwanese contractor will continue to face scrutiny. “A comprehensive set of corrective actions has now been completed and Wistron has restructured their recruiting team and enhanced training and support for workers,” Apple said in the statement. “Wistron remains on probation and we will monitor their progress closely.”

4. Tesla Shows Deference to China After Years of Defiance in U.S.

Tesla has issued back-to-back mea culpa in a matter of days in China, showing deference to government authorities in stark contrast with Chief Executive Officer Elon Musk’s years of combativeness in the U.S. Shortly after state media broke the news Monday that five Chinese regulators had summoned Tesla representatives over several quality and safety issues, the company pledged to strictly abide by Chinese laws and regulations and strengthen internal management. Last week, the carmaker said it was sorry that a staff member blamed the national grid for damaging a customer’s electric vehicle.

5. Singapore Air Gives Boost to New Boeing Jet in Bid to Cut Costs

Singapore Airlines is converting some of its Boeing Co. jetliner orders to the larger 777X, giving a boost to the coming model as part of an agreement to slow deliveries from the U.S. planemaker. The airline will pare back commitments for the Boeing 787-10 Dreamliner by 14 planes, while adding 11 777-9s to its existing order. The change brings Singapore Airlines’ total orders to 31 for the so-called 777X, which hasn’t made its debut. The move, combined with an earlier agreement to defer Airbus SE deliveries, will delay more than S$4 billion ($3 billion) in capital spending, Singapore Airlines said. The carrier has been hit especially hard by Covid-19 travel restrictions because there’s no domestic market to rely upon in the city-state.

6. U.K. Coffee Chains Need 4 Years to Recover From Covid Slump

Coffee chains in the U.K. will take four years to recover after the coronavirus crisis erased about 2 billion pounds ($2.8 billion) in sales. Temporary closures and takeaway-only trading cut sales by almost 40% last year for the U.K.’s branded coffee chain stores, which are dominated by companies including Costa Coffee and Starbucks. The industry is expected to recover to pre-pandemic levels by 2024, although there’s “deep uncertainty” over the outlook. The U.K. coffee sector, which has the highest number of branded chain stores in Europe, has also faced headwinds from the economic fallout of Brexit. Last year marked the first decline in sales and outlets in more than two decades.

7. UAE Central Bank Sees Strong Rebound as Use of Covid Fund Drops

The United Arab Emirates’ central bank stood by its forecast for a return to growth in 2021 after lower crude prices and pandemic restrictions hit the Arab world’s second-largest economy. “Economic activity is still subdued but recovering,” Governor Abdulhamid Saeed Alahmadi said. The government will continue to diversify the economy, fund infrastructure improvements and encourage private investment. In December, the bank forecast growth of 2.5% in 2021. Utilization of a stimulus program of capital and liquidity measures to help the economy through the global health crisis has fallen to about 50% of its peak indicating that banks are now gradually coming back to manage their credit books and navigate the way forward.

8. Tesla’s Global Expansion Boosted Employment by 47% Last Year

Tesla grew its global workforce by almost half last year as the electric-vehicle maker expanded operations in China and Germany and delivered almost half a million cars worldwide. Employment totalled 70,757 at the end of 2020, up 47% from 48,016 in 2019. Tesla’s factory on the outskirts of Shanghai has been key to bulking up its presence in China, where sales jumped 124% to $6.7 billion last year. Model Y deliveries began in January, and sales of the Model 3 started a little over a year ago. Last year was the first time the majority of the company’s revenue came from outside the U.S.

9. Democrats Cut Off Relief Checks at $200,000 Household Income

House Democrats are proposing to limit the next round of Covid-19 relief payments to households earning less than $200,000, after criticism that President Joe Biden’s $1.9 trillion stimulus package would benefit the rich. Draft legislation released Monday by the House Ways and Means Committee calls for $1,400 payments for single people earning $75,000 or married couples earning $150,000. The checks completely phase out for individuals making $100,000 or joint taxpayers making $200,000. The payments scale down more quickly than previous rounds, where the top levels were determined by the size of the payment and the number of children in the household.

10. Saudi Stocks May Turn Into Good Reflation Bet, Julius Baer Says

Investors looking for emerging-market opportunities to capitalize on the expected global economic rebound should take a look at Saudi Arabia’s equities, according to a strategist at Julius Baer Group. Saudi shares “could benefit from the reflation trade, especially with oil moving higher,” said Mathieu Racheter, an equity strategist for emerging markets at the Swiss firm, which has $486 billion in assets under management. The Tadawul All Share Index has lagged the rebound in the MSCI Emerging Markets Index since last year’s pandemic-spurred rout. Still, it rose for a fourth straight day on Tuesday, climbing to a three-week high as oil headed above $60 a barrel on signs the global market is tightening and demand is improving.

Curated from Bloomberg.com

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