S&P 500, Nasdaq carve out new records as vaccine outlook outweighs COVID hospitalizations and deaths; Asia stocks set to gain
Senate’s McConnell urges dropping liability, state aid in COVID-19 deal, Schumer rejects; Talk of a ‘no deal’ Brexit grows as deadline looms
Senate’s McConnell urges dropping liability, state aid in COVID-19 deal; Schumer rejects
Senate Majority Leader Mitch McConnell on Tuesday said Congress should pass a U.S. coronavirus relief package without either the business liability protections that Republicans want or the aid to state and local governments that is a Democratic priority. The Republican’s proposal was immediately rejected by the Senate’s Democratic leader, Chuck Schumer, who called it an attempt to “sabotage” bipartisan talks on coronavirus relief. The exchange appeared to leave the leaders in a continued stalemate, despite the fact that both parties are under mounting pressure to deliver a fresh infusion of aid to families and businesses reeling from a pandemic that has killed over 283,000 people in the United States and thrown millions out of work. “What I recommend is we set aside liability and set aside state and local, and pass those things that we can agree on, knowing full well we’ll be back at this after the first of the year,” McConnell told reporters. “Why don’t we set aside the two obviously most contentious issues?”
Japan unveils $708 billion in fresh stimulus with eye on post-COVID growth
Japan announced a fresh $708 billion economic stimulus package on Tuesday to speed up the recovery from the country’s deep coronavirus-driven slump, while targeting investment in new growth areas such as green and digital innovation. The new package will include about 40 trillion yen ($384.54 billion) in direct fiscal spending and initiatives targeted at reducing carbon emissions and boosting adoption of digital technology, Prime Minister Yoshihide Suga said in a meeting with ruling party executives. Policymakers globally have unleashed a wall of monetary and fiscal stimulus to prevent a deep and prolonged recession as the coronavirus closed international borders and sent millions out of work. In the United States, a $908 billion coronavirus aid plan is currently under debate in Congress.
Talk of a ‘no deal’ Brexit grows as deadline looms
“Talk of a chaotic British split from the European Union grew on Tuesday with just three weeks left to break a deadlock in trade deal negotiations, with UK Prime Minister Boris Johnson warning that the two sides may have to accept “”no deal””. The EU’s chief negotiator, Michel Barnier, told a meeting of the bloc’s ministers that he believed a no-deal scenario at the end of the year was now more likely than an agreement on trade ties, an EU official and two diplomats told Reuters. Deepening the gloom, Irish Prime Minister Micheal Martin said that unless there was a breakthrough “”in the next day or two””, EU leaders meeting in Brussels on Thursday and Friday would have to discuss contingency plans for the economic disruption a rupture with no trade accord would bring. “”Unfortunately we are facing the prospect of a no-deal Brexit if something doesn’t break that in the next day or two,”” Martin told parliament in Dublin. Johnson will meet Ursula von der Leyen, president of the EU’s executive European Commission, for dinner in Brussels on Wednesday to try and close gaps their negotiators have struggled with for months.
U.S. crude output to decline more than previously forecast in 2020 -EIA
“U.S. crude oil production is expected to fall by 910,000 barrels per day (bpd) in 2020 to 11.34 million bpd, the U.S. Energy Information Administration (EIA) said on Tuesday, a steeper decline than its previous forecast for a drop of 860,000 bpd. Output next year is expected to slide by 240,000 bpd to 11.10 million bpd, a smaller decline compared to the previous forecast for a slide of 290,000 bpd. U.S. shale production has languished as oil prices collapsed after the coronvirus pandemic eroded global demand. But as hopes for a widespread rollout of a vaccine rise, U.S. crude oil production has recovered from the two-and-a-half-year lows touched in May.
With vaccine drawing closer, U.S. tops 15 million coronavirus cases
U.S. coronavirus cases crossed the 15 million mark on Tuesday as regulators moved a step closer to approving a COVID-19 vaccine and Britain started inoculating people, offering hope of slowing a pandemic that killed 15,000 Americans in the last week alone. Record cases in at least three states – Arizona, Alabama and Ohio – pushed the cumulative case load to over 15 million, according to a Reuters tally of state and county data. With the virus showing no sign of abating, leading health officials are once again sounding the alarm of further spread when people gather for the year-end holidays. “We’re in for a very challenging period,” top infectious disease expert Dr. Anthony Fauci told a virtual summit on Tuesday. In a bit of welcome news, Pfizer Inc cleared another hurdle on Tuesday when the U.S. Food and Drug Administration released documents that raised no new red flags over the safety or efficacy of the vaccine it developed with Germany’s BioNTech SE.
Australia to make Facebook, Google pay news outlets for content
Australia finalised plans on Tuesday to make Facebook Inc (NASDAQ:FB) and Google (NASDAQ:GOOGL) pay its media outlets for news content, a world-first move aimed at protecting independent journalism that has been strongly opposed by the internet giants. Under laws to go to parliament this week, Treasurer Josh Frydenberg said the Big Tech firms must negotiate payments for content that appears on their platforms with local publishers and broadcasters. If they can’t strike a deal, a government-appointed arbitrator will decide for them. “This is a huge reform, this is a world first, and the world is watching what happens here in Australia,” Frydenberg told reporters in the capital Canberra.
FDA says Pfizer Covid vaccine provides some protection after first dose, meets success criteria
The Food and Drug Administration said Tuesday that data from Pfizer’s coronavirus vaccine trials was consistent with recommendations put forth by the agency for an emergency use authorization. It also said the vaccine was highly effective and did not raise any specific safety concerns. In documents published ahead of an advisory meeting Thursday to review Pfizer’s vaccine, FDA staff also said data submitted appeared to show the vaccine was at least 52% effective before the second dose and 82% effective for the combined group of people who took one or two doses.
US President Donald Trump does not plan to impose additional tariffs on Chinese goods before US president-elect Joe Biden takes office next month, the senior White House economic adviser said on Monday. “On the trade talks, we remain engaged,” US National Economic Council Director Larry Kudlow said at an event hosted by the Washington Post. “We’re not planning on any new tariffs.” Trump launched an aggressive trade dispute with Beijing that involved tit-for-tat tariffs on hundreds of billions of US dollars of products, many of which remain in place, despite a “phase one” trade agreement signed in January. Kudlow said China is living up to the initial agreement that included specific targets for purchases of US agricultural products such as soybeans.
U.S. Supreme Court rejects Republican challenge to Biden’s Pennsylvania win
The U.S. Supreme Court on Tuesday handed a defeat to Republicans seeking to throw out up to 2.5 million mail-in ballots in Pennsylvania as they try to undo President Donald Trump’s election loss, with the justices refusing to block the state from formalizing President-elect Joe Biden’s victory there. The court in a brief order rejected a request made by U.S. congressman Mike Kelly, a Trump ally, and other Pennsylvania Republicans who filed a lawsuit after the Nov. 3 election arguing that the state’s 2019 expansion of mail-in voting was illegal under state law. Pennsylvania was one of the pivotal states in the election, with Biden, a Democrat, defeating Trump there after the Republican president won the state in 2016. State officials had already certified the election results. There were no noted dissents from any of the justices on the court, which has a 6-3 conservative majority including three Trump appointees. Trump had urged the Republican-led Senate to confirm his most recent nominee, Justice Amy Coney Barrett, before the election so she would be able to participate in any election-related cases.
Biden pledges ‘100m shots in 100 days’ as he introduces health team
Joe Biden vowed on Tuesday to ensure 100m coronavirus vaccinations would be administered to Americans during his first 100 days in the White House – as Donald Trump held a parallel event where he ignored the deepening public health crisis, instead repeating his false claims that he, not Biden, won the November election. The Democratic president-elect on Tuesday introduced his new leadership team covering healthcare and laid out an aggressive plan to defeat the coronavirus pandemic that contrasted sharply with the Trump administration’s efforts. Speaking at an event in his hometown of Wilmington, Delaware, Biden formally introduced the team of scientists and doctors he assembled to guide the nation through what they hope will be the final stage of a public health crisis that has killed nearly 284,000 American lives and is one of the worst crises ever to hit the US. Preparing to assume office in the midst of what experts believe could be the pandemic’s darkest hour, Biden outlined his priorities for his first three months in office, including a commitment to distribute “100m shots in the first 100 days”, a plea for all Americans to wear masks during that period to prevent the spread of the virus and a promise to open a “majority of schools”.
Second U.S. judge blocks Commerce restrictions on TikTok
” A second U.S. judge late on Monday granted a preliminary injunction blocking the U.S. Commerce Department from imposing restrictions on Chinese-owned short video sharing app TikTok that would have effectively barred its use in the United States. U.S. District Judge Carl Nichols in Washington issued an order in a suit filed by TikTok-owner ByteDance more than a month after U.S. judge Wendy Beetlestone in Pennsylvania blocked the same restrictions that were set to take effect on Nov. 12 in a suit brought by some TikTok users. Nichols on Sept. 27 had separately blocked the Commerce Department from banning Apple Inc and Alphabet Inc’s Google app stores from offering the app for downloads by new users.
A TikTok spokesman said it was “pleased that the court agreed with us and granted a preliminary injunction.”
The Japanese economy advanced a record 5.3 percent on quarter in the three months to September of 2020, better than the initial estimate of a 5 percent expansion, and recovering from a revised 8.3 percent slump in the previous period. Private consumption rebounded firmly (5.1 percent vs -8.3 percent in Q2) while public spending rose at a faster pace (2.8 percent vs 0.3 percent). At the same time, gross fixed capital formation contracted at a much softer rate (-2.3 percent vs -3.2 percent). Net trade contributed positively to growth, as exports increased 7.0 percent (from -17.1 percent in Q2) while imports dropped 8.8 percent (from 1.4 percent in Q2).
Australia House Price Index QoQ
The house price index in Australia rose by 0.8 percent quarter-on-quarter in the three months to September of 2020, reversing from a 1.8 percent fall in the previous period as the economy reopened further from the COVID-19 crisis. Nearly all capital cities recorded a rise in residential property prices: Sydney (1 percent vs -2.2 percent in Q2), Brisbane (1.5 percent vs -0.9 percent), Adelaide (1.6 percent vs -0.8 percent), Perth (1.4 percent vs -0.7 percent), Hobart (1.2 percent vs -0.4 percent), Darwin (0.8 percent vs -1.4 percent) and Canberra (0.9 percent vs 0.8 percent). In contrast, house prices in Melbourne fell (-0.3 percent vs -2.3 percent). Through the year to the third quarter, prices increased by 4.5 percent in the third quarter, with all capital cities posted rises except Darwin, following a 6.2 percent gain in the June quarter.
Euro Area Employment Change
The number of employed persons in the Euro Area rose 1 percent on quarter in the three months to September of 2020, compared to preliminary estimates of a 0.9 percent increase and following an upwardly revised 3 percent fall in the previous period. It is the biggest increase since the series begun in 1995. Year over year, the employment fell 2.3 percent.
Euro Area Zew Economic Sentiment Index
The ZEW Indicator of Economic Sentiment for the Euro Area climbed 21.6 points to 54.4 in December 2020, the highest since September amid Covid-19 vaccine optimism. In December, 66.5 percent of the surveyed analysts predicted an improvement in economic activity, while 12.1 percent expected it to get worse and 21.4 percent expected no changes. Meantime, the indicator of the current economic situation edged up by 0.7 points to -75.7 while inflation expectations rose by 18.1 points to 40.7.
Germany Zew Economic Sentiment Index
The ZEW Indicator of Economic Sentiment for Germany rose by 16 points from the previous month to 55.0 in December 2020, easily beating market expectations of 45.5, amid expectations that COVID-19 vaccines will boost the economic outlook. About 67 percent of the surveyed analysts predicted an improvement in economic activity over the coming months, while 12 percent of them expected it to get worse and 21 percent expected no changes. The assessment of the economic situation in Germany has slightly worsened, and currently stands at -66.5 points, 2.2 points lower than in November.
United States API Crude Oil Stock Change
API Crude Oil Stock Change in the United States decreased to 1.14 BBL/1Million in December 4 from 4.15 BBL/1Million in the previous week.
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