1. Stocks Extend Gains; Oil Climbs on Cold Snap
Global stocks rallied as investors took comfort in the vaccine rollout while freezing temperatures in Texas roiled energy markets. The FTSE 100 Index jumped 2% and the pound strengthened after the U.K. recorded 15 million vaccinations against coronavirus. Japan’s Nikkei 225 Stock Average topped 30,000 yen for the first time since August 1990 on data showing the economy is charging ahead. Meanwhile, an Arctic blast in the U.S. threatened to disrupt energy supplies, sending crude oil to a 13-month high. Texas began rolling power blackouts for millions of households for the first time in a decade.
Futures on the S&P 500 Index increased 0.3% as of 1:48 p.m. London time.
The Stoxx Europe 600 Index increased by 1.2%.
The MSCI Asia Pacific Index advanced 0.6%.
The MSCI Emerging Market Index gained 0.6%.
2. Tesla to Start Making Cars in India, Targeting Vast Market
Tesla is closing in on an agreement to make electric vehicles in India for the first time, opening up a new growth opportunity after setting up production in China. Tesla has picked Karnataka, a southern state whose capital is Bangalore, for its first plant, the state’s chief minister said over the weekend. The automaker has been negotiating with local officials for six months and is actively considering car assembly in the suburbs of Bangalore. The company is conducting due diligence for office real estate in the region and plans to set up an R&D facility. Tesla has focused on Bangalore because it’s shaping up to be a hub for electric vehicles and aerospace manufacturing talent.
3. Blackouts in Texas as Big Freeze Upends Energy Markets
Millions of households in Texas are suffering rolling power blackouts for the first time in a decade as an unprecedented Arctic freeze wrought chaos in U.S. energy markets. The largest cities from Houston to San Antonio were without power for spells of up to an hour at a time as supplies in the U.S.’s second-largest state fluctuated wildly. The extreme cold caught the highly decentralized Texan electricity market by surprise despite a heads up a week ago about the impending frigid temperatures from the U.S. National Weather Service. With the equivalent of 2 million households being cut off at a time, the situation is expected to worsen throughout Monday.
4. JPMorgan: Markets Most Complacent in Two Decades
Global investors are the least fearful they’ve been in two decades, and perhaps the most greedy. A JPMorgan gauge of cross-asset complacency based on valuations, positioning and price momentum is nearing the highest level since the time the dot-com bubble burst and some companies found out burning cash faster than they made it wasn’t quite effective as a long-term survival strategy. Some of that get-rich-quick spirit has already been on display in 2021 from Bitcoin’s flirting with the $50,000 mark to the craze for cannabis firms and speculative warfare over penny stocks. Global equities have added $7 trillion since New Year, digital currencies have ballooned to a market value of $1.4 trillion and high-yield bond sales are raking in records.
5. Bumble, Copper, and Weed: Investments in the Spotlight
Matchmaker app Bumble, where only women are allowed to make the first move, soared as much as 85% on its debut Thursday. That values the company at about $14 billion including debt. With inflation expectations picking up, industrial metals such as copper are on a tear. Copper hit an eight-year high on Wednesday as factory-gate prices in China rose for the first time in a year. Metals used in industrial products are typically beneficiaries of economic upswings and are also a common way to hedge against inflation risk. Platinum, which is used in catalytic converters to curb vehicle pollution, also hit a six-year high this week. A change in control of the U.S. government has boosted Canadian cannabis company Canopy Growth Corp. Its shares jumped as much as 15% in New York trading Tuesday after saying it expects to gain broad access to the U.S. market this year. Canopy has a medical-cannabis operation and makes consumer products such as cannabis-infused chocolates and drinks.
6. Vegan Chocolate Race Heats Up: Nestle Plans Rice-Based KitKat
Nestle is adding its first vegan milk chocolate to its products as the world’s biggest food company expands beyond meat alternatives. The Swiss food giant will start offering plant-based KitKat bars this year, called KitKat V. The product will be for sale online and at selected stores in a handful of markets including the U.K. as a test run before a possible wider rollout. The bar, which uses a rice-based formula as a milk substitute, took about two years to develop. The main challenge in making alternatives to milk chocolate is ensuring it blends well with cocoa and sugar for a creamy texture.
7. Dubai Airports Traffic Slumps 70% in 2020
Dubai International Airport reported a 70% slump in traffic last year as restrictions in place to stem the spread of the coronavirus pandemic put the air travel industry into a tailspin. The number of travellers through the Middle East’s tourism hub fell to 25.9 million in 2020. That included 17.8 million passengers during the first quarter of the year before the pandemic started to impact travel. Since then, restrictions on air travel have battered airlines and airports around the world. Despite the drop in traffic, Dubai International Airport is the largest intercontinental hub in the world.
8. Expat Exodus Threatens Gulf Economies, S&P Says
Gulf Arab states lost up to 4% of their population last year in an “exodus” of expatriate workers that could complicate the diversification of the region’s economies, S&P Global Ratings warned in a report. The share of foreigners relative to citizens in Gulf Cooperation Council countries is set to drop further through 2023 because of subdued non-oil sector growth and workforce nationalization policies. GCC countries’ productivity, income levels, and economic diversification may stagnate in the long term without significant investment in the human capital of the national population and improvements in labour-market flexibility.
9. Jaguar’s Electric Shift May Leave U.K. Plant With No Car to Make
Jaguar Land Rover laid out plans to electrify its lineup under a new chief executive officer, with its namesake luxury-car brand ditching combustion engines just four years from now. JLR, owned by India’s Tata Motors, will invest about 2.5 billion pounds ($3.5 billion) a year into electrification and related technologies. The Land Rover line will get its first fully electric model in 2024, and by the following year, all Jaguars will be entirely powered by batteries. The shift is poised to be challenging for the carmaker, which was grappling with Brexit, stricter emissions rules and a dip in exports to China even before the coronavirus pandemic hit.
10. U.S. Infection Rate Eases to Lowest Since October
The pace of the coronavirus outbreak in the U.S. continued to ease as the country’s week-to-week average fell to its lowest in almost four months. A top Biden administration health official warned Americans not to get complacent as the potentially more lethal variant first found in the U.K. spreads across the country. California’s positive test rate fell to its lowest since November, and New York state’s hospitalizations, stuck among the nation’s highest, dropped by more than 1,000 over the last week. The U.K. affirmed its plan for schools to reopen early next month as the nation’s vaccine program meets its first target. The Czech government prolonged its lockdown as the country struggles to contain one of Europe’s worst outbreaks.
Curated from Bloomberg.com
