1. Stocks Hit Record as Small Caps Jump; Dollar Gains
Stocks extended their rally into a fourth day as investors parsed through a flurry of corporate results amid signs the U.S. labour market may be gradually improving. The dollar rose. The S&P 500 climbed to a record, led by banks and tech shares, as the Russell 2000 Index jumped 2%. The bull market in U.S. stocks remains on “solid footing” as the rebound in activity and corporate profits alongside an accommodative Federal Reserve create a supportive environment for equities, according to UBS Group. Selected high-frequency data, such as weekly consumer-confidence readings, also point to some strengthening.
The S&P 500 climbed 0.4% as of 9:47 a.m. New York time.
The Stoxx Europe 600 Index advanced 0.2%.
The MSCI Asia Pacific Index increased 0.8%.
2. U.S. Payrolls Rise Less Than Forecasted After Big Dec. Drop
The recovery in the U.S. labour market disappointed for a second month in January with only modest job growth that highlights persistently difficult prospects for millions of unemployed and bolsters calls for more stimulus. Nonfarm payrolls increased by 49,000 from the prior month after a downwardly revised 227,000 December decrease, while the unemployment rate fell to 6.3%, according to a Labor Department report Friday. The labor force participation rate declined as more people left the workforce. The January data may elicit more urgent calls for another pandemic relief package.
3. Senate Adopts Blueprint for Stimulus as Harris Breaks Tie
The Senate voted 51-50, after Vice President Kamala Harris broke her first tie, to adopt a budget blueprint for President Joe Biden’s $1.9 trillion virus relief package — following nearly 15 hours of wading through amendments from both parties. The House had already adopted its budget resolution but will likely have to vote again Friday to agree on the Senate’s language. Once that’s done, Democrats will be able to craft a relief bill in the coming weeks that can pass without any Republican votes under special budget rules. Budget Chairman Bernie Sanders said adoption means help is on the way to those suffering from an “economic collapse.”
4. U.K. Plans With CureVac; Russia-China Talks: Virus Update
The U.K. has entered into a collaboration accord with CureVac, under which the company will deliver an initial supply of 50 million doses of vaccines against Covid-19 variants. Britain will require travellers arriving from coronavirus hot spots to quarantine in hotels starting Feb. 15, almost three weeks after the plan was announced by Prime Minister Boris Johnson. Russian vaccine developers are in discussions with China’s CanSino Biologics Inc. to test a combination of their shots aimed at better results. Hungary, the first European Union country to approve Russian and Chinese coronavirus vaccines, could gradually start returning to normality this spring by inoculating the most exposed people by March 15.
5. Brace Yourself: Long-Haul Travel May Not Get Going Until 2023
It isn’t clear that vaccines actually stop travellers spreading the disease, even if they’re less likely to catch it themselves. Neither are the shots proven against the more-infectious mutant strains that have startled governments from Australia to the U.K. into closing, rather than opening, borders. An ambitious push by carriers for digital health passports to replace the mandatory quarantines killing travel demand is also fraught with challenges and has yet to win over the World Health Organization. This bleak reality has pushed back expectations of any meaningful recovery in global travel to 2022. Rather than a return to worldwide connectivity – one of the economic miracles of the jet era – prolonged international isolation appears unavoidable.
6. Banks Still Moving $970 Billion of Assets From U.K., ECB Says
Big banks still had 810 billion euros ($970 billion) of capital markets-related assets to move from the U.K. to the European Union at the end of September, underlining the extent of the moves ahead as they adjust to operating after Brexit. International banks have agreed to shift a total of about 1.2 trillion euros of assets to European units, said Andrea Enria, who leads the European Central Bank’s oversight arm. European banks “also planned to move a substantial amount of their capital market business” from the U.K., he said. The ECB and other regulators are prodding the world’s top investment banks to complete their plans to beef up operations in the EU to make sure they can service clients in the region.
7. Astra Vaccine Equally Effective Against New Variant: Study
AstraZeneca’s Covid vaccine is equally effective against the new strain of the virus that emerged in the U.K., according to a study by its co-developer, the University of Oxford. Protection against symptomatic infection was similar for the new variant as well as the original strain, according to the study, which analyzed swabs taken from volunteers from October through mid-January. The results should ease concerns about the effectiveness of existing vaccines against the mutated form of the virus, which health officials have said may be more infectious than the initial one.BioNTech, the developer of another coronavirus vaccine with Pfizer, has also said its shot appears to maintain effectiveness against the new strain.
8. Canada Loses 213,000 Jobs, Unemployment Jumps to 9.4%
Employment in Canada fell more than expected in January as a fresh wave of lockdowns weighs on the nation’s economy. The country lost 212,800 positions in the month, Statistics Canada said Friday in Ottawa. That’s on top of 52,700 jobs lost in December. The unemployment rate jumped to 9.4%, versus 8.8% previously and a forecast of 8.9%. A new round of restrictions over the last couple of months in some regions — including stay-at-home orders and curfews — have triggered fresh lay-offs that have stalled the recovery. Still, Canada’s labour market is faring better now than it did during the first wave of restrictions in March and April when employment fell by 3 million. Losses were entirely in part-time positions, with full-time jobs increasing.
9. World’s Largest Pension Fund Posts $100 Billion Quarterly Gain
The world’s biggest pension fund posted a 10.4 trillion yen ($98 billion) gain in the three months ended December, lifting assets to a record as global equity markets extended their recovery from the pandemic. Japan’s Government Pension Investment Fund gained 6.3%, with assets reaching 177.7 trillion yen, the fund said in a statement. Overseas stocks were its best-performing investment, returning 11.9%, followed by an 11.3% return in domestic stocks. Overseas debt gained 1.2%, while Japanese debt added 0.02%.
10. UBS Boosts Middle East Expansion Drive With New Qatari Hub
UBS Group is setting up a second Middle Eastern hub in Qatar that will eventually add investment banking and asset management services to its wealth-management business as part of an expansion in the region. The new Doha wealth office will open within weeks and UBS intends to hire about 20 people by the end of the year. Appointments will include back office and support staff, as well as relationship managers to build a business with Qatari clients. The wealth management business will be tapping into a market where per-capita income is almost six times that of the world average, according to World Bank data. Having a presence on the ground also opens UBS to the opportunity of potentially managing assets on behalf of one of the world’s largest sovereign wealth funds, the Qatar Investment Authority.
