The Weekly Rundown

Market Data

Headlines (Politics, General News)

On Monday, President Trump announced his administration would work with Joe Biden’s transition team to start the transfer of power, however, he did not formally concede as he vowed to continue to contest the election result.
Boris Johnson replaced Britain’s “stay at home” national lockdown with stricter measures to last until the end of March.
On Wednesday, Germany extended its nation-wide partial lockdown until December 20th.
German Chancellor Angela Merkel told parliament that efforts were being made to reach a Europe-wide decision to keep ski resorts closed until January to slow the spread of COVID-19. Austria’s Finance Minister Gernot Blümel has stated that if resorts closed they should be compensated, which would go into the billions of euros.

Economy and Central Banks

A number of top-level Chinese bond defaults, notably Tsinghua Unigroup, a high-profile state technology group, have made investors lose trust that local governments will always bail out state-owned borrowers. Goldman Sachs reports investors have increased exposure to Chinese bonds, owning 9% of total Chinese central government debt, but remain cautious of SOEs ( state-owned enterprises), owning under 1% of the country’s outstanding corporate debt.
China’s renminbi is on track for its best six months against the dollar on record due to the country’s effective handling of Covid-19, economic recovery providing competitive advantage investors expect will last well into 2021, as well as the expectation that president-elect Biden will impose less aggressive trade policies against China which took a toll on its currency.
Germany is set to borrow €160 billion in 2021, significantly more than the €96 billion initially planned, as the financial implications of Covid-19 will continue to take a heavy toll on Europe’s largest economy.
The Labour Department reported 778,000 people filed for initial jobless claims last week on a seasonally adjusted basis. This was 43,000 more than economists originally expected and it’s also higher than last week’s revised number of 748,000.

Finance and Markets

On Tuesday, the Dow Jones Industrial average, established on May 26th 1896 at a value of 40.94, reached 30,000 for the first time ever. The significant milestone came on the back of news of a peaceful presidential transition, in addition to further progress on an effective Covid-19 vaccine.
Bitcoin reached an all-time intraday high this week of $19,510, but fell 14% the next day, trading below $17,000 on Friday. Bitcoin is up 300% since its lows in March.

Tech

The French Government has begun to demand U.S technology giants, such as Facebook and Amazon, to pay millions of euros for a new digital service tax. Washington responded by stating this will reignite the transatlantic trade tensions and will lead to new tariffs being imposed on Europe.
The cloud software company Salesforce (NYSE: CRM) is currently undergoing talks to acquire Slack (NYSE: WORK) the workplace messaging app, valued at $16 billion.
Facebook’s digital currency, Libra, is set to launch in January with a single coin backed one-to-one against the dollar.

Companies

Credit Suisse will take a $450 million hit in Q4 as York Capital Management, which it owns a 30% stake in, is closing down its European Hedge Fund business.
J.P. Morgan will take on a $250 million fine for undisclosed practices in different business units. The SEC found insufficient management of conflicts of interest within the firm’s Asset Management and Wealth Management divisions.
Spanish Fuel Company Repsol (BMAD: REP), has announced it will cut its dividend by 40%, from €1 to €0.60, as it aims to fund new investments in green energy projects.
Amazon spent $500 million (£374 million) to pay employees worldwide a bonus of $300 in the U.S and £300 in the U.K.
Delta Airlines and Alitalia are set to launch a quarantine free corridor between the U.S and Italy. Passengers will not have to quarantine if they test negative three times.

Published by The Sweeney Club