The Weekly Rundown

Headlines (Politics, General News)

2.6 million in the UK have received a coronavirus vaccine. The government aims to have 15 million vaccinated by February 15, but said that the speed of vaccine rollout was limited by supply issues. Great Britain should have enough vaccines next week for 500,000 jabs a day, up from the most recent daily figure of 208,000.
The U.S House of Representatives voted to impeach Donald Trump, making him the first ever President to be impeached twice.
China has imposed travel restrictions on 23 million people and has put some areas into lockdown, after a surge in coronavirus infections.
Xiaomi has been added to a U.S blacklist of companies with connections to the Chinese military, meaning Americans cannot invest in Xiaomi shares. China National Offshore Oil Corporation was added to the Commerce Department’s ‘entity list’, meaning U.S companies cannot export products or technology to it.

Economy and Central Banks

Jerome Powell said that “now is not the time to be talking about exit” from the Fed’s current expansionary monetary policy. He said that any change in policy would only occur when there is “clear evidence” of progress towards the Fed’s employment and inflation goals. In addition, any change would be communicated well in advance of a “gradual taper of asset purchases”. Nevertheless, 10-year Treasury Bond yields rose 5bps to 1.13%
In December China’s trade surplus hit a record high monthly level. Exports grew 18.1% in dollar terms last month, while imports rose by 6.5% launching the trade surplus to a record $78 billion.

Finance and Markets

The European Securities and Markets Authority has issued a warning to EU banks and funds against bypassing rules to trade with London. Financial services were not included in the UK-EU trade deal and ‘equivalence’ was not granted to UK financial services to ease trading.
Bitcoin faces regulatory pressure after the UK’s Financial Conduct Authority and the president of the European Central Bank stated the need for stricter regulatory scrutiny for cryptocurrencies this week.
Jim Simons is stepping down as co-chairman of Renaissance Technologies ($60 billion AUM). Peter Brown will be sole chairman. The Renaissance Medallion fund was up 76% in 2020, but the Renaissance Institutional Equities Fund was down by 20% and the Renaissance Institutional Diversified Alpha Fund was down 31%.
Blackrock’s AUM has risen to $8.7 trillion.
Wells Fargo shares dropped on Friday upon its Q4 results release, despite its 64 cents earnings per share exceeding Refinitiv’s estimate of 60 cents.
JP Morgan, Citi Group, and Wells Fargo announced that they will release over $5 billion collectively from their loan loss reserves.

Tech

Signal and Telegram saw a sharp uptick in downloads last week after WhatsApp’s privacy policy update on January 4th prompted worries that data could be shared with its parent company Facebook.
Intel announced it will replace its CEO Bob Swan with Pat Gelsinger. The news comes days before Intel’s earnings report and strategy update. News is anticipated about whether Intel will invest further in chip manufacturing to compete with TSMC and Samsung or if it will opt to outsource its manufacturing to them.
TSMC has pledged it will make resolving the shortage of automotive chips a “priority”.

Companies

Wizz Air sold €500 million of 3-year bonds at a coupon rate of just 1.35% after receiving over €2 billion of orders from investors. The bonds were rated as the lowest rank of investment-grade bonds with a negative outlook from Moody’s and Fitch. This is just the latest example of low-yielding bond offerings with Eon raising €600 million at a 0.1% rate and ABB raising €800 million with zero interest paid.

Published by The Sweeney Club