As global markets reopen Tuesday, few are as hot as the U.K.’s
The financial euphoria, however, should be short-lived.
With the U.K. stock market closed since Christmas, Tuesday is the first opportunity for traders at the London Stock Exchange to respond to news of last week’s Brexit deal. The FTSE 100 has shot up more than 2% Tuesday, four times the
Dow Jones Industrial Average’s
0.5%. That should come as little surprise considering the alternative—the damaging “no-deal” investors had seen as a real possibility until the night before Christmas.
The euphoria must now yield to sobriety. The deal struck between the U.K. and the EU didn’t include financial services, and that means a major shift in trading will take place on Jan. 4, the first day when markets will open after the official Jan. 1 exit date.
From then on, U.K. financial services companies will be at the mercy of continental regulators, who have made it clear they want most transactions to return to Europe proper as quickly as feasible.
Some big international players have already set up hubs in Amsterdam, Frankfurt, or Paris, but the immediate concern of investors, bankers and regulators is that the Jan. 4 trading session goes as smoothly as possible.
Celebrate while you can.
*** Nominations are now open for the 2021 Most Influential Women in U.S. Finance list. Submit a nomination here.
House Approves $2,000 Stimulus Checks, Overrides Trump Defense Bill Veto
The House of Representatives passed legislation Monday night to increase stimulus payments to Americans earning $75,000 or less from the current $600 per person included in the latest relief aid package to $2,000, as requested by President Donald Trump.
- The bill passed by a vote of 275 to 134 with nearly all Democrats and 44 Republicans on board. The increased payments would cost the U.S. $464 billion, up from $160 billion, according to a Congressional estimate—a key concern of those opposed to the higher payments.
- Senate Minority Leader Chuck Schumer called on the president to get Senate Republicans to support the $2,000 payments. Schumer is expected to attempt to pass the bill by unanimous consent on Tuesday. If all 100 Senators do not approve it, a roll call vote will need 60 votes in the Republican-controlled chamber.
- Senate Majority Leader Mitch McConnell has not commented on the bill to increase payments. After Trump signed the $900 billion stimulus package over the weekend, he said, “I am glad the American people will receive this much-needed assistance as our nation continues battling this pandemic.”
- The House also voted 322 to 87 to override the president’s veto of a $740.5 billion defense bill that includes 3% pay raises for U.S. troops. Trump criticized the bill for proposing to rename military bases that honor Confederate officers and failing to include “critical national security measures.”
What’s Next: The fate of the latest stimulus legislation now rests in the hands of the Senate.
Three More Coronavirus Vaccines Expected by Early 2021
were first out of the gate with approved vaccines for Covid-19, but three other drugmakers are following close on their heels and could help get the U.S. and other countries to herd immunity more quickly.
is launching a 30,000-person trial in the U.S. and Mexico for its vaccine, which could be approved as soon as spring 2021. The Novavax vaccine uses proteins to trigger an immune response after it is injected, as well as a substance derived from Chilean evergreen trees to enhance that response.
Vaccines in development from
Johnson & Johnson
use viral-vector technology, in which a modified virus triggers an immune response. AstraZeneca’s drug is expected to be approved in the United Kingdom this week, and the company has said its vaccine “should remain effective” on the variant first discovered there.
- More than two million Americans have been vaccinated to date with the Pfizer and Moderna drugs, both of which use synthetic messenger RNA to trigger the body to produce protective antibodies against the virus.
What’s Next: Having multiple vaccines increases overall supply and provides options that may be more effective in different cross-sections of the population. President-elect Joe Biden plans to help juice supply as well by invoking the Defense Production Act once he takes office in January, according to a member of his Covid-19 advisory board.
Bitcoin Boom Shows No Signs of Stopping
Less than 10 days after crossing the $24,000 threshold, Bitcoin briefly traded for as much as $28,000 over the weekend. While its price fell slightly Monday, the cryptocurrency now has a total market value of nearly $500 billion—more than
- Bitcoin is up about 270% year to date. Its recent run up, which started in October, is the longest upswing since mid-2019. The S&P 500, meanwhile, has risen 15.6% so far this year.
- The Federal Reserve has vowed to keep interest rates near zero until 2021, weakening the dollar’s value and sending yields on long-term Treasury bonds below the expected rate of inflation.
- That could be why investors may be more willing to dive into riskier assets like Bitcoin in search of higher returns. Bitcoin is notoriously volatile, dropping below $5,000 in mid-March before reaching its current peak.
What’s Next: With arguments on both sides of the coin, Bitcoin has yet to win over skeptics. Still, it’s an attractive asset and one of the best-performing investments of the year.
Wonder Woman 1984 Gets a Surprising Box Office Boost
Wonder Woman 1984 delivered $16.7 million in U.S. box office sales during the Christmas weekend, much better than the $9 million generated by Tenet’s premier on Labor Day with fewer theaters open. More than 10,000 theaters were booked for groups of 10 to 20 people,
WarnerMedia said in a statement.
- At the same time, WarnerMedia allowed the movie to stream over its HBO Max platform, giving moviegoers an option to watch at home or in a traditional cinema. The company has not released details of how many people signed up for the streaming service to watch the film.
released the animated Pixar film Soul on Christmas Day on its Disney+ platform, aiming to compete with WarnerMedia and the streaming behemoth Netflix. Disney has not commented on how many people streamed the film.
What’s Next: WarnerMedia has said it will simultaneously stream 17 of its movies next year on HBO Max at the same time they are released to cinemas. Disney is planning to stream more movies as well.
—Mary Romano and Liz Moyer
Covid Second Wave Deadlier in France Than the First, With No Sign of Abating
According to French official numbers, the second wave of the coronavirus pandemic has claimed nearly 32,500 deaths in the last five months, versus 30,300 in the February-to-July period.
- The number of daily new infections in France has jumped up to around 15,000, three times the goal set by French president Emmanuel Macron when he enacted a new national lockdown in November. The government is mulling new restrictions, on top of the closure of bars and restaurants and public spaces, a ban of non-essential travel, and a nightly curfew.
- In the U.K., where a new, aggressive variant of the coronavirus was first detected a few weeks ago, the government is publicly debating whether or not to re-open schools on Jan. 4 at the end of the Christmas recess.
- The number of daily infections in the U.K. hit a record 41,385 Monday, with last week’s number up 25% over the previous seven-day period. Medical experts are asking for stricter rules to prevent “a catastrophe.”
What’s Next: The mass vaccination campaign that started throughout the EU over the weekend, two weeks after the UK, is lagging behind the rapid progression of the virus, increasing the likelihood of another major economic shock in Europe in the first half of 2021.
Think you’re a master stock picker? Join this month’s Barron’s Daily virtual stock exchange challenge and show us your stuff.
Each month, we’ll start a new challenge and invite newsletter readers—you!—to build a portfolio using virtual money and compete against the Barron’s and MarketWatch community.
Everyone will start with the same amount and can trade as often or as little as they choose. We’ll track the leaders and, at the end of the challenge, the winner whose portfolio has the most value will be announced in The Barron’s Daily newsletter.
Are you ready to compete? Join the challenge and pick your stocks here.
—Newsletter edited by Anita Hamilton, Mary, Romano, Matt Bemer, Ben Levisohn