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| | Top News  Shutterstock Stocks finished mixed Friday, as energy shares dragged down the S&P 500 index to a slight loss while strength in tech shares lifted the Nasdaq Composite to a record high. Investors were concerned by COVID-19 related developments in Europe, where Austria announced a full national lockdown due to a spike in cases, and Germany mandated new restrictions for unvaccinated people. The news cut down shares of air carriers and other travel related firms. Federal Reserve Vice Chair Richard Clarida said fourth-quarter growth likely will be very strong, and the Fed may need to discuss the pace of its tapering bond purchases. Also, the House passed the Biden Administration's $2 billion economic plan, where it moves to the Senate for possible revisions. For the week, the Dow Jones average fell 1.3% while the S&P edged 0.3% higher and the Nasdaq rose 1.2%, | | Global During a meeting on Monday night that lasted more than three hours, President Biden and China's Xi Jinping looked to reduce the tensions that have marked the relationship since January, while opening the road for more dialogue. No major resolutions were produced from the gathering, but that was expected, as the White House said the discussion would center around "ways to manage the competition between the U.S. and China responsibly." Other attendees at the meeting included Treasury Secretary Janet Yellen, Secretary of State Antony Blinken and National Security Advisor Jake Sullivan. Quotes: "Our responsibility as leaders of China and the United States is to ensure that the competition between our countries does not veer into conflict, whether intended or unintended," Biden said to his counterpart via video, while Xi responded in a similar fashion. "China and the United States should respect each other, coexist in peace and pursue win-win cooperation. I stand ready to work with you, Mr. President, to build consensus, take active steps and move China-U.S. relations forward in a positive direction." While many topics were discussed, such as human rights, climate change and Taiwan, investors honed in to what the world's biggest economies said about trade and the business landscape. Biden underscored the importance of China fulfilling its Phase 1 trade deal commitments, after other concerns were flagged last week, like the impact of China's "extremely robust and very effective industrial policies on our ability to grow and thrive." The White House also painted Biden coming into the summit with a strong hand after the signing of a major infrastructure bill that "will boost America's competitiveness with China." Analyst commentary: "Stability is the name of the game here," said Ben Harburg, managing partner at MSA Capital. "Critical to establishing that structure is placement of guardrails to reduce these risks of the economic relationship and global stability. American and Chinese businesses are looking for a more clear framework under which they are able to operate independently of the political dynamic." ( 13 comments) | | Sponsored By ProShares  The advancement of clean technology is critical to combating climate change and could be a catalyst for economic growth. The ProShares S&P Kensho Cleantech ETF invests in companies involved in developing and building the green technologies that could power the future in areas like hydro, solar, wind, and geothermal. Find out more about this timely investment opportunity. | | On The Move Boogity, boogity, boogity... An electric car rally took hold of the market over the last week, though some of those gains were later surrendered, as the electrifying sentiment ran out of charge. Traders that lit up the screens screamed future, especially after the COP26, though others cautioned the fundamentals didn't match up and FOMO forces were at play. The U.S. infrastructure package is another reason for an EV party, with $12B dedicated to accelerating the use of electric vehicles, as well as potential EV tax credits on the way in the upcoming Build Back Better bill. Stats: Just days after going public, Rivian Automotive's ( RIVN) market capitalization zoomed past that of Volkswagen ( OTCPK:VWAGY), which is the second-largest automaker in the world by volume. Putting it in perspective, VW manufactured 9.3M vehicles last year, compared to the 150 electric trucks produced by Rivian. Rival Lucid Motors' ( LCID) market value also closed in on GM's ( GM) and topped Ford's ( F) on Tuesday, underscoring investors' appetite for EV makers and the hunt for the next Tesla ( TSLA). "There's still plenty of buying interest because I still think ultimately investors are viewing this as a phase and viewing pullbacks as an opportunity," said Craig Erlam, senior market economist at OANDA. "If you ask me where the share price is going to be six months from now, 12 months from now? I'd say it's more likely to be 20% higher than 20% lower." Day in the sun: Sono Group ( SEV) also began trading on Wednesday, in an IPO that attracted lots of attention. The German solar-powered car startup, which is still pre-revenue, soared in its starting lap at a valuation of more than $1B, but hit the skids over the subsequent sessions. Sono has 16K reservations for its Sion solar electric vehicle, which it believes will be the next big wave in e-mobility, and hopes to take the solar concept to trucks, trailers and even buses. ( 112 comments) | | Covid After a federal appeals court upheld a stay on the order, the Occupational Safety and Health Administration ( OSHA) suspended enforcement of the Biden administration's COVID vaccine mandate for private businesses with 100 or more employees. The rules would have required firms to develop a roster of vaccinated and unvaccinated employees by Dec. 5, and compelled the companies to ensure unvaxxed workers wear masks at the workplace and submit to weekly testing as of Jan. 4. In terms of execution, the OSHA regulation would have been enforced through company record-keeping and some in-person inspections (with penalties of up to $13,653 for each reported violation) and covered 84M workers nationwide. How did we get here? Many legal challenges to the mandate popped up across the country, resulting in a judicial lottery to consolidate the lawsuits before a single appeals court. Under the unusual system mandated by Congress, officials placed the name of each of the judicial circuits with an active challenge on a ping pong ball that was placed in a solid wood raffle drum. John Nichols, clerk on the DC-based Judicial Panel on Multidistrict Litigation, then drew a ball, which ended up having the name of the 6th Circuit Court of Appeals in Cincinnati. Critics of the mandate were hoping for a strong conservative court, like the 5th Circuit, while proponents were pushing for an appeals court with a more liberal stance such as the 9th Circuit. More than twice as many judges have been appointed by Republican presidents than Democrats to the 6th Circuit, with a three-judge panel (yet to be determined) set to hear the first case. To note, the order being discussed by the court does not include other vaccine mandates, like the one on healthcare providers that receive Medicaid and Medicare payments, or the directive on employees of federal contractors. Next steps: "Whatever the 6th Circuit decides, I think this [vaccine-or-test mandate] is going to be resolved at the Supreme Court," declared Dan Meyer, managing partner at law firm Tully Rinckey. ( 29 comments) | | Energy Several reports suggested that the Biden administration turned to some of the world's largest oil consuming nations to lower global prices after OPEC+ snubbed several requests to increase crude production. The coordinated effort could include China, India, South Korea and Japan, and would involve releasing national crude stockpiles at a time when prices are rising at the pump. The U.S. and allies have coordinated strategic petroleum reserve releases before, with the last big effort coming during the 2011 war in OPEC member Libya. Quote: "We're talking about the symbolism of the largest consumers of the world sending a message to OPEC that 'you've got to change your behavior,'" a source told Reuters. Crude futures fell nearly 3% on Wednesday on the news, and continued dropped the rest of the week. Looking to address prices at the pump, Biden also asked the Federal Trade Commission to probe possible criminal conduct in the U.S. gasoline market. He specifically pointed to gasoline prices that rose about 3% from a month earlier, even as the price of unfinished gasoline was down more than 5%. "This unexplained large gap is well above the pre-pandemic average," Biden said in a letter to FTC Chair Lina Khan. "Meanwhile, the largest oil-and-gas companies in America are generating significant profits off higher energy prices." What is the SPR? The U.S. created the Strategic Petroleum Reserve in 1975 after the Arab Oil Embargo led to a spike in gasoline prices that scarred the U.S. economy. The reserve currently holds enough oil to meet U.S. demand for more than a month, including about 606M barrels in dozens of caverns across the Louisiana and Texas coasts, as well as small heating oil and gasoline reserves in the U.S. Northeast. Presidents have authorized several emergency sales from the SPR (Gulf War in 1991, Katrina in 2005 and Libyan Civil War in 2011), but oil swaps take place more frequently, with the last exchange happening after Hurricane Ida in September. ( 132 comments) | | Central Banking Monetary policy has been front and center over the last few months amid questions about how economic trends coming out of the pandemic will influence the world's most important central banks. Chief among them is inflation concerns, though other figures like industrial production and retail sales have also been big talking points. Lockdowns are not helping, with Germany following Austria's lead in shuttering places where hospitals are overwhelmed as surging COVID cases spread across the continent.
Bigger picture: Traders are betting that the ECB will stick to its loose monetary policy despite the Federal Reserve and Bank of England indicating that they are going to raise rates to counter inflation. The U.S. economy has also surprised on the upside this year, while recent European data has disappointed, such as Germany's latest industrial production and factory orders figures. "At a time when purchasing power is already being squeezed by higher energy and fuel bills, an undue tightening of financing conditions is not desirable, and would represent an unwarranted headwind for the recovery," ECB President Christine Lagarde declared.
Meanwhile, a lot of the trading expectations have recently spilled over from the bond markets, to currency markets, with the euro falling sharply against the dollar. On Wednesday, the currency even fell to $1.13, and is still holding at that level, marking a low that was last seen 16 months ago. Against the pound, the euro is near levels not seen since the start of the pandemic and many traders are pricing in further near-term weakness.
Over in Japan: In another diverging trend, Tokyo approved a record $490B spending package on Friday (including direct cash payments) to cushion the economic blow from the pandemic. That bucks a recent stance adopted by the world's other systemically significant central banks, which have been withdrawing crisis-mode stimulus measures (like the recent tapering decision by the Fed). It will also pile on more liabilities to Japan's heavy debt load, which has reached 266% of its gross domestic product. | | U.S. Indices
Dow -1.4% to 35,602. S&P 500 +0.3% to 4,698. Nasdaq +1.2% to 16,057. Russell 2000 -2.9% to 2,342. CBOE Volatility Index +9.9% to 17.91.
S&P 500 Sectors
Consumer Staples -1.%. Utilities +0.9%. Financials -2.8%. Telecom -1.%. Healthcare -0.7%. Industrials -1.2%. Information Technology +2.4%. Materials -2.%. Energy -5.2%. Consumer Discretionary +3.8%.
World Indices
London -1.7% to 7,224. France +0.3% to 7,112. Germany +0.4% to 16,160. Japan +0.5% to 29,746. China +0.6% to 3,560. Hong Kong -1.1% to 25,050. India -1.7% to 59,636.
Commodities and Bonds
Crude Oil WTI -6.3% to $75.67/bbl. Gold -1.2% to $1,847.1/oz. Natural Gas +6.% to 5.077. Ten-Year Treasury Yield +0.% to 130.73.
Forex and Cryptos
EUR/USD -1.48%. USD/JPY +0.16%. GBP/USD +0.27%. Bitcoin -9.1%. Litecoin -14.6%. Ethereum -8.%. Ripple -8.8%.
Top Stock Gainers
Longeveron Inc (NASDAQ:LGVN) +195%. Meredith Corp (NYSE:MDP) +102%. Jowell Global Ltd (NASDAQ:JWEL) +85%. Casper Sleep Inc (NYSE:CSPR) +85%. Trio-Tech International (NYSE:TRT) +83%.
Top Stock Losers
Connect Biopharma Holdings Ltd ADR (NASDAQ:CNTB) -65%. Flora Growth Corp (NASDAQ:FLGC) -58%. Redhill Biophrma ADR (NASDAQ:RDHL) -42%. The Beachbody Company Inc Cl A (NYSE:BODY) -42%. Big 5 Sporting (NASDAQ:BGFV) -41%.
Where will the markets be headed next week? Current trends and ideas? Add your thoughts to the comments section. | | | | | Seeking Alpha's Wall Street Breakfast Podcast Seeking Alpha's Wall Street Breakfast podcast brings you all the news you need to know for your market day. Released by 8:00 AM ET each morning, it is a quick listen that you can put on as you get ready to start your working day. | | | | |
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