Tag: WSJ

Covid-19 Virus Studies Yield New Clues on Pandemic’s Origin

Mary Pat Campbell

Link: https://www.wsj.com/articles/covid-19-virus-studies-yield-new-clues-on-pandemics-origin-11614594600

Excerpt:

At least four recent studies have identified coronaviruses closely related to the pandemic strain in bats and pangolins in Southeast Asia and Japan, a sign that these pathogens are more widespread than previously known and that there was ample opportunity for the virus to evolve.

Another new study suggests that a change in a single amino acid in a key component of the virus enabled or at least helped the virus become infectious in humans. Amino acids are organic compounds that form proteins.

Public-health officials say it is critical to identify the origin of the pandemic to take steps to avert future outbreaks, though it may take years to do so. These latest pieces of research add to evidence that the virus, called SARS-CoV-2, likely originated in bats and then evolved naturally to infect humans, possibly through an intermediary animal.

Author(s): Betsy McKay

Publication Date: 1 March 2021

Publication Site: Wall Street Journal

Most U.S. Treasury Yields Close Lower

Mary Pat Campbell

Link: https://www.wsj.com/articles/u-s-treasury-yields-fall-after-notching-big-gains-last-week-11614619970

Excerpt:

Yields on most U.S. government bonds fell Monday, showing further signs of stabilizing after soaring to multi-month highs last week.

The yield on the benchmark 10-year Treasury note settled at 1.444%, according to Tradeweb, down from 1.459% Friday.

Shorter-dated yields also headed lower, in a reversal from last week when investors bet that the Federal Reserve will start raising interest rates earlier than previously anticipated in response to an expected burst of economic growth and inflation.

The five-year yield settled at 0.708%, from 0.775% Friday. Yields fall when bond prices rise.

Author(s): Sebastian Pellejero and Sam Goldfarb

Publication Date: 1 March 2021

Publication Site: Wall Street Journal

Banks in Germany Tell Customers to Take Deposits Elsewhere

Mary Pat Campbell

Link: https://www.wsj.com/articles/banks-in-germany-tell-customers-to-take-deposits-elsewhere-11614594601?mod=djemwhatsnews

Excerpt:

Germany’s biggest lenders, Deutsche Bank AG and Commerzbank AG , have told new customers since last year to pay a 0.5% annual rate to keep large sums of money with them. The banks say they can no longer absorb the negative interest rates the European Central Bank charges them. The more customer deposits banks have, the more they have to park with the central bank.

That is creating an unusual incentive, where banks that usually want deposits as an inexpensive form of financing, are essentially telling customers to go away. Banks are even providing new online tools to help customers take their deposits elsewhere.

Banks in Europe resisted passing negative rates on to customers when the ECB first introduced them in 2014, fearing backlash. Some did it only with corporate depositors, who were less likely to complain to local politicians. The banks resorted to other ways to pass on the costs of negative rates, charging higher fees, for instance.

Author(s): Patricia Kowsmann

Publication Date: 1 March 2021

Publication Site: Wall Street Journal

Covid-19 Vaccine ‘Passports’ Raise Ethics Concerns, Logistical Hurdles

Mary Pat Campbell

Link: https://www.wsj.com/articles/covid-19-vaccine-passports-raise-ethics-concerns-logistical-hurdles-11614335403

Excerpt:

In Israel, a vaccine passport was launched last week allowing those who are inoculated to go to hotels and gyms. Saudi Arabia now issues an app-based health passport for those inoculated, while Iceland’s government is doling out vaccine passports to facilitate foreign travel. Last month, President Biden issued executive orders asking government agencies to assess the feasibility of creating digital Covid-19 vaccination certificates.

Proponents of the plans say they will enable battered economies to reopen, even as vaccines are still being rolled out, allowing people to enjoy leisure activities and go to work safe in the knowledge they aren’t harming others or at risk themselves. It could also act as an incentive for people to get the shot.

The concept is potentially fraught with pitfalls. It could discriminate against minority communities, who are less likely to accept the vaccines, according to national surveys, or young people, who are less likely to be given priority to receive them.There are questions about the ethics of granting businesses access to peoples’ health records.

Author(s): Max Colchester, Felicia Schwartz

Publication Date: 26 February 2021

Publication Site: Wall Street Journal

As Wall Street Migrates to Florida, Hedge-Funders Move to Offload Manhattan Homes

Mary Pat Campbell

Link: https://www.wsj.com/articles/wall-street-moves-to-florida-nyc-real-estate-11614020268

Excerpt:

Real-estate veterans and hedge-fund executives believe a seismic shift is under way, one that is moving vast amounts of Wall Street wealth from New York to South Florida. For the past several years, Wall Street has been colonizing the Sunshine State, attracted to more favorable tax policies and sunnier climes. And the momentum is only accelerating amid the pandemic.

….

While prices are under pressure in New York amid an oversupply of high-end condominiums on the market, price tags in Palm Beach and Miami appear to be on an unstoppable upward trajectory.

Last week, private-equity executive Scott Shleifer, a co-founder of Tiger Global Management, paid over $120 million for an oceanfront mansion in Palm Beach, setting a price record for the state. New Jersey hedge-fund executive David Tepper is also in contract to buy a $73 million house on the ocean nearby, The Wall Street Journal reported.

While he maintains a $238 million home in New York and another luxury condo in Chicago, Citadel founder Ken Griffin has also been on an acquisition spree in South Florida, spending hundreds of millions of dollars to buy land in Palm Beach and Miami, and is opening an office in Miami.

Author(s): Katherine Clarke, Cara Lombardo

Publication Date: 22 February 2021

Publication Site: Wall Street Journal

Nasdaq Amends Its Diversity Plan

Mary Pat Campbell

Link: https://www.wsj.com/articles/nasdaq-amends-its-diversity-plan-11614547707

Excerpt:

We have listened closely to all the feedback, and we’re making some changes to strengthen our proposal in response. For example, we heard from companies with smaller boards, as well as from several small-cap investors, that meeting the diversity objective would be more challenging for them. As a result of that feedback, we’re now proposing that companies with five or fewer directors may satisfy the recommended objective with one director from a diverse background rather than two. We’re also providing a one-year grace period in the event a vacancy on the board brings a company under the recommended diversity objective.

Overall, our proposal seeks to demonstrate that, with proper disclosure and clear objectives, companies and investors can create momentum toward an approach to capitalism that offers more opportunity to more people. We believe this can be accomplished through a market-driven solution — rather than government intervention.

Author(s): Adena T. Friedman, president and CEO of Nasdaq Inc.

Publication Date: 28 February 2021

Publication Site: Wall Street Journal

Bond-Market Tumult Puts ‘Lower for Longer’ in the Crosshairs

Mary Pat Campbell

Link: https://www.wsj.com/articles/bond-market-tumult-puts-lower-for-longer-in-the-crosshairs-11614517200

Excerpt:

A wave of selling during the past two weeks drove the yield on the benchmark 10-year Treasury note, which helps set borrowing costs on everything from corporate debt to mortgages, to above 1.5%, its highest level since the pandemic began and up from 0.7% in October.

….

Traders said concerning dynamics were evident in a Treasury auction late last week. Demand for five- and seven-year Treasurys was weak Thursday heading into a $62 billion auction of seven-year notes and nearly evaporated in the minutes following the auction, which was one of the most poorly received that analysts could remember.

The seven-year note was sold at a 1.195% yield, or 0.043 percentage point higher than traders had expected — a record gap for a seven-year note auction, according to Jefferies LLC analysts. Primary dealers, large financial firms that can trade directly with the Fed and are required to bid at auctions, were left with about 40% of the new notes, about twice the recent average.

Author(s): Julia-Ambra Verlaine, Sam Goldfarb

Publication Date: 28 February 2021

Publication Site: Wall Street Journal

Prelude to a State Pension Bailout

Mary Pat Campbell

Link: https://www.wsj.com/articles/prelude-to-a-state-pension-bailout-11614547953

Excerpt:

Ordinarily, insolvency means pension freezes and benefit reductions, but multiemployer pensions are run by labor unions, a key Democratic constituency. And so the House Covid bill plans to dole out an estimated $86 billion from 2022 to 2024 to 186 pensions, enabling these plans to pay full benefits through 2051. With no incentive to cut costs, there’s little reason to think the pensions will be solvent after 2051. Look forward to more spending down the road.

Bailout supporters argue they’re helping impoverished workers make ends meet, but that doesn’t add up. The average monthly benefit from a plan like Central States is a seemingly modest $1,400. But that average is skewed downward by large numbers of employees who retired after only a few years of service. The one-third of Central States retirees who receive more than $2,000 a month — plus Social Security benefits — make a bailout expensive. No one in this group is even close to being in poverty.

….

The larger worry is that Congressional Democrats’ willingness to bail out private-sector multiemployer pensions signals they would do the same for state and local employee plans. Public-employee pensions operate under the same loose funding rules as multiemployer pensions, and public plans in Illinois, Kentucky, New Jersey, Texas and other states are no better funded than the worst multiemployer plans.

Author(s): Andrew Biggs

Publication Date: 28 February 2021

Publication Site: Wall Street Journal

Bond Selloff Prompts Stock Investors to Confront Rising Rates

Mary Pat Campbell

Link: https://www.wsj.com/articles/bond-selloff-prompts-rethink-bystock-investors-11613919600

Excerpt:

The sharp increase this month in U.S. government-bond yields is pressuring the stock market and forcing investors to more seriously confront the implications of rising interest rates.

The lift in yields largely reflects investor expectations of a strong economic recovery. However, the collateral damage could include higher borrowing costs for businesses, more options for investors who had seen few alternatives to stocks and less favorable valuation models for some hot technology shares, investors and analysts said.

As of Friday [Feb 19], the yield on the benchmark 10-year U.S. Treasury note stood at 1.344%, up from 1.157% just five trading sessions earlier and roughly 0.9% at the start of the year.

Author(s): Sam Goldfarb

Publication Date: 21 February 2021

Publication Site: Wall Street Journal

GameStop Craze Puts Holders of Retail ETF on Wild Ride

Mary Pat Campbell

Link: https://www.wsj.com/articles/gamestop-craze-puts-holders-of-retail-etf-on-wild-ride-11613923200

Excerpt:

GameStop mania has spilled over into a popular exchange-traded fund, as the WallStreetBets craze reaches beyond shares favored on social media.

The fund, State Street ’s SPDR S&P Retail ETF, was created in 2006 to give investors broad exposure to mall-store firms. Its shares have surged 23% this year, far outstripping a 4% gain in the S&P 500, despite the uncertain outlook for retail. Behind those gains are the traders who congregate on social-media platforms such as Reddit’s WallStreetBets forum and whose enthusiasm has turned this mundane investment into a roller coaster.

On Jan. 27, GameStop soared 135%, driven by events such as Tesla Inc. Chief Executive Elon Musk tweeting “Gamestonk.” The State Street fund jumped 42% the same day. The next day, GameStop shares tumbled 44% and the fund, known by its ticker XRT, dropped about 9%.

Author(s): Michael Wursthorn

Publication Date: 21 February 2021

Publication Site: Wall Street Journal

Midwest Labor Markets Shake Off Covid-19 Downturn

Mary Pat Campbell

Link: https://www.wsj.com/articles/midwest-labor-markets-shake-off-covid-19-downturn-11613817001

Excerpt:

Nationally, the seasonally adjusted unemployment rate rose to 6.7% in December 2020, from 3.6% a year earlier, according to the Labor Department. Jobless rates in the four Midwest metros rose about half as much, while the rates climbed more in several coastal cities.

Columbus and Cincinnati finished last year with a seasonally adjusted 5.1% unemployment rate. The rate was 4.3% in Indianapolis and 4.7% in Minneapolis. The rates were higher in San Francisco, 7.3%, and Boston, 6.9%. The latter two cities had among the lowest unemployment rates among major metro areas at the end of 2019.

Columbus moved from having a near average unemployment rate in 2019 to having among the nation’s lowest rates for major metro areas late last year. The region, with a population of 2.1 million, is home to Ohio State University, a source of young talent and stability during economic downturns and the area’s largest single employer. The city is also home to the state Capitol and is a major hub for JPMorgan Chase & Co., the largest private employer, with 18,000 workers.

Author(s): Kim Mackrael and Joe Barrett

Publication Date: 20 February 2021

Publication Site: Wall Street Journal

Moderna Says Covid-19 Vaccine for South Africa Strain Is Ready for Human Testing

Mary Pat Campbell

Link: https://www.wsj.com/articles/moderna-says-covid-19-vaccine-for-south-africa-strain-is-ready-for-human-testing-11614201000

Excerpt:

Moderna Inc. said it has made the initial batch of doses of a new Covid-19 vaccine designed to better protect people against a new strain of the coronavirus that has shown some resistance to the company’s original vaccine.

The Cambridge, Mass., company on Wednesday said it shipped the new shots to the National Institutes of Health to conduct the first human study of the variant vaccine, which could start within weeks.

The new vaccine, code-named mRNA-1273.351, is designed to better match the virus variant that was first identified in South Africa but has since spread elsewhere.

Moderna, which makes the second Covid-19 shot authorized in the U.S., might be the first vaccine maker to have finished the laboratory work of designing a shot targeting variants that started spreading swiftly late last year.

Author(s): Peter Loftus

Publication Date: 24 February 2021

Publication Site: Wall Street Journal