Friday, August 27, 2021

S&P 500, Nasdaq End Week at Records After Powell’s Remarks. Stocks ended higher Friday, with the S&P 500 and Nasdaq Composite closing at records after Federal Reserve Chairman Jerome Powell said he was in favor of beginning to taper the central bank’s asset purchases this year, but offered no specific timetable. The Dow Jones Industrial Average rose around 243 points, or 0.7%, to end near 35,456. The S&P 500 gained around 39 points, or 0.9%, closing near 4509, while the Nasdaq finished near 15,130, up around 184 points, or 1.2%. For the week, the Dow rose 1%, while the S&P 500 saw a 1.5% gain and the Nasdaq rallied 2.8%.

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Taper Time Is Coming. Powell Sets the Stage.

Federal Reserve Chairman Jerome Powell signaled in his Jackson Hole speech Friday that the central bank may begin winding down its emergency bond-buying program this year.
Then again, it may not. During his appearance at the annual conference hosted by the Kansas City Fed, held virtually this year, Powell said the labor market and overall economy are recovering much more quickly than anticipated and the Fed’s inflation objective has been met. Still, he repeated his belief that rising prices are transitory and noted millions of people remain unemployed.
Powell went so far as to say that as of the last Fed meeting in late July, he along with “most participants” felt that it would be appropriate to start trimming bond purchases this year if the economy continued to evolve as expected.

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Covid Infections Among Young Children Are Surging. When a Vaccine Could Be Ready.

Urgency and caution are in high tension now as schooling resumes and infections by the Delta variant of the Covid-19 virus surge among unvaccinated Americans. That includes children.
The Food and Drug Administration put all hands on deck this summer to complete its review of Pfizer and BioNTech’s vaccine, hoping that a complete license would inspire hesitant adults 16 years of age and older to get the shots. Now, attention turns to vaccinating the youngest.

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Extra Unemployment Pay Is About to Expire

Emergency unemployment benefits expire Sept. 6 in states that haven’t already cut the pay ahead of the federal expiration date, meaning roughly 11 million people will lose the extra $300 in weekly jobless pay and access to the pandemic programs that gave access to gig workers and others not normally eligible for unemployment insurance.
Economists and employers alike have for months predicted the end of the program would help usher millions back into the labor market and solve the labor shortage that is at the root of the everything shortage. But there are signs the program’s expiration may not fix the labor problem—while simultaneously dragging down growth at a time when the economy is already slowing.

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New-Home Sales Jumped In July. Home Prices Rose Even More.

New-home sales in the U.S. rose for the first time since March.
Sales came in at a seasonally adjusted annualized rate of 708,000 in July, the Census Bureau said, up from an adjusted 701,000 rate in June. That was higher than the 680,000 expected by economists and the first increase since they rose to 873,000 in March from 823,000 in February. It’s down 27%, however, from the 927,000 sales that occurred in July 2020. The good news is that the amount of supply rose a touch—to 6.2 months, from six months—even as the median new home price increased to $390,500, an increase of 18% from July 2020.

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Covid-19 Vaccine Makers Rush to Keep Up After Pfizer Gets FDA Approval

Days after the U.S. Food and Drug Administration issued its first full approval of a Covid-19 vaccine, other biotechs are moving forward with efforts to secure their vaccine’s spot in the rapidly developing market.
The FDA’s approval of Pfizer and BioNTech‘s vaccine Monday set off an avalanche of employers announcing vaccine mandates for workers. The latest was Delta Air Lines, which said Wednesday that workers would need to get vaccinated or pay a $200 monthly health insurance surcharge, according to a report.

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China Could Ban Some U.S. IPOs

After the chaos following Didi Global’s U.S. debut and subsequent tumble after Chinese regulators launched a security review, interest in Chinese initial public offerings in the U.S. dropped noticeably. Now, the latest reports that China plans to ban data-heavy technology firms from U.S. IPOs confirm what many feared a couple of weeks ago.
Chinese regulators have alerted some foreign investors and companies that new rules could ban internet companies with large stores of user data from listing in the U.S., according to The Wall Street Journal.

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Apple Settles With Developers in App Store Dispute

Apple has settled a class-action lawsuit by app developers that could allow them to route around some App Store fees.
Apple agreed that developers have the right to tell their customers how they can pay for apps outside the App Store, enabling developers to avoid paying Apple commissions in some circumstances. Developers will not pay Apple a commission on any purchases taking place outside of their app or the App Store.

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Covid-19 Vaccine Mandates Spread After FDA Approval of Pfizer’s Vaccine

Employers announced a wave of Covid-19 vaccine mandates in the hours after the U.S. Food and Drug Administration said it had issued full approval of Pfizer’s Covid-19 vaccine, ushering in a new phase in a vaccination campaign that has stalled at about 60% of the eligible population.
Among the employers who announced vaccine mandates this week were CVS Health, which said it would require certain employees to be vaccinated by October 31, and New York City’s Department of Education, which will require all employees to receive their first dose by September 27. A Pentagon spokesperson said Monday the Department of Defense, the world’s largest employer, would mandate vaccines soon. Secretary of Defense Lloyd Austin had previously said that he would make vaccines mandatory following FDA approval.

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The Car Semiconductor Shortage Is Persisting

As second-quarter earnings seasons comes to a close, predictions that the semiconductor shortage would fade in the second half of 2021 look greatly exaggerated. The chip shortage—which is constraining global auto production—likely will last longer than that.
A lack of semiconductors will be responsible for about 5 million cars not being built in 2021. Those are cars that could have been built and sold around the world—if the chips were available.

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Jeff Bezos Ups His Battle With Elon Musk and SpaceX

Forget geopolitics, Space Force, or Star Wars. The real battle in space is between Jeff Bezos and Elon Musk.
On Thursday it was reported that Amazon.com is trying to interfere with the SpaceX space-based internet business dubbed Starlink. Amazon, in a three-page letter to the Federal Communications Commission, asks the agency to dismiss a SpaceX amendment related to its plans for the next generation of its Starlink satellite constellation. Amazon says the plan is too vague and raises concerns about interference with other satellite constellations.

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