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The World
The National Guard will be deployed — at the Washington, D.C. mayor’s request — as Trump supporters arrive today to protest the presidential election outcome. Trump told a Georgia crowd he’ll ‘fight like hell’ to hold on to presidency and hopes V.P. Pence “comes through for us” during the electoral vote tally. Meanwhile, the leader of the Proud Boys was arrested in Washington D.C. and charged with destruction of property and a firearms offense, as nearly 200 top U.S. business leaders pressed Congress to certify President-elect Joe Biden’s electoral victory in a letter. (Financial Times, The Guardian, Washington Post, Atlanta Journal-Constitution, Wall Street Journal)
In L.A. County, a person is dying every 10 minutes, and a person is getting infected every six seconds. In Texas, 1 in 5 hospital beds are occupied by Covid-19 patients. In the UK, Boris Johnson plunged England into its third lockdown until Feb. 15 to prevent the NHS from becoming overwhelmed by the rising flood of cases. Scotland was placed under full lockdown for three weeks, while Ireland says ICU beds could run out this month. Wall Street suffered its worst day since October on the virus advance. (Los Angeles Times, Texas Tribune, The Times, The Times-2, Financial Times)
The U.S. Covid vaccination effort is far behind original estimates. More than 15.4 million doses have been delivered to states, but only 4.5 million Americans have received their first shot. The small number is particularly striking in NYC, where only roughly 110,000 people have received the first doses — about a quarter of the total the city received. CA Gov. Newsom said California’s vaccine rollout has been too slow, while in Georgia, anger and frustration are growing over vaccination efforts. (CNBC, New York Times, Los Angeles Times, Atlanta Journal-Constitution)
Only a quarter of Americans continue to socialize in public, the lowest share to do so since Aug. 10. 19% of Democrats said they are either “continuing to socialize in public places” or “continuing to socialize in public places, but less than before.” Among GOP adults, 35% said the same. (Morning Consult)
What the data say about border closures: After EU countries rushed to close their UK borders to prevent transmission of a new — potentially more transmissible — variant of SARS-CoV-2, research has estimated the effect of international travel restrictions on spread earlier in the pandemic. Models find that strict border closures could have helped to limit viral transmission in the early days. But once the virus started spreading in other countries, border closures provided little benefit. (Nature)
Israel is the global vaccine pacesetter, and the country started vaccinations on Dec. 19, administering around 150,000 per day since then. Israel gained a head start after it negotiated early for Pfizer/BioNTech vaccine supplies. The rollout has proven successful due to the country's excellent healthcare system and public enthusiasm about the vaccine. The Health Ministry Director General said that the response has been so positive that the speed of the vaccination drive will have to be reduced in order to conserve stocks. Prime Minister Netanyahu said the results may allow Israel to emerge from the pandemic as early as February. (Statista, Jerusalem Post, Our World in Data)
The Russia hacking breach is far broader than first believed. It now appears Russia exploited multiple layers of the supply chain to gain access to as many as 250 networks: The hackers managed their intrusion from servers inside the U.S., exploiting legal prohibitions on the NSA from engaging in domestic surveillance; “early warning” sensors clearly failed; the government’s emphasis on election defense may have diverted resources and attention from problems like protecting the software “supply chain”; SolarWinds had a history of lackluster security for its products, making it an easy target. Senator Mark Warner: “This is looking much, much worse than I first feared.” (New York Times)
After Beijing said it will take “necessary measures” in response to the delisting of 3 Chinese telecom giants, the NYSE backtracked and will no longer delist the companies. Meanwhile, China’s Xi Jinping is trying to box out Biden, making trade agreements in Asia and Europe — including a pact with 14 other Asian nations, a pledge to join in reducing carbon emissions to fight global warming, and an EU investment agreement. Separately, Chinese cities reportedly went dark as the country faces shortage of coal, a major Australian export. (CNBC, South China Morning Post, New York Times, CNBC-2)
Global: 1) Iran says it has resumed enriching uranium to 20% purity, in its most significant breach yet of the 2015 nuclear deal. 2) In Baghdad, thousands of Iraqis converged on a landmark central square to commemorate the anniversary of the killing of Iranian Gen. Qassem Suleimani and a top Iraqi militia leader in a U.S. drone strike. 3) Saudi Arabia agreed to reopen its borders with Qatar to end a dispute lasting more than three years that triggered an unprecedented crisis in the oil-rich Gulf and pitted U.S. allies against each other. 4) Meanwhile, the Afghan government and Taliban will resume peace talks after a three-week break, although battlefield clashes and targeted killings risk are undermining efforts. (BBC News, Los Angeles Times, Financial Times, Reuters)
South Korea’s population shrank for first time ever, with trend expected to worsen amid Covid-19. Rising unemployment, mounting housing costs and other financial burdens associated with having children have been blamed for the low birth rate. (South China Morning Post)
America’s demography is looking European, as its policies and the pandemic are exacerbating long-term demographic stagnation: In mid-December, the U.S. Census published new population estimates (to be used for comparison when official census data are released in 2021). For those keen on growth, they offer mostly grim reading. California’s population has stalled and may, for the first time, be declining. Illinois, which has shed over 250,000 residents in a decade, has shrunk for seven successive years. In the year to July, thus counting in little pandemic effect, New York endured more shrinkage than any state: it lost 126,000, or 0.65%, of its people. Some states, mostly in the South, are growing fast, but not enough to lift the national rate. Overall, America’s population is barely inching up by historical standards. In the year to July it grew by 0.35% (or 1.2m) to 329m. No year since 1900 has seen such a miserly gain, though the year to next July could be slower still. Even in the dark days after the first world war, as the Spanish flu raged, growth was faster. William Frey of the Brookings Institution calculates expansion in the decade to July 2020 at just 6.6%. If his sums are right, that is the lowest decadal gain since 1790. (The Economist)
Economy
Markets are keyed on the Georgia Senate races: Market participants expect more fiscal stimulus, regulation and higher taxes if Democrats win and the initial reaction would be positive as stimulus would likely come first, JPMorgan Chase wrote. Société Générale said a Democratic sweep could push yields on Treasuries higher as bond investors anticipate more federal borrowing. Meanwhile, inflation expectations already have been rising in step with Democratic odds in the Georgia contests. (Finance 202, Bloomberg)
Economists are expecting a difficult 1Q21, but then a rebound, as the $900 billion economic stimulus and vaccines offer hope for a snapback later in 2021. Additionally, Americans have been saving an unusually high share of their income; many will be able to draw on reserves to boost spending once restrictions ease. Also, borrowing costs are low. (Wall Street Journal)
Factory activity across Asia continues to gain momentum, spurred by strong demand for the region’s exports, while China’s recovery is starting to moderate. Meanwhile, Euro-area manufacturing grew the fastest in more than 2 1/2 years in December. (Bloomberg)
Private equity fundraising is poised to bounce back in 2021, as limited partners want to invest more in the asset class after the pandemic slowed fundraising in 2020. Meanwhile, GP-led deals are expected to account for an estimated half to two-thirds of 2020 secondary deal volume, up from a little less than one-third of transaction volume in 2019. (Wall Street Journal, Private Equity News)
2021 will be the year of guaranteed income experiments: At least 11 U.S. cities are piloting UBI programs to give some of their residents direct cash payments, no strings attached. Another 20 mayors have said they may launch such pilots in the future, with several cities taking initial legislative steps to implement them. The ultimate aim of the mayors coalition is to pass a federal guaranteed income program. Every city that joins is eligible for $500,000 in pilot funding. The effort has gained high-profile philanthropic supporters, including Twitter CEO Jack Dorsey, who donated $3 million to the group in July and another $15 million in December. (City Lab)
Global M&A roared back in 2H20, virtually erasing the 41% year-over-year decline at the end of June. However, it was still the slowest year for global deal-making since 2017, and down 5% from 2019. Goldman Sachs retained its spot as top adviser, with Morgan Stanley leapfrogging JPMorgan for second place. Tech was the top macro sector (18.9%), followed by financials (13.6%) and energy/power (11.9%). Private equity deal value hit its highest level since 2007, both globally and for U.S. targets. (Axios)
Technology
Microsoft is testing a new Outlook app that will replace its built-in Mail and Calendar apps on Windows 10. Codenamed Monarch and “One Outlook,” the app is “a new version of Outlook designed for large-screen experiences,” according to a leaked version of the app. Meanwhile, Microsoft is planning a “sweeping visual rejuvenation of Windows” that is designed to signal to users of the operating system that “Windows is BACK.” That’s according to a job listing posted by Microsoft recently, advertising for a software engineering role in the Windows Core User Experiences team. Microsoft quietly removed references to this “sweeping visual rejuvenation,” after several Windows enthusiasts spotted the job listing over the weekend. (The Verge, The Verge-2)
Haven, the Amazon-Berkshire-JPMorgan venture to disrupt health care, is disbanding after 3 years. One key issue facing Haven was that each of the three founding companies executed their own projects separately with their own employees, obviating the need for the joint venture to begin with. (CNBC)
Even the Super Bowl isn’t immune to Gen Z’s relative disinterest in live sports: Only 27% of Gen Z adults 18-23 said they are “very likely” to tune in on Feb. 7, compared to 43% of millennials and 37% of all adults. 51% of Gen Zers said they will more likely than not watch the NFL’s title game. (Morning Consult)
Smart Links
Alibaba founder Jack Ma has not appeared in a public setting since a late October forum in Shanghai, where he was critical of China's regulatory system. (Reuters)
Private island sales spike. (Nikkei Asian Review)
Golf is booming because of the pandemic. (CNN)
Timing and location are key predictors of start-up success: Study. (MIT News)
Delta Air Lines CEO expects positive cash flow by spring. (Reuters)
Gig workers bear the brunt of U.S. labor market slowdown. (Financial Times)
New state laws going into effect in 2021: Banned sunscreens, delivery robots and minimum wage. (USA Today)
TikTok’s “Ratatouille” experiment is the future of musical theater. (Los Angeles Times)
Tourism back to 1990 levels as pandemic halts travel. (Statista)