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The World
Major U.S. stock indexes have set 32 record highs in 2021, including yesterday’s 424-point Dow surge to 31,962. Long-term bond yields are rising and inflation expectations are at multiyear highs. The price of everything in markets, from a barrel of oil to a share of mall retailer GameStop to a bitcoin, seems to be going up. The everything rally shows that investors believe the fun is just getting started. They believe that a combination of more fiscal stimulus, more-extensive vaccinations and pent-up demand for consumption, on a background of near record-low interest rates, will at last kick-start economic growth and inflation that have been elusive in recent years. (Wall Street Journal)
Tax hikes for high earners are on the table in some states: Governors in New York, Minnesota and elsewhere urge higher income and capital-gains taxes to fortify pandemic-weakened budgets. (Wall Street Journal)
A rebound in corporate profits is expected to send European stocks to record highs by the end of 2021, a Reuters poll of 24 fund managers, strategists and brokers surveyed over the past two weeks found. (Reuters)
An additional note from Fed Chair Powell’s congressional testimony: The Fed is looking carefully at issuing a digital US dollar — a "high priority" project. The potential issuance would come amid a surge in cryptocurrencies like bitcoin, which briefly surpassed $1 trillion in market value last week. (Business Insider)
Shares of GameStop surged more than 100% as investors poured into the brick-and-mortar retailer amid a C-suite shake-up. Shares were halted with less than 30 minutes left in the trading day and the stock ended up 103.9%. (CNBC)
President Biden signed an executive order directing a broad review of supply chains for critical materials — from semiconductors to pharmaceuticals and rare-earth minerals — with the aim of spurring domestic production while strengthening ties with allies. A chip shortage is squeezing auto makers in the U.S. and world-wide. Taiwan's chip industry under threat as a drought there turns critical; TSMC and UMC activate water-supply plans as reservoirs face depletion in 60 days. In the U.S., the winter storm forced Samsung to halt Texas chip plant operations. (Wall Street Journal, Nikkei Asian Review)
Around $7 billion in Iranian assets frozen in two South Korean banks due to U.S. sanctions will be released through consultations with the U.S., Seoul’s foreign ministry said, after the Iranian government stated on its website that an agreement had been reached. (Korean Times)
The European Commission was forced to defend its investment deal with Beijing from intense criticism in the European Parliament, signalling the challenge it faces in getting it over the line next year. In a lively session of the Committee on International Trade, MEPs accused Brussels of ignoring concerns over China’s labour conditions, glossing over Beijing’s crackdown in Hong Kong, and “showing the middle finger” to the new Biden administration. (South China Morning Post)
Over a million Texans are still without drinking water. Meanwhile, Texas electric bills were $28 billion higher under deregulation. For the past 20 years, Texas consumers have paid more for their electricity, a WSJ investigation found. (Texas Tribune, Wall Street Journal)
The F.D.A. could authorize Johnson & Johnson’s new single shot coronavirus vaccine as early as Saturday, depending on a vote by its vaccine advisory panel on Friday, and distribution could begin within days. Meanwhile, the Pfizer vaccine was found 94% effective in real world tests in Israel. (New York Times, Reuters)
The W.H.O.’s global vaccine-sharing scheme COVAX delivered its first COVID-19 shots — to Ghana — in the race to get doses to the world’s poorest people. Mexico, the first country in North America to approve Russia’s coronavirus shot, has received its first batch of the vaccine. Meanwhile, multiple studies have established effectiveness of contact tracing mobile apps in helping prevent virus spread — now they would benefit from better integration into health-care systems. (Reuters, CNN, Nature)
Nearly 150 institutional investors that oversee combined assets worth more than $14 trillion have issued a joint call for a “fair and equitable” global response to the pandemic, and they intend to huddle with health care companies to make progress on that goal. (STAT News)
South Korea says it will reach herd immunity by autumn. Japan appointed its first Minister for Loneliness this month after the country’s suicide rate increased for the first time in 11 years during the pandemic. The EU will keep COVID-19 curbs on non-essential travel. (BBC News, CNN, Reuters)
Australia passed a new media law that had generated noisy pushback from internet giants Google and Facebook, which didn't want to be forced to pay publishers for news content. Facebook pledged at least $1bn to pay for news over the next three years, matching Google’s spending plans in a move that aims to contain the fallout from the social media group’s shortlived ban on news in Australia. (Cnet, Financial Times)
Facebook: “The internet needs new rules that work for everyone, not just for big media corporations. By updating internet regulation, we can preserve what’s best about it — the freedom of people to express themselves and entrepreneurs to build new things. New rules only work if they benefit more people, not protect the interests of a few.” (Facebook)
L.A. City Council approved ‘hero pay’ wage boost for grocery workers. But as supermarkets are pressured to raise hazard pay, grocery chains say they will raise prices, reduce services or close stores to offset higher wages required by some cities. (Los Angeles Times, Wall Street Journal)
Gallup's latest update on lesbian, gay, bisexual or transgender identification finds 5.6% of U.S. adults identifying as LGBT. The current estimate is up from 4.5% in Gallup's previous update based on 2017 data. (Gallup)
Economy
A Torys LLP study of more than 100 executives at PE institutions and pension funds found that 76% plan to increase or maintain the amount of capital they put into private equity funds in 2021 — and are especially interested in pouring money into technology companies. (Canadian Lawyer)
Navigating Biden’s ESG-Driven Tax And Regulatory Agenda: What do taxes have to do with ESG? Everything, says Marna Ricker, vice chair of tax services at EY Americas. “Biden sees tax credits as an incentive to invest in clean energy, buy American and revitalize infrastructure in communities adversely affected by social injustice and racial inequity.” An example is a 10 percent “Made in America” tax credit for corporate actions that restore, revitalize or expand business domestically. (StrategicCFO360)
Visa and Mastercard are planning to raise swipe fees for some types of credit-card purchases in April, adding to the squeeze felt by restaurants, retailers and other merchants already struggling through the pandemic. Creating extra costs for merchants: customers’ switch to online shopping during the pandemic—a trend heralded for keeping businesses afloat when people are reluctant to venture inside stores. (Wall Street Journal)
McKinsey partners voted to replace Kevin Sneader as global managing partner in a historic rebuke over his handling of a string of crises. The vote means the next head of the influential global consulting firm will be either Bob Sternfels or Sven Smit, two senior partners based in San Francisco and Amsterdam respectively, who have made it through to the last round of the leadership election. A final vote is expected in the next week or two. (Financial Times)
Hong Kong moved unexpectedly to raise taxes on share trading by 30%, putting a damper on the city’s stock-exchange operator just as it was unveiling record annual sales and profits. (Wall Street Journal)
VC firms join the SPAC rush: This month’s batch of SPAC filings included its fair share of venture capital firms seeking to form blank-check acquisition vehicles. The list includes Lerer Hippeau, Khosla Ventures and Advancit Capital, with Khosla alone forming three blank-check companies. (Crunchbase)
Technology
Apple buys a company every three to four weeks. (BBC News)
Paramount+ details: Ad-supported tier at $5/mo has NFL games, CBSN, thousands of shows; ad-free tier at $10/mo adds live local news, more sports, live CBS shows — The rebranded, revamped and supercharged CBS All Access will launch on March 4. Paramount also is dramatically shortening the space between theatrical and streaming releases for some of its biggest films, which will debut on Paramount Plus just 45 days after they first hit theaters. (Hollywood Reporter, The Verge)
Saudi Arabia's sovereign wealth fund is all-in on gaming: It bought more than $3 billion worth of stocks in Activision Blizzard, Electronic Arts and Take-Two Interactive in the fourth quarter as part of an ongoing diversification of its investments. (Protocol)
How Chess.com built a streaming empire: One company — Chess.com — dominates the world of online chess. A company representative estimated that 65% to 70% of online players use the site. As of this writing, there are 427,580 people around the world playing games on the site. Total registered users grew from 20 million in 2017 to over 57 million today. Twitch users watched 18.3 million hours of chess content in January, nearly as much as they consumed throughout 2019. Last week, chess even surpassed League of Legends, Fortnite and Valorant as the most-watched gaming category. (Protocol)
Cumulus Media, owners of Westwood One, says it achieved more than 1bn downloads in 2020, and podcasting is “pacing up more than 30% in Q1”. Podcasting revenue grew 40% last year. (Seeking Alpha)
A new data transfer system can transmit information 10 times faster than a USB, pairing high-frequency silicon chips with a hair’s-width polymer cable. The MIT-led effort could boost energy efficiency in data centers and lighten electronics-rich vehicles. (MIT News)
Smart Links
Goldman CEO warns remote work is an aberration, not the new normal. (Bloomberg)
Women make up just 24% of research universities' top earners. (Inside Higher Ed)
Online learning boom: In a year of unprecedented disruption, enrollment in online offerings grows 140% at MIT Professional Education. (MIT News)
Tim Wu likely to join the White House National Economic Council. (Politico)
What to do when you’re in a conflict with a remote colleague? Here are some tips. (Harvard Business Review)
Microsoft is adding AI-powered text predictions to Word. (The Next Web)
Live Events: Today
Learn More (Today, 12 pm ET): Germany’s Response to the U.S.’s Crisis of Democracy and President Biden's Foreign Policy Agenda. Peter Wittig, former Ambassador of Germany to the U.S., UK, and UN, and former U.S. Ambassador Nicholas Burns. (Register — Harvard Kennedy School)