Friday, August 20, 2021
Dow Finishes up Over 200 points Friday, but Stocks Suffer Weekly Losses. U.S. stock indexes climbed higher Friday afternoon, but the benchmarks still ended with losses for the week on fears over the spread of the coronavirus Delta variant, the imminent tapering of Federal Reserve bond buying, and China’s restrictions on its economy. The Dow Jones Industrial Average gained nearly 226 points, or 0.6%, to finish at 35,120. For the week, the Dow was down 1.1%. The S&P 500 traded 0.8% higher to reach about 4442, up almost 36 points, ending the week down 0.6%. The Nasdaq Composite Index advanced nearly 173 points, or 1.2%, to almost 14,715, off 0.7% for the week.
The White House Wants to Rein In Big Tech. Here’s How.
The era of the U.S. government giving free rein to technology companies as they grow and flourish is over. The momentum around regulation has been building for at least five years, roughly corresponding to a speech that Sen. Elizabeth Warren (D., Mass.) delivered in 2016, when she singled out tech companies in arguing that “in America, competition is dying.”
That technology companies are living in a new era of oversight is no longer up for debate. The view among both Democrats and Republicans is that the status quo must change.
President Joe Biden has made his view clear with the appointment of progressive reformists to his administration. In a sprawling executive order that tackles corporate power, the Biden administration is seeking to rein in Big Tech in numerous areas, including data collection and surveillance, while also asking the Federal Trade Commission to take a closer look at mergers.
World’s Three Largest Auto Makers Face New Production Cuts
The world’s three largest auto makers are signaling that the global shortage of semiconductors could force further production cuts.
Toyota Motor said that the group plans to cut global production in September by 40% from its previous plan amid the chip crunch, according to a report from Nikkei. Meanwhile, Volkswagen, the German owner of brands including Audi and Porsche, said it may need to further cut output due to the semiconductor shortage, Reuters reported. Volkswagen sees an improvement coming by the end of 2021 and plans to make up for production shortfalls in the second half of the year, according to the report.
Fed Minutes Suggest Tapering of Bond Purchases Could Begin Later This Year
Minutes from the Federal Reserve’s latest meeting suggest tapering of monthly asset purchases may start this year as most participants said the Fed has hit its objective on the inflation prong of its dual mandate.
During the monetary policy meeting that concluded July 28, all participants said the economy had made progress toward the Fed’s maximum-employment and price-stability goals since the adoption of the guidance on $120 billion in monthly Treasury and mortgage-backed securities purchases in December. While most members agreed “substantial further progress” toward the maximum-employment goal had not yet been met, most participants said that standard had been achieved with respect to the Fed’s price-stability goal.
Housing Starts Slumped More Than Expected
Housing starts slumped more than expected in July while permits to build rose, the Census Bureau and Department of Housing and Urban Development said Wednesday morning. The latest look at residential construction comes as builders report ongoing cost and supply headwinds.
The New Residential Construction report released Wednesday contains two gauges of new-home construction: housing starts and building permits. While housing starts track the new-home construction that began in the month, permits are a forward-looking indicator of where builders intend to construct homes.
White House Announces Covid Booster Plan for Pfizer, Moderna Vaccine Recipients
Federal health officials this week announced a plan to offer Covid-19 booster shots for Americans who have been fully vaccinated beginning in September.
The plan will back boosters for people who received the Pfizer or Moderna vaccines eight months after they received their second dose. Officials say people who received Johnson & Johnson vaccines will likely need a booster, but they are waiting for more data.
China Adopts New Privacy Law Taking Aim at Tech Sector
China has adopted a strict new privacy law to come into force on Nov. 1, according to the official Xinhua News Agency, which reported that the law was approved by the National People’s Congress and promulgated immediately by president Xi Jinping.
Its passage marks another step in the Chinese government’s crackdown on the country’s biggest internet companies, tightening the regulation of cyberspace and strengthening compliance requirements to better protect user privacy.
AstraZeneca Seeks Approval of Landmark Antibody Drug Preventing Covid Symptoms
AstraZeneca will seek regulatory approval of an antibody drug that has been shown in late-stage trials to significantly reduce the risk of developing Covid-19 symptoms.
The drug is the first long-lasting protection that is not a vaccine that has been proven to prevent the disease caused by coronavirus, the company said on Friday.
China Eyes Afghanistan’s Rich Natural Resources
China has scoured the globe for natural resources to feed its prodigious growth, sinking billions into Peruvian oil fields or cobalt mines in the Democratic Republic of Congo. Now it may need look no further than next door, Afghanistan.
A footnote to the hand-wringing over the Taliban’s lightning victory has been concern over the strategic minerals they now control. A decade-old U.S. government report estimated a $1 trillion-plus mother lode of valuable metals and stones beneath Afghan soil.
Zoom Usage Is Tumbling as More People Return to Offices
As the world begins to reopen, we’re all using Zoom videoconferencing a little bit less. Or in some cases, a lot less.
J.P. Morgan analyst Sterling Auty on Friday took a close look at usage patterns for Zoom Video Communications and other videoconferencing apps, and the most striking takeaway is how daily average usage has fallen off from a year ago.
Shoppers Are Crowding Malls and Bricks-and-Mortar Stores Again
With Covid-19 vaccines rolling out, in-store shopping has bounced back in a big way. Strong digital offerings are still key to success, but the death of bricks-and-mortar retail may have been exaggerated.
Foot traffic data from 200 locations tracked by Placer.ai shows visits to outdoor malls in July were up 2.1% from 2019, while indoor mall visits were only down 0.1% from the prepandemic period. That’s a marked recovery from June, when traffic to indoor malls was down 9.3% and traffic to outdoor malls had declined 6.3%. By comparison, January indoor mall visits were down 24.1% from 2019 while outdoor mall visits dropped 11.5%.
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