Business

HONG KONG — Asian markets were mixed on Monday as news of a US stimulus agreement was offset by surging virus cases and the imposition of a strict lockdown in England, while London's FTSE and the pound sank on fears over stuttering Brexit talks.

Oil prices also tumbled as the new containment measures hammered expectations for travel over the Christmas period, with the discovery of a mutated and more infectious strain of the coronavirus in Britain also leading several governments to ban flights from the country.

After months of painful, combative talks, US lawmakers on Sunday finally announced they had reached a deal for a new economic rescue package worth nearly $900 billion.

The bill includes aid for vaccine distribution and logistics, extra jobless benefits of $300 per week, and a new round of $600 stimulus checks.

"We've agreed to a package of nearly $900 billion. It is packed with targeted policies to help struggling Americans who have already waited too long," Republican Senate Leader Mitch McConnell said in a statement.

Democratic House Speaker Nancy Pelosi and the party's top senator Chuck Schumer added that the deal "delivers urgently needed funds to save the lives and livelihoods of the American people as the virus accelerates".

While expected, the deal's announcement will come as a relief to markets, which have been desperate for Washington to give the world's top economy a much-needed shot in the arm as it struggles with the impact of COVID-19.

Also at the weekend, US authorities gave the green light to another vaccine, made by Moderna, paving the way for it to be rolled out this week.

However, the news comes as countries battle a frightening surge in infections that is battering economies once again. Among the worst-hit is the United Kingdom, where the government at the weekend tore up a planned relaxing of containment measures for Christmas.

Prime Minister Boris Johnson made the announcement as the country is hit by a new strain of the virus that is more infectious, and put millions of Britons into a strict new lockdown.

"For many, the end of 2020 cannot come soon enough," said Simon Ballard, at First Abu Dhabi Bank. 

"We expect the New Year wish of many market participants to be that the arrival and initial distribution of coronavirus vaccines now signals light at the end of a very tiring and debilitating tunnel."

Brexit talks drag on 

The pound, which had last week been sitting at highs not seen since mid-2018, sank against the dollar.

It was also under pressure from the euro, which was also down against the greenback, while the Australian dollar was hit after a virus flare-up led to some social distancing restrictions in Sydney.

Tokyo, Hong Kong, Sydney, Mumbai, Manila, Bangkok and Wellington were all in the red, though Shanghai, Seoul, Taipei and Singapore rose.

London opened more than 1 per cent lower, as did Frankfurt, while Paris shed more than 2 per cent 

"Markets have adopted a light-at-the-end-of-the-tunnel approach since Pfizer and Moderna's vaccines burst onto the stage," said OANDA's Jeffrey Halley. 

"However, the weekend's events have delivered an unceremonious Monday morning wake-up call that negotiating the first quarter of 2021 could be a torturous affair."

Adding to the selling pressure are concerns about the lack of progress on a post-Brexit trade deal with Britain and EU negotiators still stuck on fishing rights.

A senior UK government source said "significant differences remain" in the talks, which were expected to continue on Monday.

"We continue to explore every route to a deal that is in line with the fundamental principles we brought into the negotiations," he added.

Time is running out for a trade deal, with Britain due to leave the EU single market in less than two weeks, but both sides of the intense negotiations in Brussels now expect the talks to run on for three or four days.

Oil prices were also taking a hefty knock on concerns about the negative impact on demand caused by new restrictions, with both main contracts down more than three per cent.

"Stock markets can count their lucky stars that vaccine optimism so far has been able to Teflon the broader market downside," said Axi strategist Stephen Innes.

"But the same can't be said for oil prices."

RIYADH — Saudi Arabia and Russia on Saturday said they backed each other ahead of a key OPEC+ oil summit, following a tumultuous year of differences over oil production and volatile prices.

Earlier this month, the 13-member Organisation of the Petroleum Exporting Countries (OPEC), plus allies including Russia — a group known as OPEC+ — said that from January 2021 they would raise production by 500,000 barrels per day.

Saudi Arabia’s Oil Minister Prince Abdulaziz Bin Salman said the OPEC+ cooperation charter had brought the group together, producing "good results".

"That's why it should be perpetuated," he told reporters in a broadcast on state-run Al Ekhbariya TV.

Russian Deputy Prime Minister Alexander Novak said Moscow "once again confirmed our loyalty" to existing agreements.

"We plan to work together in order to achieve a balanced situation... and to propose solutions aimed at stabilising the market," Novak said.

OPEC+ will hold an online summit on January 4, while Riyadh and Moscow are due to hold talks in March, a meeting hoped to be "in person", Prince Abdulaziz said.

At the start of the year, a price war had pitted Saudi Arabia against Russia, the third and second largest oil producers respectively, as the oil market was hit hard by the COVID-19 pandemic.

But faced with Moscow's refusal to reduce production in line with OPEC cuts, Riyadh had sharply increased its own, causing prices to plummet.

Earlier this month, the OPEC+ group struck a deal to increase production over coming months.

NEW YORK — Tesla is set to join an elite group of companies in a key Wall Street index, a move which gives greater prominence to the high-flying electric carmaker and forces money managers to reshuffle their portfolios.

The company founded by Elon Musk becomes part of the Standard & Poor's 500 index on Monday, which means that investment funds based on that index will be holders of the stock.

Tesla stock has already seen a spectacular rise this year of 680 per cent, and with a market capitalisation of some $600 billion it will be the richest company to enter the prestigious S&P index. 

It is the ninth most valuable firm in the world, just behind Facebook.

Even though its car production is modest compared with rivals, Tesla's growth prospects have spurred investors to push up its value so that it's now worth more than General Motors, Ford, Toyota, Honda, Fiat Chrysler and Volkswagen combined. 

Portfolio shuffling 

As a result of the change in the S&P, stock index mutual funds and exchange traded funds — favoured by many small investors — will need to hold Tesla shares in proportion to its weight in the index, which is currently around one per cent.

This could force some significant reshuffling since Tesla is replacing Apartment Investment, with a value of just 0.02 per cent of the S&P index.

S&P Dow Jones Indices, which manages the index of the 500 firms, said it expects a record shift of some $80 billion with the entry of California-based Tesla.

The change could also encourage "active" portfolio managers who measure their performance against the benchmark index to buy Tesla to keep pace.

But some analysts say these changes may have already been priced into Tesla and that buying pressure for Tesla could diminish.

Sceptics say Tesla could see a long-overdue correction from its dizzying gains.

"We recommend investors not weight Tesla shares in their portfolio in equal proportion to the S&P because Tesla shares are in our view and by virtually every conventional metric not only overvalued, but dramatically so," said Ryan Brinkman of JP Morgan in a research note.

Pierre Ferragu of New Street Research offered a cautious view, noting that "the market is probably getting ready for S&P 500 inclusion, and this probably supported the stock greatly in recent weeks and months".

This could lead to a pullback for Tesla, according to Ferragu.

But the analyst said Tesla may still be a good long-term bet, setting a price target for Tesla in 2025 at $1,200, compared with $655 at the close on Thursday.

Jefferies analyst Philippe Houchois said Tesla poses some unique challenges for investors because of how it is shaking up the auto sector with its electric vehicles (EVs) and a different way of doing business than rivals.

"We don't believe Tesla can dominate autos given industry structure and politics, but multiple challenges to the auto business model [EVs, batteries, software, autonomy, design-to-manufacture and direct selling] ensure a durable competitive edge, with a 'messianic' brand reaching far beyond autos," the analyst said.

NEW YORK — Robinhood will pay $65 million to settle charges it misled customers over payments from trading firms that overcharged users to execute transactions, US securities regulators said on Thursday.

In exchange for the payments, Robinhood routed orders to these firms, resulting in $34.1 million in higher customer fees, the Securities and Exchange Commission (SEC) said in an order that faults the firm's statements to customers between 2015 and late 2018.

A trading app that has soared in popularity during the pandemic, Robinhood has touted the lack of trading commissions in customer communications.

"Robinhood provided misleading information to customers about the true costs of choosing to trade with the firm," said SEC Enforcement Chief Stephanie Avakian.

"Brokerage firms cannot mislead customers about order execution quality."

Robinhood said it has improved its customer disclosures and trading execution processes compared with the period discussed in the SEC order.

"The settlement relates to historical practices that do not reflect Robinhood today," said Robinhood Chief Legal Officer Dan Gallagher.

"We recognise the responsibility that comes with having helped millions of investors make their first investments, and we're committed to continuing to evolve Robinhood as we grow to meet our customers' needs."

Robinhood agreed to pay the penalty without admitting or denying the findings. The company also agreed to retain a consultant to review its processes, including customer communications.

Robinhood disclosed some information about the payments in a securities filing, but omitted it from its website "because it believed that payment for order flow might be viewed as controversial by customers", the SEC order said, adding that Robinhood directed customer service staff not to disclose the payments when asked about Robinhood's source of revenue.

The SEC action comes amid heightened scrutiny of Robinhood after the suicide of a young trader earlier this year.

On Wednesday, the state of Massachusetts launched an administrative proceeding against the app, alleging it had lured in inexperienced users and allowed them to trade in risky instruments like options without proper education.

LONDON — Most stock markets advanced on Wednesday and bitcoin broke above $20,000 for the first time, as prospects brightened for more US economic stimulus and a Brexit trade deal.

Potential for an earlier EU rollout of coronavirus vaccines boosted investor's mood further.

The dollar faltered, however, as a surge in virus cases and further restrictive measures continued to drive a tug-of-war between long-term optimism and near-term pain.

Bitcoin, the leading virtual currency, traded above $20,000 for the first time, marking an astounding leap in the past year as financial markets developed more appetite for riskier assets.

Just 12 years old, bitcoin reached a record-high $20,787 before easing back to $20,612.

It has seen a meteoric rise since March, when it stood at $5,000, spurred by online payments giant PayPal saying it would enable account holders to use cryptocurrency.

The pound built on recent gains as British and European negotiators press on with talks on a post-Brexit trade deal.

Traders were awaiting the conclusion of the Federal Reserve's latest policy meeting, hoping for some guidance on its plans for monetary policy in the new year.

"Stock markets were off to a promising start in Europe and Wall Street is poised for small gains as negotiations on both sides of the pond see much needed progress," noted Craig Erlam, analyst at Oanda trading group.

After months of stuttering talks between lawmakers in Washington, there appear to be signs of progress on a new rescue package for the world's top economy.

Hopes that the EU economy can get back on track next year got a lift on Tuesday when the European Medicines Agency said it had brought forward a meeting to decide on authorising the Pfizer-BioNTech vaccine by more than a week to December 21.

The vaccine is already being administered in Britain, the US and Canada.

That came as the US Food and Drug Administration recommended experts give the go-ahead later this week to a second vaccine, produced by Moderna.

"Progress over an economic relief package in Washington, Brexit deal optimism that could settle by week's end, and the likely seamless rollout of multiple highly effective vaccines have mixed to paint trading screens Christmassy green," said Axi strategist Stephen Innes.

The need for a big rollout of the vaccine has been laid bare by soaring infection and death rates around the world, which have led governments to impose strict containment measures leading into the Christmas holidays.

LONDON — European and US stock markets mostly rose on Tuesday on optimism over US stimulus and vaccines, but London stumbled ahead of the capital's tightened coronavirus restrictions as dealers also tracked Brexit trade talks.

Asian equities closed lower as surging COVID-19 infections forced global governments to impose tighter containment measures, trumping optimism over vaccines.

"The market continues to be dominated by the twin narratives of US stimulus and Brexit," said analyst Chris Beauchamp at trading group IG.

"Despite a miserable session in Asia, where traders fretted over Europe's return to broad lockdown policies, European markets have managed to clock up some decent gains."

The British pound rose as Brussels and London continued to pursue extended talks for a long-awaited Brexit trade deal.

"The picture still remains unclear with respect to the future trading relationship between the UK and the EU but seeing as negotiations are still ongoing, that is good enough in traders' eyes — the door is open for a deal," said CMC Markets anlayst David Madden.

London stocks fell 0.4 per cent in afternoon trading with the British capital set to face tighter coronavirus restrictions from midnight.

Added to the gloom, official data showed Britain's unemployment rate rising as the pandemic destroyed a record amount of jobs.

On the upside, Frankfurt added 0.9 per cent and Paris won 0.3 per cent in early afternoon eurozone deals, as US lawmakers inched towards finally agreeing a new stimulus for the world's top economy.

Lockdowns and vaccines 

Sentiment was also boosted after Joe Biden was confirmed as the next US president on Monday, with the Electoral College formalising his victory over Donald Trump, all but extinguishing the incumbent's efforts to overturn the result of the 2020 election.

While the US on Monday began inoculations, its death toll hit 300,000 and analysts warned that while there is light at the end of the tunnel, there was still a lot of pain ahead.

Soaring case numbers have forced leaders to reimpose measures to stop the disease spreading, with New York City Mayor Bill De Blasio saying a "full shutdown" could be announced soon.

That comes as countries around the world struggle to get a grip on the crisis.

While London faces new tough restrictions as it follows swathes of Britain into the highest tier of containment, The Netherlands was preparing to enter its strictest lockdown since the pandemic began.

Turkey, France and Germany were also imposing tougher measures ahead of the Christmas holiday.

But a second coronavirus vaccine took a step towards emergency use approval in the US when a FDA briefing document recommended experts give Moderna's jab a green light when they meet on Wednesday.

Meanwhile, the European Medicines Agency said on Tuesday it had moved forward a meeting to decide on authorisation for the Pfizer-BioNTech vaccine by more than a week to December 21.

Stimulus optimism 

Wall Street stocks opened higher, with the Dow adding 0.6 per cent as investors expect lawmakers will finally adopt some stimulus measures.

A group of bipartisan lawmakers has split off contentious elements into separate legislation, raising hopes that a smaller $748 billion package including additional unemployment benefits and rent assistance will win support.

"Optimism is fairly high something will get done since Democrats seem willing to drop state and local aid for now," said Edward Moya at currency trading platform Oanda.

LOS ANGELES — Reddit has acquired the Tik Tok-like app Dubsmash, both companies said on Sunday, as big tech moves to carve out territory in the lucrative short-form video-sharing market.

In a statement, Reddit said it had been drawn to Dubsmash — which reports over a billion video views a month — because of its commitment to diversity and promoting under-represented voices.

"Both Reddit and Dubsmash share a deep rooted respect for how communities come together," Reddit CEO Steve Huffman said.

"Dubsmash elevates under-represented creators, while Reddit fosters a sense of community and belonging across thousands of different topics and passions," he added. 

News of the deal comes as big tech scrambles to acquire space in the massive video-sharing app market following the success of TikTok, which is now under sustained pressure from the US government over its Chinese ownership. 

Dubsmash, which allows users to lip-sync to popular music or dance along to their favorite songs, has been described by tech press as the "number two" video-sharing app online.

Neither company has disclosed how much Reddit paid for Dubsmash, though the tech news website The Information earlier this year reported that a similar offer from Facebook had been in the range of hundreds of millions of dollars. 

Facebook later opted to develop its own TikTok-like platform, known as "Reels", as did popular video messaging service Snapchat. 

Dubsmash clawed its way back from the brink of collapse following brief success in 2017, with executives rebuilding the company from scratch to become one of the web's top video sharing platforms.

Its rapid rise has not been without hiccups, however, and last year the company was subject to a massive data breach when hackers obtained and then shared online some 162 million account details.