The daily business briefing: January 6, 2021
U.S. stock futures are mixed after Georgia Senate runoffs, Trump orders ban on transactions with 8 Chinese apps, and more
U.S. stock futures mixed as investors digest Georgia runoffs
U.S. stock index futures were mixed early Wednesday as investors awaited final results in Georgia's two crucial Senate runoffs. Futures for the Dow Jones Industrial Average were up by 0.2 percent several hours before the opening bell, while those of the S&P 500 were down by 0.3 percent. Futures for the tech-heavy Nasdaq Composite meanwhile plunged 1.8 percent. Democrat Raphael Warnock was projected the winner over GOP Sen. Kelly Loeffler, while Democrat Jon Ossoff led Republican Sen. David Perdue in a race still too close to call. "Consensus seems to believe that if Dems win both seats, this is negative for stocks because of the risk of higher taxes," Tom Lee, head of research at Fundstrat Global Advisors, wrote in a note. He added that he believed "the 'uncertainty' of the election is arguably a bigger overhang than the actual outcome."
Trump signs order banning 8 Chinese apps
President Trump on Tuesday signed an executive order banning transactions with eight Chinese software applications, citing possible security threats. The order covers Ant Group's Alipay mobile payment app, CamScanner, SHAREit, Tencent QQ, Beijing Kingsoft Office Software's WPS Office, and VMate, which is published by Alibaba Group subsidiary UCWeb. The move, which escalates tensions with Beijing ahead of President-elect Joe Biden's inauguration, was meant to protect national security by keep Beijing from accessing the Chinese companies' sensitive data. "By accessing personal electronic devices such as smartphones, tablets, and computers, Chinese-connected software applications can access and capture vast swaths of information from users, including sensitive personally identifiable information and private information,” the executive order states.
Bitcoin hits fresh record above $35,000
Bitcoin surged to a fresh record high on Wednesday, rising by as much as 6 percent to $35,842. The cryptocurrency had just plunged by 17 percent on Monday, its biggest one-day drop since March, after jumping to its previous record high on Jan. 3. The volatility mirrored previous boom-and-bust cycles. Some traders think Bitcoin is overpriced. But others point to JPMorgan Chase's long-term price forecast of up to $146,000 as the cryptocurrency gains acceptance as a mainstream payment option. Vijay Ayyar, head of business at crypto-exchange Luno in Singapore, noted prices weren't as volatile as they were in 2017, when Bitcoin prices were seeing drops up to 40 percent in a day. "Monday's dip was instructive as institutional investors used the opportunity to buy in," he said, adding that the market had become "more mature with bigger buyers."
Macy's to close 45 more stores this year
Macy's announced Tuesday that it was closing 45 more of its department stores by mid-2021, including a flagship store in Water Tower Place on Chicago's Magnificent Mile. Employees at the stores have been notified of the shutdowns, which are part of the struggling department-store chain's previously announced plan to close 125 locations by 2023. "Macy's is committed to rightsizing our store fleet by concentrating our existing retail locations in desirable and well-trafficked A and B malls," the company said in a statement. Macy's closed about 30 stores in 2020. The company operates 764 stores, including 546 under the Macy's name, as well as Bloomingdale's and Bluemercury stores. The loss of Macy's will hit hard in cities like Chicago, where landlords already are struggling with mounting vacancies due to business closures during the coronavirus pandemic.
Saudi Arabia and Qatar reach deal to renew diplomatic, trade ties
Saudi Arabia and Qatar have agreed to restore diplomatic and trade relations after a three-year dispute, according to a Tuesday announcement by Kuwait, which has served as a mediator. Saudi Arabia and three Arab allies — the United Arab Emirates, Bahrain, and Egypt — imposed a diplomatic, trade, and travel embargo against Qatar in 2017 over allegations that it supported terrorism, and was too close to Iran. Kuwait said that as part of the deal Saudi Arabia will reopen its airspace, as well as its sea and land borders with Qatar. The news came as Qatar's emir, Sheikh Tamim bin Hamad al-Thani, arrived in Saudi Arabia for the annual Gulf Cooperation Council summit, his first visit to the kingdom since the dispute broke out.