The daily business briefing: April 14, 2021

Harold Maass
The Ever Given
Mahmoud Khaled/Getty Images

1.

Egypt seizes ship that blocked Suez Canal

Egypt has seized the Ever Given, the container ship that got wedged in the Suez Canal and forced a weeklong shutdown of the vital waterway, the vessel's owner said Tuesday. Egyptian authorities are demanding that the ship's Japanese owner, Shoei Kisen Kaisha Ltd., pay at least $900 million to cover the damage to the canal, the rescue operation, and lost business. Tuesday's seizure came after the manager of the waterway obtained an order from an Egyptian court saying the company had failed to pay. "They don't want to pay anything," Osama Rabie, chair of the Suez Canal Authority, said. A spokesman for the ship's owner said authorities were "still talking to us. So we will continue negotiations on compensation." [The Wall Street Journal]

2.

S&P 500 hits another record high despite J&J news

The S&P 500 gained 0.3 percent to close at another record high on Tuesday, led by Apple, Microsoft, and Amazon. The tech-heavy Nasdaq jumped by nearly 1.1 percent, while the Dow Jones Industrial Average retreated from record territory, falling 0.2 percent. Early Tuesday, futures turned lower after federal agencies recommended pausing use of Johnson & Johnson's COVID-19 vaccine pending the investigation of rare blood clots in a few patients out of the millions vaccinated. The market recovered after the federal government released its consumer price index, a popular inflation gauge. The CPI rose sharply — by 0.6 percent in March, and 2.6 percent over the same period a year ago — as the economic recovery gained strength. U.S. stock futures edged higher early Wednesday ahead of bank earnings reports. [Reuters, The Wall Street Journal]

3.

Moderna says its coronavirus vaccine still effective after 6 months

Moderna announced Tuesday that studies indicated that its COVID-19 vaccine was still 90 percent effective six months after a patient's second dose. The vaccine's effectiveness also remained "greater than 95 percent against severe cases of COVID-19," the company said. Moderna is continuing to work toward final U.S. approval for the vaccine, which currently has emergency authorization. "The Moderna team continues to make important progress with our COVID-19 vaccine," said Moderna CEO Stéphane Bancel. "The new preclinical data on our variant-specific vaccine candidates give us confidence that we can proactively address emerging variants." The news came hours after U.S. authorities recommended pausing use of Johnson & Johnson's vaccine pending an investigation of several cases of rare blood clots. [The Hill]

4.

IRS chief: $1 trillion in federal taxes go uncollected annually

IRS Commissioner Charles Rettig told the Senate Finance Committee on Tuesday that the amount of federal taxes going unpaid "could approach and possibly exceed $1 trillion per year." The figure is more than double the official estimate of $441 billion. IRS research shows that $175 billion of those underpayments come from the wealthiest Americans, Rettig said. Other factors include the rise in untaxed cryptocurrencies, income from foreign sources, and illegal income. Senate Finance Committee Chairman Ron Wyden (D-Ore.) called the $1 trillion tax gap "a jaw-dropping figure." Rettig said that the IRS is "outgunned" by tax cheats and dodgers after years of budget cuts. President Biden has proposed raising the IRS budget by 10.4 percent, mostly to boost enforcement. [Politico]

5.

Coinbase goes public in big step for cryptocurrencies

Nasdaq gave Coinbase shares a reference price of $250 each late Tuesday ahead of the cryptocurrency exchange's Wednesday public listing. The price would value Coinbase at $65.3 billion. Coinbase is the first major cryptocurrency business to go public, and analysts say its stock market debut is a "watershed" moment in the mainstream acceptance of digital currencies as forms of payment and investments. By listing its stock directly instead of holding a traditional initial public offering, Coinbase is giving existing shareholders a chance to start selling shares immediately at the market price. If the shares mirror the average 37 percent gains of the five big direct listings on the New York Stock Exchange, Coinbase shares would hit $343 per share, close to their first-quarter average private market price. [CNBC, The New York Times]