Weekly Market Update

Author : Rachel Poole
Date : August 28, 2021

Global Market News

Global equities make gains

Global equities made gains this week. The S&P 500 and Dow Jones both gained 1.52% and 0.96% respectively, while the Nasdaq soared, closing 2.82% up. The yield on the US 10-year Treasury jumped up four basis points to 1.30% and the price of a barrel of West Texas Intermediate crude oil jumped more than 10% to $68.73 after having fallen for last few weeks. Volatility, as measured by the CBOE Volatility Index decreased to 16.4.

Federal Reserve signals tapering of asset purchases

In his speech at the central bank’s annual economic symposium, usually held in Jackson Hole, Federal Reserve Chairman Jerome Powell confirmed the Fed could begin tapering asset purchases by the of the year but stressed that the central bank should not overact to an inflation spike. Powell affirmed his stance that the inflation surge in the US this year is temporary. Major stock indexes rose following the Fed’s comments.

Updated Market Figures

Coronavirus Updates

Covid-19 by the numbers
Global Confirmed Covid-19 cases: 215,000,000 Global Covid-19 deaths: 4,480,000
US Confirmed Covid-19 cases: 38,600,000 US Covid-19 deaths: 635,000
*As of Friday evening

Pfizer becomes full approved by FDA

The FDA granted full approval to the Pfizer-BioNTech vaccine for those. Scientists at the FDA reviewed about 340,000 pages of vaccine data in less than four months in an unprecedented effort. Now that the vaccine is fully approved, the jab will be available under the name “Comirnaty” which is a combination of the words “Covid-19 immunity” and “mRNA”. The announcement has prompted a wave of new organizations to require employees to be vaccinated, including the US military. Many are hoping the approval will boost vaccination numbers. So far, about 52% of Americans are fully vaccinated.

International Developments

Islamic State responsible for deadly attack outside of Kabul’s airport

A complex attack outside of Kabul’s airport on Thursday killed more than a hundred people including thirteen US service members and dozens of civilians. Some US media sources say the death toll is far higher near the airport gates where thousands had gathered while trying to get on evacuation flights. The Islamic State in Khorasan (ISIS-K), an enemy of both the US and Taliban, has claimed responsibility for the attack. Pentagon spokesman John Kirby said there remain threats to evacuation efforts and “we certainly are prepared and would expect future attempts.” US President Joe Biden vowed to hunt down the attackers and said the US is coordinating with the Taliban to secure areas around the airport so that the August 31^st withdrawal deadline can be met. Just last night, the US retaliated against ISIS-K in a drone attack that killed the perpetrators.

Japan and Taiwan hold regional security dialogue

Japan and Taiwan held a regional security dialogue this week for the first time ever. During the security talks, Japanese leaders said they would support Taiwan’s entry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a massive trade agreement. Discussions also centered around Taiwan Semiconductor Manufacturing Co.’s planned investment in Japan and future collaboration opportunities in the semiconductor chip supply chain. Unsurprisingly, Chinese Foreign Ministry spokesman Zhao Lijian criticized the talks between Tokyo and Taipei and urged Japan to “stop interfering in China’s internal affairs and refrain from sending any wrong signals to ‘Taiwan independence’ forces.”

US Social & Political Developments

“Remain in Mexico” program to be reinstated

The US Supreme Court said the Biden administration must comply with a Texas federal court’s ruling to reinstate President Donald Trump’s “Remain in Mexico” program, formally called Migrant Protection Protocols (MPP), which required many asylum seekers to wait in Mexico while their cases were being decided. President Joe Biden’s decision to end the controversial program came very early in his presidency. The Biden administration officially ended the program in June, but it was decided by the courts that the administration did not provide enough reason or evidence to justify changing the policy. The Department of Homeland Security has started engaging with the Mexican government on reimplementing the MPP.

Biden meets with Bennett

Israel’s Prime Minister Naftali Bennett visited the White House yesterday to meet with President Biden. At the meeting, both leaders signaled a desire to reset US-Israel relations. Though Biden and Bennett hold different positions on the Israeli-Palestinian conflict, including on Palestinian statehood and Israeli settlement building, Biden said they have “become close friends” and that the US “will always be there for Israel.”

Corporate/Sector News

Western Digital to potentially merge with Kioxia Holdings

Western Digital, a leader in data-storage technology, is reportedly close to merging with Japanese computer memory manufacturer Kioxia Holdings. The deal could potentially be worth $20 billion, resulting in an entity about the same size as Samsung. Kioxia Holdings, formerly known as Toshiba Memory, has a long history in the semiconductor industry which could prove quite valuable to Western Digital. While the companies are still holding discussions, the biggest foreseeable hurdle seems to be government regulation. Following the reports on Wednesday, Western Digital’s stock surged almost 8%.

Walmart to launch delivery service

Walmart is launching a new delivery service for other businesses across the US. The service, called Walmart GoLocal, will send workers to stores to pick up items and then deliver them to shoppers. The program will rely on associates, gig workers, and other delivery companies and will operate through Walmart’s Spark delivery network. Walmart GoLocal is the latest of the company’s efforts over the last few years to build out its delivery network and compete with Amazon.

Tesla seeks to create new energy subsidiary

As revealed by an application filed with the Public Utility Commission, Tesla is looking to sell electricity directly to customers in Texas. If approved, the undertaking would entail the creation of a new subsidiary called Tesla Energy Ventures. The application comes as Tesla is launching other new initiatives and building up its presence in Texas. The company is also planning to build two giant mega-batteries, one in Austin and the other in Houston.

Image of the Week

Video of the Week

Europe trails behind US, China in AI research & development
Source: DW News