The coronavirus pandemic defined 2020, upending our lives and bringing unprecedented shocks to markets and investors. Next year, however, is looking a whole lot brighter.
Make no mistake: As we cross into the new year, the virus is still raging, with new infections near peaks in the U.S. and much of Europe, where millions of people are living under strict lockdowns.
The much-heralded rollout of the Covid-19 vaccines isn’t going as smoothly as hoped. The U.S. is expected to miss President Donald Trump’s target to inoculate 20 million Americans by year-end. In the European Union, there is squabbling among member states over who gets how many vaccines and when.
It’s time to look on the bright side. The vaccine rollout is the logistics challenge of a generation, and it would have been more of a surprise if it had all gone to plan. The reality is that more people are vaccinated every day, and that’s a win. The kinks will get worked out. In the meantime, treatments for Covid-19 continue to improve.
More vaccines are also on the horizon. China rounded out 2020 by approving the vaccine from state-controlled Sinopharm, and U.S. approvals for
Johnson & Johnson,
could come early in the year.
2020 wasn’t a year to pop the champagne, but 2021 soon may be.
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Congress to Vote on Move to Overturn Biden’s Presidential Win
Missouri Republican Sen. Josh Hawley said Wednesday that he will object when Congress meets on Jan. 6 to certify the results of the U.S. presidential election. The move will force lawmakers to vote on the election results.
- Any House member when joined with a Senator can object to certification of the results, and several Republican House members—including Mo Brooks of Alabama—have already said they would.
- Hawley is the first Senator to say he will object, although incoming Alabama Sen. Tommy Tuberville said he might as well. Hawley’s move assures there will be separate, two-hour floor debates on any objections in each chamber, followed by a vote.
- “At the very least, Congress should investigate allegations of voter fraud and adopt measures to secure the integrity of our elections. But Congress has so far failed to act,” Hawley said.
- “The effort by the sitting president of the United States to overturn the results is patently undemocratic. The effort by others to amplify and burnish his ludicrous claims of fraud is equally revolting,” Senate Minority Leader Chuck Schumer said Wednesday.
What’s Next: Because both chambers must agree to an objection for it to succeed, Democratic control of the House virtually dooms that outcome.
Here Are the 2021 IPOs Investors Are Already Excited About
This was a banner year for initial public offerings, culminating with the frothy debuts of
in December. But the party is far from over.
- As of Dec. 24, there were 456 U.S.-listed offerings in 2020—the most new issues since 1999—raising $167.4 billion, according to Dealogic.
- Looking ahead to 2021, investors are eyeing potential IPOs from grocery delivery service Instacart, investing platform Robinhood Markets, cryptocurrency exchange Coinbase, dating site Bumble, gaming company Roblox, and insurtech firm Oscar Health, among others.
- A booming stock market and the rise of special purpose acquisition companies (SPACs) that raise money through listings before merging with other businesses have helped fuel the rise. Almost half of all funds raised this year by the IPO market was for SPACs.
- The pandemic has also helped speed up the IPO process since startups can conduct virtual roadshows in half the time in-person meetings take.
What’s Next: Palantir and Asana bucked the trend in 2020 by opting for direct listings where no new shares are generated. Direct listings could become more popular thanks to a Securities and Exchange Commission decision that will allow companies to use direct listings to sell new shares and raise fresh capital.
The EU and China Agree on a Landmark Investment Treaty
After seven years of negotiations, the European Union and China agreed in principle to a landmark investment treaty that the 27-member bloc says will level the playing field for European investors in China. The agreement was reached on Wednesday after a final call between Chinese President Xi Jinping and European leaders including Angela Merkel and Emmanuel Macron.
- The EU says China has made significant commitments to allow European investors greater access to its manufacturing sector, as well as in cloud services, financial services, and private health care. The deal also provides a boon for Chinese investors in Europe.
China will have to usher in new rules for its state-owned enterprises, including transparency over subsidies and prohibiting forced technology transfers. Still, the deal was cheered by Chinese markets, with the
Shanghai Composite index
climbing 1.7% on Wednesday to its highest level since early 2018.
- Dedication to human rights are “at the heart” of the EU’s foreign relations, according to the bloc, but activists are already criticizing the deal. While the EU says it has secured new commitments from Beijing on workers’ rights, there are widespread allegations that detained Uighur Muslims in the Xinjiang region of China are being used as forced labor. China denies those allegations.
What’s Next: Brussels is strengthening relations with Beijing at a critical moment for China. U.S. President-elect Joe Biden has said he would take a tougher stance on China. The EU, which would be pivotal to any democratic coalition against China, may have just played into Xi Jinping’s hands.
Bitcoin Continues Its Record Run
Bitcoin rocketed to a record on Wednesday, continuing the cryptocurrency’s triple-digit run in 2020.
- The price of Bitcoin jumped 7.54% to $28,896.03 in the 24 hours through 5 p.m. on Wednesday, setting multiple new high marks along the way.
- Bitcoin’s positive momentum is being fueled by institutions and corporations purchasing more of the asset and retail demand driven by the latest wave of stimulus checks, among other factors, according to David Grider, lead digital strategist at Fundstrat.
- Bitcoin has soared more than 494% from its 2020 bottom of about $4,857 on March 12. Strategists have turned positive on the asset, too. Jim Paulsen, chief investment strategist of Leuthold Group, told clients last month that Bitcoin could be a way to balance their portfolios.
What’s Next: Bitcoin has its skeptics, including JPMorgan Chase CEO Jamie Dimon, but others are raising their price targets. Grider now has a $40,000 target, while ARK Investment Management CEO Catherine Wood in November said that prices could eventually climb to $500,000.
$2,000 Stimulus Checks Hit Dead End in Senate
The path for increasing the $600 stimulus checks included in the latest relief bill passed to $2,000 has narrowed. For a second time, Senate Majority Leader Mitch McConnell blocked a vote on the measure that passed in the House earlier this week.
- President Donald Trump and Democrats have pushed for larger checks. McConnell won’t allow a vote on the stand-alone bill, saying it has “no realistic path to quickly pass the Senate.”
- The majority leader instead wants to group together stimulus checks with two other requests from Trump: investigating alleged voter fraud in the 2020 election and repealing Section 230 of the Communications Decency Act.
What’s Next: Some Republican Senators argue the increase in checks would add to the deficit. Others in the party have expressed their support. A stand-alone vote on increasing the checks would set those two sides against each other.
I’ve been working in another state for most of the pandemic. What does that mean for my 2021 income taxes?
Millions of people made long- and short-term moves this year, dislodged by job loss or aware that remote work could unlock all sorts of possibilities for where to live.
What they might not be aware of: The state income-tax bill.
“It’s something a lot of individuals are navigating,” said Jeremiah Barlow, executive vice president and head of family wealth services at Mercer Advisors, a wealth-management firm. Around 10% to 20% of his own clientele is dealing with relocation and state income-tax issues, Barlow told MarketWatch.
The tax pains could be acute for filers in certain places where working hubs are near various state lines, like the New York, New Jersey and Pennsylvania region, said Edward Zollars of Thomas, Zollars & Lynch, an accounting and tax-services firm in Phoenix, Ariz.
Read more here.
—Newsletter edited by Anita Hamilton, Mary Romano, Matt Bemer, Ben Levisohn
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