Biden Heads to Minnesota to Promote Infrastructure Plan

U.S. President Joe Biden on Tuesday visits a Minnesota technical college to sell Americans on his recently approved $1 trillion infrastructure plan, which the administration says will train millions of Americans “for the high-growth jobs of the future” that will build the massive infrastructure Biden says the U.S. needs to compete globally.

This is Biden’s first visit to the state known as the “Land of 10,000 Lakes” since he was elected president. He plans to visit Dakota County Technical College in Rosemount, Minnesota, to speak to students about the legislation and how it affects them. 

“The majority of jobs supported by the president’s Bipartisan Infrastructure Bill will not need a four-year college degree,” White House press secretary Jen Psaki said Monday, ahead of the trip. “And the programs provided by community and technical colleges like Dakota County Technical College will provide the training and skill development needed to help workers access the jobs created.”

The public, two-year technical college serves nearly 13,000 students across multiple disciplines, including construction and manufacturing.

The White House estimates that under the new law, Minnesota will receive $4.5 billion for federal-aid highways; $302 million for bridges; $818 million for public transportation; $680 million to improve water infrastructure; and $100 million that aims to cover every resident with high-speed internet. 

The legislation also will provide about $68 million to expand the state’s electric vehicle charging network, and Minnesota will receive a slice of the $50 billion the law allocates to strengthening infrastructure against the impacts of climate change.


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Cyber Monday Caps Holiday Shopping Weekend as Virus Lingers

Americans are spending freely and going back to store shopping, knocking out some of the momentum in online sales from last year when Americans were making many of their purchases exclusively via the internet.

Shopper traffic roared back on Black Friday, but it was still below pre-pandemic levels, in part because retailers spread out big deals starting in October. The early buying is expected to also take a bite out of online sales on Monday, coined Cyber Monday by the National Retail Federation in 2005.

In fact, Adobe Digital Economy Index said that it was the first time online sales on Thanksgiving and Black Friday hadn’t grown, and Cyber Monday could likewise see a decline compared with a year ago. Adobe, which tracks more than one trillion visits to U.S. retail sites, had previously recorded healthy online sales gains since it first began reporting on e-commerce in 2012.

Still, Cyber Monday should remain the biggest online spending day of the year. For the overall holiday season, online sales should increase 10% from a year ago, compared with a 33% increase last year, according to Adobe.

A possible game changer is the omicron variant of the coronavirus, which could put a damper on shopping behavior and stores’ businesses. The World Health Organization warned Monday that the global risk from the omicron variant is “very high” based on early evidence, saying the mutated coronavirus could lead to surges with “severe consequences.”

Jon Abt, co-president and a grandson of the founder of Abt Electronics, said that holiday shopping has been robust, and so far overall sales are up 10% compared to a year ago. But he said he thinks Cyber Monday sales will be down at the Glenview, Illinois-based consumer electronics retailer after such robust growth from a year ago. He also worries about how the rest of the season will fare given the new variant.

“There are so many variables,” Abt said. “It’s a little too murky.”

Here is how the season is shaping up:

Cyber Monday still king but cooling 

Consumers are expected to spend between $10.2 billion and $11.3 billion on Monday, making it once again the biggest online shopping day of the year, according to Adobe. Still, spending on Cyber Monday could drop from last year’s level of $10.8 billion as Americans are spreading out their purchases more in response to discounting in October by retailers, according to Adobe.

Both Black Friday and Thanksgiving Day online shopping came in below Adobe’s prediction. On Black Friday, online sales reached $8.9 billion, down from the $9 billion in 2020, the second largest day of the year. On Thanksgiving Day, online sales reached $5.1 billion, even from the year-ago period.

Harley Finkelstein, president of Canadian e-commerce platform Shopify, which has 1.7 million independent brands on its site, said that so far, Cyber Monday is off to a strong start. Sales on his platform were up 21% on Black Friday compared with 2020 and more than double compared with 2019. He said he believes that independent brands will see better percentage sales gains online than big national chains, as shoppers gravitate more toward direct-to-consumer labels and look for brands with social conscience. And he says these brands have been able to get the inventory. Among some of the hot items on Shopify are children’s couches from Nugget and luxurious linens from Brooklinen.

“I think it is a tale of two different worlds,” he added.

Black Friday back but not the same 

Overall, Black Friday store traffic was more robust than last year but was still below pre-pandemic levels as shoppers spread out their buying in response to earlier deals in October and shifted more of their spending online. Sales on Friday were either below or had modest gains compared with pre-pandemic levels of 2019, according to various spending measures.

Black Friday sales about 30%, compared with the year-ago period, according to Mastercard SpendingPulse, which tracks all types of payments, including cash and credit cards. That was above its 20% growth forecast for the day. Steve Sadove, senior adviser for Mastercard, said the numbers speak to the “strength of the consumer.” For the Friday through Sunday period, sales rose 14.1% compared with the same period in 2020 and were up 5.8% compared to 2019, Mastercard reported.

Customer counts soared 60.8% on Black Friday compared with a year ago, but were down 26.9% on the same day in 2019, according to RetailNext, which analyzes store traffic with monitors and sensors in thousands of stores. Sales rose 46.4% on Black Friday but were down 5.1% in 2019, according to RetailNext. Sensormatic, another firm that tracks customer traffic, reported a 47.5% surge in traffic on Black Friday compared with a year ago but that number fell 28.3% compared with 2019.

The changing discount landscape 

Unlike in years past, many big box stores like Walmart didn’t market their discounted goods as “doorbusters,” in their Black Friday ads, choosing instead to stretch the deals out throughout the season or even the day. And the discounts are smaller this season as well.

Shoppers were also expected to pay on average between 5% to 17% more for toys, clothing, appliances, TVs and others purchases on Black Friday this year compared with last year, according to Aurelien Duthoit, senior sector advisor at Allianz Research. That’s because whatever discounts are offered will be applied to goods that already cost more.

And for the first time, discounts on Cyber Monday compared with a year ago are expected to be weaker, according to Adobe. Still, Cyber Monday remains the best day to buy TVs with discount levels at 16%, compared with 19% discounts last year. Other categories where consumers will find deals include clothing at a 15% markdown, compared with 20% last year. Computers are being discounted at 14%, compared with 28% last year, according to Adobe.

Overall holiday sales could be record breaking. For the November and December period, the National Retail Federation predicts that sales will increase between 8.5% and 10.5%. Holiday sales increased about 8% in 2020 when shoppers, locked down during the early part of the pandemic, spent their money on pajamas and home goods.


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New Twitter CEO Steps From Behind the Scenes to High Profile 

Newly named Twitter CEO Parag Agrawal has emerged from behind the scenes to take over one of Silicon Valley’s highest-profile and politically volatile jobs. 

But his prior lack of name recognition, coupled with a solid technical background, appears to be what some big company backers were looking for to lead Twitter out of its current morass. 

A 37-year-old immigrant from India, Agrawal comes from outside the ranks of celebrity CEOs, which include the man he’s replacing, Jack Dorsey, Facebook’s Mark Zuckerberg or SpaceX and Tesla’s Elon Musk. Those brand-name company founders and leaders have often been in the news — and on Twitter — for exploits beyond the day-to-day running of their companies.

Having served as Twitter’s chief technology officer for the past four years, Agrawal’s appointment was seen by Wall Street as a choice of someone who will focus on ushering Twitter into what’s widely seen as the internet’s next era — the metaverse. 

Agrawal is a “‘safe’ pick who should be looked upon as favorably by investors,” wrote CFRA Research analyst Angelo Zino, who noted that Twitter shareholder Elliott Management Corp. had pressured Dorsey to step down. 

Elliott released a statement Monday saying Agrawal and new board chairman Bret Taylor were the “right leaders for Twitter at this pivotal moment for the company.” Taylor is president and chief operating officer of the business software company Salesforce. 

Agrawal joins a growing cadre of Indian American CEOs of large tech companies, including Sundar Pichai of Google parent Alphabet, Microsoft’s Satya Nadella and IBM’s Arvind Krishna. 

He joined San Francisco-based Twitter in 2011, when it had just 1,000 employees, and has been its chief technical officer since 2017. At the end of last year, the company had a workforce of 5,500. 

Agrawal previously worked at Microsoft, Yahoo and AT&T in research roles. At Twitter, he’s worked on machine learning, revenue and consumer engineering and helping with audience growth. He studied at Stanford and the Indian Institute of Technology, Bombay. 

While Twitter has high-profile users like politicians and celebrities and is a favorite of journalists, its user base lags far behind old rivals like Facebook and YouTube and newer ones like TikTok. It has just over 200 million daily active users, a common industry metric.

As CEO, Agrawal will have to step beyond the technical details and deal with the social and political issues Twitter and social media are struggling with. Those include misinformation, abuse and effects on mental health. 

Agrawal got a fast introduction to life as CEO of a high-profile company that’s one of the central platforms for political speech online. Conservatives quickly unearthed a tweet he sent in 2010 that read “If they are not gonna make a distinction between muslims and extremists, then why should I distinguish between white people and racists.”

As some Twitter users pointed out, the 11-year-old tweet was quoting a segment on “The Daily Show,” which was referencing the firing of Juan Williams, who made a comment about being nervous about Muslims on an airplane.

Twitter did not immediately respond to a message for comment on the tweet. 


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Biden Meets with CEOs on Supply Chain Issues 

U.S. President Joe Biden met at the White House Monday with chief executives of major retailers to learn about supply chain challenges during the busy holiday season. 

“The business leaders we gathered here today represent a broad swath of American shopping: brick and mortar and online stores, national and local grocery chains, our nation’s largest retailer, and makers and sellers of toys, electronics and health supplies,” the president said. 

“I want to hear from each of you about what you’re seeing this holiday season,” he told the business leaders.

The Biden administration has been struggling to fix supply chain problems, including backlogged ports and a shortage of truck drivers to haul goods across the country. The supply chain issues, fuel prices that rose markedly earlier this year and other factors have contributed to rising U.S. inflation.

Walmart CEO Doug McMillon said, “While we’re all concerned about the supply chain, we have more inventory than we did a year ago, and we have the inventory that we need to be able to support the business.”

He told the meeting virtually, “We are seeing progress. The port and transit delays are improving.” Walmart has seen a 26% increase in shipping containers getting through U.S. ports in the past month, according to McMillon. 

Food Lion President Meg Ham told the meeting the company’s supply chain “is strong and robust, and we have ample product inside of our stores for customers to choose from during this holiday.” 

The White House said other participants at Monday’s meeting, both in person and virtual, included the CEOs of Best Buy, Samsung North America, Qurate Retail Group, Todos Supermarket, Etsy, Mattel, CVS Health and Kroger. 

Some information in this report came from the Associated Press and Reuters. 

 


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Twitter Founder and CEO Jack Dorsey Steps Down

Twitter founder and CEO Jack Dorsey is stepping down as the company’s leader.  

In a news release, Twitter said Dorsey would be replaced by Parag Agrawal, who has been the company’s chief technology officer since 2017. The move is effective immediately.  

“I’ve decided to leave Twitter because I believe the company is ready to move on from its founders. My trust in Parag as Twitter’s CEO is deep. His work over the past 10 years has been transformational. I’m deeply grateful for his skill, heart, and soul. It’s his time to lead,” Dorsey said in a statement.

Dorsey made his resignation official in a tweet Monday and attached a letter with an explanation of why he was leaving.  

“not sure anyone has heard but, I resigned from Twitter,” he wrote.

On Sunday, Dorsey tweeted “I love twitter.”

Dorsey, 45, founded the microblogging platform in 2006 and was CEO until 2008 when he was pushed aside only to return to the top spot in 2015.  

Last year, Elliott Management, a major stakeholder in the company, wanted Dorsey to choose between being CEO of Twitter or CEO of Square, a digital payment company he founded.  

Twitter’s stock rose on the news, but trading of the shares was suspended.

Some information in this report came from Reuters.


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UN: Pandemic to Cost Global Tourism $2.0 Trillion in 2021

The coronavirus pandemic will cost the global tourism sector $2.0 trillion in lost revenue in 2021, the U.N.’s tourism body said Monday, calling the sector’s recovery “fragile” and “slow.”

The forecast from the Madrid-based World Tourism Organization comes as Europe is grappling with a surge in infections and as a new heavily mutated COVID-19 variant, dubbed Omicron, spreads across the globe.

International tourist arrivals will this year remain 70-75% below the 1.5 billion arrivals recorded in 2019 before the pandemic hit, a similar decline as in 2020, according to the body.

The global tourism sector already lost $2.0 trillion (1.78 trillion euros) in revenues last year due to the pandemic, according to the UNWTO, making it one of sectors hit hardest by the health crisis.

While the U.N. body charged with promoting tourism does not have an estimate for how the sector will perform next year, its medium-term outlook is not encouraging.

“Despite the recent improvements, uneven vaccination rates around the world and new Covid-19 strains” such as the Delta variant and Omicron “could impact the already slow and fragile recovery,” it said in a statement.

The introduction of fresh virus restrictions and lockdowns in several nations in recent weeks shows how “it’s a very unpredictable situation,” UNWTO head Zurab Pololikashvili told AFP.

“It’s a historical crisis in the tourism industry but again tourism has the power to recover quite fast,” he added ahead of the start of the WTO’s annual general assembly in Madrid on Tuesday.

“I really hope that 2022 will be much better than 2021.”

While international tourism has taken a hit from the outbreak of disease in the past, the coronavirus is unprecedented in its geographical spread.

In addition to virus-related travel restrictions, the sector is also grappling with the economic strain caused by the pandemic, the spike in oils prices and the disruption of supply chains, the UNWTO said.

Pololikashvili urged nations to harmonize their virus protocols and restrictions because tourists “are confused and they don’t know how to travel.”

International tourist arrivals “rebounded” during the summer season in the Northern Hemisphere thanks to increased travel confidence, rapid vaccination and the easing of entry restrictions in many nations, the UNWTO said.

“Despite the improvement in the third quarter, the pace of recovery remains uneven across world regions due to varying degrees of mobility restrictions, vaccination rates and traveller confidence,” it added.

Arrivals in some islands in the Caribbean and South Asia, and well as some destinations in southern Europe, came close to, or sometimes exceeded pre-pandemic levels in the third quarter.

Other countries, however, hardly saw any tourists at all, particularly in Asia and the Pacific, where arrivals were down 95% compared to 2019 as many destinations remained closed to non-essential travel.

A total of 46 destinations — 21% of all destinations worldwide — currently have their borders completely closed to tourists, according to the UNWTO.

A further 55 have their borders partially closed to foreign visitors, while just four nations have lifted all virus-related restrictions — Colombia, Costa Rica, Dominican Republic and Mexico.

The future of the travel sector will be in focus at the WTO annual general assembly, which will run until Friday.

The event — which brings together representatives from 159 members states of the U.N. body — was original scheduled to be held in Marrakesh.

But Morocco in late October decided not to host the event due to the rise in COVID-19 cases in many countries.

Before the pandemic, the tourism sector accounted for about 10% of the world’s gross domestic product and jobs.


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Australian Government Vows to Unmask Online Trolls

Australia’s government said Sunday it will introduce legislation to unmask online trolls and hold social media giants like Facebook and Twitter responsible for identifying them.

Prime Minister Scott Morrison, whose conservative coalition government faces an election in the first half of 2022, said the law would protect Australians from online abuse and harassment.

“The online world should not be a wild west where bots and bigots and trolls and others can just anonymously go around and harm people and hurt people, harass them and bully them and sledge them,” Morrison told reporters.

“That is not what can happen in the real world, and there is no case for it to be able to be happening in the digital world.”

Attorney General Michaelia Cash said the legislation, reportedly to be introduced to parliament by early 2022, is needed to clarify that the social media platforms, and not the users, were responsible for defamatory comments by other people.

Confusion had been sown by a High Court ruling in September that found Australian media, as users managing their own pages on a social network, could be held liable for defamatory third-party comments posted on their pages, Cash said.

Under the planned Australian legislation, the social media companies themselves would be responsible for such defamatory content, not the users, she said.

It would also aim to stop people making defamatory comments without being identified, she said.

“You should not be able to use the cloak of online anonymity to spread your vile, defamatory comments,” the attorney general said.

The legislation would demand that social media platforms have a nominated entity based in Australia, she said.

The platforms could defend themselves from being sued as the publisher of defamatory comment only if they complied with the new legislation’s demands to have a complaints system in place that could provide the details of the person making the comment, if necessary, Cash said.

People would also be able to apply to the High Court for an “information disclosure order” demanding a social media service provide details “to unmask the troll,” the attorney general said.

In some cases, she said, the “troll” may be asked to take down the comment, which could end the matter if the other side is satisfied.

Australia’s opposition leader Anthony Albanese said he would support a safer online environment for everyone.

But he said the government had failed to propose action to stop the spread of misinformation on social media and accused some of the government’s own members of spreading misinformation about COVID and vaccinations.


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US Shoppers Return for ‘Black Friday,’ But Many Have Already Bought

Americans returned to stores for the “Black Friday” kickoff of the holiday shopping season, but online data shows that consumers have been spending big for weeks amid worries over shortages.

The day after the U.S. Thanksgiving celebration is the traditional start to the holiday shopping season, and normally sees Americans line up outside stores before they open to clinch deals on popular items.

After the pandemic kept crowds away last year, many shoppers were out in force Friday, a sign of how COVID-19 vaccines have returned life in the United States to something closer to normal.

“I just wanted to make sure that this Christmas was a good Christmas for all my friends and family,” said a masked Sylvia Gonzalez as she waited in line outside the jewelry chain Pandora in New York.

But even before retailers opened their doors early Friday morning, e-commerce shoppers in the United States had already spent $76 billion since early November, up more than 20% from the year-ago period, according to data from software company Adobe, which has projected somewhat fewer promotions this year in light of rising costs.

The jump has added to companies’ optimism about the season, suggesting some shoppers heeded calls from businesses to purchase items early this year after port backlogs and other logistics problems sparked worries that popular goods would be in short supply.

Toys led the buying spree, with Adobe pointing to actions by “anxious parents increasingly aware of supply chain challenges.”

The National Retail Federation projects overall spending could rise as much as 10.5% to $859 billion.

Nonetheless, out-of-stock listings online are up 261% compared with two years ago, according to Adobe.

Item in hand

Retailers and market watchers are broadly optimistic about the holiday shopping season in light of low unemployment and relatively strong household finances due in part to pandemic stimulus bills enacted by the government.

Countering those positive trends are lingering supply chain problems, spiking consumer prices that have affected household staples such as food and fuel, and the COVID-19 pandemic, which is still far from over.

On Friday, stock markets worldwide tumbled on worries that the latest strain of the virus found in South Africa could derail the global recovery.

Reminders of the pandemic were visible throughout shopping districts in the New York borough of Manhattan.

Signs at Macy’s reminded customers to keep 2 meters apart, and pop-up COVID-19 testing sites were positioned outside stores where mostly masked crowds were large, but not as sizeable as before the pandemic.

“In 2018, it was more like the New York you heard of,” said German tourist Ilke Zienteck. “Now, it’s a little bit like a small town.”

Still, the hum of customers inside shops suggested that many had adjusted to the “new normal” of pandemic living.

There were obvious gaps at some stores. At a Best Buy near Grand Central Station, a shelf of Apple accessories was almost completely empty, while the camera bags section had few remaining offerings.

Other chains like Victoria’s Secret and Foot Locker have acknowledged shortages of some choice products.

Taylor Schreiner, a digital research expert at Adobe, expects more consumers to order online and pay for expedited shipping, or pick up goods at stores.

“It’s not just because people want it quickly,” he said in an interview. “Having the item in hand is the surest way to have the gift for the person.”

January glut?

An emerging worry in the industry is that retailers will be stuck with goods originally intended for the holidays but that don’t arrive until January.

Macy’s is generally canceling orders for items with a Christmas motif but plans to keep other items if they are cold-weather-oriented and could sell later in the winter, executives said earlier this month.

Gap Chief Financial Officer Katrina O’Connell said the apparel chain was planning to hold some items for next winter.

“If we think items are going to be too late for the holiday season, we won’t put them in stores or online and have them generate markdowns,” she said earlier this week on a conference call with Wall Street analysts. “We’ll hold them for next year.”

Gap has been one of the companies hardest hit by supply chain problems due to lengthy factory shutdowns in Vietnam caused by the country’s COVID-19 restrictions, which contributed to a loss of some $300 million in sales in the most recent quarter. 

 


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US Stocks Sink on New COVID Variant; Dow Loses 905 Points 

Stocks sank Friday, with the Dow Jones Industrial Average briefly falling more than 1,000 points, as a new coronavirus variant first detected in South Africa appeared to be spreading across the globe. Investors were uncertain whether the variant could reverse months of progress at getting the COVID-19 pandemic under control.

The S&P 500 index dropped 106.84 points, or 2.3%, to close at 4,594.62. It was the worst day for Wall Street’s benchmark index since February.

The index was dragged lower by banks, travel companies and energy companies as investors tried to reposition to protect themselves financially from the new variant. The World Health Organization called the variant “highly transmissible.” 

The price of oil fell about 13%, the biggest decline since early in the pandemic, amid worries of another slowdown in the global economy. That in turn dragged down energy stocks. Exxon shares fell 3.5% while Chevron fell 2.3%. 

The blue chips closed down 905.04 points to end the day at 34,899.34. The Nasdaq Composite lost 353.57 points, or 2.2%, to 15,491.66. 

Bond yields fall; banks hit

“Investors are likely to shoot first and ask questions later until more is known,” Jeffrey Halley of Oanda said in a report. That was evident from the action in the bond market, where the yield on the 10-year Treasury note fell to 1.48% from 1.64% on Wednesday. As a result, banks took some of the heaviest losses. JPMorgan Chase dropped 3%. 

There have been other variants of the coronavirus — the delta variant devastated much of the U.S. throughout the summer — and investors, public officials and the general public are jittery about any new variant that’s spreading. It’s been nearly two years since COVID-19 emerged, killing more than 5 million people around the globe so far.

The economic impacts of this variant were already being felt. The European Union and the U.K. both announced travel restrictions from southern Africa on Friday. After the market closed, the U.S. also put travel restrictions on those coming from South Africa as well as seven other African nations.

Airline stocks quickly sold off, with United Airlines dropping 9.6% and American Airlines falling 8.8%. 

“COVID had seemingly been put in the rear-view mirror by financial markets until recently,” Douglas Porter, chief economist at BMO Capital Markets. “At the least, [the virus] is likely to continue throwing sand in the gears of the global economy in 2022, restraining the recovery [and] keeping kinks in the supply chain.” 

Even Bitcoin got caught up in the selling. The digital currency dropped 8.4% to $54,179, according to CoinDesk.

In Nantucket, Massachusetts, where he is spending a holiday weekend, President Joe Biden said he wasn’t concerned about the market’s decline. 

“They always do when there’s something on COVID [that] arises,” Biden said.

‘Fear gauge’

One sign of Wall Street’s anxiety was the VIX, the market’s measurement of volatility that is sometimes referred to as its “fear gauge.” The VIX jumped 53.6% to a reading of 28.54, its highest reading since January, before the vaccines began to be widely distributed.

Fearful of more lockdowns and travel bans, investors moved money into companies that largely benefited from previous waves, like Zoom Communications for meetings or Peloton for at-home exercise equipment. Shares in both companies rose nearly 6%. 

The coronavirus vaccine manufacturers were among the biggest beneficiaries of the emergence of this new variant and the subsequent investor reaction. Pfizer shares rose more than 6% while Moderna shares jumped more than 20%.

Merck shares fell 3.8%, however. While U.S. health officials said Merck’s experimental treatment of COVID-19 was effective, data showed the pill was not as effective at keeping patients out of the hospital as originally thought. 

Investors are worried that the supply chain issues that have impacted global markets for months will worsen. Ports and freight yards are vulnerable and could be shut by new, localized outbreaks.


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Global Stocks Tumble, FTSE 100 Suffers Year’s Worst Session on Virus Scare

Britain’s blue-chip share index slumped Friday, suffering its biggest drop in more than a year as fears over a newly detected and possibly vaccine-resistant coronavirus variant gripped stock markets around the world.

 

The Financial Times Stock Exchange 100 Index closed down 3.7% at its lowest in more than seven weeks, with commodity, travel, and banking stocks leading the sell-off.

 

Britain said the virus variant spreading in South Africa was considered by scientists to be the most significant one found yet and it needed to ascertain whether it rendered vaccines ineffective.

 

Tourism group TUI fell almost 10%, while airline companies like Wizz Air, easyJet and British Airways-owner IAG lost about 15% after British authorities imposed travel restrictions from South Africa and five neighboring countries.

 

“We don’t know so much about this variant yet but if it’s serious, it could change the macro scenarios altogether,” said Roland Kaloyan, head of European equity strategy at Societe Generale.

 

“The Bank of England will not hike rates in a period where we can enter lockdown and put serious burden on the economy.”

 

Supply-chain worries and inflationary pressures have kept the FTSE 100 under pressure, with the blue-chip index lagging its European peers so far this year.

 

Shares of major British lenders HSBC, Lloyds Bank and Barclays all fell almost 5% as investors scaled back expectations for an interest rate hike in December.

 

“Over the last month, the banking sector has benefited from a steeper yield curve but with the news today we see a lower bond yield and that’s also not quite positive for the long term,” said Kaloyan.

 

Energy and mining stocks fell 6.3% and 4.4%, respectively, tracking a slump in commodity prices on fresh economic slowdown fears.

 

The domestically focused mid-cap index dropped 3.0%, faring a bit better than its blue-chip counterpart as online trading platform Plus500 and CMC Markets gained ground.

 


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California Oil Spill Still Affecting Huntington Beach Businesses, Commercial Fishing

In early October, a ruptured underwater pipeline spilled crude oil in the waters off the Southern California coast. Almost two months later, life in Huntington Beach is back to normal, but residents say the reputation of the tourist city has been damaged and businesses are still hurting. Genia Dulot reports


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Stocks, Oil Tumble on Virus Variant Fears, Safe Havens Gain

Global stocks tumbled Friday and oil fell below $80 a barrel after news of a possibly vaccine-resistant coronavirus variant sent investors scurrying to the safety of bonds, the yen and the Swiss franc.

Little is known of the variant, detected in South Africa, Botswana and Hong Kong, but scientists say it has an unusual combination of mutations, may be able to evade immune responses and could be more transmissible.

British authorities think it is the most significant variant to date and have hurried to impose travel restrictions on southern Africa, as did Japan, the Czech Republic and Italy on Friday. 

The European Union also said it aimed to halt air travel from the region.

“Markets have been quite complacent about the pandemic for a while, partly because economies have been able to withstand the impact of selective lockdown measures. But we can see from the new emergency brakes on air travel that there will be  

ramifications for the price of oil,” said Chris Scicluna, head of economic research at Daiwa.

The World Health Organization is convening an experts’ meeting later Friday to evaluate whether the new variant is a “variant of concern.”

Global shares fell 0.8% and were on course for their worst week since early October.

European stocks plunged 2.7%, on track for their worst day since September 2020, with travel and leisure stocks particularly badly hit.

Germany’s DAX sank 3% and Britain’s FTSE 100 fell 2.7% to its lowest in more than a month.

MSCI’s index of Asian shares outside Japan fell 2.2%, its sharpest drop since August. 

Casino and beverage shares were hammered in Hong Kong, while travel stocks dropped in Sydney and Tokyo.

Japan’s Nikkei skidded 2.5% and S&P 500 futures were last down 1.8%.

Giles Coghlan, chief currency analyst at HYCM, a brokerage, said the closure of the U.S. market for the Thanksgiving holiday Thursday had exacerbated moves.

“We need to see how transmissible this variant is, is it able to evade the vaccines – this is crucial,” Coghlan said.

“I expect this story to drag on for a few days until scientists have a better understanding of it.”

Oil prices slid, with U.S. crude futures down 5.7% to $73.96 a barrel and Brent crude down 4.66% to $78.38 amid fresh demand fears.

As investors dashed for safe-haven assets, the yen jumped more than 1% to around 113 per dollar, having languished earlier this week at five-year lows.

The euro rose 0.4% to $1.1251, as safety rather than policy differentials drove trade.

The single currency, however, fell to near 6-1/2 year lows against the Swiss franc at 1.044 francs per euro.

“You shoot first and ask questions later when this sort of news erupts,” said Ray Attrill, head of FX strategy at National Australia Bank in Sydney.

South Africa’s rand fell 2% to a one-year low and its 2030 bond yield soared 25.5 basis points (bps).

Bond yields move inversely to price.

Other bond markets strengthened, benefiting from their safe haven status. Ten-year Treasury yields fell 11 bps to 1.5277% and 30-year yields were down 9 bps to

1.8777%. Germany’s 10-year bond yield was down 6.2 bps at -0.31%. Gold rose 0.7% to $1,800 an ounce.

The market swings come against a backdrop of already growing concern about COVID-19 outbreaks driving restrictions on movement and activity in Europe and beyond.

European countries have expanded COVID-19 booster vaccinations and tightened curbs. Slovakia announced a two-week lockdown, the Czech government will shut bars early and Germany crossed the threshold of 100,000 COVID-19-related deaths.

“I don’t think there’s any going back to the pre-COVID-19 world,” said Mark Arnold, chief investment officer at Hyperion Asset Management in Brisbane.

“We’re just going to get mutations through time and that’s going to change the way people operate in the economy. That’s just reality.”


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Europe’s Christmas Markets Warily Open as COVID Cases Rise

The holiday tree is towering over the main square in this central German city, the chestnuts and sugared almonds are roasted, and kids are clambering aboard the merry-go-round just like they did before the pandemic. But a surge in coronavirus infections has left an uneasy feeling hanging over Frankfurt’s Christmas market.

To savor a mug of mulled wine — a pleasurable rite of winter in pre-pandemic times — masked customers must pass through a one-way entrance to a fenced-off wine hut, stopping at the hand sanitizer station. Elsewhere, security officers check vaccination certificates before letting customers head for the steaming sausages and kebabs.

Despite the pandemic inconveniences, stall owners selling ornaments, roasted chestnuts and other holiday-themed items in Frankfurt and other European cities are relieved to be open at all for their first Christmas market in two years, especially with new restrictions taking effect in Germany, Austria and other countries as COVID-19 infections hit record highs. Merchants who have opened are hoping for at least a fraction of the pre-pandemic holiday sales that can make or break their businesses.

Others aren’t so lucky. Many of the famous holiday events have been canceled in Germany and Austria. With the market closures goes the money that tourists would spend in restaurants, hotels and other businesses.

Jens Knauer, who crafts intricate, lighted Christmas-themed silhouettes that people can hang in windows, said his hope was simply that the Frankfurt market “stays open as long as possible.”

While Christmas is 40% of annual revenue for many retailers and restaurateurs, “with me, it’s 100%,” Knauer said. “If I can stay open for three weeks, I can make it through the year.”

Purveyors are on edge after other Christmas markets were abruptly shut down in Germany’s Bavaria region, which includes Nuremberg, home of one of the biggest and best-known markets. Stunned exhibitors in Dresden had to pack up their goods when authorities in the eastern Saxony region suddenly imposed new restrictions amid soaring infections. Austria’s markets closed as a 10-day lockdown began Monday, with many stall owners hoping they can reopen if it’s not extended.

Markets usually attract elbow-to-elbow crowds to row upon row of ornament and food sellers, foot traffic that spills over into revenue for surrounding hotels and restaurants. This year, the crowds at Frankfurt’s market were vastly thinned out, with the stalls spread out over a larger area.

Heiner Roie, who runs a mulled wine hut in the shape of a wine barrel, said he’s assuming he will see half the business he had in 2019. A shutdown would cause “immense financial damage — it could lead to complete ruin since we haven’t made any income in two years, and at some point, the financial reserves are used up.”

But if people have a little discipline and observe the health measures, “I think we’ll manage it,” he said.

Next door, Bettina Roie’s guests are greeted with a sign asking them to show their vaccination certificates at her stand serving Swiss raclette, a popular melted cheese dish.

The market “has a good concept because what we need is space, room, to keep some distance from each other,” she said. “In contrast to a bricks-and-mortar restaurant, they have their building and their walls, but we can adjust ourselves to the circumstances.”

The extended Roie family is a fifth-generation exhibitor business that also operates the merry-go-round on Frankfurt’s central Roemerberg square, where the market opened Monday. 

Roie said it was important to reopen “so that we can bring the people even during the pandemic a little joy — that’s what we do, we bring back joy.”

The latest spike in COVID-19 cases has unsettled prospects for Europe’s economic recovery, leading some economists to hedge their expectations for growth in the final months of the year.

Holger Schmieding, chief economist at Berenberg Bank in London, has cut his forecast for the last three months of the year in the 19 countries that use the euro from 0.7% to 0.5%. But he noted that the wave of infections is having less impact across the broad economy because vaccinations have reduced serious illnesses and many companies have learned to adjust.

That is cold comfort to Germany’s DEHOGA restaurant and hotel association, which warned of a “hail of cancellations” and said members were reporting every second Christmas party or other special event was being called off.

Other European countries where the pandemic isn’t hitting as hard are returning to old ways. The traditional Christmas market in Madrid’s Plaza Mayor, in the heart of the Spanish capital, is slated to open Friday at the size it was before the pandemic.

It will have 104 stalls of nativity figures, decorations and traditional sweets in a country where 89% of those 12 or older are fully vaccinated. Last year, it had half the number of stalls and restricted the number of people allowed in the square. Masks and social distancing will remain mandatory, organizers said.

In Hungary’s capital of Budapest, Christmas markets have been fenced off and visitors must show proof of vaccination to enter.

Gyorgy Nagy, a producer and seller of handmade glazed crockery, said the restrictions initially stirred worries of fewer shoppers. But business has been good so far.

“I don’t think the fence is bad,” he said. “At the beginning, we were scared of it, really scared, but I think it’s fine. … I don’t think it will be a disadvantage.”

Markets opening reflects a broader spectrum of loose restrictions in Hungary, even as new COVID-19 cases have exceeded peaks seen during a devastating surge last spring. More infections were confirmed last week than in other week since the pandemic started.

A representative for the Advent Bazilika Christmas market said a number of its measures go beyond government requirements, including that all vendors wear masks and those selling food and drinks be vaccinated.

Bea Lakatos, a seller of fragrant soaps and oils at the Budapest market, said that while sales have been a bit weaker than before the pandemic, “I wasn’t expecting so many foreign visitors given the restrictions.”

“I think things aren’t that bad so far,” she said this week. “The weekend started particularly strong.”

In Vienna, markets were packed last weekend as people sought some Christmas cheer before Austria’s lockdown. Merchants say closures last year and the new restrictions have had disastrous consequences.

“The main sales for the whole year are made at the Christmas markets — this pause is a huge financial loss,” said Laura Brechmann who sold illuminated stars at the Spittelberg market before the lockdown began. “We hope things will reopen, but I personally don’t really expect it.”

In Austria’s Salzkammergut region, home to ski resorts and the picturesque town of Hallstatt, the tourism industry hopes the national lockdown won’t be extended past Dec. 13 and it can recover some much-needed revenue.

Last winter’s extended lockdowns cost the tourism board alone 1 million euros ($1.12 million) just in nightly tourist tax fees during that period — not to mention the huge financial losses sustained by hotels, restaurants and ski resorts.

“Overall, I do think that if things open up again before Christmas, we can save the winter season,” said Christian Schirlbauer, head of tourism for the Dachstein-Salzkammergut region. “But it will depend on whether or not the case numbers go down.” 


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As Gas Prices Spike, Americans Give Electric Cars a Closer Look 

Persistently high prices for gasoline are frustrating many Americans and causing a political headache for the administration of President Joe Biden, but they also might be accelerating the process of transitioning the country to more widespread use of vehicles that run on renewable energy — particularly electricity. 

 

Experts say that sales of electric vehicles, or EVs, tend to rise when fuel prices do, though they cautioned it’s difficult to draw a straight line from prices at the pump to car purchases. 

 

“People buy electric cars for lots of reasons, so they’re not completely dependent on gas prices, but that’s certainly reinforcing it,” said Genevieve Cullen, president of the Electric Drive Transportation Association, a trade group representing manufacturers of electric vehicles.

 

An estimated 468,000 new EVs were sold in the U.S. from the beginning of the year through September, according to data collected by Atlas Public Policy, a group that tracks the market for EVs. That represents a 45%  increase over the 323,000 EVs sold during the entirety of 2020. 

 

Looking solely at the month of September 2021, U.S. consumers bought 57,000 new EVs. That was 63% more than the 35,000 sold in September of 2020, and a 90% increase over the 30,000 sold in September 2019. 

Gas prices make EVs attractive 

 

According to the Bureau of Labor Statistics, the cost of one kilowatt hour of electricity in the United States rose from 13.5 cents in October 2020 to 14.2 cents in October 2021, an increase of 5.2%. By contrast, the BLS found the average cost of a gallon of gas rose from $2.23 in October 2020 to $3.48 in October 2021, a 56.1% increase. 

 

“High gas prices are tough on Americans driving gasoline vehicles,” said Luke Tonachel, director of clean vehicles and fuels for the Natural Resources Defense Council. “The volatility in the global price of the oil used to make gasoline is a constant worry.

 

In the U.S., though, the structure of the electricity market keeps prices from increasing sharply. 

 

“Electricity prices are regulated, and therefore quite stable,” said Tonachel. “An EV driver can expect to pay a quarter or less as much per mile as [someone] driving a gasoline vehicle.” 

 

US EV sales expected to rise further 

While electric vehicle sales are rising rapidly, the numbers begin from a low baseline. As recently as five years ago, EV sales accounted for less than 1% of new vehicles sold in the U.S. That figure has surged to what is expected to be about 4% this year, and the real increase is on the horizon. 

 

LMC Automotive, which tracks vehicle sales and estimates the future of the market, projects that by 2030, EVs, including purely electric cars and plug-in hybrid cars that can run on both electricity and gasoline, will make up 34.2% of new vehicle sales in the United States. 

 

That transition will continue, as the federal government increasingly crafts policies meant to bring the country in line with President Biden’s promise, made at the recent United Nations Climate Conference, to cut U.S. greenhouse gas emissions to about half of their 2005 levels by 2030. 

 

The Environmental Protection Agency announced this summer it would structure emissions guidelines for cars powered by internal combustion engines in order to “speed the transition of the light-duty vehicle fleet toward a zero emissions future.” 

 

“We’re going to see the car market accelerate the shift to EVs when the U.S. EPA sets emission standards that zero out pollution from vehicles,” said Tonachel. “That’s ultimately what we need to address the climate crisis, and it will result in cheaper mobility, too.” 

 

Another factor is the continued rollout of a network of charging stations across the country. The Energy Department currently lists more than 52,000 stations in the country, with upwards of 100,000 outlets. The infrastructure bill that President Biden recently signed into law contains $7.5 billion aimed at increasing that number by a factor of 10 within the next decade. 

 

Broader future for renewables 

 

There also is reason to believe that increased electrification of the transportation system will drive the adoption of renewables in other aspects of day-to-day life, as well. That’s because, as car battery technology continues to improve, it will make it easier and cheaper to store energy generated by wind and solar power sources. 

 

“Electrification of transportation is the key to growing renewables in the power sector,” said Cullen, of the Electric Drive Transportation Association. “Because batteries are one of the few effective and portable ways to store electricity. They’ll enable utilities and other power generators to manage demand so that you can save up excess wind or solar.” 

 

She added, “Battery storage is the path there. Electric transportation, this mobile electrical load, has the ability to be a grid asset.” 

 


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Canada ‘Extremely Disappointed’ That US to Raise Softwood Lumber Duty

The United States has decided to almost double the duties on Canadian softwood lumber from most producers to 17.9%, Canadian Trade Minister Mary Ng said on Wednesday, adding that Canada is “extremely disappointed.”

The current rate for most companies is about 9%.

Ng said that the U.S. Department of Commerce on Wednesday issued the final results of the second administrative reviews of its anti-dumping and countervailing duty orders regarding certain softwood lumber products from Canada.

“Canada is extremely disappointed that the United States has decided to increase the unfair duties it is imposing on Canadian softwood lumber from most producers to 17.9%,” Ng said in a statement. “Canada calls on the United States to cease imposing these unwarranted duties on Canadian softwood lumber products.”

The U.S. Commerce Department and the U.S. Trade Representative’s office did not respond to a request for comment on Wednesday night. Earlier this year, Washington announced plans to double the duties on imports of Canadian lumber and requested a dispute panel on Canada’s dairy import quotas.

Canada’s softwood lumber industry is a key component of the country’s forestry sector, which contributed more than $25 billion to the nation’s gross domestic product in 2020 and employed nearly 185,000 workers. The British Columbia Lumber Trade Council also expressed disappointment.

Ng said that “following completion of any legal challenges under the Canada-United States-Mexico Agreement’s (CUSMA) Chapter 10 or in U.S. courts, these new anti-dumping and countervailing duty rates will apply retroactively to softwood lumber exports to the United States from companies that were subject to the second administrative reviews.”

“These unjustified duties harm Canadian communities, businesses, and workers,” she said, adding: “They are also a tax on U.S. consumers.” 


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