“Be patient and learn how to sit on your hands.” — Doug Kass

1. Fully Vaccinated Tourists Can Visit Europe This Summer — fully vaccinated travelers will be allowed to visit 27 European Union nations this summer under a travel proposal the European Commission. If approved, the policy would allow visitors from countries with low infection rates and proof of vaccination. The EU is creating a “Digital Green Certificate” to help governments more easily verify a completed vaccination, a negative test, or Covid recovery. Certificates will be in digital or paper form, include a QR code for authenticity, and contain limited personal data.
Canada is also considering a vaccine passport for travelers, perhaps as an upgrade to its ArriveCAN app for visitors to report their contact information, quarantine and travel plans, and symptoms. In one poll, 78% of Canadians said vaccine passports should be required of all inbound travelers.
2. U.S. to Back Waivers for Covid-19 Vaccine Patents — The U.S. government signaled Wednesday that it would support a temporary waiver for intellectual property rights on coronavirus vaccines, as advocated by the World Health Organization, in spite of the strong objections of the global pharmaceutical industry. The pharmaceutical industry has argued that waiving patents would not address the current manufacturing bottlenecks that explain vaccine shortages, and that it could hand crucial sensitive technology and scientific secrets to countries like Russia or China.
3. U.S. Births at Lowest in 41 Years on Pandemic Worries and Economic Uncertainty — the U.S. birthrate fell 4% in 2020, the sixth straight year of decline and the lowest since 1979, according to provisional data from the Centers for Disease Control and Prevention’s National Center for Health Statistics. The birthrate was hurt by pandemic worries, economic uncertainty, and postponed pregnancies. The average number of children American women might have over their lifetimes is 1.64, a record low. Fewer babies are being born than the number needed to replace people who are dying, the CDC said.
4. India’s Covid-19 Cases Top 400,000 Again, as Vaccinations Decline — India reported another 412,262 coronavirus cases, the second time in a week it has recorded more than 400,000 cases in 24 hours, per Johns Hopkins University data. India is home to 18% of the world’s population but accounted for 46% of new Covid-19 cases globally and one in four deaths this past week, the World Health Organization said Wednesday. India has vaccinated more than 30 million people, or 2.2% of its population. President Joe Biden supports sharing Covid-19 vaccine patents, but the European Union and other World Trade Organization nations would need to approve waiving intellectual property protections. Other countries would also need the facilities, techniques and ingredients to make vaccines.

The week ahead — Economic data from Econoday.com:

“Try to get a little smarter every day and read as much as humanly possible. An investment in knowledge pays the best dividends” — Doug Kass

1. Fully Vaccinated Americans Will Be Able to Visit the European Union This Summer — European Commission President Ursula von der Leyen told the New York Times that “all 27 member states will accept, unconditionally, all those who are vaccinated with vaccines that are approved by E.M.A.” The European Medicines Agency has approved all three of the vaccines currently being given in the U.S. She didn’t provide a timeline or details on how travel would reopen, but said the United States was making “huge progress” toward reaching herd immunity of vaccinating at least 70% of its adult population by mid-June.
2. Fed Holds Steady on Interest Rates — the Federal Reserve held its key interest rate near zero and said it plans to continue supporting the economic recovery, while acknowledging recent progress in growth and employment. The Fed has held overnight interest rates near zero since March 2020, when the Covid-19 pandemic and related restrictions delivered a severe blow to the economy. Since June, the central bank has also been purchasing at least $80 billion of Treasury bonds and at least $40 billion of mortgage-backed securities to hold down longer-term borrowing costs for consumers and businesses.
Fed officials have said they would hold rates steady until the labor market is back to full strength and inflation has reached the central bank’s goal of averaging 2%. Chairman Jerome Powell has said those conditions are unlikely to materialize this year, and most Fed officials indicated last month that they expect to hold off on raising rates until 2024 at the earliest.
3. U.S. Recovery Gains Steam as Spending Fuels 6.4% GDP Growth — Gross domestic product expanded at a 6.4% annualized rate following a softer 4.3% pace in the fourth quarter, the Commerce Department’s preliminary estimate showed. Personal consumption, the biggest part of the economy, surged an annualized 10.7%, the second-fastest since the 1960s. The inflation-adjusted value of domestically produced goods and services climbed to an annualized $19.1 trillion, indicating GDP will soon eclipse the pre-pandemic peak of nearly $19.3 trillion.
4. Biden Tax Proposal Would Kick In at Over $500,000 for Couples — the new top 39.6% tax bracket, proposed in Biden’s “American Families Plan” on Wednesday, would encompass less than 1% of taxpayers, the official said, asking not to be named to speak in more detail beyond the White House’s outline. The official’s comment suggested that the new rate, up from the current 37%, would be applied from 2022. For Biden’s separate proposed increase in the capital gains tax rate to 39.6% from 20%, the administration said earlier this week that will apply to both singles and joint filers who make $1 million or more.

The week ahead — Economic data from Econoday.com:

“The more often a stupidity is repeated, the more it gets the appearance of wisdom,” — Doug Kass

1. Nvidia’s $40 Billion Deal for Arm Faces U.K. National-Security Probe — U.K. Digital Secretary Oliver Dowden on Monday invoked a little-used power to order the country’s antitrust agency to investigate the merger’s national-security implications and deliver a report by July 30. The secretary can eventually clear the deal, with or without conditions, or nix it. The U.K. probe is the latest example of how governments around the world are increasingly tightening control over semiconductor technology, after the past year demonstrated how access to advanced microprocessors can make or break some of their biggest companies.
2. Biden Wants to Cut Greenhouse Gas Emissions in Half by 2030 — Biden will call for reducing emissions to 50% of their level in 2005 as part of global efforts to fight climate change. Emissions fell by 21% from 2005 levels during the pandemic, but are ticking higher again this year as the economy recovers. Biden invited 40 world leaders to the White House event, including Russian President Vladimir Putin. The invitees include 17 countries responsible for 80% of global greenhouse gas emissions. More than 300 companies, including Apple, Walmart and Johnson & Johnson, sent Biden a letter last week saying they were in favor of cutting emissions by at least 50%, while others worry Biden’s policies will harm the economy.
3. Intel CEO Sees Prolonged Chip-Supply Constraints — Pat Gelsinger, Intel CEO, said the supply constraints that have affected some sectors of the global economy for months will continue until more capacity comes online to meet chip demand for everything from automobiles to electronics. Mr. Gelsinger this month laid out an ambitious strategy for Intel to become a major contract chip maker in addition to making semiconductors to satisfy its in-house requirements. The plan includes a $20 billion spending commitment to build two new semiconductor plants in Arizona.
4. J&J Covid-19 Vaccine Pause Over Blood-Clot Fear Is Under Review — J&J vaccine injections were put on hold last week after reports of rare blood-clot conditions in a small number of recipients, including at least three fatalities. Many public-health authorities, however, contend that the benefits of the vaccine outweigh the risks. Anthony Fauci, President Biden’s chief medical adviser, has predicted the U.S. pause would end as soon as Friday, perhaps with new restrictions or warnings. A recommendation to lift the pause—and agreement by the FDA and CDC—could put the vaccine back in circulation as early as this weekend, because millions of doses have already been distributed to vaccine sites.
5. Biden Eyeing Tax Rate as High as 43.4% in Next Economic Package — For those earning $1 million or more, the new top rate, coupled with an existing surtax on investment income, means that federal tax rates for wealthy investors could be as high as 43.4%. The new marginal 39.6% rate would be an increase from the current base rate of 20%, the people said on the condition of anonymity because the plan is not yet public. A 3.8% tax on investment income that funds Obamacare would be kept in place, pushing the tax rate on returns on financial assets higher than rates on some wage and salary income, they said. Other measures that the administration has discussed in recent weeks include enhancing the estate tax for the wealthy. Biden has warned that those earning over $400,000 can expect to pay more in taxes. The White House has already rolled out plans for corporate tax hikes, which go to fund the $2.25 trillion infrastructure-focused “American Jobs Plan.”

The week ahead — Economic data from Econoday.com:

“There are three ingredients for success—aggressiveness, timing and skill—and if you have enough aggressiveness at the right time, you don’t need that much skill.” ― Howard Marks

1. U.S. Seeks to Pause J&J Covid-19 Vaccine Use After Rare Blood-Clot Cases — the U.S. Food and Drug Administration and the U.S. Centers for Disease Control and Prevention announced the move Tuesday, after finding that six women between the ages of 18 and 48 years who got the vaccine had developed blood clots and one died. More than 6.8 million doses have been administered in the U.S., the agencies said.. The Johnson & Johnson vaccine is one of three approved for emergency use in the U.S. along with a vaccine from Moderna as well as another from Pfizer and BioNTech. AstraZeneca ran into problems in Europe, with several countries halting use while investigating reports of blood clots. European health officials later declared the vaccine “safe and effective.”
2. Biden Says He’s ‘Prepared to Negotiate’ as Infrastructure Debate Heats Up — President Joe Biden said he is “prepared to negotiate” the size and scope of his nearly $2.3 trillion infrastructure proposal as well as how to pay for it.
Republicans argue it funds things outside the scope of infrastructure and oppose raising the corporate tax rate to fund spending. Some Democrats, such as Sen. Joe Manchin, who was not at Monday’s meeting, also oppose the higher tax rate. Others are pushing to expand the size and scope of the proposal.
3. Pfizer CEO Announces Annual Covid-19 Vaccine Booster Shots Likely Needed — Pfizer Inc. PFE 1.16% Chief Executive Albert Bourla said it is likely that people who receive Covid-19 vaccines will need booster shots within a year afterward, and then annual vaccinations, to maintain protection against the virus as it evolves. Pfizer and its partner, BioNTech SE, said recently that the shot remains highly effective six months after its second dose, and they hope to provide more information on protection beyond six months in the coming weeks.

The week ahead — Economic data from Econoday.com:

“The economy is growing, and the economic reports are positive. Corporate earnings are rising and beating expectations. The media carry only good news. Securities markets strengthen. Investors grow increasingly confident and optimistic. Risk is perceived as being scarce and benign. Investors think of risk-bearing as a sure route to profit. Greed motivates behavior. Demand for investment opportunities exceeds supply. Asset prices rise beyond intrinsic value. Capital markets are wide open, making it easy to raise money or roll over debt. Defaults are few. Skepticism is low and faith is high, meaning risky deals can be done. No one can imagine things going wrong. No favorable development seems improbable. Everyone assumes things will get better forever. Investors ignore the possibility of loss and worry only about missing opportunities, No one can think of a reason to sell, and no one is forced to sell. Buyers outnumber sellers. Investors would be happy to buy if the market dips. Prices reach new highs. Media celebrate this exciting event. Investors become euphoric and carefree. Security holders marvel at their own intelligence; perhaps they buy more. Those who’ve remained on the sidelines feel remorse; thus they capitulate and buy. Prospective returns are low (or negative). Risk is high. Investors should forget about missing opportunity and worry only about losing money. This is the time for caution!” ― Howard Marks

1. Credit Suisse Takes $4.7 Billion Hit on Archegos Meltdown — Credit Suisse reported a $4.7 billion hit from the meltdown of Archegos Capital Management, slashed its dividend and said its investment banking and risk chiefs would leave the bank. The Swiss lender has been the hardest hit by the collapse late last month of Archegos, a U.S. family investment firm, suffering a major loss in its unit that services hedge funds. The Archegos crisis emerged just weeks after Greensill Capital, a U.K. finance firm that was deeply entangled with Credit Suisse, CS 0.92% filed for insolvency and left the bank on the hook for losses.
2. EV Related Stocks for “Green Energy” — below lists EV Stocks for consideration for “Biden Infrastructure Plan”

3. Get Ready for a ‘Golden Age of Travel’ — travel appears to be taking off in a V-shaped recovery. Domestic passenger traffic hit 1.5 million passengers a day in early April versus 108,000 last April. It’s down just 38% from April 2019 levels of around 2.4 million daily passengers. Carriers are now adding back flight capacity and staffing up to handle more bookings for the summer and fall. The industry is also encouraging travel with more lenient cancellation and change-fee policies, along with ongoing efforts to reassure passengers that health safety on planes is relatively strong.
4. G20 Takes Step Toward Agreement on Minimum Corporate Tax Rate — Finance ministers from the world’s most developed economies said they hoped to agree on an overhaul of the way multinationals are taxed as well as on a minimum tax rate by the end of the year. Long-running multilateral talks on the question were given a boost this week when Treasury Secretary Janet Yellen signaled the U.S. support for the idea of a global minimum tax rate that would help end the “thirty-year race to the bottom” on corporate taxation. The U.S. also put forward this week its own proposal on how to tax the world’s largest multinationals, along lines similar to the OECD’s suggestions. It aims to raise the global minimum rate to 21% although the OECD has suggest it could be closer to 15%.
5. GM to Halt Production at Several North American Plants Due to Chip Shortage — GM said that three plants previously unaffected by semiconductor supply problems will be idled or have output reduced for one or two weeks, including a factory in Tennessee and another in Michigan that make popular midsize sport-utility vehicles. Models affected include the Chevrolet Traverse SUV and the Cadillac XT5 and XT6 SUVs.
The moves follow news last week that Ford Motor Co. would deepen production cuts in North America, including idling for two weeks a factory near its headquarters in Dearborn, Mich., that makes the F-150 pickup truck, its biggest moneymaker.
Auto makers since late last year have been grappling with a shortage of semiconductor chips, which go into software modules used to control everything from brakes to dashboard touch screens. The companies have been cutting production for months as they move to line up chip supplies, with executives saying the shortage could last several more months.

The week ahead — Economic data from Econoday.com:

“But most investors do capitulate eventually. They simply run out of the resolve needed to hold out. Once the asset has doubled or tripled in price on the way up — or halved on the way down — many people feel so stupid and wrong, and are so envious of those who’ve profited from the fad or side-stepped the decline, that they lose the will to resist further. My favorite quote on this subject is from Charles Kindleberger: “There is nothing as disturbing to one’s well-being and judgment as to see a friend get rich” (Manias, Panics, and Crashes: A History of Financial Crises, 1989). Market participants are pained by the money that others have made and they’ve missed out on, and they’re afraid the trend (and the pain) will continue further. They conclude that joining the herd will stop the pain, so they surrender. Eventually they buy the asset well into its rise or sell after it has fallen a great deal. In other words, after failing to do the right thing in stage one, they compound the error by taking that action in stage three, when it has become the wrong thing to do. That’s capitulation. It’s a highly destructive aspect of investor behavior during cycles, and a great example of psychology-induced error at its worst.” ― Howard Marks

1. Credit Suisse, Nomura Warn of Major Losses After Archegos Debacle — Nomura said in a statement over the weekend that “The estimated amount of the claim against the client is approximately $2 billion,” . Credit Suisse said the selloff could be highly significant and material to its first-quarter results. Major banks including Goldman Sachs and Morgan Stanley last week unloaded some $30 billion worth of shares in U.S. media and Chinese tech companies linked to Tiger Asia manager Bill Hwang’s Archegos Capital Management.
2. Biden Will Unveil His Economic Recovery Plan in Two Parts — the president is planning to split his $3 trillion “Build Back Better” recovery plan into two separate bills, starting with a focus on infrastructure.
The biggest beneficiaries should be electric-vehicle makers and clean-energy providers. Biden’s plan includes additional incentives to buy electric vehicles in the form of tax credits and rebates.
The second part of Biden’s plan, which will include healthcare and child care, will be released “later in April,” Press Secretary Jen Psaki said Sunday. Biden proposed a $775 billion “caregiving economy” proposal while campaigning, which would include free prekindergarten, subsidies for after-school programs and increased pay for child-care workers.
This second part is expected to meet the most resistance from Republicans, who would rather use tax incentives for things like paid family leave and let states make changes instead of authorizing additional federal spending, The Wall Street Journal reported.
3. Universal Studios Hollywood Is the Latest Theme Park to Announce Its Reopening — Universal Studios Hollywood announced its official reopening date later this month, along with a new ride called “The Secret Life of Pets.”
The Southern California theme park will open its gates on April 16 at an expected reduced capacity of 25% of its 40,000 person maximum. It will require visitors to wear face coverings and prohibit anyone with a temperature above 100.4 degrees from entering. Tickets go on sale April 8.
The restrictions are part of California’s new health guidelines, issued over the weekend, which also limit park visitors to in-state residents only.
4. Pfizer Trials Show Vaccine Is Effective for At Least Six Months — Pfizer and BioNTech’s Covid-19 vaccine remains highly effective against coronavirus for at least six months after recipients get their second dose and may work just as well against the variant first identified in South Africa, the companies said Thursday. The vaccine was found 91.3% effective among 46,307 people in a Phase 3 trial, with consistent protection across age, gender, race and ethnicity, as well as among individuals with underlying health conditions. On Wednesday, the companies reported the vaccine was 100% effective at preventing Covid-19 among children ages 12 to 15, which could pave the way for its authorization for use in that age group as early as May. Pfizer’s vaccine, currently approved for use in those 16 and older, has distributed more than 200 million doses around the world and expects to produce 2.5 billion doses this year.

The week ahead — Economic data from Econoday.com:

“the first stage, when only a few unusually perceptive people believe things will get better, the second stage, when most investors realize that improvement is actually taking place, and the third stage, when everyone concludes things will get better forever.” ― Howard Marks

1. Germany Locks Down Again — Germany will lock down its economy during the coming Easter holiday as it tries to control another surge in coronavirus cases. In the U.S., new Covid-19 case data have decoupled from hospitalizations—in the best possible way. About 40,000 Americans are currently hospitalized with Covid-19 symptoms, down from about 47,000 a week ago. U.S. hospitalizations were north of 130,000 at the beginning of the year. Deaths have been declining too.
2. U.S. Officials Raise Doubts About AstraZeneca Vaccine Trial — the National Institute of Allergy and Infectious Diseases said in a statement that the Data Safety Monitoring Board, an independent body overseeing the Covid vaccine trials, had informed it that the U.K.-based pharmaceuticals group had provided outdated information to U.S. regulators. The news throws into doubt AstraZeneca’s ability to obtain swift approval for emergency use authorization by the U.S. regulator. The vaccine maker published the results of its U.S. trial, showing 79% efficacy against Covid-19 symptoms and 100% efficacy in preventing its most serious developments. The AstraZeneca vaccine, developed with Oxford University, was approved three months ago in the U.K. and Europe and has been the most widely used jab in the world since then.
It has been marred by safety concerns raised by several European governments, and EU officials’ anger over the company’s inability to fulfill its supply contract with the European Commission. Both the U.K. and EU medicines regulators insisted last week after new reviews that the vaccine was safe and should continue to be used.
3. Biden Advisers to Propose $3 Trillion Public Investment Plan — President Joe Biden’s economic advisers are in the process of putting together a multipart $3 trillion plan to boost spending on infrastructure and education, fight against climate change and reduce inequalities. The first part of the package would focus on infrastructure projects Biden touted in his “Build Back Better” plan that was released during his presidential campaign. That plan included funding for roads and bridges as well as climate-change initiatives.
The second part of the proposal would focus more on education and people. It would include extending the expanded child tax credit, tuition-free community college, universal prekindergarten, and a national paid leave program.
The Biden team is expected to recommend breaking up the plan to help it pass more quickly, according to the New York Times, which first reported details of the legislative strategy. Some White House officials believe the first set of proposals might be more appealing to Republicans. The strategy is still preliminary and under discussion.
Still, the proposal is likely to be fiercely debated, notably over its cost and eventual financing. The proposal would come days after Biden’s $1.9 trillion fiscal stimulus package was approved by Congress.
4. Intel’s New CEO Is Spending $20 Billion to Double Down on Chip Manufacturing — Intel CEO Gelsinger said that Intel planned to spend $20 billion to build two manufacturing plants in Arizona. The decision to do so comes amid increased U.S. government interest in securing domestic semiconductor manufacturing supply. Intel also said it plans to launch a stand-alone business unit called Intel Foundry Services that will offer advanced manufacturing capabilities to companies that design chips but don’t fabricate the semiconductors themselves.
Gelsinger, who assumed the CEO duties Feb. 15, said Intel plans to expand its use of third-party manufacturing plants—including for products at the core of Intel’s business, such as chips for personal computers and data centers—beginning in 2023. Some investors had speculated that Intel might leave the chip-making side of the business altogether.
5. New York Gets Ready to Legalize Marijuana for Recreational Use — New York is poised to join 14 other states that have already legalized the sale of recreational marijuana when lawmakers take up the measure next week. Under the proposed deal, anyone 21 and older could possess up to three ounces of pot as well as grow marijuana for personal use. A new Office of Cannabis Management would issue licenses to grow or sell cannabis. Local jurisdictions could also allow businesses to let people consume weed on site.

The week ahead — Economic data from Econoday.com:

“How? Try to travel into the future and look back. In 2023, do you think you’re more likely to say, “Back in 2018, I wish I’d been more aggressive” or “Back in 2018, I wish I’d been more defensive”? And is there anything today about which you’d be likely to say, “In 2018, I missed the chance of a lifetime to buy xyz”? What you think you might say a few years down the road can help you figure out what you should do today. ― Howard Marks

1. Germany Suspends Use of AstraZeneca Covid-19 Vaccine — Germany said it is temporarily stopping the administration of Covid-19 vaccines made by AstraZeneca. The Netherlands, Ireland and northern Italy became the latest places to temporarily halt the use of the AstraZeneca vaccine—which was developed with the University of Oxford and has been given to more than 17 million people in Europe—as concerns grow about its safety and effectiveness. Reports of blood clots in people who took the AstraZeneca vaccine have caused several countries—including the Netherlands, Ireland, Denmark, Austria, Estonia, Lithuania, Norway, Iceland, Bulgaria, Thailand—to stop or suspend its use. South Africa switched to the Johnson & Johnson vaccine after trials showed the AstraZeneca formula was less effective there.
2. Biden Looks for Ways to Finance Infrastructure, Push Economic Growth — Growing concerns about the U.S.’s rising deficit mean President Joe Biden will need to consider other financing options for future economic proposals—including his infrastructure spending package—like raising taxes. Biden is planning a tax increase that could raise both the corporate tax rate and the individual tax rate for people earning more than $400,000 a year, Bloomberg News reported. Treasury Secretary Janet Yellen said Sunday that the administration “will be putting forth proposals to get deficits under control.”
3. Fed Holds Steady on Interest Rates and Bond Purchases — The Fed said Wednesday that it would keep current policy unchanged but increased its forecasts for economic growth, prompting more officials to predict rate increases in 2023. In response to a question about winding down the central bank’s bond-buying program, Powell said that it is “not yet” time to start considering tapering its purchases. The central bank said in its latest statement that it would keep rates steady near zero, and reiterated it would keep buying $120 billion of Treasuries and mortgage-backed securities until “substantial further progress” is made toward the central bank’s goals of maximum employment
4. World-Wide Streaming Subscriptions Pass One Billion During Pandemic — The number of subscriptions to online video streaming services around the world reached 1.1 billion in 2020, according to data released by the Motion Picture Association. Meanwhile, global box-office revenues plunged by more than $30 billion in the year to $12 billion, as movie theaters were shut in the U.S. and in other parts of the world, according to the association. As new streaming services enter the U.S. market— Comcast Corp.and ViacomCBS Inc. have also launched platforms— Amazon. and AT&T Inc.’s HBO Max are following in Disney and Netflix’s footsteps by ramping up efforts to boost their share of international markets.

The week ahead — Economic data from Econoday.com:

“In investing, it’s easy to achieve performance that is equal to that of the average investor or a market benchmark. Since it’s easy to be average, real investment success must consist of outperforming other investors and the averages. Investment success is largely a relative concept, measured on the basis of relative performance. Simply being right about a coming event isn’t enough to ensure superior relative performance if everyone holds the same view and as a result everyone is equally right. Thus success doesn’t lie in being right, but rather in being more right than others. Similarly, one doesn’t have to be right in order to be successful: just less wrong than others. Success doesn’t come from having a correct forecast, but from having a superior forecast. Can such forecasts be obtained?” ― Howard Marks

1. CDC Announces Vaccinated Americans Can Socialize Without Masks — People who have been fully vaccinated against Covid-19 can socialize in small groups without wearing masks or social distancing, the CDC said Monday. They can also visit unvaccinated people from a single household who are at low risk for the disease without masking.
Vaccinated adults should still keep their distance, wear masks and take other precautions in public, however, since less than 10% of Americans have been fully vaccinated to date. With new infections falling more slowly over the past few weeks and more dangerous variants taking hold, worries are rising over a resurgence just as young, mostly unvaccinated people are set to head to spring break hot spots in places like Florida, which has never had a statewide mask mandate.
2. A Likely Consumer Spending Boom with a Bigger Stimulus Checks & Reopenings — The third round of stimulus more directly targets lower earners, who are also more likely to spend their checks than others. Considering that consumer spending rose 2.4% in January after checks were issued, the larger, $1,400 checks could increase spending even more.
A rise in personal income, paired with more reopenings, could “unleash substantial pent-up demand” in service sector consumption, Jefferies chief economist Aneta Markowska said. She expects personal consumption spending to rise 7% in 2021 and 4.1% in 2022. However, a third of respondents said they planned to save more of their third stimulus check, with just 5% saying they planned to use it for a vacation or trip.
3. GE Announced Plans for an 8-for-1 Reverse Stock Split — company’s shares outstanding to roughly 1.1 billion from almost 9 billion, resulting in a stock price of about $112 a share, from $14. A scan of GE’s peers shows stock prices roughly between $100 and $200 a share and share counts in the hundreds of millions. GE also sold its jet-leasing business to AerCap and financial forecasts for 2021.
4. Biden to Sign Third Stimulus Package Into Law Friday, With Checks Following Soon — The House approved the bill Wednesday by a vote of 220-211, with all but one Democrat, Maine’s Jared Golden, supporting the bill and all Republicans opposing it. The $1,400 stimulus checks will start arriving this month and will not include Biden’s signature. The bill also extends supplemental federal unemployment benefits and provides $350 billion in aid to state and local governments. A proposed increase in the federal minimum wage didn’t make it into the final bill. Biden also said Wednesday that the U.S. plans to buy 100 million more doses of Johnson & Johnson’s one-shot vaccine and that it will share any surplus with the rest of the world. The U.S. is also giving $4 billion to an international program aimed at vaccinating the poorest countries.
5. Moderna Tests Booster Aimed at South African Variant on First Human — Moderna has started giving booster doses using a formula aimed specifically at targeting a coronavirus variant first found in South Africa. The variant appears to be 50% more contagious than earlier forms of the virus and Moderna has said its current vaccine is six times less effective at neutralizing it.
Pfizer, whose vaccine was shown to be two-thirds less potent against the same strain in a study published in the New England Journal of Medicine in February, is studying the effectiveness of giving patients a third dose of its existing vaccine. A study released this week found the Pfizer vaccine was highly effective against a strain first found in Brazil. The Food and Drug Administration recently revised its rules to let pharmaceutical companies run smaller trials to shorten the time for modified vaccines to get authorized for widespread use, which could shave months off the approval process.

The week ahead — Economic data from Econoday.com:

“It’s particularly important in this vein to note the extent to which economic expectations can be self-fulfilling. If people (and companies) believe the future will be good, they’ll spend more and invest more . . . and the future will be good, and vice versa. It’s my belief that most companies concluded that the Crisis of 2008 wouldn’t be followed by a V-shaped recovery, as had been the rule in the last few recessions. Thus they declined to expand factories or workforces, and the resulting recovery was modest and gradual in the U.S. (and even more anemic elsewhere).”
― Howard Marks

1. Democrats Can Get Stimulus Signed Into Law by March 14 — the Senate will introduce its version of President Joe Biden’s $1.9 trillion stimulus plan as soon as Wednesday, kicking off the final push to get the legislation signed into law before federal unemployment benefits expire for millions of Americans. Senate Majority Leader Chuck Schumer (D, N.Y.) will present the bill—which includes $1,400 direct payments to most Americans, aid to state and local governments, and other spending measures—on the Senate floor. That starts the clock on 20 hours of debate followed by time for senators to introduce amendments and challenges. A floor vote could happen Friday morning, and is expected to fall along party lines with Vice President Kamala Harris casting the deciding vote in favor of the bill.
2. Biden Says U.S. Could Have Enough Vaccine Doses for Every American in May — President Joe Biden announced that the U.S. will have enough coronavirus vaccine doses for every American by the end of May thanks in part to Merck working with Johnson & Johnson to ramp up vaccine supplies after production delays caused the company to miss its initial target. The U.S. has a $1 billion contract with J&J for 100 million doses at a price of $10 per dose, about half of what it is paying for the Pfizer drug. J&J now expects to have 20 million doses ready by the end of March and 100 million by June.
3. Tighter Eligibility for Stimulus Payments Could Exclude 12 Million More Americans — unlike the House bill approved last week, which lets individuals earning up to $100,000 and married couples making $200,000 receive reduced payments, the Senate version will give nothing to individuals who make more than $80,000 or couples making more than $160,000. The change, which has Biden’s support, means as many as 12 million fewer adults will get checks, according to the Institute on Taxation and Economic Policy, and could shave $15 billion to $20 billion off the bill’s total cost, which must come in under $1.9 trillion.
4. 30-Year Mortgage Rate Tops 3% for First Time Since July — The average rate on a 30-year fixed-rate mortgage rose to 3.02%, mortgage-finance giant Freddie Mac said Thursday. It is the first time the rate on America’s most popular home loan has risen above 3% since July and the fifth consecutive week it has increased or held steady. Mortgage rates tend to move in the same direction as the yield on the 10-year Treasury, which has been rising. Treasury yields rise when investors feel confident enough in the economy to forgo safe-haven assets such as bonds for riskier ones including stocks.

The week ahead — Economic data from Econoday.com: