The U.S. and China met in Alaska on Thursday, but instead of reset relations, it led to more bickering that the stock market is treating like the arguments between an old, married couple.
A U.S. team led by President Joe Biden’s Secretary of State Antony Blinken and a Chinese delegation met for the first time, and the meeting devolved into recriminations about human rights, business practices, and democracy.
Geopolitical tensions are no laughing matter, but investors are used to heightened tensions between the world’s two largest economies. China’s
is off 1.7%, but that is most likely a reaction to Thursday’s 3% drop in the
caused by increasing bond yields.
The muted stock reaction to fiery words shows investors weren’t really expecting the Biden administration to repeal tariffs and other measures instituted by former President Donald Trump. But they also believe the U.S. and China will settle into a reasonable working relationship.
The reality is both sides need each other. The U.S. is the largest consumer in the world. China is the largest producer.
As long as that’s the case, don’t expect a divorce.
*** Join Barron’s senior managing editor Lauren R. Rublin and deputy editor Ben Levisohn Monday at noon to discuss the outlook for financial markets, industry sectors, and individual stocks. Sign up here.
NFL Signs Media Agreements With Amazon, Walt Disney, Comcast
The National Football League signed long-term broadcast deals with the major networks. Streaming services are in on the action.
Among those paying for the rights to NFL games are
- The new deals include the usual televised games, but hash out online broadcasts too. Amazon Prime Video will have the rights as the exclusive home of Thursday Night Football. Disney’s ESPN+ will stream ABC and ESPN televised games. ViacomCBS’ Paramount+ and Fox’s Tubi will also offer games.
- ABC also rejoined the rotation for Super Bowl broadcasts. Aside from the rights, the new deals will allow the NFL to swap in better matchups for primetime broadcasts.
What’s Next: Most of the major changes won’t take effect until 2023. For now, sports fans and online gamblers may be focused on the March Madness basketball tournament. Oppenheimer analyst Jed Kelly estimates March Madness gross gaming revenue of between $101 million and $183 million.
Europe Resumes Using AstraZeneca Shots as France Forced Into New Lockdowns
The European Medicines Agency said in an eagerly-expected report on Thursday that the benefits of the Oxford/
Covid vaccine “continue to outweigh the risk of side effects” and that the jab “is not associated with an increase in the overall risk of blood clots.”
- Rollout of the vaccine will now resume in Germany, France, Italy, Spain and most of the other EU countries that had suspended use of the jab pending the EMA’s review. But Sweden and Denmark, as well as Norway (outside the EU) said they would need more time to review the report.
- The EMA added that “the vaccine may be associated with very rare cases of blood clots associated with thrombocytopenia,” but noted that “a causal link with the vaccine is not proven, but is possible and deserves further analysis.”
- The French government announced Thursday that the whole greater Paris region will be placed under strict lockdown, forcing President Emmanuel Macron to backtrack on his insistence that such strict measures could be avoided.
What’s Next: Even just a few days of suspension of the AstraZeneca vaccine have brought more delays to Europe’s vaccination campaigns, which can now resume. Whereas the U.K. has managed to vaccinate 40% of its population, that proportion is only 12% in the EU.
Biden Administration Nears Goal of Administering 100 Million Vaccines, Despite Snafus
President Joe Biden said his administration will reach its goal of 100 million vaccine shots administered in his first 100 days in office by Friday, several weeks ahead of his original goal. “We’re way ahead of schedule, but we’ve got a long way to go,” Biden said.
- Before Biden took office, 20 million shots had been administered in the U.S. As of Thursday afternoon, a total of 116 million shots, including 96 million since Inauguration Day, had been administered, according to data from the Centers for Disease Control and Prevention.
The rollout has faced production delays and calls to increase the administration’s initial goal of 1 million vaccinations a day. In February, shortfalls from
Johnson & Johnson
led Biden’s chief medical adviser, Dr. Anthony Fauci, to change his estimate for “open season” for vaccine eligibility for every adult from April to May.
- Dr. Fauci also locked horns Thursday with Sen. Rand Paul (R., Ky.) over masks during a Senate hearing. When asked by Paul if masks were “just theater,” Fauci said, “can I just state for the record that masks are not theater,” adding, “I totally disagree with you.”
What’s Next: Even as the average number of vaccinations has risen to 2.5 million a day, the 7-day average for new cases remains above 50,000 a day and new infections in 15 states have risen at least 10% since early March. Vaccination rates continue to lag behind among Blacks and Latinos as well.
—Janet H. Cho
What Dollar General’s Outlook Says About the Pandemic’s Winners
is one of the first companies that thrived during the peak of the pandemic to put a number on how its performance could falter during the recovery. While its year over year earnings rose 20% in the quarter ending in January, the discount retailer is already bracing investors for a disappointing year ahead.
- The company said it expects same-store sales for this fiscal year to fall 4% to 6%, a bigger drop than the 1.2% decline analysts estimated. Net sales will be flat or down 2%.
- “Compared to the previous stimulus rounds, which helped us, the economy is now opening up more. We are competing with other segments of the economy outside of retail for that share of wallet, so how much we get is uncertain,” Chief Financial Officer John Garratt said on an analyst call.
To help it better compete with larger rivals
Dollar General also said it is looking to open more than 1,000 new stores. Some of those stores will be as much as 30% larger than existing ones so it can offer a wider inventory of items, like meat and beauty products, along with more checkout stations.
What’s Next: Dollar General shares fell 4.7% to $179 on Thursday. The stock has fallen 15% year to date, but is still 25% higher than it was a year ago.
Supply Chain Issues Weigh on Nike Earnings
Investors couldn’t wait for Nike’s fiscal-third quarter earnings, with a number of analysts raising their estimates in the days leading up to it. But the athletic giant’s report disappointed on Thursday, sending shares lower in after-hours trading.
- Nike said it earned $1.4 billion, or 90 cents a share, on revenue that rose 3% year over year to $10.4 billion. Analysts were looking for per-share earnings of 76 cents on revenue of $11 billion.
- Those hoping for a swifter turnaround in its key North America market were likely disappointed to see a 10% decline in revenue there. North America online growth also cooled from triple digits in the prior quarter.
- Nike blamed supply chain issues—telegraphed ahead of the report—such as shipping delays and port congestion. Similar issues weighed on sales in Europe, the Middle East, and Africa.
What’s Next: Other sales data was more hopeful. Digital sales for the Nike brand surged 59% in the quarter, with its online business recording double-digit increases in all geographic regions. Nike Direct sales—part of efforts to sell to consumers rather than third-party retailers—climbed 20%. Sales in greater China jumped 51%.
Do you remember this week’s news? How well do you know your Wall Street history? Take our quiz below about this week’s news. Tell us how you did in an email to email@example.com.
1. Tesla CEO Elon Musk revealed an additional title for himself at the company this week in a 8-K filing with the Securities and Exchange Commission. What is his new title?
a. Master of EVs
c. Lord of Space
d. Khal Crypto
2. Zack Snyder’s Justice League made its debut on HBO Max Thursday. The superhero movie—featuring Wonder Woman, Superman, Batman and other heroes—also has a supersize running time. How long is the film?
a. 2 hours, 4 minutes
b. 3 hours, 20 minutes
c. 5 hours, 10 minutes
d. 4 hours, 2 minutes
3. On Monday, Volkswagen said it would build six electric-vehicle battery factories in Europe, an investment that allows the car maker to control its battery production. Volkswagen will also increase its stake in which battery start-up?
b. Solid Power
d. Sila Nanotechnologies
4. Ford offered its employees the option to work from home forever on Thursday. Meanwhile, Google said it would invest billions in existing offices and create three new offices, expanding its footprint in the U.S. to 19 states. Which of the following states will Google not have a presence in?
d. North Carolina
5. March Madness began Thursday. Which one of these teams is not competing in the NCAA Division I men’s basketball tournament?
a. The University of Connecticut
b. The University of Kansas
c. The University of Kentucky
d. The University of North Carolina at Chapel Hill
100 Years of Barron’s
6. The Covid-19-induced bear market of 2020 lasted 33 days (Feb. 19-March 23, S&P 500), the shortest bear market in U.S. history. Which was the second shortest, at 67 days?
—Zoe Szathmary and Kenneth G. Pringle
—Newsletter edited by Anita Hamilton, Stacy Ozol, Mary Romano, Matt Bemer, Ben Levisohn