U.S. President Joe Biden meets with Chinese President Xi Jinping during a virtual summit from the Roosevelt Room of the White House on Nov. 15, 2021.
AFP via Getty Images
On the surface, the virtual meeting between President Joe Biden and China’s Xi Jinping was a bit of a nonevent. There were no major breakthroughs to speak of and the leaders of the world’s two largest economies traded warnings over Taiwan as expected.
The rhetoric around the self-ruled island wasn’t so much ramped up but reiterated by both sides. Biden underscored that the U.S. “strongly opposes unilateral efforts to change the status quo or undermine peace and stability across the Taiwan Strait,” the White House said. Xi warned “drastic measures” would follow if separatist forces of Taiwan independence “cross the red line.”
Despite that, the overall tone appeared to be one of “mutual respect, peaceful coexistence and win-win cooperation.” Those words came from the official Xinhua News Agency, summarizing Xi’s remarks. The two countries laid the groundwork for increased cooperation with a surprise joint agreement on climate change last week and continued in that vein Monday night.
Progress on that front is good but concrete developments will need to follow eventually. One such win may be ending former President Donald Trump’s trade war with China once and for all.
U.S. tariffs on around $370 billion worth of annual Chinese imports remain in place. JPMorgan analysts see a “potentially compelling case” for easing those tariffs. Lower tariffs would alleviate inflation concerns, easing both supply-chain disruptions and the costs of doing business, they said. In turn that would help offset the higher costs being passed through to consumers.
Such a move would certainly achieve the sort of “win-win cooperation” Xi was eager to highlight in the virtual meeting.
Inflation is becoming a major problem for Biden but, if he plays his cards right, he may have a ready-made solution.
—Callum Keown
*** Join MarketWatch reporter Jillian Berman and Barron’s editorial director of investing and asset management Beverly Goodman today at noon as they discuss the challenges the student loan system may face moving millions of borrowers back into repayment and share some tips for borrowers preparing for that first bill. Sign up here.
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Rising Covid Cases Prompt Arguments for Expanding Boosters
With Covid-19 cases rising again, the Biden administration may seek regulatory approval for all adults to receive booster doses. California, Colorado, New Mexico, and West Virginia already allow that. New York City health officials allow boosters for adults who ask for them.
- Pfizer asked the Food and Drug Administration to extend booster access to all adults. Boosters are currently authorized for those over 65, with underlying medical conditions or who live or work in higher-risk settings.
- U.S. Surgeon General Dr. Vivek Murthy told Fox the FDA will closely examine the data to make sure booster shots are safe and effective for the people who aren’t currently eligible before making a decision.
- Cyprus on Monday began offering boosters to all adults. Austria announced a 10-day lockdown for all unvaccinated residents aged 12 and older. Australia announced a lockdown for the unvaccinated, and the Netherlands has a partial lockdown.
- U.K. Prime Minister Boris Johnson warned another lockdown is possible this winter, urging people to get vaccinated and get their booster shots. The U.K. is expanding its booster program to people in their 40s, lowering the age limit from 50.
What’s Next: Expanded booster authorization could lift the stocks of vaccine makers Moderna , BioNTech , and Novavax , which have each declined after Merck and Pfizer announced promising data from trials of their antiviral Covid-19 pills.
—Janet H. Cho
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Biden to Take Infrastructure Victory Lap After Signing
Biden on Monday signed the $1 trillion bipartisan infrastructure act, the largest federal infrastructure investment in more than a decade and the first part of his two-pronged economic agenda. House Democrats aim to pass the second part—the $1.85 trillion social spending package—this week.
- The package, with funding to build and repair roads, bridges, ports, broadband, and other infrastructure, passed the House with support from 13 Republicans despite opposition by six Democrats. Nineteen Republicans approved it in the Senate with all 50 Democrats.
- About $550 billion more than projected federal spending, the law will be funded several ways, including more than $200 billion in unspent coronavirus relief funds; about $50 billion from delayed Medicare rebates; and $50 billion from unused unemployment insurance funds.
- Before the passage of the infrastructure plan, Tesla vehicles no longer qualified for any federal subsidies for electric-vehicle owners. Under the new package, Tesla buyers will typically qualify for about an $8,000 price subsidy.
- State transportation agencies will see the first highway funds by early December, said Jeff Davis, senior fellow at the Eno Center for Transportation, The Wall Street Journal reported. The administration will accept applications for $475 million to clear supply-chain backlogs within 90 days.
What’s Next: Biden will talk about the bipartisan infrastructure bill at the NH 175 bridge slated for repair in Woodstock, New Hampshire, today and at the General Motors
’ Factory Zero electric-vehicle assembly plant in Detroit on Wednesday.
—Janet H. Cho
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Elon Musk Sells His Last House and More Tesla Stock
Tesla and SpaceX CEO Elon Musk has found a buyer for his last remaining residential property, a 16,000-square-foot, century-old estate in Hillsborough, California, listed for nearly $32 million, Mansion Global reported. Details about the buyer or the selling price aren’t yet public.
- Musk first announced the sale on Twitter on June 14, saying: “Decided to sell my last remaining house. Just needs to go to a large family who will live there. It’s a special place.” He listed it at $37.5 million, later cutting that to $31.99 million.
- The 47-acre European-style estate, known as Guignécourt, has seven bedrooms, nine and a half bathrooms, a library with leather walls and a fireplace, a gourmet kitchen with room for a personal chef, a pool and pavilion, a three-car garage and an eight-car carport.
- Musk sold four Los Angeles-area homes for a combined $62.5 million last year, after tweeting plans to pursue the multiplanetary life. “Don’t need cash,” he wrote. “Devoting myself to Mars and Earth,” adding possessions just “weigh you down.”
- The billionaire sold another $930 million in Tesla stock, according to filings Monday with the Securities and Exchange Commission. Musk has sold close to $8 billion worth of stock since Nov. 8, a day after his Twitter poll on whether he should sell 10% of his stake.
What’s Next: Musk, whose estimated wealth of $279 billion makes him the world’s wealthiest man, has criticized plans by Biden and Vermont Sen. Bernie Sanders to tax billionaires.
—Janet H. Cho
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Electric-Vehicle Makers Notch Stock Gains as Orders Roll In
Lucid , the electric-vehicle start-up, reported more data on orders that indicate it could be on track to reach the $1.7 billion in vehicle sales Wall Street expects for next year, sending its shares higher Monday despite missing estimates for the third quarter.
- As of the end of the third quarter, Lucid had reservations for 13,000 cars. The order total has risen to 17,000 reservations since then and the company said it could reach 20,000 orders next year.
- Lucid is making deliveries, allowing it to book sales. It said demand for the Lucid Air is “significant” as it boosts production at its factory in Arizona. It won the 2022 MotorTrend car of the year designation.
- Investors reacted favorably to EV maker Rivian Automotive ’s initial public offering, last week, with shares popping from their $78 IPO price to more than $149 on Monday.
What’s Next: Rivian’s sales in 2023 could reach $10 billion based on the company’s production plans. Monday’s 14% stock gain adds up to $15 billion in market value, more than the market values of Nikola , Fisker , Lordstown Motor , and Workhorse , combined.
—Liz Moyer
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U.K. Labor Market Strength Raises Likelihood of Rate Increase
The strength of the U.K. labor market, as illustrated by new data released Tuesday, has raised the likelihood that the Bank of England could be next month the first major Western central bank to raise interest rates after the Covid-19 pandemic.
- Some 160,000 jobs were created between September and October, the U.K’s Office for National Statistics said. The performance is all the more remarkable given that it came the month after the end of a national wage-subsidy program designed to help businesses and workers throughout the pandemic.
- The unemployment rate fell to 4.3% in the third quarter of the year, the ONS said—more than economists had anticipated—and the employment rate came in at 75.4% in the same three months.
- The data release came the day after Bank of England governor Andrew Bailey insisted that labor market conditions were critical in any central bank decision on interest rates, adding that unemployment in the U.K. was now “lower than [the BoE’s] forecasts would imply.”
- The pound was up against both the euro and the dollar Tuesday morning on the news. The Bank of England earlier this month surprised analysts by keeping its key rate at its current 0.1%, after Bailey had seemed to strongly suggest that a hike was on the agenda.
What’s Next: “The absence of evidence of recent labor market weakness reinforces the likelihood of a policy tightening next month,” Investec economist Philip Shaw wrote. After this month’s miss, Bailey may in any case pay more attention to the way he guides markets ahead of the Dec. 16 meeting.
—Pierre Briançon
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—Newsletter edited by Liz Moyer, Camilla Imperiali, Steve Goldstein, Callum Keown
