Here are five things you must know for Wednesday, Jan. 6:
1. — Nasdaq Futures Slide as Wall Street Bets Democrats Win Senate
Stock futures were mixed Wednesday as investors bet Democrats could win the U.S. Senate and as U.S.-China tensions again ratcheted higher.
Democrat Rev. Raphael Warnock beat Sen. Kelly Loeffler in Georgia, winning one of two Senate runoffs in the state. His victory puts the Senate majority within the Democratic party’s reach.
The race between Republican Sen. David Perdue and Democrat Jon Ossoff remains too early to call as votes were still being counted, according to the Associated Press.
Contracts linked to the Dow Jones Industrial Average rose 58 points and S&P 500 futures declined 13 points. Nasdaq futures dropped 263 points, or 2.06%, on concerns big technology companies could face tougher antitrust scrutiny under a Democrat-controlled Congress.
The yield on the benchmark 10-year U.S. Treasury note hit 1% for the first time since March.
The elections in Georgia will determine whether the Democrats take control of Congress and enable them to push the legislative agenda of President-elect Joe Biden.
A swing to the Democrats could lead to greater fiscal stimulus and higher taxes. Just one Republican win would give the GOP enough votes to block Biden from pursuing his more ambitious policies on trade, energy and security, according to analysts.
President Donald Trump, meanwhile, signed an executive order Tuesday banning transactions with eight Chinese apps, including Ant Group’s Alipay. China accused the U.S. on Wednesday of abusing its powers, saying its actions only harmed American consumers.
2. — Wednesday’s Economic Calendar
The U.S. economic calendar Wednesday includes the ADP National Employment Report for December at 8:15 a.m. ET, the PMI Composite Final for December at 9:45 a.m., Factory Orders for November at 10 a.m., Oil Inventories for the week ended Jan. 1 at 10:30 a.m. and minutes from the Federal Reserve’s meeting Dec. 15-16 at 2 p.m.
3. — Alibaba Reportedly Plans $5 Billion Bond Sale
Proceeds from the offering could reach $8 billion depending on investor response, one person close to the matter told Reuters. The company likely would use the funds for general corporate expenses.
The offering would come amid increased regulatory scrutiny of Alibaba co-founder Jack Ma’s empire from Chinese authorities.
Ma, who hasn’t been seen or heard from since November, drew the ire of Chinese President Xi Jinping with a speech in October that attacked the government’s role in blunting creativity and innovation in the tech sector. Since then, government officials have launched an antitrust investigation in Alibaba, and squashed initial public offering plans of its online banking subsidiary, Ant Group.
CNBC reported Tuesday that Ma wasn’t “missing,” in the sense that his location was unknown, but rather was “lying low” in terms of his public appearances in hopes that he can ride out the current government backlash.
American depositary receipts of Alibaba were down 1.71% in premarket trading Wednesday to $234.
4. — NYSE Could Reverse Course Again on China Telco Delistings
The New York Stock Exchange is considering reversing course a second time to delist three major Chinese telecommunications companies after Treasury Secretary Steven Mnuchin criticized the NYSE’s surprise decision to grant the companies a reprieve, Bloomberg reported, citing three people familiar with the matter.
The NYSE decision to keep the listings came as a surprise and sparked confusion among officials at the U.S. Treasury and State departments, and the National Security Council. The NYSE reversal also triggered exasperation that reached the highest levels of the Trump administration, Bloomberg reported.
Just last week, the NYSE said it would remove the shares to comply with a U.S. government order signed by President Trump that bars investments in 35 companies owned or controlled by the Chinese military. But on Monday the Big Board in a statement said “it no longer intends to move forward with the delisting action” following “consultation with relevant regulatory authorities.”
But on Tuesday, Bloomberg reported the exchange may proceed with the delistings after all.
China Mobile (CHL) – Get Report, China Telecom (CHA) – Get Report and China Unicom (CHU) – Get Report lost more than $30 billion in market value in the final weeks of 2020 as investors sold the stocks following Trump’s order. They shed as much as $12 billion more as their American depositary receipts tumbled Monday on the NYSE’s decision to delist them. Prices climbed Tuesday after the NYSE canceled the delisting, and moved lower again after Bloomberg’s story broke.
5. — Apple CEO Tim Cook Gets Big 2020 Pay Raise
Cook’s bonus had dropped 36% hit in 2019 when his pay package fell as revenue and profit declined tied to weaker iPhone sales, The Wall Street Journal reported.
The Journal reported that according to Apple’s proxy filing, Cook’s 2020 pay, excluding vested shares, totaled $14.8 million, including the cash bonus and a $3 million salary that didn’t change from the prior year.
Cook also had a total of $281.9 million in restricted stock that vested during the year.