An otherwise quiet day in Asia has sparked to life as the president announced from Florida that he had signed the omnibus Pandemic Relief/Government Funding bill into law. The headline should provide a welcome boost to sentiment in Asia, which was likely to waiver today as Chinese authorities over the weekend told Ant Financial to go back to its core payments business.
This comes after China officials initiated an investigation into Jack Ma’s Alibaba over possible monopolistic behaviour last week. Over the weekend the veiled Ant Financial breakup threat threatened to overwhelm the 15.50% YoY increase in China Industrial Profits released over the weekend.
A certain amount of bluff and horse-trading appears to have gone on to get the President’s signature on the omnibus bill. The president let unemployment benefits lapse on Saturday night, but by signing today (Sunday US time), will restart them in return with a week’s gap and avoid a US government shutdown on Tuesday. Both the Financial Times and Bloomberg are saying that the president has claimed that the GOP Senators and the Democrat-controlled House will vote on increasing the USD600 payment. Additionally, Section 230 (the social media content liability shield) would be repealed, and an investigation in voter fraud commenced.
Whether any of that passes muster with the Senate and House, is, of course, an entirely different matter. But the possibility of an increase in direct payments above USD600 should be a market positive on top of the boost received from the president’s signature. With one eye on the Georgia Senate run-off on January 5th, politicians from both sides may also feel slightly more generous than a week ago.
The bashing big tech is a theme to keep an eye on. China is busily clipping Alibaba and Tencent’s wings at the moment; the Russian Duma has just passed a bill doing much the same for foreign social media if it wishes. If the US president is to be believed, repeal of Section 230 is on the way in the US. I have stated before that reining in big tech is perhaps the one thing that both Republicans and Democrats agree on. Big tech’s Standard Oil moment in 2021 could be getting closer to reality and is a theme that readers should be watching closely next year.
With the week shortened by holidays worldwide, Australia, New Zealand and the United Kingdom are closed today, for example, the data calendar is thin in Asia. The week’s highlight in Asia is likely to be China’s official PMI release on Thursday, along with US Initial Jobless Claims. Otherwise, politics and Covid-19 will dominate the financial market landscape. Next Tuesday’s double Senate run-off in Georgia, and potentially, stimulus votes this week, will dominate the airwaves. Blissfully, polling predictions have been absent from the media regarding the Georgia vote next week; I suspect our luck will run out as this week progresses, however.