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EUROPEAN MIDDAY BRIEFING - Stocks Charge Ahead as -2-

While the Omicron variant is still spreading across the continent, officials said the recent wave has reached a level at which travel restrictions may not help curb its footprint anymore.

   
 
 

Companies Prepare for Fallout From Cyberattacks Against Ukraine

Businesses including utilities, manufacturers and financial-services companies are bracing for potential spillover from cyberattacks against Ukraine, as U.S. officials warn of Russia-linked hacks that could ripple outward across borders and industries.

Many companies are examining their ties to Ukrainian businesses, as well as vendors with footprints in the country, as they shore up computer systems against digital campaigns that could accompany a Russian military advance into the country.

   
 
 

U.S. Plans Sanctions, Export Controls Against Russia if It Invades Ukraine

The U.S. is prepared to impose export controls on critical sectors of the Russian economy if Russian President Vladimir Putin invades Ukraine, and is working to soften market shocks if Russia withholds energy supplies in retaliation, officials said.

Taking a page out of the Trump administration playbook to pressure Chinese telecom giant Huawei Technologies Co., senior administration officials on Tuesday said the U.S. could ban the export to Russia of various products that use microelectronics based on U.S. equipment, software or technology.

   
 
 
   
 
 

GLOBAL NEWS

Fed Expected to Signal Rate Increases to Start in March

Federal Reserve officials are set to keep interest rates near zero Wednesday, at the conclusion of their two-day policy meeting, while likely signaling they are preparing to raise rates at their following gathering in mid-March.

The central bank is also poised to approve one final round of asset purchases and resume deliberations over how and when to reverse the pandemic-driven expansion of its $9 trillion securities portfolio later this year.

   
 
 

Derby's Take: Fed Likely to Use Job View in FOMC Statement to Tee Up March Rate Hike

The Federal Reserve will likely work to prepare markets for the start of interest rate increases by upgrading how it describes the job market in the policy statement to be released at the end of its monetary policy meeting Wednesday, economists say.

The forecasters believe that to tee up a widely expected March increase in the now near-zero federal-funds rate target range, the Federal Open Market Committee policy statement will likely move to say that the economy has achieved full employment. In the last FOMC statement from mid-December, the Fed said that the economy was still working to achieve that level.

   
 
 

Analysis: Why the Fed Is Unlikely to Start Raising Rates With a Half-Point Increase

Market speculation around whether the Federal Reserve might raise interest rates by a half percentage point, instead of a quarter point, at its March meeting has picked up in recent weeks. Hedge-fund manager Bill Ackman called for such a "shock and awe" move recently, as did Henry Kaufman, the former chief economist at Salomon Brothers.

While the Fed isn't likely to rule out a half-percentage-point increase as an instrument in its tool kit, the central bank is unlikely to begin any sequence of rate rises with such a move, in part because it would essentially concede that it had made a policy mistake.

   
 
 

IMF Urges El Salvador to Ditch Bitcoin's Legal Tender Status

The International Monetary Fund urged El Salvador to strip bitcoin of its status as legal tender because of its large risks to financial stability, the latest twist in protracted talks between the fund and the highly indebted Central American country to secure a $1.3 billion loan.

The fund said on Tuesday that El Salvador's recent adoption of bitcoin as a national currency also creates risks for financial integrity, consumer protection and fiscal liabilities in a tiny economy with limited government resources.

   
 
 

Chip Shortage Leaves U.S. Companies Dangerously Low on Semiconductors, Report Says

WASHINGTON-U.S. manufacturers and other companies that use semiconductors are down to less than five days of inventory for key chips, the Commerce Department said Tuesday, citing the results of a new survey.

In 2019, companies typically maintained 40 days of inventory for key chips, according to the Commerce Department report. Now for the same chips-defined as 160 products that companies identified as being the most challenging to acquire-companies are operating with fewer than five days of inventory, the report said.

   
 
 

Imports Drop at Southern California Ports as Ship Backup Grows

Imports are tumbling at the nation's busiest container port complex even as the backup of ships waiting to unload there breaks records.

   
 
 

House Speaker Nancy Pelosi to Run for Re-Election, Doesn't Address Leadership Plans

WASHINGTON-House Speaker Nancy Pelosi (D., Calif.) said she plans to seek re-election this fall, but gave no indication of whether she wants to remain her party's leader, as Democrats face an uphill battle to keep control of the chamber in the midterms elections.

To win backing for the speakership in 2018, Mrs. Pelosi made a deal with party lawmakers that she would serve as speaker for just two more terms. Since then, she has declined to talk about whether she plans to step aside. While she has the firm backing of her caucus, many have openly called for a change in leadership.

   
 
 

New York Mask Mandate Reinstated in State Appeal

An appellate judge reinstated New York's indoor mask mandate on Tuesday after the state Health Department appealed a ruling that struck down pandemic-related requirements for schools and businesses.

Judge Robert Miller stayed a Monday ruling that the state's requirements for face coverings, adopted at the start of the school year and extended in December to cover all indoor public places, were unconstitutional because they didn't relate to a specific law regarding Covid-19.

   
 
 

Biden Administration Withdraws Emergency Covid-19 Vaccine Mandate After Supreme Court Blocks Rule

The Biden administration is withdrawing an emergency private-sector vaccination mandate against Covid-19 after the Supreme Court blocked its implementation.

The Occupational Safety and Health Administration said Tuesday it would continue to work on imposing the vaccination requirement through the regular-and lengthier-rule-making process.

   
 
 

Covid-19 Deaths in the U.S. Top 2,100 a Day, Highest in Nearly a Year

Covid-19 deaths in the U.S. have reached the highest level since early last year, eclipsing daily averages from the recent Delta-fueled surge, after the newer Omicron variant spread wildly through the country and caused record-shattering case counts.

The seven-day average for newly reported Covid-19 deaths reached 2,191 a day by Monday, up about 1,000 from daily death counts two months ago, before Omicron was first detected, data from Johns Hopkins University show. While emerging evidence shows Omicron is less likely to kill the people it infects, because the variant spreads with unmatched speed the avalanche of cases can overwhelm any mitigating factors, epidemiologists say.

   
 
 

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This article is a text version of a Wall Street Journal newsletter published earlier today.

 

(END) Dow Jones Newswires

January 26, 2022 05:54 ET (10:54 GMT)

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