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Business

Brace for a volatile 2022, but cling to this tech stalwart when the storm comes, says investment adviser

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The pain is piling up for equity investors after the long U.S. holiday weekend, with bond yields at levels not seen since early 2020, and oil prices tapping 2014 highs.

The pace of Federal Reserve monetary policy tightening amid the highest inflation in about 40 years, a bumpy start to the corporate earnings reporting season and pandemic uncertainties are just a few things on the worry list. Technology stocks
COMP,
-1.12%
are set to take the biggest hit on Tuesday, as a rapid rise in short term interest rates tends to make their future cash flows less valuable.

While a Deutsche Bank chart (below) reveals more tech-bubble worries, our call of the day makes a case for one of the biggest tech stalwarts, Apple
AAPL,
-0.43%,
saying the iPhone maker has an ace in the hole that few are paying attention to.

That call comes from investment adviser Wedgewood Partners, who kick off their fourth-quarter 2021 client letter with a warning about market volatility for 2022, triggered by central bankers who are about to usher in some market chaos by pulling the plug on years of cheap money. Even Chinese President Xi Jinping was heard warning the Fed not to hike interest rates at a virtual Davos on Tuesday.

However, the adviser also sees opportunities ahead as selling picks up speed, and they plan to stick to Apple, which they’ve owned for 16 years.

While Wedgewood said it couldn’t foresee the many products the company unveiled, “we did know that Apple’s vertically integrated [software and hardware] product development strategy was unique and extremely capable of creating products and experiences that customers thought worthwhile enough to spend growing amounts of time and money on,” said the adviser.

Today, that strategy remains intact, but more important Apple is commanding a key new realm, having developed over a dozen custom processors and integrated circuits, since launching its “A-series” processors. For example, one it produced in 2017 provided the iPhone X with enough power to operate FaceID 3-D algorithms, used to unlock phones and make digital payments.

“Apple has effectively created a semiconductor business that rivals and even surpasses some of the most established semiconductor-focused businesses in the industry,” said Wedgewood. “Apple continues to differentiate through vertical integration, which has been a hallmark of Apple’s long-term strategy to grow and capture superior profitability. It is difficult to predict what new products will be unveiled; however, we think this strategy should continue to serve
shareholders quite well.”

Other top positions recommended by Wedgewood include telecom group Motorola
MSI,
-1.73%,
another tech stalwart Microsoft
MSFT,
-0.23%
and retailer Tractor Supply
TSCO,
-1.14%.

Here’s a final comment from Wedgewood about the stock storm it sees brewing. “The graphic below reminds us that when speculation reigns, markets can go far higher than what seems sober,” but when they fall “markets will repeat their long history of falling faster and further than what seems sober.”


Wedgewood Partners

“Long term investors should root for such downside. Such times are opportunities to improve portfolios. Our pencils are sharpened for opportunities as Mr. Market serves them up.”

The markets

Microsoft shares are slipping after the tech group confirmed it will buy Activision Blizzard
ATVI,
+27.39%
in a $68.7 billion cash deal. The gaming group’s shares are flying, along with those of rival Electronics Arts
EA,
+6.72%.

Goldman Sachs
GS,
-7.72%
added to a disappointing batch of bank results from last week, with shares down as earnings came up short, with Charles Schwab
SCHW,
-4.29%
also falling on gloomy results. Kinder Morgan
KMI,
-0.14%
and Alcoa
AA,
-1.43%
are still to come.

Airbnb shares
ABNB,
-2.49%
are slumping after ratings and target cut from an analyst who sees multiple headwinds and too-few catalysts.

The New York Empire state manufacturing index for January fell well short of expectations. A National Association of Home Builders index for the same month is still ahead.

An unpublished study by an Israeli hospital showed second Pfizer
PFE,
-1.78%
-BioNTech
BNTX,
-7.77%
or Moderna
MRNA,
-4.70%
boosters aren’t halting omicron infections. Separately, Moderna’s CEO Stephane Bancel said his company is working on a combined flu/COVID booster, while White House chief medical advise Dr. Anthony Fauci, said it’s too soon to tell if omicron will bring us out of the pandemic.

Another study says COVID infections are turning children into fussy eaters due to parosmia disorders that distort their sense of smell. And China state media says packages from the U.S. and Canada had helped spread omicron, as Hong Kong gets ready to cull thousands of hamsters.

An airline lobby group is warning of “chaos” for U.S. air travelers due to 5G services rolling out this month, in a letter signed by big carriers, UPS
UPS,
-1.55%
and FedEx
FDX,
-1.39%.

Larry Fink, chairman and chief executive of BlackRock
BLK,
-1.72%
said investors need to know where company leaders stand on societal issues.

Retailer Walmart 
WMT,
-1.28%
is looking at creating its own cryptocurrency and nonfungible tokens, according to U.S. patent filings.

The markets

Uncredited

The Nasdaq Composite
COMP,
-1.12%
is sprinting ahead with losses, with the Dow
DJIA,
-1.43%
and S&P 500
SPX,
-1.24%
also lower Tuesday led by those for the Nasdaq-100
NQ00,
-1.28%
as bond yields
TMUBMUSD10Y,
1.848%

TMUBMUSD02Y,
1.034%
surge across the curve. Oil prices
BRN00,
+1.06%

CL00,
+1.56%
are surging after Iran-backed Houthi rebels launched a deadly drone attack on a key oil facility in Abu Dhabi. Goldman Sachs also predicted Brent could top $100 a barrel in 2023, while the OPEC left its 2022 global oil-demand forecast unchanged.

Losses spread to Asian
NIK,
-0.27%
and Europe stocks
SXXP,
-0.77%,
with a key German bund yields
TMBMKDE-10Y,
-0.012%
about to turn positive for the first time in three years.

The chart

A January survey of more than 500 investors polled by Deutsche Bank shows a slightly gloomier mood. For example, they are more bearish:


Uncredited

Many, especially those over 34, think tech shares are in a bubble:


Uncredited

And they continue to see inflation as the biggest risk to markets, but are also fretting a more aggressive Fed:


Uncredited

Here are the top stock tickers on MarketWatch as of 6 a.m. Eastern Time.

Ticker Security name
TSLA,
+1.47% 		Tesla
GME,
-5.61% 		GameStop
AMC,
-6.32% 		AMC Entertainment
BBIG,
+29.75% 		Vinco Ventures
NIO,
-0.71% 		NIO
AAPL,
-0.43% 		Apple
CENN,
-4.72% 		Cenntro Electric Group
NVDA,
-1.57% 		Nvidia
BABA,
-0.85% 		Alibaba
NVAX,
-4.04% 		Novavax
Random reads

Tulsa pastor apologizes for wiping his saliva on a man’s face during a sermon.

The high environmental cost of your beloved fish-oil pills.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

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Business

Get ready for the climb. Here’s what history says about stock-market returns during Fed rate-hike cycles.

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Bond yields are rising again so far in 2022. The U.S. stock market seems vulnerable to a bona fide correction. But what can you really tell from a mere two weeks into a new year? Not much and quite a lot.

One thing feels assured: the days of making easy money are over in the pandemic era. Benchmark interest rates are headed higher and bond yields, which have been anchored at historically low levels, are destined to rise in tandem.

Read: Weekend reads: How to invest amid higher inflation and as interest rates rise

It seemed as if Federal Reserve members couldn’t make that point any clearer this past week, ahead of the traditional media blackout that precedes the central bank’s first policy meeting of the year on Jan. 25-26.

The U.S. consumer-price and producer-price index releases this week have only cemented the market’s expectations of a more aggressive or hawkish monetary policy from the Fed.

The only real question is how many interest-rate increases will the Federal Open Market Committee dole out in 2022. JPMorgan Chase & Co.
JPM,
-6.15%
CEO Jamie Dimon intimated that seven might be the number to beat, with market-based projections pointing to the potential for three increases to the federal funds rate in the coming months.

Check out: Here’s how the Federal Reserve may shrink its $8.77 trillion balance sheet to combat high inflation

Meanwhile, yields for the 10-year Treasury note yielded 1.771% Friday afternoon, which means that yields have climbed by about 26 basis points in the first 10 trading days to start a calendar year, which would be the briskest such rise since 1992, according to Dow Jones Market Data. Back 30 years ago, the 10-year rose 32 basis points to around 7% to start that year.

The 2-year note
TMUBMUSD02Y,
0.960%,
which tends to be more sensitive to the Fed’s interest rate moves, is knocking on the door of 1%, up 24 basis points so far this year, FactSet data show.

But do interest rate increases translate into a weaker stock market?

As it turns out, during so-called rate-hike cycles, which we seem set to enter into as early as March, the market tends to perform strongly, not poorly.

In fact, during a Fed rate-hike cycle the average return for the Dow Jones Industrial Average
DJIA,
-0.56%
is nearly 55%, that of the S&P 500
SPX,
+0.08%
is a gain of 62.9% and the Nasdaq Composite
COMP,
+0.59%
has averaged a positive return of 102.7%, according to Dow Jones, using data going back to 1989 (see attached table). Fed interest rate cuts, perhaps unsurprisingly, also yield strong gains, with the Dow up 23%, the S&P 500 gaining 21% and the Nasdaq rising 32%, on average during a Fed rate hike cycle.

Dow Jones Market Data

Interest rate cuts tend to occur during periods when the economy is weak and rate hikes when the economy is viewed as too hot by some measure, which may account for the disparity in stock market performance during periods when interest-rate reductions occur.

To be sure, it is harder to see the market producing outperformance during a period in which the economy experiences 1970s-style inflation. Right now, it feels unlikely that bullish investors will get a whiff of double-digit returns based on the way stocks are shaping up so far in 2022. The Dow is down 1.2%, the S&P 500 is off 2.2%, while the Nasdaq Composite is down a whopping 4.8% thus far in January.

Read: Worried about a bubble? Why you should overweight U.S. equities this year, according to Goldman

What’s working?

So far this year, winning stock market trades have been in energy, with the S&P 500’s energy sector
SP500.10,
+2.44%

XLE,
+2.35%
looking at a 16.4% advance so far in 2022, while financials
SP500.40,
-1.01%

XLF,
-1.04%
are running a distant second, up 4.4%. The other nine sectors of the S&P 500 are either flat or lower.

Meanwhile, value themes are making a more pronounced comeback, eking out a 0.1% weekly gain last week, as measured by the iShares S&P 500 Value ETF
IVE,
-0.14%,
but month to date the return is 1.2%.

See: These 3 ETFs let you play the hot semiconductor sector, where Nvidia, Micron, AMD and others are growing sales rapidly

What’s not working?

Growth factors are getting hammered thus far as bond yields rise because a rapid rise in yields makes their future cash flows less valuable. Higher interest rates also hinder technology companies’ ability to fund stock buy backs. The popular iShares S&P 500 Growth ETF
IVW,
+0.28%
is down 0.6% on the week and down 5.1% in January so far.

What’s really not working?

Biotech stocks are getting shellacked, with the iShares Biotechnology ETF
IBB,
+0.65%
down 1.1% on the week and 9% on the month so far.

And a popular retail-oriented ETF, the SPDR S&P Retail ETF
XRT,
-2.10%
tumbled 4.1% last week, contributing to a 7.4% decline in the month to date.

And Cathie Wood’s flagship ARK Innovation ETF
ARKK,
+0.33%
finished the week down nearly 5% for a 15.2% decline in the first two weeks of January. Other funds in the complex, including ARK Genomic Revolution ETF
ARKG,
+1.04%
and ARK Fintech Innovation ETF
ARKF,
-0.99%
are similarly woebegone.

And popular meme names also are getting hammered, with GameStop Corp.
GME,
-4.76%
down 17% last week and off over 21% in January, while AMC Entertainment Holdings
AMC,
-0.44%
sank nearly 11% on the week and more than 24% in the month to date.

Gray swan?

MarketWatch’s Bill Watts writes that fears of a Russian invasion of Ukraine are on the rise, and prompting analysts and traders to weigh the potential financial-market shock waves. Here’s what his reporting says about geopolitical risk factors and their longer-term impact on markets.

Week ahead

U.S. markets are closed in observance of the Martin Luther King Jr. holiday on Monday.

Read: Is the stock market open on Monday? Here are the trading hours on Martin Luther King Jr. Day

Notable U.S. corporate earnings

(Dow components in bold)
TUESDAY:

Goldman Sachs Group
GS,
-2.52%,
Truist Financial Corp.
TFC,
+0.96%,
Signature Bank
SBNY,
+0.07%,
PNC Financial
PNC,
-1.33%,
J.B. Hunt Transport Services
JBHT,
-1.04%,
Interactive Brokers Group Inc.
IBKR,
-1.22%

WEDNESDAY:

Morgan Stanley
MS,
-3.58%,
Bank of America
BAC,
-1.74%,
U.S. Bancorp.
USB,
+0.09%,
State Street Corp.
STT,
+0.32%,
UnitedHealth Group Inc.
UNH,
+0.27%,
Procter & Gamble
PG,
+0.96%,
Kinder Morgan
KMI,
+1.82%,
Fastenal Co.
FAST,
-2.55%

THURSDAY:

Netflix
NFLX,
+1.25%,
United Airlines Holdings
UAL,
-2.97%,
American Airlines
AAL,
-4.40%,
Baker Hughes
BKR,
+4.53%,
Discover Financial Services
DFS,
-1.44%,
CSX Corp.
CSX,
-0.82%,
Union Pacific Corp.
UNP,
-0.55%,
The Travelers Cos. Inc. TRV, Intuitive Surgical Inc. ISRG, KeyCorp.
KEY,
+1.16%

FRIDAY:

Schlumberger
SLB,
+4.53%,
Huntington Bancshares Inc.
HBAN,
+1.73%

U.S. economic reports

Tuesday

  • Empire State manufacturing index for January due at 8:30 a.m. ET
  • NAHB home builders index for January at 10 a.m.

Wednesday

  • Building permits and starts for December at 8:30 a.m.
  • Philly Fed Index for January at 8:30 a.m.

Thursday

  • Initial jobless claims for the week ended Jan. 15 (and continuing claims for Jan. 8) at 8:30 a.m.
  • Existing home sales for December at 10 a.m.

Friday

Leading economic indicators for December at 10 a.m.

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Business

After Two Weeks of Flight Cancellations, Airlines Assess What Went Wrong

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At JetBlue Airways Corp., executives felt confident coming into the Christmas season. The airline had flown through Thanksgiving week with hardly any hiccups.

Then Covid-19’s Omicron variant arrived. With its headquarters in New York, which leads the country in new case counts, JetBlue was quickly overwhelmed. Daily sick calls more than quadrupled. On Dec. 21, JetBlue canceled no flights. Four days later, on Christmas Day, it scrapped 12% of its schedule.

“Because of the exponential increase, you get to a point where you exhaust all your available reserves,” Chief Executive Robin Hayes said.

Airlines are struggling through one of the most severe and persistent mass-cancellation events of the past decade, according to data compiled by FlightAware. U.S. Covid-19 infections surged too quickly for carriers to manage without upending holiday travel, wreaking havoc on already-stretched airline workforces. Now carriers are assessing how to better manage what could continue to be a difficult period, at least for the next few weeks.

Airlines scrapped more than 3,000 U.S. flights and delayed more than 5,000 on Monday. The new wave of cancellations and delays comes as the surge in Covid-19 infections in the U.S. has left the airline industry stretched thin. Photo: Chandan Khanna/AFP/Getty Images

Airlines have canceled more than 1,000 daily U.S. flights for 13 straight days, including over 2,500 on Friday as another winter storm brought snow to Boston and New York.

Flights scrubbed from Christmas Eve through Jan. 6 exceeded 24,000, roughly 7% of the number airlines had planned to fly, according to flight-tracking service FlightAware.

For airlines, the upheaval of the pandemic is heading into a new phase. Unlike in early 2020, when terrified passengers canceled trips in droves, new variants dent but don’t decimate appetite for travel. But airlines are still rebuilding their operations. The twin challenges of rising numbers of employees calling out sick after being infected or exposed to Covid-19, and a series of severe winter storms that hit major hubs from Seattle to Chicago to Washington, D.C., created the perfect conditions for travel chaos.

It became clear that a problem was brewing early in the week of Christmas, said

Sara Nelson,

president of the Association of Flight Attendants-CWA.

“Thanksgiving went off without a hitch. We had two things going for us: We didn’t have Omicron, and we didn’t have any winter storms,” she said. “No one saw Omicron coming.”

The trouble spiraled as more workers became infected. “I was getting notices that entire crews were testing positive and they’re out of the country, in a location where they don’t have other crews. There’s no way to get that aircraft back,” Ms. Nelson said.

A check-in line at Seattle-Tacoma International Airport on Dec. 27.



Photo:

LINDSEY WASSON/REUTERS

Delta Air Lines Inc.

DAL 3.63%

was the first to flag the potential for disruption. Chief Executive

Ed Bastian,

along with the airline’s chief health officer and a medical adviser, asked the director of the Centers for Disease Control and Prevention on Dec. 21 to consider halving its recommended isolation period for fully vaccinated people who come down with breakthrough Covid-19 infections. They cited potential workforce shortages and new information about the Omicron variant. JetBlue followed with its own letter a day later.

Airlines had been under pressure from both travelers and lawmakers to deliver a smooth holiday season after meltdowns last summer and fall. Carriers including

Southwest Airlines Co.

LUV 3.25%

and

American Airlines Group Inc.

AAL 4.23%

at times struggled to maintain the buffer needed to quickly recover from storms or other disruptions, resulting in thousands of canceled flights.

Delta and

United Airlines Holdings Inc.

UAL 3.53%

were among the airlines facing the toughest problems in recent weeks. But almost no airline emerged completely unscathed.

“It has been one of the most difficult operational environments we’ve ever faced, and it forced us to cancel hundreds of flights as a result,” Delta’s chief customer experience officer,

Allison Ausband,

wrote to its frequent fliers on Jan. 5. Delta said Thursday that another round of storms headed for the Northeast would likely result in hundreds more cancellations.

Airlines aren’t alone in facing shortfalls as the Omicron variant rips through workforces. Public-transit services in New York and other cities have been disrupted. Retailers, bars and restaurants have had to temporarily close or curtail hours. School closures are at their highest point of the academic year as teachers call in sick.

Airlines operate under strict safety rules that can leave them little recourse but to cancel flights when they are short of staff in the right places. Pilots aren’t always trained to fly multiple aircraft types, for example. Regulations dictate how much rest crews must get between shifts. And employees such as flight dispatchers and mechanics can take on only so much extra work safely.

William Humphrey, 35 years old, had hoped to return on New Year’s Day from a family visit to Omaha, Neb. Citing weather, United canceled his flight and rebooked him for Jan. 2. He instead took a refund and switched to a quicker route with Delta, but that flight was canceled, too, as were two more of his Delta flights on Monday.

Dr. Humphrey, a resident physician working in Burlington, Vt., worried about finding coverage at his already short-handed office. On Tuesday, when a delay in his flight from Omaha to Detroit caused him to miss his connecting flight home to Burlington, he instead booked a flight to Albany, N.Y., rented a car, and drove the rest of the way, a three-hour trip.

“It seems like it’s getting more and more chaotic,” he said.

Waiting at Newark Liberty International Airport in Newark, N.J., on Monday.



Photo:

Christopher Occhicone/Bloomberg News

Airlines are preparing for the difficulties to last at least a few more weeks.

Alaska Air Group Inc.

ALK 2.94%

said Thursday that it will reduce Alaska Airlines departures by 10% through the end of January, citing an unprecedented rate of employee sick calls due to Omicron and the need to find a way to navigate Covid-19 as a “continued reality in our business and our world.”

“This will give us the flexibility and capacity needed to reset,” the airline said in a statement.

Southwest said that through Jan. 25 it will offer pay incentives, including up to double pay for working extra shifts, to employees such as flight attendants, customer-service representatives and mechanics. Southwest canceled over 2,500 flights this week, including more than 500 on Friday—17% of the flights it planned that day, according to FlightAware, as Omicron-related sick calls made it harder to recover from severe weather such as a major snowstorm that hit Washington, D.C., early this week.

An airline spokesman said Southwest is focusing on stabilizing its operation in the wake of winter storms while maintaining sufficient staffing as Covid-19 cases jump.

Carriers typically maintain higher staffing levels as a buffer against bad weather and other unexpected events over the busy holiday season—when demand runs high and staff callouts tend to be elevated even in the best of circumstances—said

Geoff Murray,

a partner at consulting firm Oliver Wyman. Airlines are still clamoring to hire more staff, he said, with regional carriers suffering a dearth of pilots and major carriers contending with training logjams.

SHARE YOUR THOUGHTS

What has been your recent experience traveling by air? Join the conversation below.

“There was not a lot of slack in the system,” Mr. Murray said. “The only alternatives the airlines had were to further cut back schedules going into the holiday. With the booking levels they were looking at, that would have been very difficult to do.”

At United, the number of pilots out sick, including those with Covid-19, those awaiting test results and those with other illnesses, climbed to about 900 this week from about 500 shortly before Christmas. And the number of pilots with active Covid-19 infections more than doubled to nearly 500 during that period, according to a spokesman for the union that represents United’s pilots.

The airline rushed to bump pay for pilots willing to take on extra trips, with negotiators working past midnight on Dec. 31 to craft an incentive agreement that offers up to triple pay for certain trips. United hasn’t shortened the 10-day quarantine period for pilots and flight attendants who become ill with Covid.

While airlines are still canceling flights, they will likely get a measure of relief from the typical travel slowdown following the winter holidays. Airlines tend to operate fewer flights in January than at the end of December. Airports screened 1.5 million passengers Thursday, pulling back from daily highs of more than 2 million at the height of the holiday rush, according to the Transportation Security Administration.

“I think we’ll start seeing more people coming back to work than calling out,” said JetBlue’s Mr. Hayes. “And I think that will allow us to recover very quickly from the middle of January onwards.”

A packed Miami International Airport on Jan. 3.



Photo:

chandan khanna/Agence France-Presse/Getty Images

—Stephen Council contributed to this article.

Write to Alison Sider at alison.sider@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

AT&T, Verizon Refuse FAA Request to Delay 5G Launch

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AT&T Inc.

T -0.73%

and

Verizon Communications Inc.

VZ -0.56%

rebuffed a request from federal transportation officials to delay the launch of new 5G wireless services but offered a counterproposal that would allow limited deployments to move forward this week.

The cellphone carriers said Sunday in a letter reviewed by The Wall Street Journal that they could further dim the power of their new 5G service for six months to match limits imposed by regulators in France, giving U.S. authorities more time to study more powerful signals’ effect on air traffic. The plan from the companies, which have said they plan to start service Wednesday, could prolong a standoff between the telecom and aviation industries over how to proceed.

“If U.S. airlines are permitted to operate flights every day in France, then the same operating conditions should allow them to do so in the United States,” the chief executives wrote in the letter.

Telecom-industry officials have pointed to dozens of countries, including France, that have already allowed cellular service over the frequencies in question, known as C-band. France is among the countries that have imposed wireless limits near airports while regulators study their effect on aircraft.

The message from AT&T CEO

John Stankey

and Verizon CEO

Hans Vestberg

was in response to a letter Transportation Secretary

Pete Buttigieg

and Federal Aviation Administration chief

Steve Dickson

sent late Friday. The New Year’s Eve missive asked the carriers to postpone their planned 5G launch by “no more than two weeks” while officials worked to address the wireless services’ effect on specific airports on a rolling basis over the coming weeks.

The FAA said it was reviewing the wireless companies’ letter. “U.S. aviation safety standards will guide our next actions,” the FAA said. Representatives from the Transportation Department, the FAA’s parent agency, didn’t immediately respond to requests for comment on Sunday.

Air-safety regulators have said the new cellular services could confuse key cockpit safety systems and have been preparing to impose potentially disruptive flight restrictions.

AT&T and Verizon disputed claims of any air-safety risk, though the companies already postponed a planned December debut of the new signals to provide more time for telecom and aviation regulators to share information about the wireless infrastructure and aircraft equipment in question.

The Sunday letter from telecom CEOs said transportation regulators’ latest delay request would be to “the detriment of millions of our consumer, business and government customers,” noting that carriers spent more than $80 billion to acquire the licenses in a Federal Communications Commission auction that closed in January 2021.

FCC authorities padded the spectrum they auctioned with a swath of buffer frequencies to prevent interference with cockpit systems. But air-safety regulators have expressed concern that more sensitive altimeters that pick up signals well beyond their defined range could mistake cellular transmissions for terrain. The devices feed data to commonly used cockpit systems that help planes automatically land in bad weather, prevent crashes and avoid midair collisions.

AT&T and Verizon have spent the past year preparing to turn on new signals to provide new fifth-generation wireless technology, a faster and more capable mobile service. Wireless companies in other countries already use similar frequencies, but the spectrum wasn’t available to U.S. providers until recently because of existing satellite users that had to be moved into a narrower band of spectrum before 5G service could begin.

Without a resolution to the aviation-telecom dispute, Messrs. Buttigieg and Dickson warned the FAA’s flight limits would bring severe economic consequences.

“Failure to reach a solution by Jan. 5 will force the U.S. aviation sector to take steps to protect the safety of the traveling public, particularly during periods of low visibility or inclement weather,” they wrote in their Dec. 31 letter.

Airlines have been bracing for significant flight cancellations and diversions due to potential FAA flight restrictions because of the regulator’s aviation-safety concerns. Pilots and airlines had been awaiting details of potential FAA flight restrictions that limit the use of systems that rely on radar altimeters. Aviation industry officials have most recently expected the agency to detail flight limits as soon as Monday.

Over the past week, U.S. air travel has been snarled by a mix of winter storms and staffing challenges because of increasing ranks of airline crews calling in sick with Covid-19 as the U.S. deals with a surge by the Omicron variant. Thousands of flights have been canceled and delayed.

5G and Air Traffic

More WSJ coverage on the debate over wireless frequencies and aviation, selected by the editors.

Write to Drew FitzGerald at andrew.fitzgerald@wsj.com and Andrew Tangel at Andrew.Tangel@wsj.com

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

Stocks Waver a Day After Hitting Record

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U.S. stock indexes were mixed Tuesday, a day after a record close for the S&P 500 amid lower liquidity in the last days of the year.

The S&P 500 swung between small gains and losses, touching a new intraday high in morning trading, after the broad-market index rallied 1.4% on Monday. It finished down 4.84 points, or 0.1%, to 4786.35. The Dow Jones Industrial Average rose 95.83 points, or 0.3%, to 36398.21. The Nasdaq Composite fell 89.5 points, or 0.6%, to 15781.72.

Stocks have been buffeted by the spread of the Omicron variant in recent weeks as governments around the world have imposed restrictions to try to curb coronavirus infections. But some recent studies have suggested the variant might result in milder illness with lower risk of hospitalization.

The Centers for Disease Control and Prevention reduced the recommended isolation period for some people who test positive to try to minimize disruptions. Still, many economists have lowered their forecasts for economic growth in the first quarter of next year.

“What is emanating from markets is the faith that Omicron won’t be able to disrupt the economic recovery,” said

Antonio Cavarero,

head of investments at Generali Insurance Asset Management. “There is no visible risk reduction.” That is partly due to lower liquidity from fewer people working around the holidays, he said.

Stock investors are keeping eyes on a phenomenon known as the “Santa Claus rally.” Indexes such as the S&P 500 have a tendency to rise in the last five days of the year and the first two days of the new year. Such a rally takes place at the end of about four of every five years, according to “Stock Trader’s Almanac.”

“It happens because people start positioning. People are reading everyone’s 2022 estimates and planning for next year,” said

Jeffrey Meyers,

a consultant to hedge funds and family offices at Market Securities.

Governments and policy advisers are showing signs of taking a lighter touch with policies regarding the rapidly spreading Omicron variant, reducing quarantine times and in some instances forgoing social-distancing restrictions as they try to keep economies moving. Vaccine makers gave up gains from earlier in the session, with

Novavax

declining 1.2% and

Moderna

down 2.2%.

The news has helped shares of travel and energy companies, with

United Airlines

up 1.6% and

Valero Energy

up 1.9%.

Cutting quarantine times is bullish for investors and prompting market participants to look beyond the Omicron surge, said

David Kotok,

chief investment officer at Cumberland Advisors. But it also risks allowing the Covid-19 virus to mutate, spread and disrupt economies, he added. He is overweight healthcare stocks.

“This ain’t over, and markets want to celebrate it being over. But the virus doesn’t care about what markets want,” Mr. Kotok said.

Oil prices ticked up, with global benchmark Brent crude climbing 0.4% to $78.94 a barrel.

The yield on the benchmark 10-year Treasury note was unchanged at 1.480%.

The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, showed U.S. home-price growth slowed in October. Shares of home builders edged higher during Tuesday’s session, with

D.R. Horton

advancing 0.7% and

Taylor Morrison

rising 0.8%.

U.S. companies will be entering 2022 at a very high level of corporate earnings, said Mr. Kotok. That will require companies to produce robust earnings growth next year, in the face of less fiscal and monetary policy stimulus.

“I’m a terrified bull,” he said.

Stocks have been buffeted by the spread of the Omicron variant in recent weeks.



Photo:

John Minchillo/Associated Press

Bitcoin slipped around 6.3% from its level at 5 p.m. ET on Monday, trading around $47,794. The cryptocurrency has oscillated around the $50,000 mark for the past five days.

Overseas, the pan-continental Stoxx Europe 600 added 0.6%.

The Turkish lira rose 1.3% to 11.8 to the dollar. The currency had strengthened after the government announced a new economic plan last week. President

Recep Tayyip Erdogan

“may have bought Turkey some time but it’s still not a great story,” Mr. Meyers said. Speculative investors likely closed out short positions ahead of the long holiday weekend and may now be putting them back on, weighing on the lira, he said.

In Asia, most major benchmarks rose. The Shanghai Composite Index climbed 0.4% and Hong Kong’s Hang Seng Index added 0.2%. Japan’s Nikkei 225 advanced 1.4%, led by gains in technology stocks.  

Shares of

China Evergrande Group

pared early gains bust still rose 3.8%. The heavily indebted real-estate developer said construction work had resumed at more than 90% of its stalled residential projects. It also said it was delivering apartments faster to home buyers.

Write to Sebastian Pellejero at sebastian.pellejero@wsj.com and Anna Hirtenstein at anna.hirtenstein@wsj.com

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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World

Covid live news: travel chaos as 3,500 more flights cancelled; fresh curbs in France | World news

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06:06

Indonesia detects first Omicron case

Reuters reports that Indonesian health authorities were conducting contact tracing on Tuesday after detecting the Southeast Asian country’s first case of the Omicron coronavirus variant in the community, health ministry official Siti Nadia Tarmizi said.

It says: The first confirmed case was a 37-year-old male who was from the city of Medan and had visited a restaurant in Jakarta’s central business district earlier this month, Tarmizi told a news conference. The man had no recent history of overseas travel or contacts with international travellers, Tarmizi said, adding he was asymptomatic and was in isolation at a Jakarta hospital.

Here’s a look at Indonesia’s cases over time:

indo










05:47

There is an interstate fight brewing in Australia over Covid testing requirements for tourists travelling from New South Wales into Queensland during the busy summer holidays. Cait Kelly and Caitlin Cassidy explain:










05:37

Daily new coronavirus cases in Turkey surged 30%

Reuters reports that daily new coronavirus cases in Turkey surged 30% on Monday to 26,099, health ministry data showed, the highest percentage rise this year, as the health minister warned about the rapid spread of the Omicron variant:

Turkey’s daily case levels have been below or about 20,000 in December, down from about 30,000 in October. The number of deaths due to coronavirus fell to 157 on Monday from 173 a day earlier.

“The Omicron variant is spreading more quickly than the other variants,” health minister Fahrettin Koca said on Twitter late on Monday. “You must be careful and get your booster shot done.”










05:01

Agence France-Presse reports that Delta Air Lines on Monday cited new Chinese cleaning requirements after it rerouted a China-bound flight back to the United States, drawing criticism from Chinese authorities.

The report states:

The December 21 flight was supposed to land in Shanghai after disembarking from Seattle, but instead returned to the US city midair. Delta said the reason for the reversal was new Chinese requirements issued earlier that day in the wake of the latest Covid-19 surge.

“The new cleaning procedures require significantly extended ground time and are not operationally viable for Delta,” a Delta spokesman said. “We apologize for any inconvenience this is causing for customers as we continue to work on rebooking on alternate flights.”

The Chinese consulate in San Francisco complained that several Chinese citizens were stranded on board with expired visas and Covid-19 tests that no longer met time requirements, according to Chinese state media.

Airlines, including Delta and other leading US carriers, have canceled thousands of flights in recent days as the Omicron variant of Covid-19 hits airline workers and roils travel plans for many consumers.










04:44

In three days time, on 31 December, it will be the second anniversary of the day that health authorities in Wuhan reported an unknown pneumonia outbreak to World Health Organization (WHO) colleagues in Beijing.

This time last year, Michael Standaert visited Wuhan to report on how the city had changed since the emergence of the coronavirus.

Updated










04:18

Our colleagues in Australia report that 486 people who were initially told by a Sydney clinic that their Covid test had a negative result were actually positive.

That is a total of 886 people to whom St Vincent’s hospital mistakenly gave the all clear. First, 400 people were told on Christmas Day that their result was negative, only to be told later they were positive.

Yesterday the hospital’s pathology department (SydPath) said another 950 people who were tested in the days before Christmas were “prematurely” sent a text message saying they were negative when their actual results had not yet been confirmed.

Of those 950 people, 486 were eventually found to be positive.

All of the Covid developments in Australia are wrapped up at their live blog:

Updated










03:54

Local authorities in Shaanxi province are cracking down on food hoarding and price gouging as 13 million people in its capital Xi’an entered a sixth day of strict lockdown and mandatory testing, writes our correspondent in Taipei, Rhoda Kwan.

The new rules, introduced on Sunday, introduced a reporting hotline and strengthened the monitoring of shops and markets. The hotline has received over 300 complaints in two days, most over an increase in the prices of daily necessities including eggs, meat and vegetables.




A medical worker prepares to administer a nucleic acid test to a client at a private outdoor clinic in Beijing. Photograph: Kevin Frayer/Getty Images

Authorities say they have investigated 33 illegal cases and have closed five by Tuesday.

The measures come as China is battling its worst community outbreak of the Delta variant since 2020 little over a month before Beijing is set to host the Winter Olympic games.

Updated










03:43

Stock markets have continued to gain ground despite the surge of Omicron around the world.

Asian markets lifted on Tuesday with the Nikkei in Japan up nearly 1%, Shanghai up 0.2%, Seoul up 0.1% and Sydney’s ASX200 is up 0.44%.

Wall Street had another record-breaking day on Monday with the S&P 500 index rising 1.38% to end at an all-time high thanks to strong US retail sales. The narrower Dow Jones average climbed 0.98% and the Nasdaq Composite added 1.39%.










03:21

Apple has closed all of its 12 stores in New York City to indoor shopping as cases of the Omicron variant surge across the United States. Customers will be able to pick up online orders at the stores, an Apple spokesperson said.

“We regularly monitor conditions and we will adjust both our health measures and store services to support the wellbeing of customers and employees,” the company said in a statement.




 The Apple store on Fifth Avenue, New York. Photograph: Carlo Allegri/Reuters










03:14

Germany has reported another 21,080 cases bringing the country’s total to 7,026,369. The Robert Koch Institute also reported another 372 deaths which means that Germany has now seen 110,805 people die of Covid-19.










02:48

More from the US where the Centers for Disease Control and Prevention said on Monday it was shortening the recommended time for isolation for Americans with Covid to five days from its previous guidance of 10 days, given they are asymptomatic.

CDC
(@CDCgov)

CDC has shortened the recommended time for #COVID19 isolation and quarantine. Learn more about what to do if you test positive or have close contact with someone who tested positive for COVID-19: https://t.co/ScxsyrZI16.

December 27, 2021

It is hoped the move will help airlines and other businesses mitigate staff shortages from the disease.

CDC director Rochelle Walensky said it was “vital people stay home and test when sick and adhere to recommended masking in order to mitigate the spread of Covid, especially as we continue to see more of the Omicron variant”.

Rochelle Walensky, MD, MPH
(@CDCDirector)

With these updates to isolation & quarantine recommendations, it is vital people stay home and test when sick and adhere to recommended masking in order to mitigate the spread of #COVID19, especially as we continue to see more of the #OmicronVariant.

December 27, 2021










02:32

France speeds up booster scheme – but no new year curbs

France has reduced the waiting time for a third booster shot to three months from four in response to the rapid spread of Omicron.

Jean Castex, the French prime minister, also said that from Monday and for the next three weeks all public gatherings would be limited to 2,000 people for indoor events, and to 5,000 people for outdoor events.




 A queue for Covid tests in Paris. Photograph: Lionel Urman/SIPA/REX/Shutterstock

Masks will be mandatory in city centres and people must work from home three days a week if possible, Castex said, as the country’s infection rate hit a record level of more than 700 per 100,000 people.

However, there will be no curfew on New Year’s Eve celebrations and schools will reopen after the festiv season as planned on 4 January.










02:16

China cases rise again

China’s coronavirus cases rose for a fourth consecutive day on Monday, with Xi’an city reporting more infections in a flare up that has put 13 million residents under lockdown.

Xi’an reported 175 cases, up from the previous day’s 150, official data showed on Tuesday. None of them are of the Omicron variant. China has reported only a handful of Omicron infections among international travellers and in its south.

Mainland China detected 182 local symptomatic cases for Monday, the health commission said, compared with 162 a day earlier.

Xi’an is experiencing China’s biggest community outbreak since 2020. Read our correspondent Rhoda Kwan’s report on how the city is responding, including a disinfection campaign, with staffers spraying pathogen-killing solutions on surfaces of roads and buildings:










02:09

Government should consider flight vaccine mandate, says Fauci

Dr Anthony Fauci has suggested that the federal government should consider a vaccine mandate for domestic air travel.

“That is just another one of the requirements that I think is reasonable to consider,” America’s leading infectious disease expert told MSNBC in an interview.




 Dr Anthony Fauci wears a face mask as he arrives for the White House Covid team’s regular call with the National Governors Association on Monday. Photograph: Carolyn Kaster/AP

The Biden administration has thought about this move before , or one requiring either vaccination or proof of negative test. But given the resistance to vaccine mandates for health workers and other categories in the US, such a requirement could face legal challenges.

Here’s how we reported the pushback against mandates in the US earlier this year:










02:01

An illustration of the airline problem comes in the travel saga of two brothers from the US Pacific North-west.

Harley Garner, a 27-year-old creative strategist from Portland, and his brother, who lives in Seattle, were staying with their parents in Pahrump, Nevada, over the holidays and had planned to fly home on Sunday evening, Reuters reports.

Both brothers’ respective flights from Las Vegas – to Portland via Alaska Airlines and to Seattle via Allegiant Airlines – were cancelled on Sunday afternoon. Both managed to book seats on later flights.

When their second flights were cancelled, they decided at 3am on Monday to start driving. Their father took them to Bakersfield, California, where they planned to rent a car and then drive up to Portland and Seattle, totalling some 17 hours on the road.

Garner said the most frustrating part of the travel nightmare, which Alaska Airlines said was weather-related, although Portland was not experiencing severe weather on Monday, was the last-minute notification of cancellations.










01:54

Thousands more flights scrapped

More than 3,500 flights have been cancelled on Monday and Tuesday causing widespread disruptions for travellers all over the world as airlines crews succumb to the Omicron Covid strain.

According to flight tracker FlightAware, 2,700 flights have been cancelled on Monday and 860 more on Tuesday.




 A Brazilian woman and her child wait for their flight at Miami airport. Photograph: Rebecca Blackwell/AP

In total, 11,000 flights have been cancelled since Friday thanks to the impact on crews, although bad weather has also played a part in cancellations in the US.

In more travel misery, the US Centers for Disease Control and Prevention said on Monday it was investigating 68 cruise ships after reports of Covid-19 cases on board.

Updated










01:39

Good morning/afternoon/evening to you wherever you might be and welcome to our rolling coverage of the coronavirus pandemic.

Here’s a summary of the main developments:

  • Thousands more flights have been cancelled by airlines around the world, causing chaotic scenes at airports at one of the busiest times of the year for travel. Carriers scrapped 2,700 flights on Monday and a further 800 have already been dropped from Tuesday’s schedules. Dr Anthony Fauci said a vaccine mandate should be considered for all passengers in the US.
  • Boris Johnson will not introduce further Covid restrictions in England before 2022, giving mass events the go-ahead and leaving nightclubs open for New Year’s Eve – in contrast with devolved governments in Scotland, Wales and Northern Ireland. Scientists said it was “the greatest divergence between scientific advice and legislation” seen since the start of the pandemic.
  • The US Centre for Disease Control has reduced the recommended isolation time for people recording a positive test from 10 days to five. The CDC said these changes reflect the latest data on when the virus is most contagious.
  • Joe Biden said the dramatic surge in US Covid cases caused by the Omicron variant “should be a source of concern but it should not be a source of panic”.
  • France has narrowed the delay for a third booster shot to three months from four in response to the rapid spread of Omicron but there will be no curfew for New Year’s Eve. From Monday, all indoor gatherings will be limited to 2,000 people, and to 5,000 people for outdoor events. Consumption of drinks and food will be banned in long-distance transport and home working will become mandatory for at least three days per week where possible.
  • Denmark and Iceland reported record daily Covid cases on Monday. Denmark now has the world’s highest infection rate, with 1,612 cases per 100,000 people.
  • The number of patients in England admitted into hospital with Covid-19 has reached its highest level since mid-February after a 74% rise in a week. In London, hospital admissions have increased by 73%. A total of 8,474 people were in hospital in England with Covid-19 as of 8am today – the highest number since 5 March.
  • Scotland has recorded a record number of Covid cases over the Christmas weekend, hitting a high of 11,030 new cases on Boxing Day, the Scottish government has said. Nicola Sturgeon, Scotland’s first minister, is due to update a specially-reconvened sitting of the Scottish parliament on Wednesday about the spread of the virus and the impact on hospitals.
  • Paraguay has confirmed the country’s first Omicron cases, health officials said. The cases were detected in people who had travelled outside the country this month but the government has not taken immediate action on travel. Argentina reported its highest daily tally for six months with 20,263 cases.
  • Greece has announced further restrictions effective between 3 and 16 January to contain a further surge in Covid infections. Bars and restaurants will have to close at midnight and no standing customers at entertainment venues will be allowed. There will also be a maximum limit of six people per table.



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Business

Stock Market Today: Dow Rose as Moderna Slumped Again

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The


Dow Jones Industrial Average
had one of its best days this year on Monday, as value and defensive stocks led a rebound from last week’s market declines.

The news Monday was relatively positive, with signs that the Omicron variant of Covid-19 might be less severe than earlier strains and reports that China is considering easing monetary policy. On the Federal Reserve policy front, the latest reporting suggested that the central bank could announce plans at its next meeting to more quickly pull back from its bond-buying program.

The Dow surged 647 points, or 1.9%, for its best one-day point gain since November 2020 and the largest percentage increase since last March. The


S&P 500
closed up 1.2% and the Nasdaq Composite rose 0.9%, while the small-cap


Russell 2000
gained 2.1%, for its fourth-straight daily move of 2% or more.

Post-pandemic reopening stocks were among the biggest gainers on Monday. The


U.S. Global Jets
exchange-traded fund (ticker: JETS) added 5.3%, as


American Airlines Group

(AAL) added 7.9% and


United Airlines Holdings

(UAL) jumped 8.3%. Cruise lines


Carnival

(CCL) and


Royal Caribbean Cruises

(RCL) surged 8.0% and 8.3%, respectively.


Marriott International

(MAR) added 4.5%,


Live Nation Entertainment

(LYV) rose 6.1%, and


Cinemark Holdings

(CNK) gained 7.7%.

S&P 500 value stocks as a group gained 1.4% on Monday, versus a 0.9% rise for growth stocks in the index.

Investor attention remains focused on the newly discovered Omicron variant of coronavirus, news of which recently brought about the Dow’s worst day of the year and saw volatility rock markets last week. The latest headline driving sentiment comes from South Africa, where data—though from a small sample size—suggest that symptoms caused by Omicron were milder than with other variants.

Investors aren’t out of the woods yet, however. The broad market will remain sensitive to daily headlines about Omicron—both good and bad.

“It still feels like we’re in the guesswork stage of working out what the impact of Omicron will be,” said Russ Mould, an analyst at broker AJ Bell. “It would be naive to rule out further volatility as markets attempt to work out exactly what’s going on.”

On Monday, the news was positive and investors bought the market. All 11 S&P 500 sectors closed in the green.

Fed policy has been pushing investor sentiment the other way. Chair Jerome Powell indicated last week that the central bank would consider speeding up its slowing, or tapering, of monthly asset purchases, which add liquidity to markets, amid higher inflation.

“We’re really at a fascinating crossroads in markets at the moment,” said Jim Reid, a strategist at Deutsche Bank. “The market sentiment on the virus and the policy makers at the Fed are moving in opposite directions.”

Those trends mean different things for different kinds of stocks and indexes.

If Omicron is less severe than feared, then the economy might hold up better than expected. That would be good for economically-sensitive cyclical stocks, like many of those in the Dow. Higher bond yields and interest rates, however, can put downward pressure on stock valuations, particularly those with nosebleed price-to-earnings ratios, many of which are found in the Nasdaq.

“Like Friday, how the Nasdaq trades will likely determine the day, as markets want to see the tech sector stabilize after intense weakness late last week,” wrote the Sevens Report’s Tom Essaye. “If the Nasdaq can stabilize, the broad market can bounce.”

The tech-heavy index bounced from a loss of about 1% shortly after Monday’s opening bell.

In the commodity space, oil prices rose Monday after Saudi Arabia raised its January prices for Asian and U.S. customers over the weekend by $0.60, in a sign of firmer demand expectations.

Futures contracts for the international oil benchmark Brent rose 4.6%, to above $73 a barrel, with U.S. futures for West Texas Intermediate crude up 4.9% to about $69.50 a barrel.

“Given that OPEC+ is proceeding with its planned 400,000 barrels per day increase this month, it appears that Saudi Arabia is taking a punt that Omicron is a virus in a teacup,” said Jeffrey Halley, an analyst at broker Oanda. “Saudi Arabia’s confidence, along with the South African Omicron article over the weekend, is a boost to markets looking for good news in any corner they can find it.”

Cryptocurrency markets remained depressed after digital assets took a tumble over the weekend.


Bitcoin
and


Ether,
the two leading cryptos, remained off their lows following the stark fall Saturday, but were slipping after steadying Sunday. Bitcoin was trading hands around $49,000—down from more than $57,000 as recently as Friday—with Ether holding above $4,000.

Here are several stocks on the move Monday:


Nvidia

(ticker: NVDA) was among the most actively traded stocks in the U.S. Monday, closing down about 2.1%. Shares of fellow semiconductor firm Advanced Micro Devices (AMD) lost 3.4%.


Lucid Group

(LCID) stock dropped 5.1% after the electric-vehicle startup revealed that it had received a subpoena from the Securities and Exchange Commission, without offering many details.


Kohl’s

(KSS) gained 5.4% after an activist investor said it should explore selling itself.


Moderna

(MRNA) fell 13.5% after its president said that the risk that vaccines don’t work as well against Omicron is high. Pfizer (PFE) stock slid more than 5%.

Alibaba Group Holding (BABA) stock closed up 10.4% after a management shakeup at the e-commerce giant.


Deutsche Bank

(DB) rose 3.6% after JPMorgan upgraded the bank to Overweight from Neutral, adding that the group shows positive revenue developments in key divisions.

Pharma giant


Roche

(ROG.Switzerland) rose 1.5% in Zurich after announcing that it would release rapid antigen tests for Covid-19 and flu viruses next month.

Food delivery group


Just Eat Takeaway.com

(JET.U.K.) fell 4.9% in London following a price target cut and downgrade to Market Perform from Outperform by Bernstein, which sees few positive catalysts in the pipeline for the company.

Write to Jack Denton at jack.denton@dowjones.com

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Business

Craft beer icon Bell’s Brewery bought by global conglomerate

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Bell’s Brewery, one of the most iconic craft brewers in the U.S., is being acquired by a unit of global beverage conglomerate Kirin Group, adding to the long list of beer-industry consolidation in recent years.

Founder Larry Bell, who started the brewery in Kalamazoo, Mich., in 1985, is retiring and said Wednesday he is selling the company to Australia-based Lion Little World Beverages , which is owned by Japan’s Kirin
2503,
+0.85%.
The move will put Bell’s under the same corporate umbrella as Colorado-based New Belgium Brewery, which sold to Lion in 2019.

“This decision ultimately came down to two determining factors,” Bell said in a statement. “First, the folks at New Belgium share our ironclad commitment to the craft of brewing and the community-first way we’ve built our business. Second, this was the right time. I’ve been doing this for more than 36 years and recently battled some serious health issues. I want everyone who loves this company like I do to know we have found a partner that truly values our incredible beer, our culture, and the importance of our roots here in Michigan.”

The price of the deal was not disclosed, and no major changes or layoffs are expected for the time being. “Beer drinkers should expect no changes to Bell’s current beers,” the company added.

Bell’s Executive Vice President Carrie Yunker will continue to lead day-to-day operations, and will report to New Belgium Chief Executive Steve Fechheimer.

“In Bell’s, we see a likeminded group of people dedicated to making the world’s best beer — doing business in a way that improves the wellbeing of the people who power our success,” Fechheimer said in a statement. “We couldn’t be happier to welcome the entire Bell’s team.”

Bell’s is best known for its Two Hearted IPA, which in 2020 was named best beer in America for the fourth straight year by the American Homebrewers Association magazine Zymurgy. That same survey ranked Bell’s Hopslam the No. 5 beer, and Bell’s as the best brewery in America.

After enjoying boom years and rapid expansion in the late 2000s, the craft beer industry has sharply pulled back over the past decade, suffering from oversaturated markets, slower sales and competition from hard seltzers. Lion bought New Belgium, maker of Fat Tire, nearly two years ago for an undisclosed price, and Japan’s Sapporo Holdings Ltd.
2501,
+0.13%
bought San Francisco’s Anchor Brewing, which billed itself as the oldest craft brewer in the U.S., in 2017 for about $85 million. In 2019, Boston Beer Co.
SAM,
-2.99%
bought Delaware’s Dogfish Head Brewery for about $300 million, and Anheuser-Busch InBev SA
BUD,

bought Kona Brewing Co. and Redhook Brewery in a deal valued at more than $200 million.

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Business

Stock Market Today: Alibaba Gains, Novavax Drops, and the Dow Rises

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Text size

Macro concerns such as supply-chain issues appear to be on the back burner amid earnings season.


Brendan Smialowski/AFP via Getty Images

The stock market was higher Wednesday, as investors weighed the prospect of strong corporate earnings against broader concerns over the economy.

In midday trading, the


Dow Jones Industrial Average
added 160 points, or 0.5%, while the


S&P 500
—which marked its fifth consecutive session of gains Tuesday—rose 0.4%. The


Nasdaq Composite
was up 0.2%.

Earnings season continued apace Wednesday, with


Abbott Laboratories

(ticker: ABT),


Verizon

(VZ),


Biogen

reporting Wednesday morning—they all beat—following


Netflix

(NFLX) and


United Airlines

(UAL) results Tuesday evening. One thing that stands out: With 16% of S&P 500 market cap having reported, results are nowhere near as good as bank earnings suggested last week, according to Credit Suisse strategist Jonathan Golub. While earnings have topped estimates by 14.1% overall, financials have topped forecasts by 21.6%, while everyone else has surpassed expectations by just 6.3%. It’s something to keep an eye on as earnings season progresses.

Wider concerns around familiar themes—such as inflation, central bank stimulus, and supply-chain disruptions—appear to have been allayed for now, as profit margins continue to hold up.

“Whilst inflation concerns are still very much bubbling under the surface of markets, risk appetite strengthened further yesterday thanks in no small part to decent earnings reports,” said Jim Reid, a strategist at Deutsche Bank. “There are no signs of widespread erosion of margins at the moment. Perhaps there is so much money sloshing about that for now prices are broadly being passed on.”

Still, bond yields now sit above 1.6% after trading over 1.65% on Tuesday, and that could pressure stocks. Higher bond yields typically weigh on technology companies in particular, because they tend to discount the present value of future cash flows, and the valuations of many tech companies are grounded in profits expected years in the future.


Tesla

(TSLA) and


IBM

(IBM) are among the companies releasing financial results in the day ahead.

Meanwhile,


Bitcoin
prices touched an all-time high above $66,000. The leading cryptocurrency has been buoyed by the launch of the first exchange-traded fund tracking regulated Bitcoin futures—a landmark moment for the crypto industry. 

Trading in the ProShares


Bitcoin Strategy ETF
(BITO) began Tuesday and most of the substantial volume was driven by high-frequency traders and retail investors, according to analyst Jeffrey Halley of broker Oanda.

“Although a regulated ETF based on regulated futures does fit nicely into the mandates of many in the institutional space, I suspect they may wait a while before dipping their toes in the water,” Halley said.

Here are eight stocks on the move Wednesday:


Novavax

(NVAX) dropped 11% following a report alleging that manufacturing problems jeopardize billions of Covid-19 vaccine doses set to be delivered to low- and middle-income countries.

Verizon gained 2.6% after the company reported better-than-expected earnings.

Netflix stock fell 1.2% despite reporting better-than-expected earnings after Tuesday’s close. The stock was downgraded to Hold from Buy at Deutsche Bank.


Alibaba

(BABA) stock rose 0.5% one day after gaining 6.1% on reports that it would make its own chips and that Jack Ma would be traveling to Europe.

The U.S.-listed shares of Dutch semiconductor equipment manufacturer


ASML

(ASML) fell 4.3% after the company outlined revenue guidance for the next quarter below Wall Street’s estimates.


Nestlé

(NESN.Switzerland) rose 3.3% in Zurich, as the food and drinks giant raised its full-year sales outlook after posting revenue ahead of analyst expectations—citing strong retail spending.


Deliveroo

(ROO.U.K.) rose 3.2% in London, as the food delivery company upgraded its full-year forecast after reporting strong order growth in the third quarter.


Kering

(KER.France) fell 4% in Paris, as the luxury-goods group, which owns brands including Gucci, saw sales growth held back in the crucial Asian-Pacific region by rising Covid-19 cases over the summer. But the company as a whole posted sales ahead of expectations.

Write to editors@barrons.com

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Business

Remote Workers Can Live Anywhere. These Cities (and Small Towns) Are Luring Them With Perks.

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Shara Gaona didn’t know much about Topeka when the pandemic struck. But the remote-working United Airlines analyst, untethered from her Chicago office, decided to move to the Kansas capital and collect $10,000 in local government incentives.

Topeka is on a growing list of locations—from Bemidji, Minn., to the state of West Virginia—dangling incentives to entice remote workers. Many companies are offering office-free jobs, and some workers are willing to relocate for cash, cheaper housing or other perks.

“I’ve had a lot of people ask me, ‘What the hell are you doing in Topeka?’ ” Ms. Gaona said. “Well, they’re giving me $10,000.”

The 41-year-old sold her Chicago condo early this year, and she and her fiancé, Matt Gordon, are renovating a house in Topeka they plan to move to soon. The couple, who had office-based jobs at

United Airlines Holdings Inc.

UAL -0.73%

before the pandemic, can continue working remotely, Ms. Gaona said.

Similar incentive programs existed before the Covid-19 pandemic, including in Vermont and Tulsa, Okla., while others were in the works. But they started sprouting up quickly after Covid-19 shut down traditional offices, including a Paducah, Ky., program that launched in August.

Shara Gaona and her fiancé, Matt Gordon, are in the process of moving to Topeka after leaving Chicago. They plan to continue working remotely for United Airlines, as they have since the pandemic began.



Photo:

Christopher Smith for the Wall Street Journal

Ms. Gaona sold her condo in Chicago and plans to move in to a new home in Topeka once renovations are complete.



Photo:

Christopher Smith for the Wall Street Journal

In addition to financial offers, some places are offering extra perks, like a free year at a co-working space in Bemidji, free coffee and martial arts classes in Stillwater, Okla., and subsidized rafting and rock climbing in West Virginia. A new program in Greensburg, Ind., includes a couple in town who offered to serve as “grandparents on demand” to help with babysitting and Grandparents Day at school. In Topeka, the sandwich chain Jimmy John’s had kicked in $1,000 for remote workers who moved to one of its local delivery zones, though this promotion just ended, according to an economic-development spokesman.

These incentive programs mark a shift from an older economic-development model: trying to persuade companies, rather than individuals, to relocate. In some cases, communities say they are hurting more for people than for jobs. They also hope an influx of skilled workers will make them look more appealing to large employers. It is also hard not to join the fray.

“Is this the new arms race? I would say yes,” said Justin Minges, chief executive at Stillwater’s chamber of commerce.

An Indianapolis-based company called MakeMyMove debuted a website in December that acts as a listing site and portal for such incentive programs. The company said there are now at least 24 programs specifically targeting remote workers in the U.S., including 19 launched since the pandemic began. The company also acts as a paid consultant to help create some of these programs.

Cash payments can have requirements pegged to people staying a certain amount of time or making enough money, and bigger paychecks can mean bigger payments. Topeka pays $10,000 to home buyers making at least $60,000, but less to those with lower salaries. Officials with several programs say they believe that paying to attract people with high-salary jobs will pay off as the movers spend in their new communities.

A farmers market in downtown Topeka.



Photo:

Christopher Smith for the Wall Street Journal

Officials running these programs are betting the U.S. will never completely return to pre-pandemic office life. Remote job listings in the U.S. with salaries topping $80,000 reached about 15% of all job listings in the third quarter of this year, up from about 13% in the prior quarter and 4% in late 2019, before the pandemic started, according to Ladders Inc., which runs the job site theladders.com.

“This is a real, structural permanent change in the American workforce,” said Ladders CEO Marc Cenedella.

While the mobile workforce grows, so does the competition. Stillwater, a city of 48,000 people, has thus far made offers to four people after launching a program in July that uses city funding to offer $5,000 in home-buying assistance. No one has moved yet, and at least two of these applicants are weighing other incentive programs, according to the chamber of commerce.

One is Torin Dougherty, a 27-year-old

3M Co.

employee in Minneapolis, who plans to visit Stillwater for the first time this weekend. But he may also apply to a few other programs, including in Tulsa and a regional program covering part of Alabama, he said. He’s going to visit Tulsa, too, after a week and a half in Stillwater.

Torin Dougherty, 27 years old, is weighing various options as he makes plans to take his permanently remote job with him to a new city.



Photo:

Ackerman + Gruber for The Wall Street Journal

Mr. Dougherty built a spreadsheet to rank municipalities he is considering making his new home, based on factors from financial incentives to access to outdoor activities.



Photo:

Ackerman + Gruber for The Wall Street Journal

Mr. Dougherty has made a spreadsheet to rank the various places, comparing them on fields like presentation on their websites, length of applications and access to activities like hunting and fishing. He’s weighing not just the money, but also opportunities to help build the programs and put a stamp on the local community, he said. If he were to move to Stillwater, he would first rent a place to live, and is talking to the chamber of commerce about potential rental assistance.

The San Francisco native has spent most of his life in California and Minnesota, and said he wants to experience more of the country.

“It’s really important for your own experience to see what else is out there,” Mr. Dougherty said.

Wish You Were Here

Some of the incentives available to remote workers who move to selected locales:

Topeka, Kan.

Incentives include: Up to $10,000 in cash, with the highest amount available to home buyers making at least $60,000, and lesser amounts for lower salaries and renters.

Requirements: Applicants have to come from outside Topeka and Shawnee County, must stay a year or money can be clawed back. Minimum salary for program is $35,000.

Bemidji, Minn.

Incentives include: Up to $2,500 in reimbursement for expenses such as moving, one-year membership at co-working space and chamber of commerce, a “Community Concierge” program to introduce new arrivals to the community.

Requirements: Applicants must come from at least 60 miles away.

West Virginia

Incentives include: $12,000 in cash, with $10,000 paid over the first 12 months and $2,000 after a second year. Other perks include free co-working space and a year of free outdoor recreation, with the total incentive package valued at more than $20,000, according to the program.

Requirements: Applicants must come from out of state and participate in interviews. Program is currently aimed at bringing people to the cities of Morgantown and Lewisburg, with a third community to be added next year.

Stillwater, Okla.

Incentives include: $5,000 toward a home purchase within city limits, estimated $2,000 in free coffee for a year from a local company, free martial arts classes, other gifts from local stores and restaurants via the chamber of commerce.

Requirements: Requires a job with full-time work at home, but chamber says hybrid workers who commute may also be eligible.

The Shoals (Alabama)

Incentives include: A reimbursement of up to $10,000 based on salary, with the highest amount paying to people who make above $124,800.

Requirements: Salary of at least $52,000, staying in the region a year to collect the full amount.

Several communities say early demand is strong. Tulsa’s three-year old program has already brought in more than 1,100 people. A two-county Alabama program in a region dubbed the Shoals has received roughly 1,800 applications since launching in mid-2019. So far 71 newcomers have arrived. The screening process there requires making sure applicants meet qualifications, such as salary and employment requirements. Program administrators also interview applicants to make sure they understand the community, including that they would be moving to an area with small towns, where they will rely on a car and not public transit.

“We don’t want someone to move here and regret it,” said Mackenzie Cottles, a spokeswoman for the Shoals Economic Development Authority, which runs the program.

This Alabama program is funded thus far with about $600,000 through a half-cent in sales taxes already collected to cover economic development, Ms. Cottles said. Payments to people moving in can reach up to $10,000 depending on salary.

In West Virginia, a program offering up to $12,000 in cash along with outdoorsy perks has netted 50 remote workers and another 60 family members, though not all have moved yet. Launched in April, it is funded by a $25 million gift from Brad Smith, a native of the state and executive chairman at TurboTax maker Intuit Inc., and his wife Alys.

The program is currently aimed at sending people to the cities of Morgantown and Lewisburg. The program is sponsoring a picnic and kayaking event for recent relocators this weekend.

Quintina Mengyan, 29, director of customer experience at Chicago-based ticket marketplace Vivid Seats, moved to Morgantown with her boyfriend in August. West Virginia was new to her, but she has already added a side job coaching lacrosse at West Virginia University. She also said she has considerably more space to work in a new townhouse, where she has a dedicated office.

In Chicago, Ms. Mengyan said, office closures “quickly evolved to me feeling suffocated in a 618-square-foot apartment with my boyfriend and 80-pound dog.”

Paying to lure new residents has drawn some skeptics. In Vermont, some lawmakers have questioned whether payments are really the deciding factor when people move there, though its programs have paid out money for hundreds of people who moved to the state, including recipients and their family members. Lawmakers this year re-funded the program but also called for a study on its effectiveness.

“I can see where this is going to end up going to people who were going to move to a community anyway,” said Tessa Conroy, an assistant professor at the University of Wisconsin-Madison who studies economic development. “Or maybe you do manage to attract someone. Is that really the ideal resident, someone who was paid?”

Communities should also invest in keeping people who already live there, and who might be disgruntled to see money spent on luring newcomers, Ms. Conroy said.

Jack Calcutt, who manages a global sales team for financial-information firm

FactSet Research Systems Inc.

and used to work from a Norwalk, Conn., office, received Topeka’s incentive for taking his job and family, including six children, there in late 2020. The family would have gone anyway, he said, as his wife is from the area. They had long thought about moving there and he suddenly had the chance to take his job on the road.

But the family is also grateful for the support, and Topeka has proven to be an excellent fit, Mr. Calcutt said. “It feels like Topeka wants me here, and that gives me a degree of loyalty for the community,” he said.

Jack and Katie-Scarlett Calcutt accepted Topeka’s incentive to move from Connecticut with their six children—and Mr. Calcutt’s remote job.



Photo:

Christopher Smith for the Wall Street Journal

‘It feels like Topeka wants me here,’ Mr. Calcutt said, calling the city an excellent fit for his sprawling family.



Photo:

Christopher Smith for the Wall Street Journal

The city of 127,000 and surrounding county first launched an incentive program in late 2019, aimed at helping local companies fill jobs. They added remote-worker incentives last year.

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The program, with funding to cover roughly 15 to 20 new remote workers a year, has fielded some 535 applications since it rolled out in August of 2020 and approved 19 remote workers, according to Bob Ross, a spokesman for the local economic-development agency. Requirements include proof of employment outside the local county; if a recipient doesn’t stay a year, the program can claw the money back.

Ms. Gaona is temporarily living in Mexico’s Yucatán Peninsula while organizing renovations on her Topeka house. She said she welcomed the change from Chicago but has some concerns about life in a smaller city, including things like easy access to a gym and grocery store.

“We don’t have to stay forever,” she said. “But if we like it, we can.”

Write to Jon Kamp at jon.kamp@wsj.com

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