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Credit…John Locher/Associated Press
Stocks on Wall Street are set to rise about 1 percent when markets open on Monday, following a jump in Asian and European stocks after a rout in government bonds subsided.
The S&P 500 index fell nearly 2.5 percent last week but was set to recover nearly half of these losses on Monday. The Stoxx Europe 600 index climbed 1.3 percent, with gains in every sector, and Asian stock indexes closed broadly higher. Over the weekend, U.S. federal regulators authorized the one-shot Johnson & Johnson Covid-19 vaccine, adding to the positive market sentiment.
The Senate this week will begin work on a $1.9 trillion relief package passed by the House on Saturday. Democrats in the Senate, which is evenly split, face political and procedural challenges. Lawmakers are aiming to send the bill to President Biden for enactment by March 14, when unemployment benefits will begin to expire for some jobless workers.
The 10-year yield on U.S. Treasury notes was at 1.43 percent, down from as high as 1.61 percent on Thursday. Globally, long-dated bond yields fell from Australia to Britain on Monday. Last week, rising yields and higher inflation expectations led some traders to question when central banks would have to pull back on their easy-money policies. And the Bank of England’s chief economist said central bankers needed to avoid being complacent about how difficult it might be to tame inflation.
The prospect of tighter monetary policy knocked stock indexes down from their recent highs, and the Nasdaq fell nearly 5 percent last week as technology stocks lost value.
On Monday, Nasdaq futures rose about 1.5 percent. “We do not expect the tech sell-off to extend much further and continue to see value in the sector for longer-term investors,” strategists at UBS wrote in a note.
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Commodity prices also rose, including oil. Futures of West Texas Intermediate, the U.S. crude benchmark, rose 1.5 percent to $62.41 a barrel.
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Homebuilders such as Persimmon, Barratt Developments and Taylor Wimpey were the biggest gainers in the FTSE 100 index ahead of the British government’s budget presentation on Wednesday, when the chancellor is expected to announce a new mortgage guarantee program to help people buy houses with small deposits.
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The Bank of Ireland said it was closing a third of its branches, 103 in total, in the Republic of Ireland and Northern Ireland. The bank’s shares rose 3.5 percent as it announced the cost-cutting measure after reporting steep losses for its past fiscal year.
Credit…Anna Moneymaker for The New York Times
Senator Elizabeth Warren, Democrat of Massachusetts, plans to introduce legislation on Monday that would tax the net worth of the wealthiest people in America, a proposal aimed at persuading President Biden and other Democrats to fund sweeping new federal spending programs by taxing the richest Americans.
Ms. Warren’s wealth tax would apply a 2 percent tax to individual net worth — including the value of stocks, houses, boats and anything else a person owns, after subtracting out any debts — above $50 million. It would add an additional 1 percent surcharge for net worth above $1 billion.
The proposal, which mirrors the plan Ms. Warren unveiled while seeking the 2020 presidential nomination, is not among the top revenue-raisers that Democratic leaders are considering to help offset Mr. Biden’s campaign proposals to spend trillions of dollars on infrastructure, education, child care, clean energy deployment, health care and other domestic initiatives. Unlike Ms. Warren, Mr. Biden pointedly did not endorse a wealth tax in the 2020 Democratic presidential primaries.
But Ms. Warren is pushing colleagues to pursue such a plan, which has gained popularity with the public as the richest Americans reap huge gains while 10 million Americans remain out of work as a result of the pandemic.
Polls have consistently shown Ms. Warren’s proposal winning the support of more than three in five Americans, including a majority of Republican voters.
“A wealth tax is popular among voters on both sides for good reason: because they understand the system is rigged to benefit the wealthy and large corporations,” Ms. Warren said. “As Congress develops additional plans to help our economy, the wealth tax should be at the top of the list to help pay for these plans because of the huge amounts of revenue it would generate.”
She said she was confident that “lawmakers will catch up to the overwhelming majority of Americans who are demanding more fairness, more change, and who believe it’s time for a wealth tax.”
Mr. Biden did not propose any tax increases to offset the $1.9 trillion economic aid package that he hopes to sign later this month. Mr. Biden has said he will pay for long-term spending — as opposed to a temporary economic jolt — with tax increases on high earners and corporations.
Business groups and Republicans have already begun to raise concerns about Mr. Biden’s tax plans. Those same groups are not fans of Ms. Warren’s plan, which was a centerpiece of her 2020 Democratic presidential campaign.
Critics say the tax would be difficult for the federal government to calculate and enforce, that it would discourage investment and that it could be ruled unconstitutional by courts. Ms. Warren has amassed letters of support from constitutional scholars who say the plan would pass muster.
Berkshire Hathaway released its latest annual results on Saturday, and the accompanying letter to investors from Warren Buffett, the conglomerate’s chairman and chief executive, revealed a clear theme: The investor known as the Oracle of Omaha isn’t taking as many risks — or big swings at deal-making — as he used to, according to the DealBook newsletter.
Berkshire is spending more of its $138 billion in cash on smaller investments, rather than deploying it on the huge acquisitions that he famously made in the past. Berkshire bought back nearly $25 billion of its own shares last year, a record for a company that until recently was reluctant to spend its cash this way.
In his letter to investors, Mr. Buffett sang the praises of buybacks — at Berkshire and at the companies it invests in — writing, “As a sultry Mae West assured us: ‘Too much of a good thing can be … wonderful.’”
When it came to deal-making, Mr. Buffett admitted a big mistake in his last major corporate takeover. He wrote that the $37 billion he paid for Precision Castparts, a maker of airplane parts, was too much. (The 2016 transaction resulted in a $10 billion write-down last year.) “No one misled me in any way,” he wrote. “I was simply too optimistic.”
Berkshire’s biggest bets today include a $120 billion stake in Apple and majority stakes in Burlington Northern railroad and Berkshire Hathaway Energy. That relative conservatism comes as Berkshire’s stock has underperformed the S&P 500 in recent years.
Credit…Felix Schmitt for The New York Times
Heidelberg, Germany, is at the forefront of a movement: the push to get rid of cars entirely.
Heidelberg, a city of 160,000 people on the Neckar River, is one of only six cities in Europe considered “innovators” by C40 Cities, an organization that promotes climate-friendly urban policies and whose chairman is Michael Bloomberg, the former mayor of New York. (The others are Oslo, Copenhagen, Venice, and Amsterdam and Rotterdam in the Netherlands.)
Eckart Würzner, Heidelberg’s mayor, is on a mission to make his city emission free, Jack Ewing reports for The New York Times. And he’s not a fan of electric vehicles — he wants to reduce dependence on cars, no matter where they get their juice.
Heidelberg is buying a fleet of hydrogen-powered buses and designing neighborhoods to discourage all vehicles and encourage walking. It is building a network of bicycle “superhighways” to the suburbs and bridges that would allow cyclists to bypass congested areas or cross the Neckar without having to compete for road space with motor vehicles. Residents who give up their cars get to ride public transportation free for a year.
“If you need a car, use car sharing,” Mr. Würzner said in an interview.
Battery-powered vehicles don’t pollute the air, but they take up just as much space as gasoline models. Eckart Würzner, Heidelberg’s mayor, complains that Heidelberg still suffers rush-hour traffic jams, even though only about 20 percent of residents get around by car.
“Commuters are the main problem we haven’t solved yet,” Mr. Würzner said. Traffic was heavy on a recent weekday, pandemic notwithstanding.
Credit…Ting Shen for The New York Times
A police reform bill in Massachusetts has managed to strike a balance on regulating facial recognition, allowing law enforcement to harness the benefits of the tool while building in protections that might prevent the false arrests that have happened before, Kashmir Hill reports for The New York Times.
The bill, which goes into effect in July, creates new guardrails: Police first must get a judge’s permission before running a face recognition search, and then have someone from the state police, the F.B.I. or the Registry of Motor Vehicles perform the search. A local officer can’t just download a facial recognition app and do a search.
The law also creates a commission to study facial recognition policies and make recommendations, such as whether a criminal defendant should be told that they were identified using the technology.
Lawmakers, civil liberties advocates and police chiefs have debated whether and how to use the technology because of concerns about both privacy and accuracy. But figuring out how to regulate it is tricky. So far, that has generally meant an all-or-nothing approach.
City councils in Oakland, Calif., Portland, Ore., San Francisco, Minneapolis and elsewhere have banned police use of the technology, largely because of bias in how it works. Studies in recent years by MIT researchers and the federal government found that many facial recognition algorithms are most accurate for white men, but less so for everyone else.
Credit…Simon Newman/Reuters
SoftBank said on Friday that it had settled its legal dispute with Adam Neumann, a WeWork co-founder, opening the way for the co-working company to go public just 16 months after SoftBank rescued it from collapse.
SoftBank had offered to buy $3 billion of stock from WeWork shareholders, including Mr. Neumann, who stepped down as C.E.O. during the company’s disastrous attempt at listing in 2019. In April, as the coronavirus was emptying WeWork offices, SoftBank said that it wouldn’t go ahead with the purchase, prompting Mr. Neumann to sue.
As part of the agreement, SoftBank is now spending only $1.5 billion on the stock, according to two people with knowledge of the settlement. But the lower bill is because SoftBank is cutting the number of shares it will buy in half; that means Mr. Neumann will get $480 million instead of up to $960 million. (SoftBank has invested well over $10 billion in WeWork, making it the company’s largest shareholder and allowing it to operate despite losses.)
According to these people, SoftBank also pledged to pay $50 million for Mr. Neumann’s legal fees, to extend a $430 million loan it made to him by five years and to pay the last $50 million of a $185 million consulting fee it owed him.
Settling the dispute removes a big obstacle to taking WeWork public. SoftBank has been in talks to merge with BowX Acquisition, a special purpose acquisition company, or SPAC, run by Vivek Ranadivé, the founder of Tibco Software and owner of the N.B.A.’s Sacramento Kings.
Such a deal, which would give WeWork a public listing, raises some crucial questions.
SoftBank owns 70 percent of WeWork’s shares but has direct control of just under half of shareholder votes. Would those numbers change after an offering? Who does control WeWork?
Would investors balk at WeWork’s financial performance, again? It’s not clear how the company has performed recently; it last publicly disclosed a full set of financials some 18 months ago. A glut of office space is coming onto the market, which might be more attractive to companies than taking WeWork space. And individuals may be less likely to use a co-working space now that they’ve gotten used to working from home.
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