Aurelia Butler

How well did you keep up with the news this week? Take our quiz. US stocks closed at record highs on the final day of trading before the Christmas break as the release of encouraging economic and health data eased anxiety about the impact of the Omicron coronavirus variant.The S&P 500 stock index added 0.6 per cent, taking its gains for the week to more than 2 per cent. The benchmark index closed at 4,725.79. The tech-heavy Nasdaq Composite closed 0.8 per cent higher, leaving the index up more than 3 per cent this week at 15,653.37.The record close follows a volatile month of trading. Stocks have swung dramatically since the discovery of the Omicron strain in late November, and a recent shift from global central banks towards tightening monetary policy. In recent days, however, there have been encouraging results from a series of academic studies showing that the Omicron variant is less severe than the earlier Delta variant. The latest study was released yesterday by the UK Health Security Agency, a government body, and based on 132 people infected with the variant who sought hospital treatment in England up to December 20.The study found that people with Omicron were between 50 and 70 per cent less likely to require an overnight stay in hospital and were 31 to 45 per cent less likely to need hospital treatment compared with those with Delta.UK government officials said the reduction in Omicron’s severity stemmed from a combination of breakthrough infections in vaccinated people and reinfections caused by the variant being milder, and a potential change in the biology of the virus.The findings were consistent with separate research released this week by Imperial College London and the University of Edinburgh, alongside healthcare data from South Africa and Denmark.The UKHSA study found, however, that people who received coronavirus vaccine booster shots more than 10 weeks ago were facing the first signs of waning immunity against symptomatic infection from Omicron.Alongside the latest medical data investors also digested encouraging economic data highlighting the resilience of the world’s largest economy. US first-time jobless claims were unchanged from the previous week, while new orders of US durable goods last month were higher than analysts expected. The US core personal consumption expenditure index, which strips out volatile items such as food and energy costs, leapt 4.7 per cent year on year in November, suggesting American households were spending at a rapid rate.2022 stock market outlook Words like “nimble” and “volatility” pepper predictions, writes Markets Editor Katie Martin.Thanks for reading FirstFT Americas. We wish all our readers a happy holiday and will be back in your inboxes on Tuesday, December 28. Here’s the rest of today’s news — GordonFive more stories in the news1. US and Russia to hold Ukraine talks Vladimir Putin said the two sides would meet in Geneva in January for talks, which he maintained at his annual press conference were essential to protect Moscow from what he claimed were existential threats from Nato. Go deeper By amassing tens of thousands of troops on the Ukrainian border, Putin has forced the White House into what experts in the region believe is a scramble to formulate policy on the fly.2. UK department store Selfridges sold for $5.4bn The retailer, established in 1908 by Harry Gordon Selfridge, has been sold by Canada’s billionaire Weston family to a Thai conglomerate and an Austrian real estate group.3. Facebook befriends start-up to build the metaverse AI Reverie, an artificial intelligence company with links to the US military, will be used by Facebook to build the metaverse after being acquired by the company now known as Meta in August. 4. Buyout groups spend $42bn buying companies from themselves Private equity groups this year struck $42bn worth of deals in which they sold portfolio companies to their own funds, a sharp increase over 2020 in a once-niche type of transaction that can generate handsome payouts to executives. 5. Low supply and high demand boosts champagne prices Vintage champagnes such as Dom Pérignon 2008 and Krug 2000 have popped in price this year, outperforming global stocks, as wealthy investors hunt for returns in previously overlooked asset classes.Coronavirus digestUS President Joe Biden has acknowledged that he should have pushed for a bigger national programme to distribute free rapid Covid-19 tests earlier. Omicron has brought the slow reopening of Asia to a juddering halt as governments rush to reimpose travel restrictions.More than half of the 31 shows on Broadway have had to call off a performance in December owing to coronavirus.The day aheadLibya election postponed Libyans were meant to go to the polls but after the High National Electoral Commission ordered a dissolution of the electoral committees nationwide without naming a final list of candidates, the commission said it was “impossible” to hold the vote. The election board has proposed January 24 as the new date for the poll. (Al Jazeera)Christmas Eve Pope Francis will celebrate midnight mass at St Peter’s Basilica. Midnight mass will also be celebrated at the site of Jesus’s birth, at the Church of the Nativity on Manger Square in the West Bank town of Bethlehem. What else we’re readingYear in a word: Transitory As inflation kept accelerating the word “transitory”, used by Federal Reserve chair Jay Powell to describe temporary price rises, started to become an embarrassment. Other FT words of the year include metaverse and meme stock.Web3’s messy vision of a tech future As 2022 looms, a new movement, under the banner of Web3, has become one of the most discussed — and least understood — forces in tech. West Coast Editor Richard Waters does his best to explain.The Art of Conversation An FT illustrated story by Kristen Radtke, the author of two books of graphic non-fiction, looking back at how humans learnt to communicate — and how we might do it better in the pandemic age.

Where have weather records been broken this year? This year has been progressively warmer than normal, with global temperatures inching higher than the average with each passing month. The FT is tracking extreme climate events from around the world. Explore our interactive tracker. Afghan female footballers enjoy new lease of life in England After facing rocket blasts and firefights, some of the most talented female players escaped the Taliban and are finding new beginnings in England’s north, thanks to supporters including Leeds United Football Club.The FT View: Spare a thought for Afghanistan this Christmas.TelevisionThe exertion of Christmas lunch usually gives way to the quiet hubbub of primetime comedy. But the television landscape has changed since the 1970s. Henry Mance looks back at the golden age of Christmas TV and considers what might take its place. More

ANKARA (Reuters) – Turkey’s lira was on track for its strongest week on record on Friday, having spiked 44% with the support of billions of dollars of state-backed market interventions and a promise that the government would cover FX losses on certain deposits.The currency had plunged on Monday to an all-time low of 18.4 to the dollar, after a months-long slide due to unorthodox interest rate cuts and fears of an inflationary spiral. But late on Monday President Tayyip Erdogan unveiled a scheme in which the Treasury and central bank would reimburse losses on converted lira deposits against foreign currencies, sparking the biggest intraday rally ever. The anti-dollarisation plan set off four straight days of gains as Turks converted some $900 million worth of hard currencies into lira, according to Finance Minister Nureddin Nebati. The currency cooled 4% on Friday to 11.85 versus the dollar at 0918 GMT. The lira got a big boost from what traders and economists called backdoor dollar sales by state banks supported by the central bank. In the first three days of the week alone, the central bank’s net foreign reserves dropped by $8.5 billion, according to the calculations of three bankers who spoke to Reuters. The drop totalled nearly $18 billion in December, they said.As of Dec 17, the central bank’s net foreign reserves tumbled to $12.2 billion, from $21.2 billion a week earlier, to levels last hit in May in a reflection of the interventions. ‘USING ALL INSTRUMENTS’Citing four sources familiar with the operations, including a senior Turkish official, Reuters reported on Thursday that state banks heavily sold dollars earlier this week on the heels of Erdogan’s announcement.The state banks have not commented on the issue. The central bank, which was not immediately available for comment, had announced dollar-selling market interventions earlier this month but not this week. Nebati, discussing interventions on broadcaster NTV on Thursday, said Turkey is “using all the instruments at its disposal in a positive way”. Hakan Kara, former chief economist at Turkey’s central bank, said on Twitter (NYSE:TWTR) the bank’s FX sales amount to $17-20 billion this month, including $3 billion on Wednesday alone, though he said it was unclear specifically how they were used. “State banks provided significant support to the forex balance but it’s not only state banks that are selling dollars,” said a bank trader who requested anonymity. In 2019-2020, the central bank backed, via swaps, the sale of some $128 billion via state banks to stabilise the lira, depleting Turkey’s foreign reserves and drawing sharp criticism from the political opposition. Under pressure from Erdogan, the central bank has slashed its policy rates by 500 basis points to 14% since September despite a jump above 21% in inflation. Price rises are set to blow through 30% next year in part due to the lira depreciation. Reflecting these concerns, Turkish Airlines will raise employee pay by the rate of inflation plus 65% for 2022, according to an agreement with its labour union. More

BEIJING (Reuters) – China is planning to build a financial centre in the western region by 2025, the central bank said on Friday, in a bid to support economic growth in the Chengdu-Chongqing area. In an inter-agency document outlining the plans, the People’s Bank of China said the government will study and set up a mechanism of capital exchanges with Singapore and Japan, and carry out bilateral investment and financing projects. More

SHANGHAI (Reuters) – China’s financial futures exchange said on Friday it will halve settlement fees for stock index futures and bond futures trading in 2022.The China Financial Futures Exchange said it was responding to calls from the central government, and the move will effectively reduce investors’ trading costs. More

TOKYO (Reuters) -Japan’s cabinet approved on Friday an annual budget of $940 billion that is a record for a tenth straight year, putting priority on the response to battling COVID-19 and the prime minister’s aim of growth and wealth distribution.The budget of 107.6 trillion yen ($941.55 billion) for the fiscal year that starts in April 2022 is Japan’s biggest initial spending plan, underscoring a priority of reviving the pandemic-hit economy over returning to long-term fiscal health.However, when asked if heavy spending to fight the COVID-19 pandemic could force the government to alter its primary balance target, Finance Minister Shunichi Suzuki said, “I don’t think so, for now.”Suzuki renewed his pledge to stick to the target, saying it was important to keep up efforts to improve public finances as the cornerstone of Japan’s credibility.Prime Minister Fumio Kishida’s first budget, which parliament must approve by the end of the current fiscal year in March, comes days after the body approved 36 trillion yen of record extra stimulus spending to aid the COVID-19 recovery.Bigger spending meant fiscal discipline was loosening among Japanese policymakers who are counting on the Bank of Japan’s ultra-loose monetary policy to keep borrowing costs low, analysts said.”Politicians show no signs of making efforts to repay government debt,” said Yasunari Ueno, chief market economist at Mizuho Securities. “The lack of fiscal discipline is the biggest side effect of the BOJ’s massive monetary easing.”The budget includes 5 trillion yen for emergency costs of COVID-19, a record defence outlay of 5.37 trillion, the largest-ever welfare cost of 36.3 trillion and 24.3 trillion yen for debt servicing.Public debt in Japan, the world’s third-largest economy, is more than twice the size of its $5 trillion economy, the heaviest among industrialised countries.Kishida has pledged to improve public finances in the long run and the budget foresees new borrowing of 36.9 trillion yen next year, less than this year’s initial plan of 43.6 trillion.Lower borrowing will be replaced with higher tax revenues, seen rising for the first time in two years to a record 65.2 trillion yen as COVID-19 curbs on economic activity ease.The government estimates real economic growth of 3.2% in the next fiscal year, up from a prior estimate of 2.2%. The estimates form the basis for the budget plan.But with debt still accounting for 34.3% of the budget, it will be tough to achieve a primary budget surplus by fiscal year 2025/26 as the government aims to do.The primary budget deficit, which excludes new bond sales and debt servicing, is seen at 13 trillion yen in the next fiscal year, higher than an estimate of 20 trillion for this year, but still off from the government’s target.($1=114.2800 yen) More