Bloomberg - Evening Briefing - February’s winners

After a pleasantly surprising January, Wall Street got kicked around this month. But not everyone is glum: For the first time in more than two decades, some of the world’s most risk-free securities are delivering bigger payouts than a 60/40 portfolio of stocks and bonds. The yield on six-month US Treasury bills rose as high as 5.14% Tuesday, the most since 2007. The steep jump has reduced any incentive for risk, marking a break from the post-financial crisis era when persistently low interest rates drove investors toward speculative investments in a desperate search for returns. This time, it’s upside down. “Hawkish policy,” Morgan Stanley strategists told clients in a note, “is rewarding caution.” —David E. Rovella

The SPAC, that early pandemic darling, may have run out its 15 minutes. Special purpose acquisition companies, for those who may have already forgotten, are publicly traded corporate shells with no business other than seeking out a merger with another company. Well, a growing number of ventures that went public this way have now gone bankrupt.

Apple’s suppliers are looking to build facilities outside China. Many are likely to move industrial capacity to other countries far faster than had been anticipated as a way of getting ahead of escalating tensions between Beijing and Washington.

As Xi Jinping prepares to begin his second decade as China’s leader, he’s facing a new phenomenon: An increasingly skeptical public. His sudden, botched ending of “Covid-zero” restrictions triggered an infection wave that experts say could kill more than a million people. It followed a series of rare protests against him, the Communist Party and those very restrictions—not to mention the toll they took on China’s economy. Interviews with more than a dozen people in Shanghai showed a deep lack of trust when it comes to the path forward under Xi.

A protester is forced into a police car by Chinese security forces on Nov. 27 during street protests in Shanghai. Photographer: Bloomberg

The US Supreme Court has stopped President Joe Biden from implementing several measures aimed at fighting the coronavirus pandemic and its economic fallout. From efforts to block evictions to requiring workers to get vaccines or regular tests, the court—dominated by six Republican-appointees—has repeatedly sent the government’s lawyers packing. On Tuesday, the right-leaning jurists seemed to be planning something similar when it comes to Biden’s proposal to forgive $400 billion in student loan debt. In a challenge brought by GOP-controlled states, members of the court’s 6-3 supermajority voiced skepticism that a law granting the administration certain powers in an emergency includes forgiving student loans. Their criticism echoed that of Republican-appointed judges on lower courts who have blocked Biden’s loan initiative. Economic observers warn that the sudden reappearance of student loan bills after a long pandemic suspension may wield a sharp blow to the booming US economy, and the lives of millions of Americans without the money to pay them. Indeed, the $1.8 trillion student debt bubble is about to burst, and it may be the Supreme Court that puts a needle to it.

Nigeria’s ruling party candidate appeared to be leading the race to become the next president of Africa’s biggest economy as of 6 p.m. New York time, though the vote is being assailed by opposition parties for alleged disparities. Nigeria’s electoral authority is defending its handling of the Feb. 25 election after opposition parties and civil-society groups cited differences between official tallies and data available with parties’ polling agents.

Bola Tinubu, center, arrives to vote at a polling station in Lagos on Feb. 25. Photographer: John Wessels/AFP/Getty Images

Europe should worry about China, not Russia. Natural gas supplies for the continent could be hit harder by a bigger-than-expected jump in Chinese demand for liquefied natural gas, which might surge as much as 35% in 2023, according to a new report. That would boost global competition for the fuel and may push prices back up to the “unsustainable” levels seen last summer.

Ukrainian officials are signaling that the besieged eastern city of Bakhmut may soon be impossible to defend as Russian soldiers, mercenaries and convicts level the area. “The enemy is gradually destroying everything that can be used to protect our positions, for reinforcement and defense,” Volodymyr Zelenskiy said Monday evening. Independent analysts have said that by holding the city, which may not have much strategic value, Kyiv has sought to inflict high casualties while playing for time ahead of an expected spring offensive.

Bloomberg continues to track the global coronavirus pandemic. Click here for daily updates.

• Norfolk-Southern accused of trying destroy toxic train wreck evidence.
• Nuclear energy is returning to the home of the last meltdown.
• Bloomberg Opinion: Vladimir Putin’s next victim may be Moldova.
• Janet Yellen makes a surprise visit to Ukraine to reinforce US support.
• He’s not kidding: Jerome Powell is very serious about the debt ceiling.
• Bloomberg Opinion: Sorry Twitter, Elon found a new shiny object.
• This upstart museum has Metropolitan Museum of Art-sized cash.

Two Michigan pension fund officials attended a 2018 Apax Partners event at the Four Seasons Hotel in Florence, Italy, that featured tours of the Tuscan countryside on vintage Vespas and a gala dinner at the 17th Century Villa le Corti. The bill for the state? Less than $200 per official. Gaw Capital paid for most of the $21,127 business-class airfare for an Illinois fund official attending its meeting at a resort in Japan. The bill for the state? $392. Florida officials visited Milan, Rome and Paris last June, courtesy of JPMorgan, and other funds have since covered Florida officials’ trips to London, Stockholm and Helsinki. State pension fund officials, just to remind, are public employees.

Four Seasons Hotel Firenze Photographer: Peter Vitale/Four Seasons

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