Live Updated Dec. 11, 2020, 12:17 p.m. ET Dec. 11, 2020, 12:17 p.m. ET British Pound Tumbles as Prospects Dim in Brexit Talks: Live Updates RIGHT NOW Stocks drop as Brexit and U.S. stimulus talks remain stuck with time running out.

Pound suffers its worst week in three months as yet another Brexit deadline nears. Trucks approaching Dover, England, for passage to France on Friday. It’s still uncertain if Britain and European Union can reach a trade deal by Jan. 1. Credit... Frank Augstein/Associated Press As Britain approaches yet another new deadline to strike a trade deal with the European Union on Sunday, the pound is closing out its worst week in three months. It took a sharp turn lower against the euro on Thursday, and sunk further on Friday, as traders grappled with the prospect that Britain’s trade talks with the European Union could really fail. “The markets tend to think as long as they are talking there is hope. I’ve been really cautious about that,” said Jane Foley, a strategist at Rabobank. “There may not be a deal but there will be disruption, even if there is a deal. And there will be political fallout.” All of which is bad for the currency. In just under three weeks, the Brexit transition period will end and, if no agreement is reached, Britain will be forced to do business with its largest trading partner on World Trade Organization terms, meaning tariffs would be introduced on goods and there would be less chance of future cooperation between services industries. So far three issues — fishing rights, business competition rules and how a deal will be enforced — have stalled the talks. Prime Minister Boris Johnson went to Brussels on Wednesday night to dine with the European Commission president, Ursula von der Leyen, to try a breach the impasse. By time the fish dinner was over, there were reports that the outlook for a deal were even more gloomy. A new deadline was set for Sunday. Then on Thursday, the European Commission laid out its plans for what it would do if there was no deal. And Mr. Johnson said an agreement was “not yet there at all” and that there was a “strong possibility” of no deal. The perpetual optimism of the financial markets has been tested many times before. Innumerable Brexit deadlines have come and gone. But this time, there is serious concern about how an agreement, if one is reached, could be ratified into law before Jan. 1. The British Parliament is preparing plans to work until Christmas, but the European Union will have a harder time gathering 27 nations over the holiday period. This week has been the worst for the pound since early September, when traders got spooked that Boris Johnson would thwart a trade deal by introducing a new bill that clashed with the E.U. withdrawal agreement and break international law. Even before the end of the transition period, Britain got a glimpse at the type of disruption that occurs when trade isn’t running smoothly, when Honda shut down its assembly plant in England this week because parts were stuck in transit. The economic impact of more trade disruption in the new year once customs checks begin will weigh on a British economy attempting to scratch out a recovery during a second wave of the pandemic. Data on Thursday showed that gross domestic product increased 0.4 percent in October, a slowdown before England went into a monthlong lockdown in November.

Stocks drop as Brexit and U.S. stimulus talks remain stuck with time running out. By: Ella Koeze · Source: Refinitiv Stocks fell on Friday as investors steered away from risky assets despite news that the United States was likely to authorize the Pfizer-BioNTech vaccine within days. Instead traders are facing the prospect of a no-deal Brexit, a stalemate in Washington over economic aid and months of economic hardship as countries still struggle to contain the virus.

The S&P 500 fell half a percent., while the Stoxx Europe 600 and the FTSE 100 in Britain were more than 1 percent lower.

The S&P 500 is on track to break two straight weeks of gains. When markets closed on Thursday, the U.S. benchmark index had fallen 0.8 percent so far this week.

Oil prices also fell on Friday, pulling back from a rally the day before when prices jumped to their highest since March. Futures of West Texas Intermediate, the U.S. benchmark, declined 0.5 percent to $46.57 a barrel.

Prime Minister Boris Johnson of Britain and the European Commission president, Ursula von der Leyen, have both said that it was looking more likely that Britain and the European Union would not come to an agreement on free trade by the end of year. Talks are expected to continue through the weekend.

In the United States, hopes of reaching a deal on fresh fiscal stimulus before Congress breaks were diminished. On Thursday, aides to Senator Mitch McConnell, the Republican majority leader, indicated that many Republicans would not agree to a bipartisan package that had emerged. The same day, data showed more than 947,000 people applied for unemployment benefits last week, a jump from the previous week.

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States try to rescue small businesses as federal aid is snarled. With the economic recovery faltering and federal aid stalled in Washington, state governments are stepping in to try to help small businesses survive the pandemic winter.



The Colorado legislature held a special session last week to pass an economic aid package. Ohio is offering a new round of grants to restaurants, bars and other businesses affected by the pandemic. And in California, a new fund will use state money to backstop what could ultimately be hundreds of millions of dollars in private loans. Other states, led by both Republicans and Democrats, have announced or are considering similar measures. The efforts come as many businesses face an increasingly dire situation, The New York Times’s Ben Casselman reports. A survey from the National Federation of Independent Business on Tuesday showed optimism falling and uncertainty rising as the nationwide surge in coronavirus cases leads governments to reimpose restrictions and consumers to pare their spending. Separate data from the Census Bureau shows an increasing share of small businesses cutting jobs, and other surveys have shown large numbers of businesses in danger of failing. If that happens, it could be a disaster for both state economies and state budgets. Local businesses are major sources of tax revenue — both directly and through their employees — and major drivers of economic activity. If they fail in large numbers, it will slow the economic recovery once the pandemic is over.

The latest: Lululemon’s sales jump, Walmart says it has a vaccine plan. Lululemon reported sales of $1.1 billion for the third quarter on Thursday, up 22 percent from last year, as shoppers bought leggings and other workout gear to stay comfortable and in shape while working from home. In North America, net revenue grew by 19 percent. Direct to consumer revenue — which includes online sales — increased 94 percent.

Walmart is preparing more than 5,000 of its stores to receive vaccine doses so they can be ready to distribute the shots once they meet regulatory approval and become available. The retailer said in a statement on Thursday that it was ensuring that it had sufficient freezers and dry ice to store the vaccine, and preparing to distribute the vaccine through its Walmart and Sam’s Club stores and in long-term care facilities like nursing homes. The company will rely on state governments to direct its distribution efforts.

Source: New York Times

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