Some late news. Airbus has trimmed its plans to increase aircraft production, due to the impact of the pandemic.

The aerospace group says production rates will remain lower for longer, with a smaller increase in output of single-aisle planes, and no increase in production of widebody jets yet.

Airbus says:

The new average production rates for the A320 Family will now lead to a gradual increase in production from the current rate of 40 per month to 43 in Q3 and 45 in Q4 2021. This latest production plan represents a slower ramp up than the previously anticipated 47 aircraft per month from July.

The A220 monthly production rate will increase from four to five aircraft per month from the end of Q1 2021 as previously foreseen.

Widebody production is expected to remain stable at current levels, with monthly production rates of around five and two for the A350 and A330, respectively. This decision postpones a potential rate increase for the A350 to a later stage.

CEO Guillaume Faury tweets:

The FTSE 100 index has closed lower tonight, with the stronger pound weighing on multinational companies.

The Footsie closed 24 points lower at 6715, a drop of 0.37%, as this morning’s bounce faded.

Oil companies BP (-3.1%) and Royal Dutch Shell (-2.9%) were among the fallers, along with airline group IAG (-3%), medical devices firm Smith & Nephew (-2.6%).

Property firms British Land (-2.5%) and Land Securities (-2.3%) also dropped, amid concerns that the current lockdown in England could last longer than the government initially hoped.

Over in Frankfurt, ECB president Christine Lagarde has warned that the latest wave of Covid-19 infections, and lockdown restrictions, will hit the recovery at the start of this year.

Lagarde told reporters:

“The resurgence of the pandemic and the associated intensification of containment measures have likely led to a decline in activity in the fourth quarter of 2020 and are also expected to weigh on activity in the first quarter of this year.”

The big picture, as this chart shows, is that America is suffering an unemployment emergency that dwarfs the impact of the financial crisis over a decade ago:

The persistently high US jobless claims total shows the challenge facing President Joe Biden and his team, as they try to fight the Covid-19 pandemic and strengthen the economy.

Glassdoor senior economist Daniel Zhao explains:

“Initial unemployment insurance (UI) claims fell slightly last week to 961,000. Although this is a dip from recent weeks, claims remain elevated at levels not seen in months. The recent surge was likely due to a combination of larger-than-expected seasonal and pandemic-induced layoffs, which are now slackening. Unemployment claims continue to show a job market unable to progress further as long as COVID-19 remains in the driver’s seat.

The current wave of the pandemic doesn’t appear to be receding yet and the prospect of new, more transmissible variants raise the risk of a prolonged third wave. While the vaccine offers a light at the end of the tunnel, we’re still far away from a complete reopening of the economy that could drive rehiring and stem further layoffs.

Today’s report comes as President Joe Biden takes office and sets the stage for the economic challenges that the new administration will face. On top of tackling the pandemic, an early hurdle facing the new administration will be the expiration of expanded UI programs in March. A major determinant for the economy’s trajectory in 2021 will be how the new administration navigates passing aid with only the slimmest of margins in the Senate.”

In New York, the stock market has opened at record levels, but trading is rather more muted than yesterday.

• Dow Jones Industrial Average: up 28 points or 0.09% at 31,216 points
• S&P 500: up 1.8 points or 0.05% at 3,853 points.
• Nasdaq: up 36 points or 0.27% at 13,493 points

Here’s more detail and reaction to the jobless figures, first from Dr Thomas Kevin Swift of the American Chemistry Council:

Greg Daco of Oxford Economics says claims are ‘alarmingly’ high:

Here’s economist John Eckstein on the fall in ‘continuing claims’ (people who have received benefits for at least two weeks):

Kathy Bostjancic of Oxford Economics says there is some good news in this week’s US jobless report, but the number of people seeking help overall is little changed:

The Washington Center for Equitable Growth have summarised the key points from today’s US jobless report:

British shoppers who bought items from European websites are facing post-Brexit demands of more than £100 in import duties that must be paid before parcel firms will deliver the items.

Despite claims by Boris Johnson that there would be tariff-free trade after the Brexit transition period ended on 31 December, consumers who bought items from EU websites are being chased for import duties, VAT and admin fees – which, they say, render the purchase uneconomic.

Lisa Walpole, from Norfolk, has been told she must pay £121 to the parcels firm UPS for a £236 clothes order she made from the Norwegian website Onepiece.com, which specialises in premium jumpsuits. At the time of the order the company had promised free international delivery....

The European Central Bank’s decision not to launch any fresh stimulus moves today hasn’t alarmed the markets.

Neil Birrell, Chief Investment Officer at Premier Miton Investors, says the ECB can still act if conditions deteriorate:

“No change from the ECB is no surprise. Confirmation of the Pandemic Purchase Programme and maintaining the stimulus after the December boost is good news.

It also looks like they don’t view the extension of the lockdown as having such a negative effect that they need to step things up. The ECB, like every other central bank, is ready to act and still has the ability to do so.”

But Melissa Davies, chief economist at Redburn, points out that government spending, not more central bank stimulus, is crucial:

The reality is that the ECB is in a difficult spot (twas ever thus) - without fiscal backing and decisive action from national governments, simply creating more liquidity that ends up recycled into ‘safe’ core countries does little. Credit conditions are continuing to tighten despite repeated TLTRO expansions and the currency is too strong.

The ECB needs to get creative if it wants to stimulate the economy longer-term, e.g. buying private sector assets such as bad loans or equities.”

The FTSE 100 index now has six female CEOs again, following Jette Nygaard-Andersen’s appointment to run gambling firm Entain (see earlier post).

The others are Emma Walmsley at GlaxoSmithKline, Liv Garfield at Severn Trent, Alison Brittain at Whitbread, Alison Rose at NatWest Group, and Milena Mondini de Focatiis at Admiral.

With ITV (run by Carolyn McCall) recently relegated to the FTSE 250 index, the blue-chip FTSE 100 index is still far from true equality in its top jobs.

There has been some progress in recent years, with a rise in women in boardroom positions. But the City is still struggling on gender diversity among top executive roles.

It is also under pressure on ethnic diversity, with the Church of England pushing for “boards of directors, management teams and pipelines of talent to look like the communities in which they exist”, as we reported last weekend:

Speaking of manufacturers... the Financial Times is reporting that Volkswagen, the world’s largest carmaker, will pay more than €100m in fines after narrowly missing strict EU emissions targets in 2020.

That’s despite VW launching its flagship electric vehicle during the year.

They explain:

The group, which includes the Audi, Porsche and Seat brands, said its fleet-wide emissions in Europe stood at 99.8 grammes of CO2 per kilometre driven, roughly half a gramme short of the goal set by Brussels.

The miss is a blow for VW, which has sought to remodel itself as an electric vehicle superpower in the wake of the diesel emissions scandal, and plans to eclipse Tesla by selling 26m battery-powered cars this decade.

Metallica and Michael Bublé are not the most obvious double-act.

But they’re both part of the latest trend of investors buying up the rights to classic popular songs and albums, as my colleague Jasper Jolly explains:

The producer of songs by Metallica and Michael Bublé has sold his rights to investors in the latest in a flurry of back-catalogue sales by artists and other rights owners looking to cash in on the music streaming boom.

Bob Rock has sold his producer’s rights in heavy metal band Metallica’s eponymous album and songs by Canadian singer Michael Buble that include Call Me Irresponsible, Crazy Love, and Christmas.

The deal, for an undisclosed amount, gives investment firm Hipgnosis Songs Fund rights to 43 songs.

The buyer is among a small number of companies snapping up the rights to classic tracks. The advent of music streaming and easily edited social media videos has reinvigorated listener numbers for some classics, and the revenues attached to them. For instance, Fleetwood Mac’s Dreams returned to the charts last autumn 43 years after it was first released after a video of a skateboarder lip-syncing the lyrics went viral.

I certainly don’t do stock market recommendations (there are already too many people struggling without threatening your nest egg).

But Adrian Lowcock, head of Personal Investing at investment platform Willis Owen, does have some fund ideas for how people might want to position themselves for the Biden presidency.

He points to:

Artemis US Select – Cormac Weldon looks for economically-sensitive companies, particularly focusing on businesses that perform best during ‘growth’ phases of the economy. The team models the impact various scenarios might have on a company’s share price. A key element of their approach is the belief that risk is only worth taking if the potential reward significantly exceeds the potential loss. Meticulous company screening is combined with wider social, economic and thematic research to produce a high conviction portfolio of 40 to 60 best ideas.

JPM US Equity Income – Manager Clare Hart focuses on companies with relatively attractive dividend yields (at least 2% at purchase) and with high levels of dividend cover. She invests in high-quality companies with durable franchises, consistent earnings, high returns on invested capital and strong management. Hart pays attention to capital preservation and tends to favour companies with a sustainable competitive advantage. As a result, the yield on the fund is modest but the strategy should produce a steady income, with the potential to grow over the longer-term.

Schroder US Mid-Cap – Robert Kaynor is a cautious investor and views avoiding losses as the most effective way to grow capital over the long-term. This approach will cause the fund to lag during strong bull-markets but should deliver over time. Companies are chosen based on an analysis of their business model, valuations and their financial statements. The fund invests in three types of stocks: mispriced growth; where the current share price doesn’t reflect the potential growth, ‘Steady Eddies’; companies with stable growth and earnings, and turnarounds; recovery stocks with low or negative growth but where change is occurring.

Incidentally, yesterday’s rally was the best Inauguration Day since Ronald Reagan was sworn back in as president in 1985.

That follows a strong rally since the US election, with the S&P 500 having gained around 13% - with vaccine hopes also lifting stocks.

The Covid-19 lockdown has driven a boom in pet ownership, with people turning to furry and feathered friends to get them through the pandemic.

Pets At Home, which sells food, toys, bedding and accessories as well as veterinary services and animals, grew its sales by 18.0% year-on-year in the last quarter, to £302m.

It saw “continued growth in our VIP and Puppy & Kitten clubs”, as more families took the opportunity to adopt a pet.

As an essential retailer, Pets At Home kept trading through the pandemic - with a one-hour Click & Collect service at all its 451-strong store estate, and a “Deliver to Car” service across more than 150 stores.

It has also launched two smaller “next generation stores” in London (Camden and Putney), and is working on a wider rollout inside the M25.

The Evening Standard has more details:

Pets At Home is on the hunt for up to 20 sites in London, where it plans to open high street branches to cater for a new wave of animal owners in the capital since the first lockdown.

Chief executive Peter Pritchard said the retailer has seen a “significant step up in pet ownership during the pandemic”.

European technology stocks are leading today’s rally, Reuters points out:

Tech stocks jumped 1.5%, continuing their rally for a second straight session, led by software maker Sage Group which jumped 4.7% after posting higher quarterly recurring revenue.

“In the past few days, the market has been breathing a sigh of relief that we had a safe transfer of power from Trump to Biden,” said Dhaval Joshi, strategist at BCA Research.

Separately, the Bank of England has reported that lenders expect to offer more secured credit to consumers in the current quarter.

That could help those looking to buy a house:

Fresh from fighting off a takeover bid, the owner of betting firms Ladbrokes and Coral has become the first major listed British gambling group to appoint a female CEO.

Entain named non-executive director Jette Nygaard-Andersen as its top boss this morning, two days after MGM Resorts - its US partner - abandoned its £8bn takeover approach.

Nygaard-Andersen has been an independent non-executive director of Entain since 2019. The company says:

As a Board member Jette has been instrumental in the development of Entain’s growth and sustainability strategy.

Jette has more than 20 years’ experience in leadership and operational roles in media, entertainment, sport and digital businesses and an extensive track record of working with fast-growing digital next generation online and mobile entertainment companies offering video gaming, e-Sports, and social media video content.

Entain also reported strong online betting growth, making up for the impact of traditional bookmakers being closed during the pandemic. Online net gaming revenue surged 41% in the final quarter of 2020, while retail sales in the UK fell 38%.

US joint venture BetMGM grew its revenues by 130% in the last year, as it profited from the state-by-state rollout of sports betting in the US, after the Supreme Court struck down a federal law that bars it in 2018.

The London stock market has opened higher, with the FTSE 100 index of blue-chip shares gaining 26 points or 0.4% to 6766 points.

Kay Van-Petersen, global macro strategist at Saxo Capital Markets, reckons that Democratic control of the Senate “increases not just the probability of more fiscal (stimulus), but the magnitude.”

He said (via Reuters)

“That means that this market should be way, way, way higher as a whole and we’re going to get there. We’re entering this regime of even more accelerated asset class inflation.”

But... OANDA analyst Jeffrey Halley warns that president Biden’s spending plans could face opposition in the Senate (split 50:50, with vice-president Kamala Harris holding the tiebreaking vote):

For all the noise about the Biden $1.9 trillion stimulus package that we are writing about ad nauseum, and the follow-on remake America spending the new President also wishes to enact, one critical risk remains and is being totally ignored by financial markets everywhere. That is the inclination of the Republican minority in the US Senate to bipartisanship. Their silence has been deafening until now on how cooperative they intend to be with the new President.

Certain aspects of the Biden stimulus plan, and his follow-on spending wishes will almost certainly require a 60-vote majority in the Senate under the Byrd Rule. Otherwise, they will enter reconciliation, piece by piece in Senate committees to work around the filibuster. The net result will be a long drawn out process and risks momentum being lost on the Biden plan. It should also be noted that some Democrat Senators are more right of centre, making controversial passages potentially challenging to pass even within their own party.