Project Syndicate: China runs roughshod over international law to expand its territory and influence without firing a shot

NEW DELHI, India (Project Syndicate)—As the world’s largest, strongest, and longest-surviving dictatorship, contemporary China lacks the rule of law. Yet it is increasingly using its rubber-stamp Parliament to enact domestic legislation asserting territorial claims and rights in international law. In fact, China has become quite adept at waging “lawfare”—the misuse and abuse of law for political and strategic ends.

Under “commander-in-chief” Xi Jinping’s bullying leadership, lawfare has developed into a critical component of China’s broader approach to asymmetrical or hybrid warfare. The blurring of the line between war and peace is enshrined in the regime’s official strategy as the “Three Warfares” (san zhong zhanfa) doctrine. Just as the pen can be mightier than the sword, so, too, can lawfare, psychological warfare, and public-opinion warfare.

Through psychological warfare, propaganda, and a cynical misuse of law, China is advancing its revisionist territorial ambitions without having to fire a shot. The world’s democracies must wake up to the increasingly aggressive hybrid war that President Xi Jinping is waging.

Through these methods, Xi is advancing expansionism without firing a shot. Already, China’s bulletless aggression is proving to be a game changer in Asia. Waging the Three Warfares in conjunction with military operations has yielded China significant territorial gains.

Historical fantasies

Within this larger strategy, lawfare is aimed at rewriting rules to animate historical fantasies and legitimize unlawful actions retroactively. For example, China recently enacted a Land Borders Law to support its territorial revisionism in the Himalayas. And to advance its expansionism in the South and East China Seas, it enacted the Coast Guard Law and the Maritime Traffic Safety Law earlier this year.

China claims most of the South China Sea and Taiwan, as well as areas along its borders with India, Nepal and Bhutan.


Getty Images/iStockphoto

The new laws, authorizing the use of force in disputed areas, were established amid rising tensions with neighboring countries. The Land Borders Law comes amid a military stalemate in the Himalayas, where more than 100,000 Chinese and Indian troops have been locked in standoffs for nearly 20 months following repeated Chinese incursions into Indian territory.

The Coast Guard Law, by treating disputed waters as China’s, not only violates the United Nations Convention on the Law of the Sea; it also could trigger armed conflict with Japan or the United States. The Land Borders Law likewise threatens to spark war with India by signaling China’s intent to determine borders unilaterally. It even extends to the Tibet-originating transboundary rivers, where China proclaims a right to divert as much of the shared waters as it wishes.

As authoritarian regimes in China and Russia continue to make gains, President Biden faces a challenge of reigniting global democracy at his upcoming Summit for Democracy. Photo Illustration: Elise Dean

These recent laws follow the success of the Three Warfares strategy in redrawing the map of the South China Sea—despite an international arbitral tribunal’s ruling rejecting Chinese territorial claims there—and then swallowing Hong Kong, which had long flourished under democratic institutions as a major global financial center.

In the South China Sea, through which around one-third of global maritime trade passes, Xi’s regime has stepped up lawfare to consolidate Chinese control, turning its contrived historical claims into reality.

Unilateral moves

Last year, while other claimant countries were battling the COVID-19 pandemic, Xi’s government created two new administrative districts to strengthen its claims over the Spratly and Paracel Islands and other land features. And in further defiance of international law, China gave Mandarin-language names to 80 islands, reefs, seamounts, shoals, and ridges, 55 of which are fully submerged.

The Hong Kong National Security Law, enacted in mid-2020, is a similarly aggressive act of lawfare. Xi has used the law to crush Hong Kong’s pro-democracy movement and rescind the guarantees enshrined in China’s U. N-registered treaty with the United Kingdom. The treaty committed China to preserving Hong Kong citizens’ basic rights, freedoms, and political self-determination for at least 50 years after regaining sovereignty over the territory.

The strategy’s success in unraveling Hong Kong’s autonomy raises the question of whether China will now enact similar legislation aimed at Taiwan or even invoke its 2005 Anti-Secession Law, which underscored its resolve to bring the island democracy under mainland rule. With China escalating its psychological and information warfare, there is a real danger that it could move against Taiwan after the Beijing Winter Olympics in February.

Xi’s expansionism has not spared even tiny Bhutan, with a population of just 784,000. Riding roughshod over a 1998 bilateral treaty that obligated China “not to resort to unilateral action to alter the status quo of the border,” the regime has built militarized villages in Bhutan’s northern and western borderlands.

Flout international law

As these examples show, domestic legislation is increasingly providing China with a pretext to flout binding international law, including bilateral and multilateral treaties to which it is a party.

With more than one million detainees, Xi’s Muslim gulag in Xinjiang has made a mockery of the 1948 Genocide Convention, to which China acceded in 1983 (with the rider that it does not consider itself bound by Article IX, the clause allowing any party in a dispute to lodge a complaint with the International Court of Justice). And because effective control is the shibboleth of a strong territorial claim in international law, Xi is using new legislation to undergird China’s administration of disputed areas, including with newly implanted residents.

Establishing such facts on the ground is integral to Xi’s territorial aggrandizement. That is why China has taken pains to create artificial islands and administrative districts in the South China Sea, and to pursue a militarized village-building spree in Himalayan borderlands that India, Bhutan, and Nepal consider to be within their own national boundaries.

Despite these encroachments, very little international attention has been given to Xi’s lawfare or broader hybrid warfare. The focus on China’s military buildup obscures the fact that the country is quietly expanding its maritime and land boundaries without firing a shot. Given Xi’s overarching goal—to achieve global primacy for China under his leadership—the world’s democracies need to devise a concerted strategy to counter his Three Warfares.

Brahma Chellaney, professor of strategic studies at the New Delhi-based Center for Policy Research and fellow at the Robert Bosch Academy in Berlin, is the author of several books, including “Asian JuggernautWater: Asia’s New Battleground,” and “Water, Peace, and War: Confronting the Global Water Crisis.

This commentary was published with permission of Project SyndicateChina’s Global Hybrid War.

Coronavirus Update: Early data indicates that boosters, at least for BioNTech and Pfizer’s COVID-19 vaccine, further protect against omicron

The latest batch of preliminary data indicates that COVID-19 booster shots are what is needed to further protect against the omicron variant of the coronavirus that causes COVID-19. 

A preprint, published Tuesday by researchers in South Africa, found that the BioNTech/Pfizer vaccine could be 20% less effective against omicron than other variants, based on a study of 12 people. (It did not include the plasma of people who have received a booster.)

“We assume Moderna will be in a similar ballpark in terms of impact and implied effectiveness, and J&J will be even worse,” Raymond James analyst Steven Seedhouse told investors in response to the research out of South Africa.

BioNTech SE
BNTX,
-4.36%

and Pfizer Inc.
PFE,
-0.95%

said Wednesday that a laboratory study indicated that a booster dose of Comirnaty increased antibodies to a level that better combats infections with omicron than two doses. Neutralizing antibody titers were 25 times in those who had been boosted compared with people who had received two doses. It’s thought that higher antibody levels are likely needed to better combat the variant. 

BioNTech and Pfizer also said that people who have received only two doses of Comirnaty may still be protected against severe disease. 

There are a few caveats. The data is preliminary and was shared in a news release, not in a preprint or a peer-reviewed medical study. In addition, the companies have not yet provided any information about who they gathered the sera from, including their ages or how many individuals were included in the study.

The good news, however, is that people who are boosted or those who are fully vaccinated and previously infected with the virus “may retain some protective immunity,” Citi analysts told investors on Wednesday. The BioNTech/Pfizer data also indicates that the reduction in immunity “is less than we had feared given the heavily mutated spike of omicron.”

The emergence of the new omicron variant in recent weeks has raised concern among public health officials around the world, who have said the number and location of mutations on the spike protein is worrying. However, at this time, the emerging viewpoint is that while omicron may be more infectious, including among the vaccinated, it may not cause more severe disease.

South African authorities said earlier this week that they are seeing fewer severely ill COVID-19 patients requiring oxygen than they have reported in other waves.

The U.S. expects to have additional data from the lab sometime next week, according to public remarks made Tuesday by Dr. Anthony Fauci, the president’s chief medical advisor.

“We’ll be able to determine whether or not antibodies induced by our vaccines lose their capability of effectiveness with omicron,” he said.

The latest COVID-19 numbers

The daily average case count in the U.S. climbed to 120,071 on Tuesday, the highest since Sept. 25 and a 27% increase from two weeks ago, according to a New York Times tracker. The daily average death toll rose 13%, to 1,298, the most since Nov. 3, and hospitalizations increased 19%, to an eight-week high of 60,747.

About 199.7 million people in the U.S. are fully vaccinated, according to the Centers for Disease Control and Prevention. This is 60% of the population. The number of people who have received a booster dose is increasing; about 47.8 million people, or 24% of the population, are now boosted.

What else you should know about COVID-19

In other Pfizer news, CEO Albert Bourla told The Wall Street Journal that the company expects to have full data for its experimental COVID-19 pill this month. He still expects an authorization before the end of the year.

Norway has limited the number of people who can attend household gatherings to 10, in order to limit the spread of the virus, according to Reuters. The Nordic country also said bars and restaurants can no longer serve alcohol past midnight.

A federal judge in Georgia on Tuesday temporarily blocked the Biden administration’s COVID-19 vaccine mandate for federal contractors, according to multiple published reports

: Intel’s new CEO shows signs he’s ready to over-deliver

Since taking over as Intel’s CEO, Pat Gelsinger has been more decisive and transparent about the company’s direction, challenges and opportunities than investors could have hoped.

The IDM 2.0 strategy brought Intel
INTC,
-1.87%

back to its geekier roots and made significant commitments to onshoring manufacturing and playing a greater role in supporting semiconductor production to meet the surging demand that has been at the core of our recent global supply chain woes.

However, despite his best efforts to improve investor sentiment and provide a spark to the company’s lagging share price, the market has largely shrugged off what I believe is a clear path to improved results and long-term growth for the company. 

Also by Daniel Newman: Marvell Technology breaks away from the pack, joining the list of must-own semiconductor stocks

With a need to reinvigorate investors and return the share price to greater levels, Gelsinger pulled on a new lever this week when the company announced its intention to spin off one of its prized assets, Mobileye.

The initial reaction sent share prices surging more than 7%, but the price tapered off throughout the day and rose a bit less than broader indices on one of the market’s best days since March. This is an almost predictable response despite the massive return that Mobileye is about to provide to Intel, in a deal that would keep the company in control of Mobileye but concurrently unlock the value of one of the leading autonomous-driving platforms. 

Spinning off innovative companies

The trend toward spinning off innovation and growth assets that are tied up in larger companies that are underperforming market expectations has become more prevalent as of late. We saw Dell capitalize on VMware’s momentum in a move that improved Dell’s
DELL,
-1.02%

balance sheet significantly.

Just a few weeks back, Honeywell
HON,
-1.89%

spun out its Quantum business in a merger with Cambridge Quantum Computing that will likely yield a public offering of some type that would open investors looking to bet on quantum, but not wanting to necessarily have their dollars tied in a more steady industrial name like Honeywell.

Both of those deals made sense. However, I would argue that the Mobileye deal will perform even better and provide a much-needed jolt for Intel, which, despite reports of its demise, is still showing revenue growth and strong earnings. Just not at the pace of its fabless peers. 

What makes the Mobileye deal so lucrative is the nature of the autonomous-vehicle and EV space. Investors have been extremely bullish on disruptive automotive plays, which has sent more than just Tesla
TSLA,
-0.51%

surging. Still, names like Lucid
LCID,
+0.96%

and Rivian
RIVN,
+1.10%

to valuations well above long-established automakers based mainly on the very idea of their products.

Potential payday for Intel

Intel paid around $15 billion for Mobileye in 2017. In less than five years, it could see an IPO above $50 billion based on early reports, with a possibility that it could rise significantly. Mobileye has customers, revenue growth, intellectual property and profitability. That’s a “quadfecta” that names like Rivian and Lucid Motors would struggle to deliver despite valuations north of $70 billion for Lucid and $100 billion for Rivian. With semiconductors slated to be approximately 20% of the bill of materials for vehicles by 2030, the growth opportunity in this space is significant. 

Since the acquisition of Mobileye, the company has seen its revenues triple and has just met a key milestone, shipping its 100 millionth EyeQ. While primarily operating autonomously from Intel, the company saw its portfolio diversify from silicon to a full-stack ADAS platform incorporating computer vision, policy control, high-definition mapping and a comprehensive safety framework.

At IAA Mobility in September, the company announced its plans for robotaxis based on its full-stack in conjunction with SixT, MoovIT, a previous $900 million acquisition by Mobileye, and Luminar’s lidar technology. Launching robotaxis in 2022 is a massive win for the company. Presuming it happens, it isn’t just shaping AVs but taking a significant lead in the mobility-as-a-service space. 

Put all of this growth and momentum together, and then add a current strong revenue performance and the commitment from Intel to spin the company off with a strong balance sheet intact, and it is hard not to think the market’s voracious appetite for autonomous and EV investments won’t make this an exciting IPO. 

Full slate

For those wondering what this means for Intel, it is hard not to see this positively. In my conversation with Gelsinger, he reiterated that this is a “want to do” and not a “need to do” for the company. I can’t help but feel the unlocking of value in a red-hot automotive market won’t provide a shot of confidence to investors and put a rapid growth asset on Intel’s books that it will manufacture a volume of chips for well into the future.

Meanwhile, the company has plenty to focus on. From its next-generation process and packaging to its new fabs here in the United States that should become high-performing assets as chip demand is likely to continue to surge, and domestic manufacturing will likely be more a requirement than an option for at least a portion of fabless chipmakers. 

Daniel Newman is the principal analyst at Futurum Research, which provides or has provided research, analysis, advising, and/or consulting to Marvell, Qualcomm, Intel, Nvidia and dozens of other companies in the tech and digital industries. Neither he nor his firm holds any equity positions with any companies cited. Follow him on Twitter @danielnewmanUV.

Tesco shares are on the up! Should I buy or avoid them?

The Tesco (LSE:TSCO) share price has been on an upward trajectory for the past six months. Should I buy Tesco shares for my portfolio at current levels? Let’s take a look.

Supermarket giant

Tesco is the UK’s biggest retailer and makes up one-quarter of the so-called big four supermarkets. The other three are Asda, Morrisons, and Sainsbury. Tesco’s position as the largest provides it with a competitive advantage in my opinion. It also added wholesale business Booker to its portfolio a few years ago.

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Tesco shares have been on an upward trajectory since the summer. As I write, shares are trading for 284p. Shares are up 26% from 225p six months ago. Coincidentally, the Tesco share price is up 26% over the past 12 months too. So with this recent rise in share price, should I add the shares to my portfolio?

Should I buy Tesco shares?

To help me make a decision, I have compiled a for and against argument.

FOR: Tesco looks like a bargain at current levels. Based on its current share price, it sports a price-to-earnings growth ratio of just 0.1 The general consensus is that a ratio of under 1 represents a potential bargain. Furthermore, Tesco’s price-to-earnings ratio of just 14 backs up my view. Statista has some excellent information on Tesco and they believe sales growth could rise by over 40% by 2024. If this performance comes to fruition, buying the shares right now could be a master stroke.

AGAINST: Competition in the supermarket sector has always been intense. Tesco has maintained a 25% or above market share against the other three big firms. In addition, German discounters Aldi and Lidl are now making real headway in the UK market. Furthermore, the spate of online-only firms such as Ocado are beginning to gain momentum as well. Growth in sales and increased performance will not be easy to come by.

FOR: Tesco’s market clout as well as size and footprint is one of its competitive advantages. The old adage ‘too big to fail’ springs to mind. Although this does not mean performance can’t suffer, Tesco has a global footprint and has taken steps to streamline operations such as selling its Asian business earlier this year. This will mean it can focus more energy on more lucrative markets such as the UK.

AGAINST: Current macroeconomic pressures such as rising inflation and costs will place pressure on performance and returns. If Tesco can pass rising costs on to customers, it may lose some customers to cheaper competitors. If it decides not to pass on this rising cost, margins will be squeezed. The supply chain crisis as well the shortage of HGV drivers will also affect operations. Right now, there’s no telling how long these problems will last.

My verdict

Right now I would avoid buying Tesco shares for my portfolio. As a savvy investor, uncertainty is a big red flag. The macroeconomic pressures are off-putting, especially as they could affect Tesco’s performance and any returns. In addition to this, competition is getting much more fierce in the supermarket sector with online disruptors as well.

There are aspects of Tesco I like, which I have mentioned above. However, right now I would probably avoid supermarket stocks like Tesco and buy other shares for my portfolio. I will keep a keen eye on developments, however.

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Jabran Khan has no position in any shares mentioned. The Motley Fool UK has recommended Tesco. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

: Roku stock rallies after company reaches agreement with Google over YouTube

Shares of Roku Inc. are surging Wednesday after the streaming-media company confirmed that it will be extending its agreements with Alphabet Inc. services YouTube and YouTube TV.

Roku
ROKU,
+14.11%

and Alphabet’s
GOOG,
-0.15%

GOOGL,
-0.15%

Google had been in heated negotiations about the future of YouTube and YouTube TV on the Roku platform. Roku had pulled the YouTube TV app from its channel store back in April after the companies failed to agree on terms for the online-cable service.

Now the companies appear to be on better footing, with a Roku spokesperson saying Wednesday that the two have “agreed to a multi-year extension for both YouTube and YouTube TV.” The arrangement is “a positive development for our shared customers, making both YouTube and YouTube TV available for all streamers on the Roku platform,” the spokesperson continued.

Terms of the deal weren’t disclosed.

Roku’s stock was up 10.5% in Wednesday morning trading, while shares of Alphabet were off 0.5%.

Subscribe: Want intel on all the news moving markets? Sign up for our daily Need to Know newsletter.

Back in April, Roku maintained that it wasn’t seeking additional “financial consideration” through its YouTube TV negotiations, though the company said it was pushing back at requests from Google that it deemed “anticompetitive.” Google said at the time that it was looking to renew the YouTube TV agreement under “existing reasonable terms” and denied that it made requests “to access user data or interfere with search results.”

Wells Fargo analyst Steven Cahall wrote in a late November note to clients that he thought investors were “concerned about core YouTube falling off of Roku at some point” as tensions escalated over YouTube TV.

Even with Wednesday’s rally, shares of Roku are off 29% over the past three months, as the S&P 500
SPX,
-0.11%

has risen about 4%.

How to Justify the Annual Fee on a Travel Credit Card

If you’re seeking even a few travel upgrades, you’re more than likely going to need a travel credit card. While it’s true that there are plenty of decent no-annual-fee travel credit cards out there, paying for an annual fee can sometimes pay dividends when you calculate the eye-popping value that some travel credit cards deliver. The most premium travel credit cards come with annual fees north of $500, but satisfy cardholders because of perks like upgrades to an airline’s premium class, access to exclusive airport lounges or automatic hotel elite status.

But what about the travelers who don’t necessarily need a $0 annual fee credit card, but don’t want to pay exceptional amounts of money out-of-pocket to cover an annual fee, either?

Here’s how to justify a mid-tier or higher annual fee on a travel credit card, even if you’re on a tight budget.

The problem with travel credit cards with annual fees

For better or for worse, premium travel credit cards have a lot in common with coupon books. They promise tantalizing savings, but can be burdensome to track. They offer increasing value with increased use, but may incite more spending than intended. They sucker you into only using certain brands that accept your rewards, even if another airline’s route is more convenient or another hotel is cheaper.

If that’s enough to spike your anxiety, then a credit card with an annual fee likely isn’t for you — and that’s OK. After all, the easiest annual fee to justify is $0.

But once you’ve experienced the outsized value of a no-cost travel credit card, you might be ready to upgrade to something with a few more perks — and a higher cost.

Nerdy tip: The average cost of a travel credit card in 2019 was $93.17 according to a study by U.S. News and World Report. Use that figure as a benchmark when analyzing the space in your budget for this expense.

3 times you can justify an annual fee

Here’s how to think about the upfront cost versus value of perks when you’re ready for a travel credit card that costs money. With a fee, you can generally anticipate bigger rewards, upgrade opportunities and other benefits that improve the comforts or convenience of your travels.

1. The card’s perks have a clear, fixed value and are something you’d otherwise pay for

Many travel credit cards have benefits that — if you use them — easily offset the annual fee. Once you’ve earned back the value of the annual fee, then all of a card’s additional benefits (like rewards earnings or other perks) can sometimes mean you actually come out ahead.

Some cards earn statement credits, where you get money automatically back in your account for purchases from certain airlines or hotel brands or in certain spending categories. Other credit card perks aren’t quite as effortless to use but can still have a fairly straightforward value.

Some examples include:

  • TSA PreCheck or Global Entry: TSA PreCheck or Global Entry membership is practically imperative for frequent flyers, allowing you to speed through airport security without taking off your shoes or removing your laptop. The application fee is $85 for PreCheck and $100 for Global Entry. But rather than pay for it out-of-pocket, some cards offer TSA PreCheck or Global Entry credits.

  • Free checked bags: Many airline cards offer free checked bags often for your entire group (up to a certain amount, usually six). If you and five buddies each check a bag that might normally cost $30, then that’s $360 in savings for a round-trip flight, which could alone justify the annual fee.

Add up how much you might spend on these things without a costly travel credit card. If those costs outweigh the annual fee, then that’s pretty easy to talk yourself into applying.

Take caution

Plans change. Grandma may have lived down the street from a Marriott, but maybe she moved and you’re suckered into a bunch of Bonvoy points that you’re now less likely to use. Perhaps you check bags and anticipated one round-trip flight each month for work, thus you expected annual savings of $720 on bag fees alone — only to lose your job.

If you’re nervous about the reliability of a branded credit card in the medium or long run, consider a more generic travel credit card, like the Chase Sapphire Preferred® Card. This card’s points can be spent at several brands instead of just a few.

2. The spending rewards are high and the card’s bonus categories align with your general spending habits

Another time that you can justify an annual fee is if the card gives a kickback of 1% or more for purchases, such as streaming services or rideshare services, that you already often make. Especially as the pandemic shifted spending habits, consider where your money is going, and how much you’re earning back on your current cards.

For instance, if you spend a lot of money regularly at a grocery store, then a card like the Blue Cash Preferred® Card from American Express could be worthwhile. It gets 6% cash back on purchases made at U.S. supermarkets on up to $6,000 per calendar year. The card has an annual fee of $0 intro for the first year, then $95. Terms apply.

Take caution:

Before adding a new, category-specific credit card to your wallet, weigh the opportunity cost (the amount of money you lose by using one card versus another) of applying for a card with an annual fee versus using one with lesser rewards, albeit no annual fee. Some quick math can help you determine if your grocery bill getting 2% cash back with a no-annual-fee card is a better deal than getting 6% cash back with a card that has a $0 intro for the first year, then $95 annual fee.

3. There is a sign-up bonus you just can’t pass up

Sign-up bonuses can be a useful way to earn a windfall of points if you’re able to hit the minimum spending requirements. A good sign-up bonus could translate into a free round-trip flight or several night stay at your preferred hotel.

Generally speaking, the higher the annual fee, the higher the welcome bonus should be. Some of these sign-up bonuses can be worth upward of a thousand dollars in value, which can make adding a specific card to your wallet a compelling option (even if it will cost you $50 or more upfront).

Take caution:

Any newcomer welcome bonus is a one-time deal. Next year, you’ll owe an annual fee, but won’t have a sign-up bonus to help justify it this time around.

What’s more, if you’re not likely to meet the spending threshold, the minimum spend might cause more stress on your finances than the value of even a large sum of travel points and miles. So take a look at your budget and make the right call for you.

Nerdy tip: It might be tempting to cancel your card after earning a welcome bonus. A word of caution: Closing accounts mean you’ll lose that credit history, which could potentially have a negative impact on your credit scores.

Some issuers may let you downgrade to a no-annual credit card, but it’s not guaranteed.

The bottom line

Some high-rollers plunk down their plastic (or metal) like it’s a status symbol. But even the most frugal among us can benefit from travel credit cards that charge annual fees. Travelers who salivate over free food or who spend money on expenses like checked bag fees can often circumvent costs by charging them to the right credit card.

If you balk at credit card annual fees, there are plenty of good ones that don’t have them. But if you’re open to annual fees and you’re enthusiastic about starting to use travel rewards as a tool for lessening travel costs, then justifying two (and for some, three) figures in annual fees isn’t actually as ludicrous as you might think.

How to maximize your rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2021, including those best for:

London Markets: Pound under pressure as U.K. markets mull further COVID restrictions

Stocks in London clung to gains on Wednesday, while the pound came under pressure after a report that U.K. Prime Minister Boris Johnson may tighten restrictions on the country as it battles rising COVID cases.

Citing three senior government officials, the Financial Times reported that the government will introduce vaccine passports for large venues and recommendations for individuals to work from home. The announcement of new measures could come as soon as Wednesday and would represent a fourth set of restrictions for Britain during the pandemic.

However, one of those sources claimed Johnson was trying to distract from a scandal over a leaked mock Downing Street press conference that referred to a staff party last Christmas.

Johnson has apologized over the reports and ordered an inquiry into video that was recorded on Dec. 22, 2020 and shown late Tuesday by broadcaster ITV. He told members of parliament on Wednesday that the government needed to focus on the new omicron variant of COVID-19 that was spreading faster through the country than past ones.

The pound 
GBPUSD,
-0.15%

fell as low as $1.3187 vs. the dollar, hovering at around that level in the afternoon. U.K.-listed travel stocks were mixed, with shares of InterContinental Hotels Group
IHG,
+1.60%

up 1.9% and cruise company Carnival
CCL,
+4.87%

climbing nearly 5%, but easyJet
EZJ,
-1.19%

stock down 1.5%.

Shares of travel group TUI
TUI,
+1.56%

rose 1.2%, after dropping earlier after the company reported bookings had slowed for its winter reservations.

“The outlook adds another piece to a precarious picture over the next few months for the travel and tourism sector, given uncertainty surrounding the new COVID strain,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, in a note to clients.

Drugmaker Pfizer
PFE,
-0.75%

may have lent a hand in stabilizing some losses after the company said preliminary studies showed that three doses of its COVID vaccine, including one booster, would neutralize the omicron variant. But Wall Street was trading modestly lower as investors digested two strong consecutive sessions.

The FTSE 100 index
UKX,
+0.10%
,
climbed 1.5% on Tuesday, and has gained 3% over the last two trading sessions, the biggest such back-to-back gains since Feb. 15, 2021. The index was barely positive on Wednesday at 7,346.63.

Building passive income: how I’m aiming to generate £300 per month in dividends

Warren Buffett famously said, “If you don’t find a way to make money while you sleep, you’ll work till you die”. We all want passive income, and building it is one of the best ways to achieve that financial independence. There are many forms of passive income, like owning rental properties or a business. But dividend investing is my personal favourite. 

Dividends

Dividends are a portion of a company’s profits allocated to its shareholders. These payments can be made once, twice, or even four times a year and are often reflective of how profitable that company has been. Dividend investing is a strategy by which investors build a portfolio of reliable companies that regularly pay a stable dividend, which can then be re-invested into that portfolio. This strategy is very popular in the UK and in recent years we have seen record high dividend yields. Some even going to 13% or 15% of the share’s value!

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

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Average yield

But these high rates are usually unsustainable over the long term. For example, the mining company EVRAZ paid 53p per share in 2019, a whopping 13.39% of the share price. But EVRAZ only paid 42p in 2017 and didn’t pay anything in 2016 or 2015.

The vast majority of UK companies pay a dividend of around 4%. This year, companies like BAE systems and Unilever are expected to allocate 4.22% and 3.39% respectively. It’s worth remembering that no company is under any obligation to increase, maintain, or even pay a dividend. Consistency is everything.

Capital needed

To reach my goal of £300 per month, I will need a total pot of £90,000. Four percent of £90,000 is £3,600. That, divided over 12 months is £300.

While I don’t have anywhere near that money on hand, if I save £250 per month, I would reach that magic number in about 30 years. 

Admittedly 30 years is a long time, but if I start investing that money right away, then the compounding interest will bring that date forwards faster. Now I just need to choose some companies.

Companies

While the goal is to aim for safe companies I can rely on, I do think it’s worth taking a few risks to help speed up the clock. I have spoken at length about how much I like Imperial Brands. The tobacco company has paid a sizeable dividend to its shareholders at least twice a year since 2002. The average yield today is actually 8.9%.

Since my plan uses 4% over 30 years as its benchmark, I’m not worried if Imperial Brands decides to cut down its dividend payment. However, I do think its important I don’t rely on this process and balance out the portfolio with smaller yield companies which I can depend on more consistently.

Lloyds Bank makes a dividend payment of around 2.6% which is beneath my target, but would balance out the risk. Finally, I would choose Unilever as the company is large, profitable, and currently pays a 3.39% dividend.

None of this is a guarantee for the future. Any one of these companies may eventually collapse for some unforeseen reason. All investing bears risks. But without risks one cannot achieve a reward. The important thing is to build a diverse portfolio so that, when retirement comes, I will have a passive income stream I can rely on.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies still trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!


James Reynolds has no position in any of the shares mentioned. The Motley Fool UK has recommended Imperial Brands. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The Margin: The best bar in the world for 2021 has been named — and it’s this ‘elegant’ spot in London

If you want to visit the bar proclaimed as the world’s best, you’d better book a trip to London.

The Connaught Bar, a London watering hole that bills itself as evoking “a touch of timeless elegance,” was named the top drinking spot across the globe for the second consecutive year by the World’s 50 Best Bars organization.

In a statement, the organization said Tuesday that the Connaught “stays true to its principles of presenting artful, modern drinks with graceful service.” The bar’s menu includes a mix of classics — the Connaught Martini features Tanqueray No. 10 Gin with a blend of vermouths — alongside more inventive sips. One drink, the Ellipses, features dots of edible paint on a square of ice.

While the Connaught may have landed England in the top position, the top 50 list is dominated by bars in other locales. For example, Singapore had six bars on the slate, with the highest ranking being Jigger & Pony in the ninth spot.

A handful of U.S. bars also made the cut, including three in New York: Katana Kitten (No. 10), Dante (30) and Attaboy (34). A bar in Miami, Café La Trova, also made the top 50, while further U.S. establishments were among those ranked 51st through 100th. Dante, a Greenwich Village bar that specializes in Italian cocktails, had been named the world’s best bar in 2019 at Tales of the Cocktail, another prominent industry forum.

The announcement of the World’s 50 Best Bars list comes as drinking establishments are still trying to recover from the pandemic, which forced many bars to shut down for months on end and stigmatized the industry even after reopening. By their very nature, bars bring people together in often tight spaces — the very opposite of social distancing — so they were often seen as particularly perilous places to be.

Art Sutley, a hospitality consultant, said he hopes this year’s 50 Best announcement will give the industry a much-needed lift. He added that the places that make it on the list usually see a sizable boost of business from locals and tourists alike. “You become a destination bar,” Sutley said.

Read on: MarketWatch’s weekly Weekend Sip column samples a vodka made from wildfire-damaged wine grapes, a single-malt from India, a high-tech rye and more

2 FTSE 100 must-buy stocks for me in a  stock market crash

Yesterday was a good day for the FTSE 100 index. It rose above 7,300 for the first time in December, after fears of the Omicron virus led to a wobble in the stock markets recently. Clearly then, it appears that investor confidence is returning. And if the index continues to rally through the rest of the month, my earlier prediction that it could conceivably rise to 7,500 by year-end might just happen. 

As optimistic as I would like to be, however, I think it is also prudent to prepare for things to go wrong. There have been plenty of times this year when the stock markets looked like they were close to melting down. We have not seen a full-blown market crash, but there has been more than one day when my portfolio has been completely in the red, thanks to ongoing pandemic-driven challenges. So especially when the going is good, I like to remind myself what to buy if a stock market crash were to happen tomorrow. I do not want to be stuck not knowing what to do when the best stocks around become available at deep discounts. 

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

JD Sports Fashion: an unstoppable FTSE 100 stock

The first such stock I would buy is JD Sports Fashion (LSE: JD). The FTSE 100 athleisure retailer has shown stellar stock market performance for a while now. And there is a whole new reason to like the stock now. It just did a stock split, so every share of the company became five shares. This means that for the price of one share earlier, I can now buy five shares. As can be imagined, this has resulted in a massive price drop per share.

It is now available for a little over 200p. But the low absolute value should not fool me. It is a solid stock that has seen massive gains over the years. I expect that it would continue to see big gains in the future, which is why I just increased my holdings as well. 

Of course being a retailer, there is always the risk that it could face challenges again if we were to go back into lockdowns. And this would now be at a time that it has made some acquisitions. This could add greater complexity to its situation. But going by its long-term performance, I am fairly confident it could bounce back. 

Croda International: consistently performing

Croda International is another FTSE 100 stock for me to buy. The speciality chemicals’ manufacturer looks prohibitively expensive with a price-to-earnings (P/E) ratio of 55 times. But a look at its long-term share price chart tells me why. The stock has pretty much consistently been rising over the years, so clearly investors are ready to buy it at a premium. And its performance has been strong too. It goes without saying that past performance is no guarantee of future returns, but is nevertheless a strong indicator. 

A market crash could be just the right time for me to buy this high performing stock on dip. 


Manika Premsingh owns shares of JD Sports Fashion. The Motley Fool UK has recommended Croda International. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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