Premarket: The 2 big reasons stocks are struggling as 2021 kicks off

What’s happening: The S&P 500 and Nasdaq Composite both fell 1.5% on Monday, while the Dow dropped more than 380 points, or 1.3%.

The selloff “suggests that many investors might have made a New Year’s resolution to stay sober, at least for the first day or two of 2021,” Ed Yardeni, president of Yardeni Research, told clients Tuesday.

The broad themes that sent stocks to record highs at the end of 2020 are still intact. Unprecedented support from central banks and governments remains in place, and the vaccine rollout that will eventually feed an economic recovery is gathering steam.

“Fiscal and monetary policy are highly supportive, and financial conditions are very loose,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “We therefore continue to expect strong global growth in 2021.”

In the meantime, however, virus headlines are generating turbulence.

On Monday, UK Prime Minister Boris Johnson announced a third lockdown for England. The nation is grappling with a surge in Covid-19 cases believed to be triggered by a new, more infectious variant. Italy said Tuesday that it’s extending most of the coronavirus restrictions imposed during the Christmas holidays until Jan. 15. German leaders are also discussing an extension of the country’s lockdown.

Meanwhile, hospitalizations continue to surge in the United States, while the vaccination effort is lagging behind targets. Just 4.5 million people have received their first dose, the US Centers for Disease Control and Prevention said Monday. That’s well behind what officials had hoped for by now.

Then there’s the political action in Georgia on Tuesday. Two runoff contests there will determine whether Republicans can keep hold of the Senate.

“It is impossible to overstate how critical these races are for fiscal, tax and regulatory policy over the next two years,” Chris Krueger, policy analyst at Cowen Washington Research, said in a report Monday.

A sweep by Democrats would allow for more ambitious spending programs once President-elect Joe Biden enters the White House. But it would also make corporate tax hikes more likely, which could jolt investors.

A jittery Wall Street thinks the vote could go either way. That means traders, and not just political junkies, will be glued to their TVs tonight.

“The race looks close to a toss-up, albeit with a slight Republican lean,” Goldman Sachs chief US political economist Alec Phillips told clients.

Wall Street reverses plan to kick out China telcos

The New York Stock Exchange has abruptly reversed its decision to kick out three of China’s largest state-owned telecom companies, my CNN Business colleague Laura He reports.

In a bizarre turn of events, the exchange said late Monday that it no longer intends to delist the firms after “further consultation with relevant regulatory authorities,” and that they will continue to be listed and traded on the NYSE “at this time.”

The sudden about-face comes just days after the NYSE announced that it would end trading in the shares of China Mobile, China Telecom and China Unicom — a move it said was needed to comply with an order President Donald Trump signed late last year banning Americans from investing in firms that the US government suspects are either owned or controlled by the Chinese military.

The action was poised to increase tensions between the world’s two biggest economies. The Chinese government has criticized the United States for “wantonly suppressing foreign companies listed in the country” and previously said it would take “necessary measures” to safeguard the interests of Chinese firms.

The reasons behind the NYSE’s reversal were not immediately clear — though investors are certainly getting whiplash.

Investor insight: Shares of all three affected firms, which also trade in Hong Kong, dropped Monday before rallying Tuesday. China Unicom advanced 8.5%, while China Mobile jumped 5% and China Telecom rose more than 3%.

The company that tried to fix US health care is shutting down

There was palpable excitement when Amazon’s Jeff Bezos, JPMorgan Chase’s Jamie Dimon and Berkshire Hathaway’s Warren Buffett announced that they were forming a company to reimagine health care.

But three years later, the partnership — known as Haven — is shutting down, my CNN Business colleague Paul R. La Monica reports.

The ambitious venture was created in 2018 to provide better health care services and insurance at a lower cost to workers and families at the three companies. The hope was their learnings could be applied at other firms, too.

But Haven struggled to usher in large-scale changes to a notoriously thorny and complex system. CEO Atul Gawande, who was given significant bandwidth and funding to make his vision a reality, stepped down last May.

In a letter to employees, Dimon lauded the effort.

“Haven worked best as an incubator of ideas, a place to pilot, test and learn — and a way to share best practices across our companies,” he said. “Our learnings have been invaluable.”

That may be true. But the end of the high-profile venture likely comes as a disappointment to those in the industry who hoped for bigger solutions.