US stocks fell before the start of one of the most uncertain earnings seasons on record as the coronavirus pandemic rattles the global economy. The S&P 500 fell 1.01% to 2,761.63 while Dow Jones was down 328.6 points (1.39%) to 23,390.77.

Clarida Says Virus a Severe Hit, US Can Escape Deflation

Federal Reserve Vice Chairman Richard Clarida says the central bank has the tools needed to keep the US out of a deflationary trap, even as the coronavirus deals a severe hit to the economy. Demand is impacted very adversely, we’re trying to offset that with our policy, Clarida said. She believes it’s dis-inflationary and not deflationary. She thinks they have the tools to keep the economy out of deflation and to support the economy through this challenging period.

Homeowners Seeking Mortgage Relief With US Economy Shuttered

Almost 4% of mortgage borrowers have stopped making their payments as the coronavirus pandemic puts millions of US homeowners out of work. The share of loans in forbearance jumped to 3.74% during the week ended April 5, up from 2.73% the previous week, according to a survey from the Mortgage Bankers Association.

Treasury Begins Sending US$1,200 Rescue Payments This Week

Americans will start to see their stimulus payments this week, a centerpiece of the US$2.2trn rescue package meant to provide a buffer against the coronavirus pandemic that’s shuttered much of the US economy. The Internal Revenue Service has begun sending US$1,200 payments to middle and lower income adults, plus US$500 for their minor children.

Chamber Urges Congress to Boost Small Firm Aid as Funds Run Low

The US Chamber of Commerce is urging Congress to give a small-business aid program an infusion of funds before it runs out, as Democrats and Republicans remain deadlocked over extending assistance to local governments and hospitals. Suzanne Clark, who is president of the U.S. largest business group, said that congressional leaders need to take action to shore up both disaster aid and a pool of US$349bn in forgivable loans.

Recovery in Chinese Trade Far From Sight as Global Outlook Dims

The contraction in China’s foreign trade is set to continue through the second quarter, as global demand remains depressed by measures to curb the ongoing coronavirus outbreak. Both exports and imports are forecast to have slumped 10% or more in March, with data due Tuesday expected to show a continuation of the declines seen in the first two months of the year.

New Zealand Seeks to Limit Jobless Surge With More Stimulus

New Zealand’s government is preparing additional fiscal measures to limit a surge in unemployment as it battles the coronavirus, Finance Minister Grant Robertson said. Work on further significant government investment to protect jobs, support cashflow, and prepare the economy for recovery is well advanced,” Robertson said. Scenarios released by the Treasury department show that unemployment “can be kept below 10%, and return to 5% in 2021 with additional government support,” he said.

Oil Surrenders to Demand Loss Despite Historic OPEC+ Output Cuts

Oil in London eked out a modest gain on Monday as investors weighed whether an unprecedented deal by the world’s biggest producers to cut output could stabilize the market reeling from the coronavirus pandemic. Brent crude for June settlement increased US$0.26 to US$31.74 per barrel.

Source: Affin Hwang Research - 14 Apr 2020