Stocks Climb to Five-month High; Dollar Slumps

US stocks rose for a fourth day as investor optimism over the likelihood for a new spending bill and potential coronavirus vaccines outweighed concern about an escalation of tensions with China. The S&P 500 rose 0.57% to 3,276.02 while Dow Jones was up 165.44 points (0.62%) to 27,005.84.

US Jobs Picture Worsens With Census Survey Showing July Drop

The US labor market’s rebound is increasingly at risk of being cut short after a survey showed employment dropping sharply this month. The number of employed Americans declined by about 6.7 million from mid-June through mid-July, including a 4.1 million plunge from the first to the second week of July, according to the Census Bureau’s weekly Household Pulse Survey.

US Sales of Previously Owned Homes Rebound on Lower Rates

US sales of previously owned homes rose in June for the first time in four months as the economy reopened more broadly from coronavirus-related shutdowns and buyers took advantage of record-low mortgage rates. Closing transactions jumped 20.7% from the prior month to an annualized pace of 4.72 million, data from the National Association of Realtors showed.

Lagarde Says Allocation of EU Stimulus ‘could Have Been Better’

The mix of grants and loans in Europe’s rescue package could have been better, according to European Central Bank President Christine Lagarde. The 750bn-euro ($868bn) stimulus deal struck by European Union governments this week “is clearly a demonstration of solidarity, of transfer to those that need it most,” she said. The allocation of loans and grants in the package is a “good balance,” Lagarde said. It could have been better, but it’s a very ambitious project actually.

UK Sees US Trade Deal More Likely Next Year Than in 2020

The UK accepts it is unlikely to secure a trade deal with the US before November’s presidential election, a setback for Boris Johnson’s effort to secure an early win from leaving the European Union. Britain is more likely to conclude negotiations with the US, its largest trading partner, in January rather than this year after the coronavirus slowed the progress of discussions, according to a person with knowledge of the matter.

Japan Lifts View of Economy Again, But Says Situation Still Grim

Japan’s government upgraded its assessment of the economy in July for a second month, saying conditions are picking up even as they remain severe amid reopening from coronavirus shutdowns. In its monthly report released, the Cabinet Office said it saw improvement in 6 out of 14 economic categories, including consumer spending, exports, production and public investment.

China Vows to Support Job Creation After Virus Battered Economy

China’s top leaders have pledged to support job growth as the government battles high unemployment due to the blow the coronavirus dealt the economy. A meeting by the country’s State Council chaired by Premier Li Keqiang, he vowed to broadly support job growth, including for part-time and “flexible” employment, according to a government statement.

Oil Steadies With Weak Dollar Eclipsing Sluggish Demand Backdrop

Crude nearly erased all losses with a declining dollar and strong US equities lending support to a market weakened by sluggish demand. Brent crude for September settlement decrease US$0.03 to US$44.29 per barrel.

Source: Affin Hwang Research - 23 Jul 2020