Nasdaq sets a record as tech jumps; dollar climbs

Stocks advanced, with tech shares leading the way, amid positive economic data and after the White House was said to consider acting on its own to boost unemployment benefits. The S&P 500 rose by 0.72% to 3,294.61 while Dow Jones was up 236.08 points (0.89%) to 26,664.40.

Extension of jobless benefits to buoy growth, Fed’s Kaplan says

A continuation of some form of extra unemployment benefits would bolster economic growth, Federal Reserve Bank of Dallas President Robert Kaplan said. The extra US$600 per week of jobless aid passed by Congress in March amid the start of the coronavirus pandemic ran out at the end of July. If unemployment insurance isn’t boosted further, it could weaken growth, Kaplan said. He sees the economy contracting 4.5% to 5% this year, but rebounding strongly in the third and fourth quarters.

Treasury lifts quarterly borrowing estimate to US$947bn

The US Treasury said it expects to raise US$947bn in debt over the three months through September to fund the massive and continuing spending surge to address the coronavirus crisis. The figure, released in Washington, is US$270bn higher than the Treasury projected in May, when it expected to borrow US$677bn of net marketable debt in the quarter.

US ISM manufacturing expands at fastest pace since March 2019

US manufacturing expanded in July at the fastest pace since March 2019 as more factories boosted production in the face of firmer orders and lean inventories. The Institute for Supply Management said that its manufacturing gauge increased to 54.2 last month from 52.6. Readings above 50 indicate expansion, and the latest figure exceeded the 53.6 median projection in a Bloomberg survey of economists.

UK manufacturing grows as sector starts long road to recovery

UK manufacturing grew at the fastest pace in almost three years in July as the nation’s lockdown eased, although economists warned the sector still faces an arduous road to recovery. IHS Markit’s Purchasing Managers Index for the industry climbed to 53.3 from 50.1 in June, the company said. That’s slightly below a flash estimate, but still well above the 50 level that indicates growth.

Japan’s economy shrinks at same pace in 1q as capex holds up

Japan’s economy shrank at the same pace as previously estimated in the first quarter, according to a further revision of data that continued to show the country was in a recession before the pandemic took its heaviest toll. Gross domestic product shrank an annualized 2.2% in the first quarter compared with the final three months of 2019, the Cabinet Office reported, with business investment showing more resilience than expected.

South Korean consumer prices rise for first time since April

South Korea’s consumer prices advanced in July, adding to signs that the economic downturn from the coronavirus pandemic is bottoming out. Inflation accelerated to 0.3% from June’s zero and May’s negative readings, data from the statistics office showed. Economists had also expected consumer prices to increase 0.3% from a year earlier.

Oil rally pauses as more OPEC supply offsets economic cheer

Oil’s rally stuttered in Asia with the prospect of higher OPEC+ output in August keeping gains in check despite signs of an economic recovery. Brent crude for October settlement rose US$0.63 to US$44.15 per barrel.

Source: Affin Hwang Research - 4 Aug 2020