Stocks Mixed; Oil Rises Most in Almost Three Week

US stocks were mostly mixed as investors sold some of the high-flyers that drove the latest rally that almost pushed US equities back to record highs. Crude oil rallied and the dollar touched a one-week high. The S&P 500 rose by 0.27% to 3,360.47 while Dow Jones was up 357.96 points (1.30%) to 27,791.44.

Job Openings in US Unexpectedly Rose in June, Hiring Solid

US job openings unexpectedly increased in June and hiring maintained a solid pace as state economies continued with reopening efforts. The number of available positions climbed to 5.89 million during the month from a revised 5.37 million in May, according to the Labor Department’s Job Openings and Labor Turnover Survey.

Fed Study Says Average Inflation May be Better Way to Reach Goal

Average inflation targeting may be an effective tool in the current economic environment, where sluggish price increases have forced central banks to keep interest rates low, constraining the tools at their disposal in times of crisis, according to economists at the Federal Reserve Bank of San Francisco. The Fed targets inflation at 2% in an effort to keep prices from rising too quickly, as happened in the 1970s and 1980s.

France’s Economic Recovery Loses Pace After Initial Surge

The pace of France’s economic recovery is slowing, the country’s central bank said, confirming expectations of a prolonged period before output catches up with pre-crisis levels. In its monthly report, the Bank of France said economic activity was 7% below normal levels in July after a 9% gap in June. Indicators for August suggest a similar shortfall as last month or only a slight improvement.

China July Consumer Inflation Picks Up Amid Flood Disruption

China consumer inflation accelerated and factory price deflation eased in July, as the nation’s economy continued to recover from the coronavirus crisis amid disruption from regional flooding. The consumer price index rose 2.7% last month from a year earlier, following a 2.5% gain in June, the National Bureau of Statistics said. The median forecast was for a 2.6% increase.

Indonesia Ramps Up Stimulus Spending to Revive Sluggish Demand

Indonesia is accelerating disbursement of some US$50bn in fiscal stimulus to revive consumer spending and prevent Southeast Asia’s largest economy from sliding into a recession. The government will pay 28.8trn rupiah (US$1.96bn) to civil servants and state pensioners as a 13th month salary starting this week, Finance Minister Sri Mulyani Indrawati said.

Philippines’ House Approves US$3.3bn Pandemic Relief Bill

The Philippines is nearing a second pandemic relief measure, after the House of Representatives passed a 162bn-peso (US$3.3bn) bill that would provide subsidy to the unemployed and loans to small businesses. The proposed law, which was approved by 242 lawmakers, also allocates billions of pesos in realigned funds from this year’s budget and state companies’ savings for pandemic-hit tourism, transport and farm workers.

Oil Holds Gains on US Stimulus Optimism, Signs of Virus Easing

Oil held onto gains in Asia on signs that the US may move forward with another economic stimulus deal that could bolster consumption, and as the growth in new coronavirus cases begins to ease. Brent crude for October settlement rose US$0.59 to US$44.99 per barrel.

Source: Affin Hwang Research - 11 Aug 2020