S&P 500 gains, fails to eclipse its all-time high

US stocks climbed amid a rally in technology companies, while failing to top their alltime high as big banks sold off. Treasuries rose. The S&P 500 rose by 0.3% to 3,381.99 while Dow Jones was down 86.11 points (0.3%) to 27,844.91.

Low rates push homebuilder optimism to highest since 1998

US homebuilders are riding a wave of optimism as record-low mortgage rates drive demand for new homes. A gauge of builder sentiment jumped to 78, a six-point gain from July that pushed it to the highest level since 1998, according to the National Association of Home Builders/Wells Fargo Market Index.

Greenspan says US virus failure threatens recovery, aids China

The failure of the US to handle the coronavirus pandemic risks derailing the economic recovery and puts the country at a competitive disadvantage in its long-run battle with China for global hegemony, former Federal Reserve Chairman Alan Greenspan said. Greenspan said that the US has at times looked like it “has lost its way,” while China has enjoyed continued success in expanding its economy, including being the first to recover from a pandemic-driven swoon in activity.

Singapore boosts stimulus by S$8bn amid recession

Singapore Deputy Prime Minister Heng Swee Keat announced additional support measures of S$8bn (US$5.8bn) to cushion the blow from the coronavirus pandemic, extending wage subsidies and aiming to shore up the hard-hit aviation and hospitality sectors. The new set of measures, announced almost three months after the last package, adds to Singapore’s total pledged pandemic aid of almost S$100bn, Heng, who is also finance minister, said. The measures will be financed in part by unused expenditures from earlier budgets, and won’t require additional funds.

Thailand recession deepens with biggest gdp fall since 1998

Thailand’s economy contracted the most in more than two decades, deepening its recession as the nation’s key drivers of trade and tourism remain hobbled by the global coronavirus pandemic. Gross domestic product shrank 12.2% yoy, the National Economic and Social Development Council said, its biggest decline since the Asian financial crisis in 1998. .

Japan sees record economic slump with recovery hinging on virus

Japan posted a record economic contraction in the second quarter, with recovery prospects now hinging on how quickly an uptick in virus infections can be contained. The world’s third-largest economy contracted an annualized 27.8% qoq in the three months through June as a state of emergency and lockdowns in the country’s major export markets hammered consumer spending, production and exports.

PBOC adds cash to ease liquidity stress with rate unchanged

China’s central bank supplied liquidity to commercial lenders on Monday to help them manage upcoming government bond sales, while leaving the price of the money unchanged as the economy recovers. The People’s Bank of China (PBOC) added 700bn yuan (US$101bn) of one-year funding via the medium-term lending facility. The central bank said that today’s operation is meant to offset the 400bn yuan in loans coming due Monday and another 150bn yuan maturing on Aug. 26.

Oil rises to five-month high on signals of economic recovery

Oil jumped to a five-month high alongside a surge in US equities as optimism that an economic recovery may be on the horizon lifted hopes for improving fuel demand to follow. Brent crude for October settlement rose US$0.57 to US$45.37 per barrel.

Source: Affin Hwang Research - 18 Aug 2020