Stocks Extend Weekly Advance After Economic Data

Stocks climbed, led by technology companies, after economic data bolstered optimism that a recovery from a pandemic-induced recession is on track. Treasuries and the dollar rose. The S&P 500 rose by 0.3% to 3,397.16 while Dow Jones was up 190.60 points (0.7%) to 27,930.33.

US Existing-home Sales Surged in July by Most on Record

US sales of previously owned homes surged by the most on record in July as lower mortgage rates continued to power a residential real estate market that’s proving a key source of strength for the economic recovery. Closing transactions increased 24.7% from the prior month to a 5.86 million annualized rate, the strongest pace since the end of 2006 and reflecting broad gains across the US.

UK Economic Revival Is Clouded by Debt, Job Losses and Brexit

The UK economy rebounded faster than expected in August but the figures were clouded by warnings of an impending crisis for retailers, a jobs crunch, ballooning public debt, and signs that trade talks with the European Union will fail.While IHS Markit’s monthly Purchasing Managers Index, which measures private-sector business activity, jumped to a seven-year high, the report showed that business confidence declined and companies continued to cut jobs.

Europe’s Economic Recovery Stumbles After Initial Bounceback

The euro-area economy unexpectedly lost momentum this month after a resurgence of coronavirus cases forced new restrictions, highlighting the challenge of rekindling growth while the pandemic remains untamed. In a report published, IHS Markit said its composite measure of private-sector activity dropped to 51.6 in August from 54.9 in July. The manufacturing gauge remained virtually unchanged, but services plunged to 50.1, a level that practically signals stagnation.

Australia Warns State Border Closures Are Slowing Jobs Recovery

More than half of the 1.3 million Australians who lost their jobs or were stood down at the start of the pandemic are back in work, though the recovery is being hampered by state border closures, Treasurer Josh Frydenberg said. Almost 700,000 people have gained effective employment since April, Frydenberg said in a statement.

Thai Lenders Able to Deal With Virus Impact, Central Bank Says

Thailand’s commercial banks are financially sound and are able to withstand any economic impact from the pandemic, Bank of Thailand Deputy Governor Ronadol Numnonda said in a statement. The banking system’s capital fund is strong with an adequacy ratio, or BIS ratio, at the “high level” of 19.2% by the end of June. Lenders are profitable and have excess liquidity, he said.

Chinese Premier Says Economy Can Grow in 2020 If Jobs Target Met

China’s economy can grow this year if the nation achieves its target of adding 9 million jobs, Premier Li Keqiang said in a visit to the western city of Chongqing. Li called on the nation to step up its efforts and prepare for uncertainties after the economy achieved positive results in recent months. China also targets that smaller companies and business operators could survive this year from the coronavirus outbreak.

Oil Rallies as Twin Hurricane Threat Disrupts US Production

Oil rose on Monday as a twin storm front threatened major disruption to oil operations in the Gulf of Mexico, while ongoing concerns over the economic impact from the pandemic kept gains in check. Brent crude for October settlement gain US$0.26 to US$44.61 per barrel.

Source: Affin Hwang Research - 24 Aug 2020