Stocks ‘juggernaut’ Extends Rally; Dollar Weakens

Stocks extended a streak of record gains amid rising expectations for loose monetary policy while the economy shows signs of recovering from the coronavirus pandemic. The dollar weakened and gold appreciated. The S&P 500 rose by 1.02% to 3,478.73 while Dow Jones was up 83.48 points (0.3%) to 28,331.92.

Meadows Predicts No Stimulus Deal Until End of September

White House Chief of Staff Mark Meadows predicted there will be no stimulus deal with Congress until the end of September, and sought to blame House Speaker Nancy Pelosi for the delay. “If we got back in the room with some of their priorities, we could cut a deal -- the president wants to do that. But I’m not optimistic,” Meadows said in an interview.

Fed’s Top Inflation Hawk Isn’t Opposed to Overshooting 2% Goal

Federal Reserve Bank of Kansas City President Esther George, who has been among the most hawkish Fed policy makers, doesn’t oppose some overshooting of the central bank’s 2% inflation target and sees more risk of price pressures being too weak than too strong. “I have never thought of 2% as a ceiling but to really stay focused on what anchors inflation expectations in the economy,” George said.

Active Canadian Businesses Fell 14% in First Stage of Pandemic

The number of active Canadian businesses dropped by 14% in the earliest months of the pandemic, according to a government report. Establishments that reported having at least one employee totaled 689,907 in May, compared with 797,582 in February, the last month before Covid-19 caused nationwide lockdowns, Statistics Canada reported. The number of active businesses fell 3.6% compared with April.

France Gives Hints on Stimulus Plan to be Unveiled Next Week

France’s government gave further hints about the contents of its 100bn-euro (US$118bn) plan to boost the economy as it seeks to reassure the country it has the situation under control. Measures will include 2bn euros for the cultural sector, Prime Minister Jean Castex said in an interview. Full details of the stimulus package will be announced on Sept. 3, he added.

Germany to Use EU Funds to Trim About 15bn Euros From Debt

Germany will use its share of the European Union’s rescue program to avoid taking on more debt rather than fund new growth initiatives. Chancellor Angela Merkel’s coalition agreed to spend about 15bn euros (US$18bn) from the EU on existing programs, including measures already part of Germany’s stimulus plan as well as the country’s coal exit, according to people familiar with the discussions.

UK Plan to Help Restaurants May Cost More Than Estimated

Chancellor of the Exchequer Rishi Sunak’s plan to help get customers back into UK restaurants after the coronavirus lockdown may cost more than the 500mn pounds (US$660mn) initially estimated by the Treasury, a person familiar with the matter said. The official, who declined to be named discussing yet-to-be processed data, said that because of a lag in restaurants applying for the funding, the eventual sum may exceed the Treasury’s estimate when announcing the policy in July.

Oil Edges Up With Traders Assessing US Gulf Hurricane Impact

Oil eked out a gain following a choppy trading session as traders eyed declining US stockpiles and expected weaker demand from the shutdown of Gulf Coast refineries ahead of Hurricane Laura. Brent crude for October settlement down US$0.22 to US$45.64 per barrel.

Source: Affin Hwang Research - 27 Aug 2020