Apple’s Gain Lifts Nasdaq While Most Stocks Fall

Most stocks fell after China threw a wrench into US companies’ efforts to buy TikTok, while a jump in Apple Inc. powered the Nasdaq 100 to a record high. The S&P 500 fell by 0.22% to 3,500.31 while Dow Jones was down 223.82 points (0.7%) to 28,430.05.

Fed’s Clarida Leaves Door Open to Yield Caps in New Strategy

Federal Reserve Vice Chair Richard Clarida left open the possibility of employing Treasury yield caps at some point in the future, though he indicated it’s not likely now and reiterated the central bank’s rejection of negative interest rates. “Yield caps and targets were not warranted in the current environment but should remain an option that the committee could reassess in the future if circumstances changed markedly,” Clarida said.

Kashkari Says There’s No Urgency for Fed to Update Rate Guidance

There isn’t any urgency for the Federal Reserve to offer more clarity on how long it will hold interest rates near zero at the moment because investors already understand the central bank won’t be tightening for a while, Minneapolis Fed President Neel Kashkari said. Market expectations are that rates will be low for a long period of time, he said.

Italy Plunged Into Recession by Investment, Consumer Slump

Italian companies slashed investment and consumers cut back on spending during the coronavirus lockdown in the second quarter, sending the economy into a record contraction. Figures from statistics office Istat showed household spending fell 11.3% in the period, and exports dropped 26.4%. Investment plunged 14.9%, with transport investment down about 20%. The economy shrank 12.8% in the three months, slightly worse than an initial estimate.

India Posts Worst GDP Slump of Major Economies as Virus Spikes

India’s economy posted the biggest contraction among major economies last quarter, with a recent surge in coronavirus infections weighing on the outlook for any recovery. Gross domestic product shrank 23.9% in the three months to June from a year earlier, the Statistics Ministry said. That’s the sharpest decline since the nation started publishing quarterly figures in 1996.

China’s Economic Recovery Continues on Strong Services

Chinese economic activity continued to rebound in August, with a gauge of the services industry at the strongest level since early 2018 while the expansion in manufacturing activity slowed slightly. The non-manufacturing gauge rose to 55.2 from July’s 54.2, the National Bureau of Statistics said. The official manufacturing purchasing managers’ index moderated to 51 from 51.1 a month earlier.

Singapore Will Seek to Boost Revenue After Drawing Down Reserves

Singapore will take steps to strengthen its revenue position to face a challenging fiscal environment caused by the Covid-19 pandemic, which has already led the country to draw deep from its past reserves, according to its finance minister. The government intends to raise the goods and services tax to help fund growing health care and social spending needs but will carefully monitor the timing of such moves including the state of the economy and spending needs, according to Heng Swee Keat in the ministry’s addendum to the president’s address this week.

Oil Stable as Vaccine Progress Helps Dampen Demand Uncertainty

Oil was trapped in a tight range below US$43 a barrel with a surge in coronavirus infections in some parts of the world offset by progress toward a vaccine. Brent crude for November settlement down US$0.53 to US$45.28 per barrel.

Source: Affin Hwang Research - 1 Sept 2020