S&P 500 Index Jumps to Biggest Gain in Two Months

US equities rose alongside European stocks as the nearly relentless rally in risk assets continued, but with a twist as tech shares underperformed. The S&P 500 rose by 1.54% to 3,580.84 while Dow Jones was up 454.84 points (1.59%) to 29,100.50.

Fed Says Economy Showing Progress But Uncertainty Persists

The US economy showed signs of progress but continued to struggle amid the ongoing coronavirus pandemic, according to a new report from the Federal Reserve. Economic activity increased among most districts, but gains were generally modest and activity remained well below levels prior to the Covid-19 pandemic,” the central bank said.

CBO Sees US Federal Debt Exceeding Size of Economy in 2021

The US federal budget deficit will soar to a record US$3.3trn this fiscal year, swelling government debt to a size bigger than the economy in the wake of massive spending to cushion Americans from the coronavirus pandemic, according to the Congressional Budget Office’s latest tally. Debt held by the public will reach US$21.9trn in the fiscal year ending September 2021, or the equivalent to 104.4% of gross domestic product.

Downbeat BOE Has ‘significant’ QE Room Left to Counter Crisis

The Bank of England can significantly increase the speed and volume of its bond purchases if needed to aid the economic recovery, according to deputy governor Dave Ramsden. We have headroom to do materially more quantitative easing if we need, Ramsden told. We have the operational and other capabilities to do it fast if market dysfunction required that. So we can influence both the size and pace.

Australian GDP Falls by Most on Record, Confirming Recession

Australia’s economy contracted by the most on record last quarter, underscoring the need for unprecedented stimulus measures as the recovery from the nation’s first recession in almost 30 years is buffeted by Victoria state’s renewed Covid outbreak and lockdown. GDP plunged 7% from the first three months of the year, the largest fall since records dating back to 1959, the statistics bureau said. From a year earlier, GDP tumbled 6.3% versus an estimated 5.1% fall.

Thailand to Miss Stimulus Borrowing Target as Spending Falters

Thailand is likely to sell fewer bonds this fiscal year than previously announced, as government spending to cushion the blow from coronavirus outbreak is hampered by delays in identifying the right projects. The government may borrow only 450bn baht (US$14.4bn) through sale of securities and through term loans in the year ending Sept. 30, less than the 600bn baht planned earlier to fund the Covid-19 stimulus program, said director general of the Finance Ministry’s Public Debt Management Office.

Singapore Can’t Sustain Virus Support Measures Forever, PM Says

Singapore can’t indefinitely sustain emergency fiscal measures introduced to shield citizens from the coronavirus pandemic’s economic fallout, Prime Minister Lee Hsien Loong said. In his first major parliamentary address since July’s general election, Lee said his government is not ideologically opposed to any solution to the crisis, but that Singapore must make the “best use” of its financial resources to meet the needs of different groups in a targeted manner.

Oil Drops With Upcoming Refiner Maintenance a Warning for Demand

Oil tumbled to the lowest level in more than three weeks with the expectation that refinery demand for crude will weaken in the fall and as investors sought refuge in a stronger dollar. Brent crude for November settlement lost US$1.15 to US$44.43 per barrel.

Source: Affin Hwang Research - 3 Sept 2020