Stocks Post Biggest Rout Since June as Tech Sinks

US equities tumbled by the most in almost three months as the rotation away from high-flying tech stocks gained steam, with investors questioning the sustainability of lofty valuations. The S&P 500 fell by 3.51% to 3,455.06 while Dow Jones was down 807.77 points (2.78%) to 29,292.73.

US Jobless Claims Give Mixed Picture With Shift in Adjustments

US unemployment-claims figures gave a mixed picture of the labor market amid government changes to seasonal adjustments to account for distortions from the pandemic. Initial jobless claims in state programs totaled 881,000 in the week ended Aug. 29, according to Labor Department data. That follows 1.01 million in the prior week, a figure that’s not directly comparable because of the change to methodology.

Fed’s Evans Says Substantial Additional Fiscal Aid Critical

The course of the economic recovery in the US will “critically depend on receiving substantial additional support from fiscal policy,” Federal Reserve Bank of Chicago President Charles Evans said. Partisan politics threatens to endanger additional fiscal relief,” Evans said. A lack of action or an inadequate one presents a very significant downside risk to the economy today.

French Government Could Extend Emergency Furlough Beyond 2020

France could extend the furlough program it created to protect jobs during the Covid- 19 crisis, French Finance Minister Bruno Le Maire said, indicating the government is ready to spend more than the 100bn euros (US$119bn) unveiled in its stimulus plan earlier in the day. “We will keep the furlough for the most exposed sectors hotels, cafes, events until the end of the year. If, after that, we still need to keep it, we will,” Le Maire said.

One in Seven UK Homes Are Selling in a Week Since Tax Cut

The UK property market is booming with the number of homes selling within a week more than doubling from last year as Britons scramble to cash in on a tax cut. One in seven has found a buyer in fewer than seven days since Chancellor Rishi Sunak raised the threshold for paying stamp duty, a home-buying levy, to spur activity in July.

MAS to Enhance Bank Access to Dollar Funding to Improve Liquidity

Singapore’s financial regulator said it will introduce measures to enhance banks’ access to local and US dollar funding to protect the city state’s financial sector against the economic fallout of the coronavirus pandemic. From Sept. 28, the new facility will provide banks and financial firms an additional channel to borrow Singapore dollar funds at longer tenors and will allow lenders to use more forms of collateral, the Monetary Authority of Singapore said in a statement

Philippine Jobless Rate Eases From Record as Economy Reopens

Philippine economic officials want to continue easing movement restrictions as the country’s slow reopening helped reduce joblessness from last quarter’s record level. The country’s unemployment rate eased to 10% in July, down from 17.7% in April, the Philippine Statistics Authority reported. While the number of people without work fell to 4.6 million in July from 7.3 million in April, it was still nearly double the 2.4 million a year earlier.

Oil Falls With Stronger Dollar and Oversupply Fears Looming

Oil dipped to its lowest level in nearly a month with a stronger dollar, looming extra supplies from Iraq and depressed demand all contributing to the bearish sentiment. Brent crude for November settlement lost US$0.36 to US$44.07 per barrel.

Source: Affin Hwang Research - 4 Sept 2020