Stocks hit six-week low as tech slide accelerates

Technology shares pushed US stocks to a six-week low as investors searched for new catalysts to give direction to global markets. The dollar strengthened and Treasuries were little changed. The S&P 500 fell by 1.12% to 3,319.47 while Dow Jones was down 244.56 points (0.88%) to 27,657.42.

US consumer sentiment climbed to a six-month high in September

US consumer sentiment increased more than expected in early September to a sixmonth high as Americans grew more upbeat about the economy’s prospects. The University of Michigan’s preliminary sentiment index for September advanced to 78.9 from a final August reading of 74.1, according to data released. The measure of expectations rose 4.8 points to 73.3, also a six-month high, while a gauge of current conditions increased 4.6 points to 87.5.

Fed’s Bullard ‘optimistic’ US can get growth all the way back

Federal Reserve Bank of St. Louis President James Bullard said the US economy can fully recover from the coronavirus pandemic. “I’m optimistic we will get all the way back. 100% of GDP can be produced safely with enough innovation. The policy response to this crisis has been very good”. Bullard said “we want to keep rates low out several years in order to allow the economy to fully recover from the crisis”

Italy’s GDP will drop by single digit this year, Gualtieri says

Italy’s 2020 gross domestic product will decline by a single digit, Italy’s Finance Minister Roberto Gualtieri said. Gualtieri was responding to questions about whether the government’s forecast of an 8% decline for the year will be revised to a 9% slump. He declined to give an exact number and said the government will present its economic plan and targets mostly likely on Sept 28-29.

UK retail sales rise for fourth month but clouds are gathering

UK retail sales extended their recovery in August as a government initiative to boost the hospitality industry lured locked-down Britons out to the shops. The volume of goods sold in stores and online rose 0.8% from July, the Office for National Statistics said. It marked a fourth month of growth following an unprecedented slump in April. Sales excluding auto fuel rose 0.6%, stronger than economists forecast.

Thai economy seen shrinking less than forecast on cash boost

Thailand may avoid its worst-ever economic performance by boosting cash handouts to pandemic-hit citizens and accelerating government spending in the final quarter, according to Deputy Prime Minister. Thailand may shrink less than 7.5% this year with the help of various stimulus measures and barring a major second wave of coronavirus infections, Supattanapong said. The government expects total spending of about 100bn baht (US$3.2bn) under its co-pay programs next quarter, he said.

Japan inflation goes negative on government travel discounts

Japan’s key inflation gauge went negative again last month, driven down by government discounts meant to boost consumer spending and help the pandemic-hit travel industry. Consumer prices excluding fresh food fell 0.4% yoy in August, falling back into negative territory again after two flat months. A 32% drop in the cost of hotel accommodations accounted for most of the overall drop.

Oil declines as demand uncertainty tempers bullish sentiment

Oil slipped in Asia, taking a breather from last week’s rally amid uncertainty on the trajectory of a demand recovery from the pandemic. Brent crude for November settlement declined US$0.29 to US$42.86 per barrel.

Source: Affin Hwang Research - 21 Sept 2020