GLOBAL NEWS

Stocks Whipsaw as Traders Weigh Odds of Stimulus

Stocks whipsawed as investors weighed the chances of a compromise on a new stimulus package amid concern over an uptick in global coronavirus cases. The dollar fell. The S&P 500 rose by 0.3% to 3,246.59 while Dow Jones was up 52.31 points (0.2%) to 26,815.44.

Powell Hints Small Business, Unemployment Aid Most Important

Federal Reserve Chair Jerome Powell indicated that aid to small businesses and support for the unemployed should be prioritized if Congress were to reallocate money away from backstopping the central bank’s emergency-lending programs. Powell said an expansion of the Paycheck Protection Program and “something more” for Americans who have lost their jobs because of the coronavirus pandemic would have the greatest economic impact.

US Jobless Claims Remain Elevated in Fits-and-starts Recovery

Applications for US unemployment benefits were little changed last week, contrasting with estimates for a decline and highlighting an economic recovery that’s coming in fits and starts. Initial jobless claims in regular state programs increased by 4,000 to 870,000 in the week ended Sept. 19, still about four times pre-pandemic levels, according to Labor Department figures.

US New-home Sales Climb to 1 Million Rate, Fastest Since 2006

Sales of new homes in the US unexpectedly advanced for a fourth month in August to the highest level in almost 14 years as record-low mortgage rates continued to entice buyers into a market with ever-shrinking supply. Purchases of new single-family houses increased 4.8% to a 1 million annualized pace, led by a flurry of demand in the South, after an upwardly revised 14.7% surge in July, government data showed.

Sunak Says Many More UK Jobs Will Go Despite Crisis Support

Chancellor of the Exchequer Rishi Sunak announced measures to help businesses survive the winter but warned that an unemployment “tragedy” is already under way as coronavirus hits the UK again. In an emergency statement to Parliament, Britain’s finance minister announced measures to subsidize wages for part-time workers, extend loans for companies affected by lockdown rules, and cut sales taxes for longer.

German Business Optimism Improves, Lifted by Industry Mood

German companies are turning increasingly optimistic that government support and a reluctance to return to wide-scale lockdowns will carry the economy through the coronavirus pandemic. The Ifo institute’s business climate index rose to 93.4 in September from 92.5 in August.

Korea Consumer Confidence Retreats on New Virus Wave, Curbs

Consumer confidence in South Korea slipped for the first time in five months as a jump in virus cases and tighter social restrictions made households more pessimistic about the economy’s outlook. The consumer sentiment index fell to 79.4 in September from 88.2 the previous month, the Bank of Korea said in a statement. The 8.8 point decline was the largest since March when the country was reeling from the first wave of the pandemic.

Oil Rally Stutters as Demand Concerns Offset Stimulus Optimism

Oil held above US$40 on renewed hopes for more stimulus measures to lift the US economy out of its Covid-induced recession, although futures are on track for a weekly decline due to persistent concerns over demand. Brent crude for November settlement rose US$0.17 to US$41.94 per barrel.

Source: Affin Hwang Research - 25 Sept 2020