GLOBAL NEWS

Stocks Slump as Traders Weigh Outlook for Stimulus

The end-of-month rebound in global equities faded as investors weighed prospects for fiscal stimulus in the US and the outlook for the coronavirus pandemic. The S&P 500 fell by 0.48% to 3,335.47 while Dow Jones was down 131.40 points (0.48%) to 27,452.66.

US August Goods-trade Gap Widens to Record on Jump in Imports

The US merchandise-trade deficit widened in August by more than expected to a fresh record as companies raced to replenish depleted stockpiles with imports in the face of firmer demand. The overall deficit swelled to US$82.9bn from US$80.1bn in July, according to Commerce Department data released Tuesday. Imports rose by 3.1% to a seven-month high of US$201.3bn while exports increased 2.8% to US$118.3bn.

Consumer Confidence in US Posts Biggest Gain in 17 Years

Consumer confidence rebounded in September by the most in more than 17 years as Americans grew more upbeat about the outlook for the economy and job market, though sentiment remained below pre-pandemic levels. The Conference Board’s index increased 15.5 points, the most since April 2003, to 101.8 from August’s upwardly revised 86.3, according to a report issued.

Bailey Says BOE Hasn’t Yet Reached a Judgment on Negative Rates

Bank of England (BOE) Governor Andrew Bailey pushed back against speculation that central bank would cut interest rates below zero anytime soon, saying policy makers haven’t reached any judgment on whether to introduce negative interest rates. The central bank is examining the operational implications of taking rates below zero, such as whether computer systems are able to handle negative figures. However, officials have other tools available and will use them actively as necessary, Bailey said.

Euro-area Economic Confidence Rises for Fifth Straight Month

Economic confidence in the euro area improved for a fifth month, albeit at a slower pace as resurgent virus infections cast uncertainty over the outlook. A European Commission sentiment index rose more than expected in September, sending the euro to the highest level in nearly a week. Yet confidence remains more than 30% below its pre-crisis level and evidence is building that the steep rebound following the end of lockdowns has started to level off.

German Inflation Further Below Zero Bolsters Stimulus Case

Germany’s inflation rate fell further below zero as the pandemic curtailed demand, adding to the case for more monetary stimulus from the European Central Bank. Consumer prices declined 0.4% in September, the steepest pace in more than five years. Europe’s largest economy is suffering a double blow from tepid consumption and a sales-tax cut the government introduced earlier this year to bolster the economy.

Vietnam’s Economic Growth Accelerates on Industry, Exports

Vietnam’s economic growth accelerated in the third quarter as exports and manufacturing began recovering from the pandemic-induced slump of the first half of the year. Gross domestic product rose 2.62% yoy, up from a revised 0.39% in the second quarter, the General Statistics Office said. The median estimate in a Bloomberg survey of five economists was for growth of 2.7%.

WTI Oil Holds Below US$40 as Concerns About Demand Recovery Increase

WTI oil held below US$40 a barrel on rising concerns that it will be some time before there’s a meaningful recovery in demand. Brent crude for November settlement fell US$1.40 to US$41.03 per barrel.

Source: Affin Hwang Research - 30 Sept 2020