Stocks Trim Losses Amid Stimulus Talks, Bank Rally

Stocks pared losses as traders awaited news on negotiations over a fresh round of stimulus amid a resurgence in coronavirus cases around the globe. The dollar climbed. The S&P 500 fell by 0.15% to 3,483.34 while Dow Jones was down 19.80 points (0.01%) to 28,494.20.

Fed Signals Prime Money Market Funds Need Stiffer Rules

The Federal Reserve is signaling that the coronavirus disruptions that hit financial markets in March indicate prime money market funds and other sources of shortterm funding may need tougher rules. “The runs on prime money funds and commercial paper were particularly disappointing,” Fed Vice Chairman of Supervision Randal Quarles said. He added that “it is worth asking whether there may be other steps needed to secure these very important sources of liquidity.”

Mnuchin Says Trump to Lean on McConnell If Stimulus Deal Reached

Treasury Secretary Steven Mnuchin told House Speaker Nancy Pelosi that President Trump will personally lobby to get reluctant Senate Republicans behind any stimulus deal they reach. Trump said he’s willing to go beyond the US$1.8trn offer for a virus relief plan that’s already been offered by the administration, but Senate Majority Leader Mitch McConnell rejected that, saying GOP lawmakers won’t go along.

US Jobless Claims Hit Highest Since August in Unexpected Jump

Applications for US state unemployment benefits unexpectedly jumped last week to the highest since August and Americans increasingly moved to longer-term jobless aid. Both are troubling signs for a labor market whose recovery from the pandemic was already slowing. Initial jobless claims in regular state programs totaled 898,000 in the week ended Oct. 10, up 53,000 from the prior week, Labor Department data showed.

World Economy Faces New Fiscal Cliffs Amid Pressure for Spending

The world’s major economies poured money into the fight against the coronavirus slump, and now they’re edging toward what may be a more complex policy choice: when and how to turn off the spigots. Governments have pledged some US$12trn in spending this year, the International Monetary Fund estimates. The fund says it’s too early to cut off the support, record debt levels will pose a challenge for policy makers.

China September Inflation Slows as Food Price Gains Moderate

China’s consumer inflation slowed in September, driven by a moderation in food price gains. The consumer price index rose 1.7% last month from a year earlier, following a 2.4% gain in August, the National Bureau of Statistics said. The median forecast was for a 1.9% increase. The producer price index registered a 2.1% decline, after a 2% drop in August.

Singapore Home Sales Rise to Highest in More Than Two Years

Singapore home sales rose to the highest in more than two years in September on the back of low interest rates and government stimulus cushioning the economic fallout from the coronavirus pandemic. Unit sales jumped 5.6% to 1,329 last month, the highest since July 2018, Urban Redevelopment Authority data showed. The figures show Singapore’s property market is weathering the city’s worst recession after a two-month lockdown to combat the coronavirus.

Oil Claws Back Early Loss on Shrinking US Petroleum Stockpiles

Oil recovered from early losses as shrinking American crude and refined product stockpiles offset signs that the fragile demand recovery is under threat. Brent crude for December settlement declined by US$0.16 to US$43.16 per barrel.

Source: Affin Hwang Research - 18 Oct 2020