S&P 500 Tumbles Most in a Month on Virus Spread

The S&P 500 Index posted its biggest drop in a month on concern rising coronavirus cases will hurt the global economy and as prospects dimmed for fiscal aid from Washington before the presidential election. The S&P 500 fell by 1.86% to 3,400.97 while Dow Jones was down 650.19 points (2.29%) to 27,685.38.

Trump Won’t Release Tax-cut Plan Before Election, Kudlow Says

President Donald Trump’s administration has no plans to release a second-term tax plan before the election, White House economic adviser Larry Kudlow said, despite promises that voters would get a detailed look at his agenda. The president’s aides are “deep into discussions” about further tax cuts if Trump wins another term on Nov. 3, but there’s no need to lay out policy specifics, Kudlow said.

Pelosi, Mnuchin Fail to Reach Deal on Stimulus in Monday Call

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin failed again to close major differences on a fresh stimulus for a US economy facing a renewed surge in Covid-19 cases. The two main negotiators still had not resolved language for a national testing and tracing program for the coronavirus, according to Pelosi’s spokesman Drew Hammill.’

Trudeau Holds Off on New Budget Goal as Billions Flow Out in Aid

Justin Trudeau signaled his government won’t immediately set a new fiscal anchor as it rolls out more Covid-19 spending. The prime ministersaid the pandemic has been too disruptive for his team to commit to a strict budgetary goal in its next update, expected in November. The last official government estimate of this year’s budget deficit was C$343.2 billion ($259.8 billion) in July, or 16% of gross domestic product.

German Businesses Lose Faith in Recovery as Virus Spreads

German companies are turning pessimistic on the recovery, potentially marking the beginning of a major economic setback after half a year of gradual improvements. The Ifo Institute’s business climate index dropped for the first time in six months, just as coronavirus cases in the country reached new records. The reading of 92.7 in October was lower than the median forecast of economists in a Bloomberg survey, and compares to 93.2 the previous month. A gauge of expectations also deteriorated.

South Korea Rebounds From Recession as Exports Jump

South Korea rebounded from recession last quarter, as the fastest export-growth in decades helped buffer the economy from a summer wave of the coronavirus that weighed on consumers. Gross domestic product increased 1.9% in the three months through September from the prior quarter, the Bank of Korea reported. Exports increased the most since 1986. Compared with the same period last year, the economy shrank 1.3%.

US, India to Sign Defense Pact Amid China Border Standoff’

The US and India will sign a defense agreement and boost trade ties in high-level talks that come as the South Asian nation sees its worst border conflict with China in four decades. The talks are also set to further boost India’s defense purchases from the US, currently at US$20 billion, and help address its security concerns in the Indian Ocean region as it seeks to compete with China.

Oil Falls With Dimming Stimulus Chances and Surging Virus Cases

Oil slid to a three-week-low amid concerns that rising coronavirus cases coupled with diminishing prospects for a US stimulus deal will crimp the demand recovery. Brent crude for December settlement fell by US$1.31 to US$40.46 per barrel.

Source: Affin Hwang Research - 27 Oct 2020