Stocks Ease Off Record Highs With Virus in Focus

Stocks pulled back from record highs as investor focus turned to the surge in virus cases and new lockdown measures, overshadowing optimism that Covid-19 vaccines will eventually end the pandemic. The S&P 500 fell by 0.48% to 3,609.53 while Dow Jones was down 167.09 points (0.56%) to 29,783.35.

Powell Says Solid Expansion Likely With Virus Surge Posing Risks

Federal Reserve Chair Jerome Powell said the US economic recovery is likely to continue at a “solid” pace yet risks losing momentum as the virus surges, adding that it was too soon to close the Fed’s emergency lending facilities. Powell called rising virus infection rates a “significant” downside risk “especially in the near term.

US Retail Sales Rose in October at Slowest Pace in Six Months

US retail sales climbed in October at the slowest pace in six months, suggesting consumers are becoming more hesitant amid a surging pandemic and lack of fresh federal stimulus. The value of total sales increased 0.3% from the prior month, when there was a downwardly revised 1.6% gain, Commerce Department figures showed. Excluding autos and gasoline, sales rose 0.2%.

Christine Lagarde says covid vaccine ‘no game changer’ for ECB stimulus plans

European Central Bank President Christine Lagarde doesn’t see the news that a coronavirus vaccine is near as fundamentally altering the institution’s plan to add monetary stimulus. Lagarde said that the central bank is focused on stopping the current economic slump from worsening, and that it always assumed a medical solution would be available in 2021.

French Lockdown to Push Economy Back Into a Contraction

France‘s second lockdown will push the economy back into a slump and slow the recovery in 2021, even though restrictions to contain the coronavirus aren’t as severe as earlier in the year. In a best-case scenario of restrictions ending Dec. 1 and a quick return to the levels of activity seen just before the second lockdown, output would still drop 2.5%, statistics agency Insee said. If activity remains at November’s levels through December, the contraction could be as deep as 6%.

Singapore to Run Budget Deficit Into 2021 Amid Pandemic Aid

Singapore Prime Minister Lee Hsien Loong sees the government running a budget deficit at least through early next year, and perhaps “a while” longer, as the coronavirus-hit economy bends the city-state’s traditional fiscal prudence. “The next budget is in February. I very much doubt we will have any budget surplus by then,” Lee said. “I hope that we will be able to come back to prudence and a balanced budget, but it may take a while,” he said.

Philippines Says No Debt Blowout, Sees Reviving Demand Tough

Philippine Finance Secretary Carlos Dominguez said he doesn’t see a need for outsized government borrowings, betting that the recovery plan and the promise of a vaccine will spur an economic rebound next year. “No need to get out of the normal loan programs we have planned,” Dominguez said. The finance chief also said he doesn’t see the necessity “at this point” for the government to add to its central bank borrowing.

Oil Dips After Industry Reports Rising US Crude Stockpiles

Oil pared gains after an industry report showed growing US crude supplies, adding to uncertainty over the OPEC+ alliance’s output plans for next year. Brent crude for January settlement fell US$0.07 to US$43.75 per barrel

Source: Affin Hwang Research - 18 Nov 2020