US Stocks Decline Amid Fed Dispute With Treasury

The S&P 500 Index extended a weekly decline as traders weighed a conflict between the White House and Federal Reserve over emergency lending programs along with assurances that the government has plenty of room to help the economy. The S&P 500 fell by 0.68% to 3,557.54 while Dow Jones was down 219.75 points (0.75%) to 29,263.48.

Fed to Return Lending-backstop Funds to Treasury as Requested

The Federal Reserve said it would comply with a Treasury Department request to return unused funds meant to backstop five emergency lending programs, moving to tamp down a public rift that arose a day earlier. “We will work out arrangements with you for returning the unused portions of the funds allocated to the Cares Act facilities in connection with their year-end termination,” Fed Chairman Jerome Powell said in a letter to Treasury Secretary Steven Mnuchin.

ECB’s Guindos Says Euro-area Economy Set for Another Contraction

The euro-area economy may shrink in the final quarter of the year as a second wave of lockdowns to combat the pandemic derails the recovery, European Central Bank (ECB) Vice President Luis de Guindos said. “My personal view is that in the fourth quarter, the projection we had is not going to be met,” Guindos said. “Growth is going to be close to zero or even negative.”

UK Retail Sales Rise as Christmas Shopping Kicks Off Early

UK retail sales rose for a sixth straight month in October, helped by early Christmas shopping as consumers moved to get ahead of virus lockdowns that closed stores. The volume of sales increased 1.2% according to data published. But another report on household confidence gave reason for concern, showing that sentiment is subdued and people are more worried about their personal finances.

Sunak Plans Spending to Ease Enormous Strain on UK Economy

Chancellor of the Exchequer Rishi Sunak said he will increase spending on public services this week in a bid to shore up the UK economy amid the “enormous stress and strain” of the coronavirus pandemic. The chancellor will unveil departmental budgets on Wednesday as he seeks to balance the need to support the economy against the long-term risks of ballooning government borrowing.

Indonesia’s Current Account Swings to First Surplus Since 2011

Indonesia’s current account balance in the third quarter swung to a surplus for the first time in nine years, thanks to rising exports as domestic demand for imports remains weak. The gap was US$1bn in the July-September period, or 0.36% of GDP, according to a Bank Indonesia (BI) statement. That’s the widest surplus since the first quarter of 2011. For the full year, BI expects the current account deficit to be below 1.5% of GDP.

Hong Kong Strives to Join Regional Trade Deal: Finance Chief

Hong Kong hopes to be part of the first group of economies to join the Regional Comprehensive Economic Partnership (RCEP) after the agreement takes effect, Financial Secretary Paul Chan said. The total bilateral trade between Hong Kong and the 15 member states of RCEP accounts for 71% of Hong Kong’s total trade in goods, Chan said. “Joining the RCEP agreement will benefit trade in services and investment.”

Oil Rises for Third Straight Week on Covid-19 Vaccine Optimism

Oil rose to the highest in nearly three months with positive Covid-19 vaccine developments paving the way for a more sustained recovery in oil demand. Brent crude for January settlement gained US$0.76 to US$44.96 per barrel.

Source: Affin Hwang Research - 23 Nov 2020