US stocks rise on reopening rotation; gold drops

US stocks climbed as investors piled into companies that will benefit most from a return to normal economic activity. Tech shares lagged behind, while gold slumped. The S&P 500 rose by 0.56% to 3,577.59 while Dow Jones was down 327.79 points (1.12%) to 29,591.27.

US business activity expands most since 2015, IHS Markit says

US business activity powered ahead in November at the fastest pace since March 2015, with stronger growth at service providers and manufacturers highlighting broad momentum in an economy challenged by the coronavirus resurgence. The IHS Markit flash composite index of purchasing managers at manufacturers and service providers increased to 57.9 from 56.3. Readings above 50 indicate growth and the figure stands in stark contrast to the euro area, where activity shrank as governments tightened restrictions to contain a surge in infections.

Bank of Canada deputy downplays risks of consumer default wave

The massive policy response from the Bank of Canada and the federal government successfully prevented the country’s financial system from buckling, though vigilance is still needed, according to a top central banker. Signs of overwhelming financial strain are few, and the risk of a wave of consumer defaults seems low, Deputy Governor Toni Gravelle said.

Europe’s virus lockdowns push economy into another contraction

The euro area is slipping into another contraction amid new virus restrictions that are taking a massive toll on parts of the economy. IHS Markit’s composite Purchasing Managers’ Index fell to 45.1 in November from 50 in October, hinting at declining output. The drop was led by services, reflecting the closure of bars and restaurants and the loss of business in the hospitality sector. Manufacturing continued to grow, although at a slower pace.

UK output contracts as new covid lockdown hits services

UK output contracted for the first time in five months as new restrictions to halt the spread of Covid-19 shuttered much of the service sector. IHS Markit’s composite Purchasing Managers Index dropped to 47.4 in November from 52.1 a month earlier, slipping below the critical 50 mark showing the first contraction since June.

Singapore sees return to growth in 2021 on global recovery

Singapore said its economy will probably expand 4% to 6% next year amid a global recovery from the worst of the coronavirus pandemic and as travel restrictions and local safety measures are eased. The city-state also narrowed its forecast for this year’s contraction, the Ministry of Trade and Industry said, highlighting an improved outlook for manufacturing, driven primarily by electronics.

Korea consumer sentiment hits 10-month high before virus curbs

South Korea’s consumer sentiment rose to the highest since the start of the pandemic, according to a central bank survey conducted mid-November, showing the economy’s recovery was on track before worsening local outbreaks led to tighter restrictions. The consumer sentiment index rose by 6.3 points to 97.9 in November, the Bank of Korea said.

Brent oil hits eight-month high on hopes for vaccine in weeks

Global oil prices hit the highest level since March as hopes for a vaccine rollout within weeks brightened the outlook for fuel consumption. Brent crude for January settlement gained US$1.10 to US$46.06 per barrel.

Source: Affin Hwang Research - 24 Nov 2020