US stocks slip from records after data deluge

The rotation out of tech shares and into cyclicals, sparked by promising vaccine news, reversed Wednesday as investors cast a wary eye on a batch of data that suggest a possible slowdown in economic growth. The S&P 500 fell by 0.16% to 3,629.65 while Dow Jones was down 173.77 points (0.58%) to 29,872.47.

Fed discussed updating bond-purchase guidance ‘fairly soon’

Federal Reserve officials discussed at their Nov. 4-5 meeting providing more guidance on their bond-buying strategy “fairly soon,” though they didn’t see a need for immediate adjustments. “Many participants judged that the Committee might want to enhance its guidance for asset purchases fairly soon,” according to meeting minutes published by the Fed.

Data deluge shows uneven progress in US economic recovery

A smorgasbord of US data on the eve of the Thanksgiving holiday showed lingering signs of both strain and strength in an economy trying to escape the clutches of the coronavirus. The number of people applying for state unemployment benefits unexpectedly increased in consecutive weeks for the first time since July, Americans’ income declined more than forecast in October and consumer sentiment dipped to a three-month low.

ECB warns European banks may need more bad-loan provisions

Euro-area banks will probably have to set aside more money to soak up losses when government pandemic support ends and the economy grapples with massively increased debt, the European Central Bank said. Provisions for losses on loans to companies are lower than in previous crises and below those seen in the US, the ECB said in its Financial Stability Review.

UK faces worst slump in 300 years as Sunak set to cut spending

Chancellor of the Exchequer Rishi Sunak sought to balance more jobs support with controversial spending cuts to help pay back the UK’s huge pandemic debts, as he warned the country is facing an “economic emergency.” With unemployment expected to reach 7.5% next year, Sunak announced billions of pounds for infrastructure to boost jobs and a wage rise for the lowest-paid workers.

Vietnam ministry proposes fuel tax cut extension through 2021

Vietnam’s Ministry of Finance is proposing Prime minister Nguyen Xuan Phuc extend a 30% cut in the jet fuel environmental tax through next year to help struggling airlines, according to a posting on the ministry’s website. The National Assembly earlier this year approved a cut in the jet fuel environmental tax to 2,100 dong per liter from 3,000 dong August through December.

Philippine planning head aims to reopen more to spur economy

The Philippine government can further loosen movement curbs before year-end to support a recovery from recession, according to Economic Planning Secretary Karl Chua, as the number of new coronavirus cases drop. In areas where virus cases have declined, the local government can probably “experiment on hybrid, face-to-face classes” and allow more children and senior citizens to go out to spur economic activity at the end of 2020, Chua said.

Oil surges with weaker dollar compounding US supply draw

Oil closed at an eight-month high amid a weakening dollar and optimism surrounding a surprise decline in US crude supplies and recent breakthroughs on a Covid-19 vaccine. Brent crude for January settlement gained US$0.75 to US$48.61 per barrel

Source: Affin Hwang Research - 26 Nov 2020