US Stocks Fall From Record Highs; Dollar Gains

US stocks fell from records as investors assessed the prospects for risk assets after a blistering month long rally. The S&P 500 fell by 0.46% to 3,621.63 while Dow Jones was down 271.73 points (0.91%) to 29,638.64.

US Jobless-claims Data to Come With Disclaimer on Accuracy

The Labor Department “plans to clarify in its weekly news releases that the numbers it reports for weeks of unemployment claimed do not accurately estimate the number of unique individuals claiming benefits,” the U.S. Government Accountability Office said. The latest jobless-claims report said 20.5 million people were claiming benefits across all unemployment insurance programs in the week ended Nov. 7.

Trudeau Keeps Spending Taps Open to Support Canada Recovery

Justin Trudeau’s government, which has delivered the biggest Covid-19 fiscal response in the industrialized world, announced plans for another dose of stimulus and vowed to continue priming the economy as long as needed. Finance Minister Chrystia Freeland unveiled C$51.7bn (US$39.8bn) of new spending over two years in a minibudget, led by an enhanced wage subsidy for business. Freeland also pledged, another C$70bn to C$100bn of additional stimulus over 3 years to spur the recovery.

Euro Area Overhauls Bailout Fund Amid Economic Warning Signs

Euro-area finance ministers struck a deal on a long-planned overhaul of the region’s bailout fund, moving a step closer to shoring up the euro’s architecture as the region deals with a devastating pandemic-induced recession. The agreement, which was signed off, caps a multi-year effort to beef up the European Stability Mechanism, which can provide 500bn euros (US$598bn) in emergency loans to euro-area economies.

German Consumer-price Slump Worsens as ECB Readies Stimulus

Germany’s consumer-price slump unexpectedly worsened in November, adding to the case for additional monetary stimulus from the European Central Bank. The inflation rate dropped to -0.7% from -0.5%, the steepest decline in more than a decade. Economists had forecast a slight improvement. Inflation in Europe’s largest economy has been negative since August as a result of a sales-tax cut the government introduced to spur consumption.

Korea Economy Expands More Than Initially Estimated Last Quarter

South Korea’s economy grew at a faster pace than initially estimated last quarter, as greater investment boosted the country’s rebound from its pandemic-driven slump. Gross domestic product increased a revised 2.1% in the third quarter from the previous three months, the Bank of Korea reported, compared with 1.9% in earlier calculations. The revision comes after the central bank last week raised its forecast for the full year, projecting a 1.1% contraction that was less smaller than seen in August.

Thailand Likely to Act Again on Baht, Finance Minister Says

Recent measures from the Bank of Thailand that aim to restrain the surging baht will likely be followed by “further strict” steps, but policy makers are unlikely to impose outright capital controls, Thai Finance Minister Arkhom Termpittayapaisith said. “I think that’s only the first step,” Arkhom said, referring to the Bank of Thailand’s Nov. 20 move to ease rules on capital outflows.

Oil Rally Stalls on Uncertainty Over OPEC+ Output Plan

Oil’s rally above US$45 a barrel hit the brakes on Monday after OPEC talks ended without a clear stance on whether to delay an output increase in January. Brent crude for January settlement fell US$0.59 to US$47.59 per barrel.

Source: Affin Hwang Research - 1 Dec 2020