US stocks climb to record highs; dollar weakens

US stocks started December by rising to record highs as a renewal of aid talks added to optimism over progress on coronavirus vaccines. The dollar extended its slide to a more than two-year low and Treasury yields jumped. The S&P 500 rose by 1.13% to 3,662.45 while Dow Jones was up 185.28 points (0.63%) to 29,823.92.

Powell, Mnuchin embrace new stimulus after Fed lending rift

Federal Reserve Chair Jerome Powell and US Treasury Secretary Steven Mnuchin both backed more fiscal stimulus to bridge the economy through the next few months of the pandemic as the promise of Covid-19 vaccines looms. “Some fiscal support now would really help move the economy along” and guard against downside risks, particularly to small businesses, Powell said.

US factory gauge eases from two-year high as employment cools

US manufacturing expanded at a slower pace in November, easing back from the strongest reading in two years as orders, employment and production cooled. A gauge of factory activity fell 1.8 points to 57.5, according to data from the Institute for Supply Management. The figure, showed conditions remain well above the 50 level that indicates growth.

ECB’s Schnabel warns against hopes for blockbuster stimulus

The European Central Bank should focus on keeping financial conditions at current levels through the crisis rather than announcing a blockbuster stimulus package that beats market expectations, according to Executive Board member Isabel Schnabel. Just over a week before the ECB Governing Council’s policy decision, Schnabel confirmed that more support is likely because the pandemic will be more protracted than expected. “This has to be reflected in our policy decisions,” she said.

German economy shows resilience to renewed virus slump

The German economy displayed resilience last month in the face of new virus restrictions, with manufacturing recording solid growth and joblessness unexpectedly declining. Although restaurants, bars, gyms and cultural venues are closed to try to limit the spread of the coronavirus, factories are benefiting from a rebound in global trade, data released. In a separate release, unemployment dropped for a fifth month.

North Asia’s factories gather steam as china output picks up

Factory activity in some of North Asia’s biggest export-led economies rebounded in November as China’s recovery lifts the region, purchasing managers’ indexes show. South Korea’s PMI rose to 52.9 last month, its highest reading since February 2011, from 51.2 in October, according to IHS Markit figures. Japan picked up to 49, the best reading since August 2019, from 48.7. Taiwan rose to 56.9, the highest since January 2018, from 55.1.

Korea economy grows more than first 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.

Oil extends drop after industry report shows US supply build

Oil extended losses after an industry report showed a surprise build in US crude inventories, adding to concerns over a split within OPEC. Brent crude for February settlement fell US$0.46 to US$47.42 per barrel.

Source: Affin Hwang Research - 2 Dec 2020