Stock rally reaches new highs on stimulus optimism

US stocks climbed to all-time highs and Treasury yields jumped after a report showing US employment gains slowed in November bolstered expectations for more federal stimulus. The S&P 500 rose by 0.88% to 3,699.12 while Dow Jones was up 248.74 points (0.83%) to 30,218.26.

Trump, McConnell likely to back relief bill, senator says

President Donald Trump and Senate Majority Leader Mitch McConnell will come “on board” with a US$908 billion package to provide pandemic relief, according to a member of a bipartisan group that’s seeking legislation before the end of the year. “President Trump has indicated that he would sign a US$908 billion package, there’s only one US$908 billion package out there and it’s ours,” Senator Bill Cassidy, a Republican from Louisiana, said.

Service industries in US expand at a more moderate pace

US service industries expanded at a more moderate, yet healthy pace in November, tempered by softer growth in orders and business activity that remain constrained by the coronavirus. The Institute for Supply Management’s services index fell to 55.9 during the month from 56.6 in October, according to data released. Readings above 50 indicate expansion.

ECB may opt for 12-month extension to emergency bond program

European Central Bank policy makers would probably agree to extend their pandemic bond-buying program by a full year until the middle of 2022 if that is proposed by the Executive Board, according to officials familiar with the situation. Several members of the Governing Council would support a 12-month extension, even those who have a personal preference for six months, the officials said.

German factory orders surpassed pre-pandemic levels in October

German factory orders rose for a sixth month in October and surpassed pre-crisis levels, in a sign of the manufacturing sector’s growing resilience to the pandemic. Demand rose 2.9%, nearly twice as much as predicted by economists. The Economy Ministry said the gain was led by investment goods, which were particularly well-sought outside the euro area. As a result, orders for machinery rose some 5% above levels recorded in the fourth quarter of last year.

Quicker Philippine inflation could keep central bank on hold

Inflation in the Philippines accelerated to its fastest pace in 20 months in November on higher food and beverage costs, giving the central bank reason to pause on further rate cuts. Consumer prices last month climbed 3.3% from a year earlier, compared with 2.5% in October, the Philippine Statistics Authority said. The November figure exceeded the central bank’s 2.4%-3.2% forecast range.

Thai central bank says GDP may be worse than expected next year

Thailand’s gross domestic product could underperform next year if tourism remains weak, even as this year’s economic performance may beat sharply reduced forecasts, the country’s central bank head said. All reasonable policy options are on the table in such a situation, although there’s currently no need for the central bank to pursue quantitative easing, Bank of Thailand Governor Sethaput Suthiwart-Narueput said.

Oil rises for fifth week with OPEC+ deal uncertainty in rearview

Oil rose for a fifth straight week with support from an OPEC+ deal and hopes for another round of US stimulus. Brent crude for February settlement gained US$0.54 to US$49.25 per barrel.

Source: Affin Hwang Research - 7 Dec 2020