Stocks rally to records as investors cheer aid

US equities rallied to records after President Donald Trump backed away from earlier threats and signed a coronavirus aid package. The S&P 500 rose by 0.87% to 3,735.36 while Dow Jones was up 204.10 points (0.68%) to 30,403.97.

Trump signs virus relief bill after panning US$600 checks

President Donald Trump signed a bill containing US$900 billion in pandemic relief, backing down from last-minute demands that undercut his own negotiating team, risked a government shutdown and delayed widely supported economic aid as coronavirus cases continue to rise. The legislation Congress passed Dec. 21 includes US$1.4 trillion in government spending to fund federal agencies through the end of the fiscal year in September.

House backs Trump on US$2,000 checks, daring Senate GOP to follow

The House on Monday passed a bill replacing the US$600 stimulus checks in the newly enacted virus relief bill with US$2,000 payments, as Democrats and moderate Republicans voted in favor of a proposal backed by President Donald Trump. The bill cleared the chamber on a 275 to 134 vote, reaching the two-thirds majority needed for the expedited procedure.

EU governments signal support to complete China investment deal

European Union governments signaled support for completing work on a long-sought agreement with China to open the Chinese market further to EU investors, bringing closer a major economic and political victory for both sides. EU member-country envoys urged the European Commission, the bloc’s executive arm, to complete negotiations with the Chinese government within days, according to a European official.

EU-UK trade deal gets nod from bloc’s top envoys in Brussels

European Union ambassadors gave the go-ahead to the bloc’s draft free-trade agreement with the UK, paving the way for the deal to take effect on Jan. 1. “EU ambassadors have unanimously approved the provisional application of the EU-UK Trade and Cooperation Agreement as of January 1, 2021,” Sebastian Fischer, a Brussels-based spokesman for the German government.

Korea’s consumer sentiment retreats amid worst virus wave

South Korean consumer confidence weakened sharply in December from a 10-month high as a resurgence of the coronavirus led to tighter restrictions on activity.The Bank of Korea’s consumer sentiment index slid to 89.8 from 97.9 in November for its lowest reading in three months, the central bank said. The biggest declines were seen in subindexes measuring the outlook for spending among households and their assessment of the economy.

Duterte approves record Philippine budget for pandemic recovery

Philippine President Rodrigo Duterte has approved a record 4.5 trillion-peso (US$93.6 billion) budget for next year that economic managers have called the “heftiest stimulus package” for recovery from the pandemic. The Philippines is expecting its economy to grow by as much 7.5% in 2021 after plunging into recession this year. Duterte’s economic team has said the 2021 budget will help boost economic growth.

Oil slides with supply risks countering boost from stimulus
Crude slipped as investors ignored a broader market surge that pushed equities to record highs and focused instead on looming new supply from OPEC+. Brent crude for February settlement fell US$0.43 to US$50.86 per barrel.

Source: Affin Hwang Research - 29 Dec 2020