US stocks climb, led by small caps; dollar falls

US stocks climbed, with small-cap shares outperforming in one of the final trading sessions of 2020. The dollar continued its slide, weakening to the lowest in 2 1/2 years. The S&P 500 rose by 0.13% to 3,732.04 while Dow Jones was up 73.89 points (0.24%) to 30,409.56.

Pending sales of US existing homes decline for a third month

A gauge of US pending home sales fell for the third consecutive month in November, suggesting higher prices and limited inventory are slowing momentum in the housing market despite record-low borrowing costs. The National Association of Realtors’ index of contract signings to purchase previously owned homes declined 2.6% from the prior month to 125.7, according to data released.

US posts record goods-trade gap ahead of holiday season

The US merchandise-trade deficit widened to an all-time high in November as American companies imported a record value of consumer goods. The shortfall grew to US$84.8 billion last month from US$80.4 billion in October, according to Commerce Department data released. Imports rose 2.6% to US$212 billion, the highest since May 2019 and led by a jump in shipments of consumer goods. Exports increased 0.8% to US$127.2 billion.

Johnson’s Brexit deal clears its first Parliamentary hurdle

Boris Johnson’s Brexit deal cleared the House of Commons, putting the UK’s trade agreement with the European Union on course to become law within hours. Members of parliament voted 521 to 73 to approve the accord after they were recalled from their Christmas break for an emergency session. The House of Lords, the unelected upper chamber, will vote on the legislation later in the evening.

Giuseppe says Italy won’t use all EU recovery funds over debt concerns

Prime Minister Giuseppe Conte said Italy won’t make full use of European Union pandemic recovery funds amid growing concerns over rising public debt and the country’s ability to effectively use the funds. “We cannot use all the loans that we’re given,” Conte said during his year-end press conference in Rome. “There is a limit, we have to be credible and offer a sustainable curve for public debt.”

China’s central bank reiterates it will avoid sharp policy exit

China’s central bank reiterated its pledge to avoid a sudden shift in monetary policy while it maintains necessary support for the economy’s recovery. The main priority is stability, the People’s Bank of China said in a statement after its quarterly policy meeting, vowing to “make no sharp turn” on policy. Monetary policy should be flexible, targeted, reasonable and appropriate, it said.

Thailand to extend travel subsidies as outbreak halts bookings

Thailand plans to extend its domestic travel subsidy program next year as a new outbreak of coronavirus cases hits people’s holiday travel plans, dealing a fresh blow to the tourism-dependent economy. “Domestic tourism has frozen completely,” Tourism Minister Phiphat Ratchakitprakarn said. “We have recently added 1 million more hotel room bookings into the Travel Together program, but we’re confident there won’t actually be any traveling during this time.”

Oil jumps after industry group reports US crude supply decline

Oil extended gains after an industry group reported a larger-than-expected decrease in US crude stockpiles. Brent crude for February settlement rose US$0.25 to US$51.34 per barrel.

Source: Affin Hwang Research - 31 Dec 2020