Stocks hold gains after Capitol chaos halts surge

US stocks stabilized in the green, though remained well off session highs after protesters surged into the US Capitol, forcing a lockdown that interrupted certification of the presidential election. The S&P 500 rose by 0.57% to 3,748.14 while Dow Jones was up 437.80 points (1.44%) to 30,829.40.

Fed officials all backed bond-buying pace, December minutes show

Federal Reserve officials unanimously backed holding the pace of asset purchases steady when they met last month, with some open to “future adjustments” if needed. “All participants judged that it would be appropriate to continue those purchases at least at the current pace, and nearly all favored maintaining the current composition of purchases,” according to minutes of their Dec. 15-16 meeting published.

US private jobs post first decline since April, ADP data show

The number of employees at US businesses unexpectedly declined in December for the first time since April, underscoring the immediate economic impact of mounting coronavirus cases across the country. Company payrolls decreased by 123,000 during the month, concentrated in leisure and hospitality and retail, according to ADP Research Institute data released.

BOE Governor Bailey warns Brexit will bring big economic losses

Bank of England (BOE) Governor Andrew Bailey risked reigniting the politically charged debate over Brexit by predicting that the trade deal struck with the European Union (EU) could end up costing the UK economy the equivalent of more than 80bn pounds (US$109bn). Bailey endorsed warnings from the Office for Budget Responsibility, that gross domestic product will be as much as 4% lower in the long term than it would be had the country remained in the EU.

Europe’s fledgling recovery is at risk as pandemic worsens

The euro-area economy showed signs of improvement at the end of last year. A gauge of private-sector activity rose in December, with continued strength in manufacturing largely countering a slide in services, according to the final reading of an IHS Markit survey of purchasing managers. French consumer confidence jumped by the most in 3 1/2 years.

Indian economy expected to contract by 9.6% in 2020-21: World Bank

India's economy is estimated to contract by 9.6% in the fiscal year 2020-21, reflecting a sharp drop in household spending and private investment, and the growth is expected to recover to 5.4% in 2021, the World Bank said. In its Global Economic Prospects report, the World Bank said that the informal sector, which accounts for fourfifths of employment, has been subject to severe income losses during the pandemic.

PBOC vows to step up ‘prudential oversight’ of online platforms

China’s central bank vowed to tighten “prudential oversight” of online platforms’ financial activities and step up supervision in the payments sector. The PBOC will step up efforts against monopolies and prevent the disorderly expansion of capital and tighten scrutiny of the payments sector and individual credit-scoring businesses, as well as prohibit excessive marketing of financial products, it said in a statement.

Oil pares gains with US Capitol protests shaking risk appetite

Oil pared gains late in the session as protests in Washington overtook the US Capitol, overshadowing a draw in US crude inventories and Saudi Arabia’s surprise pledge to unilaterally cut output in the next two months. Brent crude for March settlement gained US$0.70 to US$54.30 per barrel.

Source: Affin Hwang Research - 7 Jan 2021