Tech Stocks Rise With Small Caps; Treasuries Slip

US stocks rose, led by gains in tech shares and small caps, with Wall Street parsing the latest earnings ahead of a flood of reports this week. The S&P 500 rose by 0.81% to 3,798.91 while Dow Jones was up 116.26 points (0.38%) to 30,930.52.

Biden Team Hints at Keeping Trump’s Tough Line Toward China

President-elect Joe Biden’s cabinet picks signaled that the new administration would continue some of Donald Trump’s hard-line economic policies toward China, with officials vowing to fight “abusive” trade practices and bar products from the region home to the nation’s ethnic Uighur Muslim minority.

IMF Urges Germany to Keep Economy on Pandemic Support

The German government shouldn’t be afraid to bolster fiscal stimulus if the pandemic drags out the economic recovery, according to the International Monetary Fund. The Washington-based lender urged Chancellor Angela Merkel’s administration to consider additional aid for illiquid or insolvent-yet-viable businesses and maintain support for the country’s labor market to avoid more permanent scars.

BOE’s Haldane Says UK Can End Furlough Before Rebound Complete

The Bank of England’s chief economist said the government can afford to end its furlough plan before the UK’s recovery is fully complete. Andy Haldane, who has been the most publicly optimistic of the central bank’s rate-setting committee, said the economy may be growing quickly enough by the second quarter to absorb the 1 million people who lost their jobs in the coronaviurus crisis.

Asian Central Banks Start Year Juggling Politics, Policy Reviews

Central banks across Asia are starting the year juggling policy reviews and political pressure to do more to support their economies. Bank of Japan Governor Haruhiko Kuroda has promised to release a policy review in March that he emphasized isn’t intended to backpedal from massive monetary easing, but rather to make it “more effective and sustainable.” The Reserve Bank of India is reviewing its inflationtargeting mechanism, with some in Prime Minister Narendra Modi’s government seeking to widen the band from the current 2%-6% range.

Hong Kong Unemployment Rises to Highest Level Since 2004

Hong Kong’s unemployment rate rose in December to the highest level in 16 years as the city struggled under stiff social distancing measures to control new waves of Covid-19 cases. The jobless rate jumped to 6.6% in the October-to-December period from 6.3% previously, returning to levels not seen since December 2004, according to a government report. The number of unemployed rose by about 1,500 to 245,800, while the underemployment rate remained at 3.4%.

Thailand Passes US$7 Billion Handout to Weather New Virus Impact

Thai cabinet signed off on a US$7 billion cash handout program to help millions of low-income people weather the impact of control measures imposed to contain a new wave of Covid-19 infections. An estimated 31.1 million people, including welfare-card holders, farmers and informal sector workers, will benefit from the direct cash transfer. The financial assistance is seen boosting gross domestic product by 0.5 to 0.6 percentage point, Finance Minister Arkhom Termpittayapaisith said.

Oil Surges With Equities on Hopes Stimulus Will Boost Economy

Oil surged the most in over a week in London as broader markets rallied on expectations of additional US stimulus boosting the economy. Brent crude for March settlement rose US$1.15 to US$55.90 per barrel.

Source: Affin Hwang Research - 20 Jan 2021