Tech Leads Stock Gains Ahead of Megacap Earnings

Technology shares led gains in US stocks as investors awaited earnings from some of the biggest companies. The S&P 500 rose by 0.36% to 3,855.36 while Dow Jones was down 36.98 points (0.12%) to 30,960.00.

Biden ‘open to Negotiate’ on Stimulus, Seeks GOP Backing

President Joe Biden said he’s open to reshaping his US$1.9trn Covid-19 relief proposal as the administration seeks a bipartisan deal, though didn’t rule out pursuing a Democrat-only route for passage. “I’m open to negotiate,” Biden. Still, he said “time is of the essence and I must tell you I’m reluctant to cherry pick and take out one or two items here.”

German Business Mood Darkens as Virus Lockdowns Delay Recovery

German companies’ optimism in an economic recovery is being tested as extended lockdowns at home and abroad curb activity. A gauge of sentiment over current conditions fell in January, dragging the Ifo Institute’s business climate index down to 90.1. A measure of expectations for the next six months also declined amid uncertainty about the impact of new, more contagious coronavirus strains on the economy.

Italian Deficit May Reach 9.2% This Year as Covid Costs Pile Up

The Italian Treasury is starting to factor in a bigger hit to the country’s battered public finances this year as another extended lockdown holds back the recovery, a senior government official said. Treasury models suggest the budget deficit may reach as much as 9.2% of output this year, the official said. The government is also looking at a deteriorating outlook for growth and could see the economy expand as little as 4.5% in its worst-case scenario, according to the official.

Lagarde Says ‘no Doubt’ ECB Will Preserve Financing Conditions

The European Central Bank (ECB) will be in the market “for an extended period of time” to ensure the economy has ample access to affordable funding to cope with the pandemic and its aftermath, President Christine Lagarde said. “The ECB will make sure that financing conditions are preserved at a favorable level,” she said. ECB is pumping money into the euro-area economy with bond purchases and long-term bank loans to keep borrowing costs down.

Thai Tourist Arrivals at Decade Low as New Wave Clouds Outlook

Foreign tourist arrivals into Thailand plunged to the lowest level in at least 12 years after the country closed its borders to contain the coronavirus outbreak, with a resurgence in infections now undermining efforts to reopen the industry. Tourist arrivals slumped to 6.7mn in 2020 from 39.9mn a year earlier, data from the Ministry of Tourism and Sports showed. That’s the lowest number of visitors since at least 2008, according to ministry data.

Yi Says PBOC Will Balance Stabilizing Growth and Curbing Risks

The People’s Bank of China (PBOC) will seek to balance supporting economic growth and curbing emerging risks, Governor Yi Gang said, signaling a continuation of the central bank’s existing policy stance. “Going forward, China’s monetary policy will, on one hand, adjust to new economic developments in a timely manner, and on the other hand maintain policy stability to avoid a policy cliff,” the central bank chief.

Oil Rises With Tighter Supply Outook Overshadowing Vaccine Woes

Oil gained the most in about a week with expectations for tighter global supply offsetting concerns that a bumpy Covid-19 vaccine rollout will further blunt demand. Brent crude for March settlement gained US$0.47 to US$55.88 per barrel.

Source: Affin Hwang Research - 26 Jan 2021