Stocks Notch Best Day in 10 Weeks, Nasdaq Up 2.5%

Stocks had their biggest rally in about 10 weeks as several strategists said the recent explosion of speculative buying won’t derail the bull market in equities. The S&P 500 rose by 1.61% to 3,773.86 while Dow Jones was up 229.29 points (0.76%) to 30,211.91.

Biden to Focus on Trade Enforcement After Years of Trump Tariffs

President Joe Biden’s administration is setting up its trade policy to prioritize enforcement of existing commitments by the US’s partners over negotiating more deals to open new export markets. Biden’s likely strategy for supporting American producers focuses on going after violations via dialogue, work with allies and use of dispute-resolution mechanisms in existing trade agreements rather than following the Trump administration’s more blunt unilateral tool of national-security tariffs.

US Manufacturing Remains Robust While Price Pressures Build

A measure of US manufacturing remained robust at the start of the year, though pandemic-related supply chain disruptions are restraining production and driving up prices. The Institute for Supply Management’s gauge of factory activity eased to a still-elevated 58.7 in January from 60.5 a month earlier, according to data released.

UK’s Sunak Poised to Stick to Tax Pledges in March 3 Budget

UK Prime Minister Boris Johnson’s government is sticking to an election promise not to hike taxes on wages and sales next month, rejecting pressure to increase revenue to tackle the record deficit run-up during the coronavirus pandemic, according to a person familiar with the matter. Chancellor of the Exchequer Rishi Sunak‘s budget next month will not raise income tax, national insurance or value added tax.

Italian Manufacturing Fuels Hope of 2021 Economic Recovery

Italian manufacturing is picking up at the fastest pace in nearly three years, a bright spot in an economy that probably shrank close to 10% during the 2020 pandemic. Factories, mostly located in the country’s north, saw a sustained upturn in output in January, with orders expanding at a solid pace thanks to demand from Europe and North America, according to an IHS Markit survey. A Purchasing Managers’ Index for Italian manufacturing climbed to 55.1 in January from 52.8 in December.

Asia Manufacturing Activity Holds Up Even as China PMIs Cool

Factory activity across much of Asia continued to hold up in January even as China’s output showed signs of moderating. Taiwan’s IHS Markit January manufacturing purchasing mangers’ index rose to 60.2 from 59.4 in December, its highest reading since April 2010. South Korea’s rose to 53.2 from 52.9, the most since February 2011. Both were well above the 50 level that separates contraction from expansion.

Thai Households Pile Up Debt as New Virus Wave Weighs on Income

Thailand’s household debt, already among the highest in emerging Asia, is expected to rise further as a fresh Covid outbreak curbs incomes, weighing on consumer spending and heightening financial-stability risks. Household debt stood at 13.8 trillion baht ($460 billion), or 87% of gross domestic product, at the end of September 2020, up from 79% a year earlier, according to central bank data.

Oil Rises Most in Weeks Swept Up in Broader Market Enthusiasm

Oil rose to the highest in more than two weeks, lifted by broader market strength and optimism over demand recovering this year. Brent crude for April settlement rose US$1.31 to US$56.35 per barrel.

Source: Affin Hwang Research - 2 Feb 2021