S&P 500 Pares Gains Into the Close as Nasdaq Drops

Stocks almost wiped out their advance as a decline in technology and retail companies dragged down the Nasdaq 100. Treasuries retreated. Oil climbed. The S&P 500 rose by 0.10% to 3,830.17 while Dow Jones was up 36.12 points (0.12%) to 30,723.60.

House Passes Budget to Speed Biden’s Plan

The House passed a budget that smooths the path for fast-track passage of President Joe Biden’s US$1.9 trillion Covid-19 relief plan. Treasury Secretary Janet Yellen met with Democratic and Republican mayors in an effort to bolster support for the proposal. The House vote followed action by the Senate on Tuesday to consider a similar budget resolution -- beginning a process that would let Democrats proceed with the Biden stimulus without Republican votes.

US Companies Add More Jobs Than Expected, ADP Data Show

US companies added more jobs than forecast in January, a sign that the labor market may be gradually improving as Covid-19 infections begin to ebb. Company payrolls increased by 174,000 during the month, according to ADP Research Institute data released. The prior month was revised up to a 78,000 decline.

Euro-Area Inflation Jumps as ECB Warns Against Undue Optimism

Inflation returned to the euro area in January thanks to temporary shifts in prices, suggesting the European Central Bank won’t see any need to change its course in supporting the economy. Consumer prices rose an annual 0.9%, more than economists expected, for the first gain in six months. A measure that excludes volatile items such as food and energy surged to 1.4%, the highest in more than five years.

Spain Considers Debt Relief for Companies as Virus Pain Persists

Spain’s government is considering debt relief for companies as extended pandemic restrictions and a slow European vaccine rollout tip the economy into another downturn, according to officials. One proposal would excuse a portion of the debt borrowed through Spain’s state-backed loan guarantee program for companies that stand a good chance of surviving after the pandemic, the officials said.

RBA’s Lowe Hails QE, Warns on Premature Stimulus Withdrawal

Reserve Bank of Australia chief Philip Lowe praised the country’s quantitative-easing program and warned it would be premature to consider withdrawing monetary stimulus when global peers are extending theirs, and with domestic unemployment and inflation still far from the target. “The bond-purchase program has helped to lower interest rates and has meant that the Australian dollar is lower than it otherwise would have been,” Lowe said.

Bank of Thailand Holds Key Rate, Lets Fiscal Policy Lead

Thailand’s central bank held its benchmark interest rate steady at an all-time low as fiscal measures take the lead in reviving the economy amid a renewed outbreak of Covid-19. The Bank of Thailand kept the policy rate at 0.5% in a unanimous decision, its sixth straight hold. Assistant Governor Titanun Mallikamas said the central bank was preserving its policy space for the proper time, but was prepared to use additional monetary tools and was assessing the need for new measures in the foreign-exchange market.

Oil Surges as OPEC+ Pledges to Clear Pandemic-driven Surplus

Oil climbed to the highest in more than a year in New York as OPEC and its allies pledged to continue whittling down global inventories. Brent crude for April settlement rose US$1.00 to US$58.46 per barrel.

Source: Affin Hwang Research - 4 Feb 2021