Stocks Climb on Stimulus Hope After Weak Jobs Data

Stocks extended their weekly rally after weaker-than-forecast US jobs data bolstered the case for President Joe Biden’s US$1.9 trillion coronavirus relief package. The dollar fell. The S&P 500 rose by 0.39% to 3,886.83 while Dow Jones was up 92.38 points (0.30%) to 31,148.24.

Yellen Sees Full Employment Next Year With Biden’s Stimulus Plan

Treasury Secretary Janet Yellen said the US can return to full employment in 2022 if it enacts a robust enough coronavirus stimulus package, but otherwise risks a slower rebound in jobs and the economy. Yellen said that low-wage earners, minorities and women are suffering the most and could face “permanent” damage from a prolonged slowdown.

ECB’s Lagarde Sees Summer Recovery, Tricky Post-pandemic Phase

European Central Bank President Christine Lagarde predicted the euro-area recovery will pick up in the summer, while stressing that public authorities will have a difficult job weaning the economy off of emergency support. Lagarde expressed confidence in the region’s ability to emerge from the coronavirus crisis stronger, with a more digital and greener future. She also urged governments to speed up work on their spending plans, so the European Commission can start issuing joint debt.

Italy’s Visco Sees Recovery Even as Covid Weighs on Growth

The Bank of Italy sees an increase in economic output in the Spring even as continued fears over coronavirus infections weigh on a recovery in consumer spending, governor Ignazio Visco said. A spring recovery “hinges crucially upon the progressive attenuation of the epidemic over the course of the coming months. The surveys conducted by the Bank of Italy at the end of November suggest that consumption expenditure is being held back by fears of infection, besides the precautionary motive based on economic and financial considerations.

German Factory Orders Slide as Virus Forces Curbs on Activity

German factory orders fell for the first time in eight months after the spread of the coronavirus forced the euro area’s biggest economy and many of its trading partners into lockdowns. Demand dropped 1.9%, damped by investment goods and orders from the euro area. Orders were still up more than 6% from the previous year.

India’s RBI Signals Support to Modi’s Budget to Aid Growth

India’s central bank kept interest rates on hold at 4% and began withdrawing some pandemic-era policies, while reiterating its intent to keep its stance accommodative to support economic growth. The Reserve Bank of India emphasized it was seeking to ensure ample liquidity to manage the government’s near-record borrowing and keep rates lower for longer.

Philippine House Speaker Files US$8.7 Billion Pandemic Relief Bill

Philippines House Speaker Lord Allan Velasco said he submitted a 420 billion peso (US$8.7 billion) pandemic relief bill to Congress to revive an economy in recession. The relief will help fund programs for pandemic-hit businesses and deliver another wave of cash aid for the poor, Velasco said in a statement. The bill was filed jointly with lawmaker Stella Quimbo, according to the Speaker.

Oil Extends Weekly Gain With Brent Pushing Toward US$60 a Barrel

Oil set a fresh one-year high in New York with continued producer supply curbs helping spur strength everywhere from physical markets to the futures curve. Brent crude for April settlement rose US$0.50 to US$59.34 per barrel.

Source: Affin Hwang Research - 8 Feb 2021