Stocks Post Longest Rally Since August; Oil Gains

Rising prospects for a robust federal spending package, coupled with a slowdown in virus infection rates, sent US stocks higher for the sixth straight session. The S&P 500 rose by 0.74% to 3,915.59 while Dow Jones was up 237.52 points (0.76%) to 31,385.76.

House Democrats Unveil First Draft of Stimulus-bill Measures

House Democrats released the first draft text for key pieces of legislation that will comprise President Joe Biden’s Covid-19 relief bill. The legislative language from the Ways and Means, Financial Services and Education and Labor Committees show Democrats are forging ahead with plans to bump the federal minimum wage to US$15 an hour by 2025 and make another round of stimulus payments. Billions of dollars are planned for airline staff, airports and trains.

ECB’s Lagarde Sees Signficant Economic Risk From Resurgent Virus

European Central Bank President Christine Lagarde pledged monetary support for the economy amid extended coronavirus lockdowns and said governments must do the same. “The renewed surge in Covid-19 cases, the mutations in the virus and the strict containment measures are a significant downside risk to euro-area economic activity,” she told European Parliament lawmaker. It remains crucial that monetary and fiscal policy continue to work hand in hand.

Canadian Consumer Insolvencies Fall to Lowest in Two Decades

Canadian consumer insolvencies fell last year to the lowest level in two decades, as government support measures and creditor deferral programs allowed borrowers to keep making monthly payments. There were 96,458 filings in 2020, the lowest since 2002, the Office of the Superintendent of Bankruptcy Canada reported. Official data from Statistics Canada showed disposable income and savings rates actually increased during the lockdowns.

German Industrial Production Stagnates on Virus Restrictions

German industrial production failed to grow for the first time in eight months in December, adding to signs that the economy is being weakened by the second wave of the coronavirus pandemic. Output stagnated at the end of last year as gains in manufacturing were offset by weaker construction.

Japan Wages Fall Most Since 2015 as Winter Bonuses Slide

Japanese wages fell in December for a ninth straight month, declining the most since June 2015, as employers remained fearful of the profit outlook amid a global resurgence of the coronavirus. Labor cash earnings slid 3.2% from a year earlier, as year-end bonus payments plunged, labor ministry data showed. Economists predicted an overall 4.8% decline.

Singapore Sees Some Light at End of Tunnel in Aviation Recovery

Countries could relax border controls and allow more travel if there’s a set of standards for vaccine certification that immigration authorities can use to help determine entry policies, Singapore Transport Minister Ong Ye Kung said. With vaccination and vaccination certification, we can start to relax some border measures to allow some travel to start happening within the course of this year.

Brent Climbs Above US$60 With Trading Houses Divided on Rally

Oil in London rose above US$60 a barrel for the first time in more than a year in a rally that’s dividing the world’s top oil trading houses. Brent crude for April settlement rose US$1.22 to US$60.56 per barrel.

Source: Affin Hwang Research - 9 Feb 2021