Stocks Snap Five-day Winning Streak; Oil Declines

US stocks fell for the first time in six trading sessions while yields on benchmark Treasury notes lingered close to more than one-year highs as investors weighed the strength of the global economic recovery. The S&P 500 dropped by 0.16% to 3,962.71 while Dow Jones was down 127.51 points (0.39%) to 32,825.95.

US Retail Sales Declined in February as Weather Impeded Demand

US retail sales declined in February, when inclement winter weather settled over large swaths of the country, representing a temporary setback in demand that’s poised to accelerate in coming months. The 3% decrease in total retail receipts followed an upwardly revised 7.6% surge in January that was the strongest advance in seven months, Commerce Department figures showed.

Biden wants corporate tax hike, help for families making US$110k, aide says

President Biden’s tax plan will feature higher levies on corporations and wealthy Americans, with relief eyed for middle-class households, including those in the US$110,000-a-year income range. “The key here is that president believes strongly that the biggest corporations and those folks who have done extremely well over the last several decades should pay more,” deputy director of National Economic Council.

ECB’s Kazimir Urges Faster Fiscal Response as Bond Yields Curbed

ECB is shielding the euro-zone economy from higher bond yields partly because the region is rolling out its fiscal stimulus too slowly. While the rise in euro-area government bond yields this year isn’t “dramatic for now,” the Slovakian central bank governor said ECB wanted to shore up confidence that the region wouldn’t suffer from higher borrowing costs sparked by the US$1.9 trillion US fiscal package.

French Economy Set for Firmer 2021 as Restrictions Hurt Less

The French economy is weathering the Covid pandemic and government restrictions better than previously forecast, putting it on a path to stronger growth this year, the Bank of France said. Activity fell less than the central bank initially expected at the end of 2020 as household and business investment held up despite the lockdown in November 2020.

German Investor Confidence Improves Amid Easing Virus Curbs

Investor confidence in Germany’s economic recovery improved after the government laid out a path toward ending coronavirus lockdowns, attempting to offer businesses a bit more certainty in planning for the months ahead. A gauge of expectations rose to 76.6 in March from 71.2 the previous month, reaching the highest since September, according to a survey by economic research institute ZEW.

RBA Emphasizes Need for Higher Wages Growth in Subtle Shift

RBA highlighted the importance of stronger wages growth before considering any rise in interest rates, providing itself with a little extra room by emphasizing a traditionally lagging indicator. “It was likely that wages growth would need to be sustainably above 3%,” RBA said in minutes of its March policy meeting, noting overseas experience suggested they would need a tight labor market and considerable time for this to occur.

Oil Extends Retreat With Market Assessing Global Demand Recovery

Oil fell the most in a week as investors assessed the state of the demand recovery in different parts of the world. Brent crude for May settlement dropped US$0.49 to US$68.39 per barrel.

Source: Affin Hwang Research - 17 Mar 2021