Stocks Slump, With Tech Leading Decline; Oil Jumps

Tech companies led declines in US equities as investors rotated away from the stocks that thrived during the pandemic. Oil jumped after the Suez Canal was blocked by a giant container ship. The S&P 500 dropped by 0.55% to 3,889.14 while Dow Jones was down 3.09 points to 32,420.06.

Powell Sees ‘Highly Desirable’ Gains Behind Modest Jobs View

Federal Reserve Chair Jerome Powell said the central bank’s relatively muted forecast for lower unemployment this year -- despite very strong expected growth -- was actually disguising “highly desirable” labor market gains. In quarterly forecasts published, officials saw unemployment declining to 4.5% by year end from 6.2% in February.

Treasury Has Sent US$325 Billion in Household Stimulus Payments

The Treasury Department and Internal Revenue Service have so far sent about 127 million stimulus payments worth around US$325bn. The second batch of payments includes about 37 million checks worth about US$83bn. That follows the IRS’s announcement that it had sent 90 million payments worth US$242bn in the first wave, bringing the total processed to about 79% of the more than US$410bn approved.

Euro-area Companies Return to Growth With Price Pressures Rising

Private-sector activity in the euro area unexpectedly grew for the first time in six months in March, fueled by a record increase in factory output that masks fresh concerns across the economy about surging infections and new lockdowns. The upturn is also fueling price pressures in the broader economy as companies seek to pass on a spike in costs caused by shortages and shipment delays that has been hitting them all year.

BOE’s Chief Economist Says ‘rip Roaring Recovery’ Is Possible

The UK economy could see a “rip roaring” recovery even if consumers spend just a bit of the additional savings they accumulated during the Covid crisis, according to BOE’s Andy Haldane. Doubling down on his optimistic outlook for an economic resurgence, he expects a sharp bounce back as restrictions on the economy are removed. He said about US$205 billion has been saved over the past year, mostly by higher income households.

China’s US$2.3 Trillion Hidden Debt Could Climb Even Further

China’s local governments had 14.8 trillion yuan (US$2.3 trillion) of hidden debt last year, and the figure could climb even further this year. Local governments were under pressure to increase infrastructure investment and shore up growth through the pandemic, leading to a 6% rise in off-budget borrowing from a recent low of 13.9 billion yuan in the third quarter of 2019.

Thailand keeps rate at record low, cuts GDP outlook with tourism stalled

The Bank of Thailand kept its benchmark interest rate unchanged at an all-time low and cut its growth forecast as it lets fiscal measures take the lead in reviving the economy from its sharpest fall in more than two decades. The central bank held the policy rate at 0.5% in a unanimous decision, after cutting by a total of 75 basis points last year.

Oil Bounces Back as US Supply Report Hints at Demand Revival

Oil surged the most since November as signs of stronger gasoline demand in the US eased concerns around the global economic recovery from the pandemic. Brent crude for May settlement rose US$3.62 to US$64.41 per barrel.

Source: Affin Hwang Research - 31 Mar 2021