Stocks Drop a Second Day With Spending in Focus

Stocks fell for a second day and Treasury yields touched a 14-month high as traders weighed the consequences of more stimulus from the Biden administration. The S&P 500 dropped by 0.32% to 3,958.55 while Dow Jones was down 104.41 points (0.31%) to 33,066.96.

US Consumer Confidence Surges to One-year High on Job Optimism

US consumer confidence rose in March to a one-year high as Americans grew more upbeat about the economy and labor market, a sign that household spending may pick up more broadly in the coming months. The Conference Board’s index increased to 109.7 from a revised 90.4 reading in February. Households’ outlooks brightened as millions received Covid-19 vaccinations and restrictions on businesses were lifted more broadly.

Biden to Map US$2 Trillion Economic Plan in Reborn Pittsburgh

President Joe Biden will unveil his vision for a mass ramp-up in US infrastructure spending in Pittsburgh, a city the White House views as a prime example of an old manufacturing hub revitalized by new industries from health care to technology. The infrastructure package would amount to about US$2 trillion over eight years. That would be paid for over a 15-year period with a bump in the corporate tax to 28%.

Euro-area Confidence Rises to Strongest Since Pandemic Started

Confidence in the euro-area economy improved sharply in March, reaching levels last recorded before the pandemic, as companies and consumers see vaccine roll-outs eventually helping support a recovery. A European Commission sentiment index increased to 101.0. Sentiment rose across all sectors of the economy and particularly strongly in Germany, the region’s largest member. Employment expectations jumped.

German Inflation Accelerates as Fuel Prices Add to One-offs

Germany’s inflation rate accelerated in March to the highest level in nearly two years, driven by a jump in fuel costs that’s adding to a range of special factors elevating prices this year. Consumer prices were up 2% from a year earlier. Inflation in Germany is partly reflecting the expiration of temporary sales-tax cuts, a boost in the country’s minimum wage and changes to the composition of the price basket.

Hong Kong Retail Sales End Two-year Losing Streak With 30% Gain

Hong Kong’s retail sales ended a two-year losing streak in February, surging 30% from a year ago because of last year’s low base when the coronavirus outbreak brought the economy to a halt. Retail sales by value rose to US$3.8 billion last month, the Hong Kong Census and Statistics Department said in a statement. Retail sales by volume climbed 31.7% from a year earlier.

Korean Manufacturers’ Confidence Hits Decade High Amid Recovery

Confidence among South Korean manufacturers has jumped to its highest in almost 10 years. An index of business sentiment among manufacturers climbed to 91 in April from 85, for its highest reading since August 2011. The improvement was broad-based, with separate gauges for domestic firms and exporters rising at a similar pace, and sentiment for small companies increasing even more than for exporters.

Oil Slips With Strong Dollar Compounding Worsening Virus Outlook

Oil snapped a two-day streak of gains alongside a strengthening dollar as near-term risks to the demand recovery emerged ahead of a OPEC+ meeting this week to decide on output policy. Brent crude for May settlement dropped US$0.84 to US$64.14 per barrel.

Source: Affin Hwang Research - 31 Mar 2021