Stocks Close at Record Highs; Bond Yields Tumble

US stocks jumped to record highs with retail sales and weekly jobless claims data signaling an accelerating recovery in the world’s biggest economy. Yields on benchmark 10-year Treasury notes dropped the most since February. The S&P 500 rose by 1.11% to 4,170.42 while Dow Jones was up 305.10 points (0.90%) to 34,035.99.

State Jobless Claims in US Fall to Lowest Since March 2020

The number of applications for US state unemployment benefits plummeted last week to the lowest since the pandemic began, indicating the labor market continues to thaw as governments lift restrictions on business and activity picks up. Initial claims in regular state programs decreased by 193,000 to 576,000 in the week ended April 10. The prior week’s total was revised upward to 769,000.

US Factory Output Rises in March, Shaking Off Winter Weakness

Production at US factories increased in March by the most in eight months as manufacturing returned to a path of solid growth following a weather-related setback in February. The 2.7% increase in output followed a downwardly revised 3.7% decline in February. Total industrial production, which also includes mining and utility output, rose 1.4% in March after a revised 2.6% decrease a month earlier.

Italy’s Debt Burden Will Breach 1920 Record on Crisis Costs

Italy’s debt this year will exceed the country’s previous record amassed in the aftermath of World War I, laying bare the debilitating cost of the coronavirus pandemic on the euro-zone’s third-biggest economy. The new borrowing tally of 159.8% of gross domestic product featured in a fiscal outlook ratified by Prime Minister Mario Draghi’s cabinet. That exceeds the probable all-time high of 159.5% achieved in 1920.

Australia Among Fastest to Return to Pre-pandemic Employment

Australia is one of the first nations to regain all jobs lost through the pandemic, reflecting a successful early suppression of Covid-19 and a massive fiscal-monetary shot that’s sent the economy roaring back. Employment and hours worked in March were higher than in the same month of 2020. Unemployment in Australia fell to 5.6% last month, despite the participation rate climbing to a record high 66.3%.

Australia Foreign Investment Uncertainty Spikes as Tensions Rise

Foreign investment uncertainty in Australia jumped in 2020 amid increased international tensions and the politicization of decisions relating to the energy and resources industries, according to a new gauge. The index showed uncertainty almost doubled last year compared with the average in 2019. Gross inflow of foreign direct investment in 2020 fell to only half the average of the five years through 2019, it said.

China’s Holdings of Treasuries Hit Highest Since July 2019

China’s holdings of US Treasuries rose in February to the highest since mid-2019 as yields climbed thanks to prospects of more stimulus for an American economy increasingly recovering from the coronavirus pandemic. The second-largest foreign holder behind Japan increased by US$9 billion in February to US$1.1 trillion, the highest total since July 2019.

Oil Edges Higher With US Outlook Sustaining Price Breakout

Oil extended its climb out of a month-long trading range with further signs of an accelerating rebound taking shape in the US. Brent crude for June settlement rose US$0.36 to US$66.94 per barrel.

Source: Affin Hwang Research - 16 Apr 2021