Stocks Decline Amid Earnings, Economic Concern

US stocks fell for a second day as rising virus cases around the world led to renewed concern over the continued economic impact, overshadowing a batch of solid corporate results. The S&P 500 declined by 0.68% to 4,134.94 while Dow Jones was down 256.33 points (0.75%) to 33,821.30.

US Poverty Rate Rose to Pandemic High Ahead of New Stimulus

The US poverty rate rose to 11.7% in March, the highest level yet during the pandemic following an increase in the latter part of last year as many government benefits expired. The March 2021 estimates indicate that without additional aid many in the US continued to suffer from the economic impacts from Covid-19. The projections didn’t capture benefits provided by the American Rescue Plan signed last month.

Jobless Aid to 300,000 Cut Off Prematurely in Some US States

Almost one-third of jobless people in some US states are getting cut off from extended unemployment benefits prematurely because of an outdated method used to determine who qualifies for aid. A person’s unemployment insurance is automatically extended when jobless rates hit certain thresholds, but some states aren’t taking into consideration new programs created during the pandemic.

Don’t Expect Post-covid Spending Boom in Europe, Commission Says

Many European consumers are unlikely to go back to pre-crisis levels of spending even after lockdowns are phased out, the European Commission said. The executive arm of EU said excess savings accumulated during lockdowns seem to be concentrated among high-income earners whose propensity to consume is relatively low. Poorer households have socked away very little and are unlikely to splurge on purchases.

UK Labor Market Weakens With Unexpected Drop in Payrolls

The UK labor market weakened unexpectedly, with company payrolls falling for the first time in four months and more people dropping out of the workforce. The number of employees on payrolls fell 56,000 in March.The jobless rate fell to 4.9% in the quarter through February because 80,000 people became economically inactive, indicating they stopped looking for work.

New Zealand Inflation Accelerates, Easing Pressure on Policy

New Zealand inflation accelerated slightly in the first quarter, adding to signs the central bank may not need to cut interest rates any further. Consumer prices rose 1.5% from a year earlier, picking up from 1.4% in the fourth quarter and matching economists’ estimates. Prices advanced 0.8% from three months earlier. The Reserve Bank projects inflation will temporarily accelerate into the top half of its 1-3% target range through 2021, before slowing next year.

Bank Indonesia Holds Key Rate Steady and Cuts Gdp Outlook

Indonesia’s central bank left its benchmark interest rate unchanged, and cut its outlook for economic growth, as expanded mobility curbs limit consumption and foreign outflows pressure the currency. Bank Indonesia kept the seven-day reverse repurchase rate at a record low of 3.5%. The central bank also said it now forecasts gross domestic product to expand 4.1%-5.1% this year, down from 4.3%-5.3% previously.

Oil Slides With Broader Market Selloff Adding to Demand Concerns

Oil slumped the most in two weeks alongside a broader market rout as a resurgent virus in some of the world’s top oil importers highlighted the uneven road to recovery. Brent crude for June settlement fell US$0.48 to US$66.57 per barrel.

Source: Affin Hwang Research - 21 Apr 2021