Stocks Close Near Session Lows as Nasdaq 100 Drops

Stocks closed lower as giants Tesla Inc. and Amazon.com Inc. weighed on the Nasdaq 100. Traders also parsed economic data, with inflation remaining at the forefront of the investment debate. The dollar dropped. The S&P 500 rose by 0.27% to 4,192.66 while Dow Jones was up 238.38 points (0.70%) to 34,113.23.

Treasury Quadruples Borrowing Estimates to Pay for Stimulus

The US Treasury more than quadrupled its borrowing estimate for the quarter through June, and expects to need some US$1.3 trillion over the second half of the fiscal year to help pay for a raft of fresh pandemic-relief spending. The Treasury’s projections incorporated the impact of President Joe Biden’s US$1.9 trillion pandemic-relief bill, enacted in March.

Powell Says Economy Making Real Progress, But Not for Everyone

Fed’s Chair Powell said that while US economic recovery is “making real progress,” the gains have been uneven following a downturn that cut hard along lines of race and income. He noted that the economic outlook here in the United States has clearly brightened. Almost 20% of workers in the lowest earnings rung were still unemployed after a year in February. That compares with just 6% for the highest-paid workers.

Euro-area Factories Face Unprecedented Supply-chain Delays

Euro-area manufacturers are battling unprecedented delays in securing raw materials and parts, leading to a record build-up of uncompleted orders and rising prices as the economy starts to recover. Factories surveyed by IHS Markit cited a “mismatch of supply and demand” along with transport difficulties, especially sea freight as the main reasons for delays. A gauge of manufacturing activity rose to 62.9 in April.

Asia Manufacturing Powers Ahead, Even as China PMI Cools

Asia’s manufacturing activity remained robust through April even as a gauge of factory output in China, the region’s top economy and industrial powerhouse, showed signs of cooling. Taiwan’s IHS Markit April manufacturing purchasing managers’ index rose to 62.4 from 60.8 in March. Indonesia’s PMI reading rose to 54.6 from 53.2. The Philippines PMI fell to 49 from 52.2.

South Korea’s Inflation Accelerates to Fastest Since 2017

South Korea’s inflation accelerated in April to the fastest pace since 2017, aided by a favorable base effect amid a broadening economic recovery. Inflation rose to 2.3% in April, rapidly increasing from the 1.5% gain in March. The inflation boost was driven by rising commodity and energy prices, which had plunged during the same period a year earlier when the pandemic spread across the world.

Hong Kong Ends Record Slump With Fastest Growth in a Decade

Hong Kong’s economy finally turned the corner, posting its fastest growth since 2010 as the city makes a stronger recovery from the pandemic and social unrest before that. After declining for a record six quarters, GDP surged 7.8% in the first quarter from a year earlier. The quarter-on-quarter expansion, a better reflection of growth momentum, also outperformed, reaching 5.3%.

Oil Rises With Growing Reopening Efforts Offsetting Virus Surge

Oil climbed as optimism over progress in reopening some of the world’s largest economies outweighed deepening coronavirus risks elsewhere. Brent crude for July settlement rose US$0.80 to US$67.56 per barrel.

Source: Affin Hwang Research - 4 May 2021