Stocks Slide for Second Day; Treasury Yields Rise

Energy, financial and industrials shares led US stocks lower as the pullback centered in the technology sector widened while investors remained on edge over the threat of inflation. The S&P 500 fell by 0.87% to 4,152.10 while Dow Jones was down 473.66 points (1.36%) to 34,269.16.

Fed Officials See Bright Economic Outlook -- and a Need for Aid

The US economy is on the road to recovery but still faces risks and it’s premature to discuss reducing monetary policy support, according to a chorus of Federal Reserve officials. “The outlook is bright, but risks remain, and we are far from our goals,” Governor Lael Brainard said. “It will be important to remain patiently focused on achieving the maximum-employment and inflation outcomes in our guidance”, he adds.

Job Openings in US Surge to a Record High 8.12 Million

US job openings surged in March to a record high, underscoring a rapid increase in labor demand as vaccinations accelerate and states reopen their economies. The number of available positions increased to 8.12 million during the month, the highest in data back to 2000, from an upwardly revised 7.53 million in February, the Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS, showed

ECB’s Knot Signals Upward Revision to 2021 Growth Forecast

The euro-area economy may expand by more than the 4% currently projected by the European Central Bank this year as savings are unleashed and consumption rebounds, according to Governing Council member Klaas Knot. The Dutch policy maker argued that service-sector activity is reviving in line with the experiences of other countries that were faster at rolling out vaccinations, and that the bloc will likely follow a similar path now that it is catching up.

German Investor Confidence Jumps to 21-year High on Vaccines

Investor confidence in Germany’s economic recovery jumped to the highest level in more than 21 years after the country’s vaccine rollout gained speed. The ZEW institute’s gauge of expectations rose to 84.4 in May from 70.7 the previous month. A measure of current conditions improved, as did prospects for the euro zone.

WEF Still Proceeding With Singapore Meeting Even as Virus Spikes

The World Economic Forum plans to go ahead with its annual meeting in Singapore this August despite a jump in coronavirus cases that prompted the Asian city-state to reimpose restrictions and tighten border controls. The meeting will proceed with the close cooperation of the Singaporean authorities, who are leading concerning the health and safety measures.

Philippine GDP Shrinks More Than Expected Amid Virus Fight

The Philippines’ economy is struggling to gain momentum as elevated numbers of Covid cases hamper reopening efforts and destroy jobs. Gross domestic product fell 4.2% in the first quarter from a year ago, the statistics authority said. A return to stricter curbs in Manila and other key economic areas threatens the government’s goal -- currently up for review -- of at least 6.5% growth this year. It’s also expected to drive unemployment, which has yet to show considerable improvement.

Oil Edges Higher With Weak Dollar Offsetting Refiner Run Cuts

Oil rose as a weaker dollar lent support and offset a burgeoning pile up of crude in the US Gulf Coast as refineries there cut runs in response to the Colonial Pipeline shutdown. Brent crude for July settlement rose US$0.23 to US$ 68.55 per barrel.

Source: Affin Hwang Research - 12 May 2021