Stocks Fall for Second Day on Inflation Worries

US stocks declined for a second day with losses steepening in the final 15 minutes of trading as investors weighed the rush to reopen the economy against inflationary pressure from a rise in commodity prices. The S&P 500 fell by 0.85% to 4,127.83 while Dow Jones was down 267.13 points (0.78%) to 34,060.66.

Biden Eyes More US Jobs in Expanded Vaccine Sharing Abroad

President Joe Biden promise that the US would be an “arsenal” of coronavirus vaccines for the world, announcing he’d share FDA-authorized shots after criticism that his administration had hoarded hundreds of millions of doses. But he also signaled that he intends for US manufacturers to hold or grow their share of the global market for vaccines, casting his decision to begin supplying other countries as an engine for American jobs. He cautioned that American contributions alone won’t resolve the crisis.

US Housing Starts Trail Estimate, Hinting at Supply Chain Woes

US housing starts fell by more than forecast in April, suggesting that supply-chain constraints and rising materials costs continue to hold builders back. Residential starts decreased 9.5% in April to a 1.57 million annualized rate, according to government data released.

UK Jobs Market Gains More Than Expected as Lockdown Eases

The UK labor market strengthened more than expected in April as the economy began to emerge from coronavirus restrictions. The number of people on payrolls rose 97,000, and vacancies increased 13%, the Office for National Statistics. The jobless rate in first quarter fell unexpectedly to 4.8% as employment surged 84,000, the first gain since the pandemic struck.

Japan’s Economy Shrinks in Emergency, Raising Double-dip Fears

Japan’s economy shrank more than expected during the first three months of the year, raising the possibility of a double-dip recession as the country struggles to contain infections and speed up its vaccine rollout. GDP contracted an annualized 5.1% from the previous quarter, ending six months of double-digit growth, as businesses cut investment, shoppers held back spending and government outlays fell amid a suspension of a travel-promotion campaign to help the ailing tourism industry.

Thailand Said to Plan US$22bn Borrowing to Fund Covid Relief

Thailand plans to borrow an additional 700bn baht (US$22.3bn) to fund measures to counter the worst Covid-19 outbreak to hit Southeast Asia’s second-largest economy, people familiar with the matter said. The government proposes to spend 400bn baht of the new borrowing to help various sections of the society affected by the new outbreak, while 270bn baht will be used to revive the economy, the people said.

Philippines Cuts GDP Growth Outlook Amid Tough Virus Fight

The Philippine government cut its economic outlook for this year and next as it struggles with a surge in coronavirus cases that threatens its recovery. Gross domestic product is now tipped to grow 6% to 7% this year, down from a previous estimate of 6.5%-7.5%, according to the Development Budget Coordination Committee, which sets the government’s economic assumptions for budget purposes. The outlook for 2022 was lowered to 7%-9% growth, from 8%-10% earlier.

Oil Slips Amid Prospects of Progress on Iran Nuclear Deal Talks

Oil sunk as investors weighed developments in ongoing talks between world powers on a revival of the Iran nuclear deal, which would bring more supply to the market. Brent crude for July settlement fell US$0.75 to US$68.71 per barrel.

Source: Affin Hwang Research - 19 May 2021