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Stocks rally to record as small caps outpace tech

EconNov 14. 2020

By Syndication Washington Post, Bloomberg · Rita Nazareth, Claire Ballentine · BUSINESS, US-GLOBAL-MARKETS 
Stocks climbed to a record as the rotation to economically-sensitive industries regained momentum even with a surge in coronavirus cases that could lead to more restrictions and crimp growth.

Both the S&P 500 and the Russell 2000 Index of small caps rallied to all-time highs, while the Dow Jones industrial average rose to pre-pandemic levels. All major groups in the equity benchmark advanced, with energy, industrial and financial companies among the biggest gainers. The tech-heavy Nasdaq 100 underperformed major gauges, with stay-at-home winner Zoom Video Communications Inc. tumbling. Walt Disney Co. jumped on solid results, and Cisco Systems Inc. climbed after upbeat sales projections. Tesla Inc., whose Chief Executive Officer Elon Musk tweeted he may have covid-19, fell. DoorDash Inc., the biggest U.S. food delivery platform, filed for an initial public offering.

The risk-on mood fueled a rotation into value and cyclical sectors, whereas more defensive industries underperformed. Stock funds attracted a record amount after positive results for a coronavirus vaccine, adding $44.5 billion in the week through Nov. 11, according to Bank of America Corp. and EPFR Global data. While the latest figures on covid-19 continued to fuel concern, with the surge in U.S. infections now spread to 49 states, the S&P 500 notched a second weekly rally.

“You have this push-pull,” said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management’s Ascent Private Wealth Group. “As people become more optimistic, you get the recovery in the more cyclical sectors, and then as the optimism wanes a bit, you go back into the tech stocks.”

New York’s daily covid-19 cases exceeded 5,000, the highest for the state since April, as New York Mayor Bill de Blasio, D, warned parents to prepare for city schools to halt in-person classes as soon as Monday. California, Oregon and Washington state urged arriving people to self-quarantine, while Illinois reported a record number of daily infections and hospitalizations, a day after Chicago announced a stay-home advisory.

Federal Reserve Bank of St. Louis President James Bullard and New York head John Williams both voiced concerns about the economic impact of the pandemic, echoing previous comments from Fed Chairman Jerome Powell. U.S. consumer sentiment unexpectedly declined in early November as an increase in covid-19 infections and the election prompted Americans to reassess their outlooks. Meanwhile, a key measure of prices paid to U.S. producers decelerated in October, consistent with a pandemic that continues to limit pricing power.

U.S. stocks are poised for “a digestion period,” according to Keith Lerner, chief market strategist at SunTrust Private Wealth Management. He cited the S&P 500’s track record since 1990 after days when more than 60% of its component stocks reached 20-day highs, as they did Monday. There were 25 instances mentioned in a report Thursday. A month later, the S&P 500 was unchanged on average. Gains were posted over three-, six- and 12 months, with the latter period bringing an average increase of 12.5%.

These are some of the main moves in markets:

Stocks

–The S&P 500 gained 1.4% at 4 p.m. EST.

–The Stoxx Europe 600 Index was little changed.

–The MSCI Asia Pacific Index climbed 0.1%.

Currencies

–The Bloomberg Dollar Spot Index declined 0.4%.

–The euro advanced 0.2% to $1.1832.

–The Japanese yen appreciated 0.5% to 104.65 per dollar.

Bonds

–The yield on 10-year Treasurys rose one basis point to 0.90%.

–Germany’s 10-year yield decreased one basis point to -0.55%.

–Britain’s 10-year yield fell one basis point to 0.338%.

Commodities

–The Bloomberg Commodity Index was little changed.

–West Texas Intermediate crude fell 2.3% to $40.18 a barrel.

–Gold rose 0.6% to $1,887.63 an ounce.

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Banks eye new generation to expand credit-card customer base

EconNov 14. 2020

By The Nation

Banks’ credit-card divisions plan to tap more young customers next year to boost the growth of their business.

Somwang Toraktrakul, managing director of Krungsriayudhya Card Co Ltd, said the company will launch new products that are tailormade to tap the new generation, even though their spending through credit cards at present is not high.

The company is targeting a 7 to 8 per cent growth in card subscription next year, while it expects spending via its credit cards to grow 12 per cent.

Though spending via its credit cards in the past 10 months shrank 12 per cent, it is still an improvement from minus 50 per cent in March and April, he said.

The company’s credit-card subscription base at present totals 1.4 million cards, which is expected to rise to 1.5 million by yearend.

Thaweelap Rittapirom, Bangkok Bank’s executive vice president, said his bank will also focus on tapping the new generation next year.

It will take part in university activities to raise awareness of its BBL brand, which will make them think of BBL first when they want credit-card services.

The bank will also expand partnership in many sectors as part of efforts to boost the number of new cardholders and spending next year.

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Thailand urged to open up to foreign skilled labour, cut red tape on foreign investment

EconNov 13. 2020From left, Ambassadors to Thailand Brian John Davidson (UK), Allan McKinnon (Australia), Michael George DeSombre (US), Georg Schmidt (Germany), and Kazuya Nashida (Japan). 

By Wichit Chaitrong
The Nation

US Ambassador Michael George DeSombre and his counterparts from Australia, Britain, Germany and Japan have urged the Thai government to ease business restrictions in Thailand in order to attract more foreign direct investment in the post-Covid era.

The five foreign missions proposed 10 steps for Thailand to crack the top 10 in the World Bank’s global ease of doing business index.

The proposals are the outcome of consultation with Chambers of Commerce of four countries – Australia, Germany, Britain and the US – under the Foreign Chambers Alliance (FCA), DeSombre told press at his Bangkok residence on Friday.

Among the 10 proposals is a call for Thailand to open up to foreign skilled labour.

While the Board of Investment (BOI) and Eastern Economic Corridor (EEC) policy committee have offered incentives for foreign investors to bring in skilled workers, foreign businesses want a wider easing.

“We strongly encourage Thailand to open up to foreign skilled labour in general, not just through various exceptions or otherwise for the benefit of Thai people,” said DeSombre.

Thailand should make it easier for advanced manufacturing firms to establish plants here, he said. The country should not be afraid of opening up the labour market since foreign skilled workers would help train the next generation of Thai workers, he added. Thirty years ago, Dow Chemical and Siam Cement Group launched one of Thailand’s first petrochemical joint ventures with over 30 per cent of foreign workers, who helped to train Thai workers, said DeSombre. Today the same joint venture employs just one foreigner in a workforce of 1,000 people, he said, adding that a similar pattern could be seen at Ford Motor’s project in the EEC.

Meanwhile Japanese Ambassador Kazuya Nashida urged the Thai government to lift the 14-day quarantine requirement for short visits by investors from Japan. Foreign business travellers just wanted to visit Thai factories, not go shopping or to public places, and did not have more than two weeks to spare, he said.

Japan currently offers a fast-track lane for businesspeople from South Korea, Singapore and Vietnam.

He also called on Thailand to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Vietnam has an advantage over Thailand as it has already joined the CPTPP, and has other free trade agreements with the European Union and US, he said.

Germany’s Ambassador Georg Schmidt said German investors in Thailand were complaining about too much paperwork for customs clearances, tax refunds, invoices and renewal of licences and visas. Each investor has to sign about 100 such documents per week, said Schmidt.

He also praised Thailand for its digitisation efforts but called for faster development of electronic payment systems to ease business transactions. Several such initiatives are being trialled by Thai authorities. 

A pivot to digital commerce is among the FCA’s 10 steps for Thailand to reach the top 10 in the ease of doing business index. 

Others include simplifying and digitising cross-border clearances, simplifying BOI applications and applicability, establishing account-based customs processing, simplifying access for skilled labour, and improving bankruptcy processes.

Thailand has made impressive gains in the World Bank’s Ease of Doing Business index, moving from 46th to 26th to 21st in recent years. 

“By implementing the 10 measures the FCA proposes, we predict Thailand could quickly move into the top 10 of the World Bank index,” said the statement issued by the ambassadors.

Thailand is currently facing a shortage of skilled labour. Pre-Covid, the country also faced a shortage of unskilled labour, leading to the importation of migrant labour from neighbouring countries.

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Stimulus schemes to inject Bt180bn in fourth quarter

EconNov 13. 2020

By The Nation

The two latest economic stimulus measures will inject about Bt180 billion into the Thai economy in the fourth quarter, the government announced on Friday.

The “Khon La Khrueng” (Let’s Go Halves) subsidised-shopping scheme and the personal-income-tax-deduction scheme are expected to inject Bt60 billion and Bt120 billion, respectively, said government spokesman Anucha Burapasri.

The “Khon La Khrueng” scheme, which runs from October 23 to December 31, offers about 10 million citizens discounts of up to Bt150 per day on purchases at participating stores, capped at Bt3,000 throughout the period.

As of Thursday (November 12), the scheme had racked up Bt13.4 billion in shopping purchases, half of which (Bt6.8 billion) was paid by the government. Registered shoppers have spent an average Bt208 daily.

The second scheme grants deductions on personal income tax of up to Bt30,000 per person. It runs from October 23 until December 31 and applies for the 2020 tax year. Around 4 million people will be eligible for this scheme.

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EEC primed to attract large amounts in foreign investment next year: Finance Minister

EconNov 13. 2020

By The Nation

Finance Minister Supattanapong Punmeechaow, who chaired the fourth Eastern Economic Corridor (EEC) committee for this year on Thursday, said the plan to build a smart agricultural sector in the region was making good progress.

The system aims to employ technology in the agriculture industry to boost the quality of products, and subsequently increase farmers’ income, while making farming sustainable and meeting demands.

The plan focuses on five clusters, namely fruit, fisheries, plants for bio-chemical products, herbs and high-value agricultural goods.

The EEC will implement key projects with relevant agencies, such as establishing the Eastern Fruit Corridor (EFC), giving farmers knowledge of e-commerce, developing cosmetics from agricultural products and growing organic vegetables.

As for 5G network development, the committee has signed a memorandum of understanding (MoU) with TOT to start building 5G infrastructure immediately. The project should kick off within three months in Map Ta Phut Industrial Estate and Rayong’s Ban Chang district, and create up to 100,000 jobs and establish income generating opportunities. It also hopes to lure foreign investment.

Supattanapong said the EEC Office and related agencies have continued to push for the 2022 EEC integration plan through cooperation with 18 ministries and 103 agencies with missions such as infrastructure development, tourism promotion, boosting education to improve the country’s workforce, research, technology and innovation, and improving the quality of life in mind.

He said the integration plan requires a budget of Bt300 billion, but only 20 per cent or about Bt20 billion will come from the state budget. The minister said the rest of the funding needs to come from private investment, which he hopes will start flowing in from next year.

“To attract investment in 2022, we will take proactive steps with both the Board of Investment [BoI] and the EEC. Main projects should close their deals this year, with the last one being the Laem Chabang Port. We will try to have the contracts signed within December to prove to investors that Thailand is ready,” he said.

At the same time, real signs of investment can be seen in the EEC. The BoI has said it issued more investment promotion certificates for the EEC and the third-quarter figures from the National Economic and Social Development Council to be announced on Monday should show clear signs of economic improvement.

Kanit Sangsubhan, EECO’s secretary-general, said a report on the EFC is being prepared for the upcoming EEC meeting next month, which will be chaired by the prime minister.

The fruit corridor project requires PTT and other partners to set up a cold storage system for storing 4,000 tonnes of fruit as well as building a piping system to service Map Ta Phut Industrial Estate, among others.

Narit Therdsteerasukdi, BoI’s deputy secretary-general, said in the first nine months of this year, 313 projects had applied for the promotion of investment valued at Bt109.43 billion, marking a 16 per cent rise from the same period last year, which saw applications for 309 projects worth Bt185 billion.

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644 Thai firms well-armed in case an EU-US carbon war erupts

EconNov 13. 2020

By The Nation

With Joe Biden set to be sworn in as US president on January 20, 2021 if all goes well, many countries are wondering if the US-China trade war will come to an end or if a technology war will erupt.

People are also waiting to see if Biden decides to return to the Paris Climate Agreement and invest more than US$2 trillion in clean energy and moves to reduce global warming.

President Donald Trump had announced on June 1, 2017, that the United States will cease all participation in the 2015 Paris Agreement.

Biden’s decision, however, may possibly lead to a carbon war and force partner countries to require labelling of carbon footprint and impose a carbon tax on products exported to the US.

Wisit Limluecha, vice chairman of the Thai National Shippers’ Council, said Thailand is ready to cope with this.

So far, more than 4,472 products in 18 key industry groups have passed the carbon footprint assessment (assessment of the amount of greenhouse gas emitted over the lifecycle of a product or service from raw material source, transportation, use and post-use waste management) and obtained the carbon footprint label from the Thailand Greenhouse Gas Management Organisation.

Most of the products are in the food and beverage industry followed by construction, petroleum and jewellery. More than 644 companies have registered for the label.

“Most products exported by large firms already have the carbon footprint label. Though the system is expensive to set up, it helps reduce costs in the long run. Thailand is considered to be the most alert and ready country in the Asean region in terms of carbon footprint. From now on, it will be necessary to help small businesses follow climate-friendly practises to help boost their competitiveness. Neither Europe nor the US require carbon footprint labelling yet, but we have to prepare. Many exporters are taking advantage of the label to boost their exports,” Wisit said.

The European Union is expected to impose an additional tax on goods that are manufactured using processes that emit carbon dioxide or greenhouse gases and do not meet EU standards. This scheme is should be enforced in 2023.

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Outgoing Trump administration bans investments in Chinese companies it says support China’s military

EconNov 13. 2020

By The Washington Post
Jeanne Whalen

WASHINGTON – The White House on Thursday issued an executive order banning U.S. investment in a few dozen Chinese companies that it said have ties to the People’s Liberation Army, underscoring the administration’s drive to continue severing China links before President Donald Trump’s term ends in January.

Beginning Jan. 11, the order prohibits any U.S. citizens or funds from investing in companies deemed by the Pentagon and other federal agencies to support China’s military. China “is increasingly exploiting United States capital to resource and to enable the development and modernization of its military, intelligence, and other security apparatuses, which continues to allow the PRC to directly threaten the United States homeland and United States forces overseas,” the Trump order said.

But the impact of the order is unclear. The affected companies do not appear to include China’s major, publicly traded tech firms, and several of the companies said to be affected by the prohibition, including Huawei, don’t trade on stock markets. Others are large state-owned defense contractors, such as China Electronics Technology Group Corp., that don’t have foreign stockholders.

Some of the firms do have foreign investors, including China Mobile Communications Group and China Telecommunications Corp.

The Pentagon didn’t respond to a request for comment. Nor did China’s embassy in the United States.

In a post on his Senate website, Sen. Marco Rubio, R-Fla., said the ban will affect roughly 30 companies, including those on a list the Pentagon released this summer. Rubio applauded the order, saying it resembled legislation he introduced last month.

Andy Rothman, a San Francisco-based investment strategist for the fund manager Matthews Asia, called the impact of the order underwhelming.

U.S. investors own about 2% of the value of the companies traded on China’s stock market, he said.

“Only a small fraction of publicly-listed Chinese companies are associated with that country’s military-industrial complex,” he said in an email. “So it is not apparent that U.S. investors play a role in financing China’s military, or that American investments in China’s stock market provide Washington with much political or economic leverage.”

Martin Chorzempa, a research fellow at the Peterson Institute for International Economics, called the move “symbolic.”

The order is “not going to be a problem for China’s military and intelligence upgrading. Those do not depend on U.S. investors at all, as far as I can tell,” he said.

“It reads to me like the last attempts of an outgoing administration to do as much as they can to push a decoupling between the U.S. and China without being willing to really rattle U.S. investors” by including bigger Chinese firms on the list, he said.

Chorzempa did not, however, rule out that the Trump administration could expand the list in the coming months.

The order is one of a flurry of bans the Trump administration has issued in recent months to try to cut trade and investment ties with China. Those have included orders to ban the Chinese mobile apps TikTok and WeChat from U.S. app stores – bans that U.S. courts have temporarily halted – and a growing number of export restrictions aimed at cutting the sale of U.S. semiconductors and other technology to Chinese companies.

National security adviser Robert O’Brien said the order would “protect American investors from unintentionally providing capital that goes to enhancing the capabilities of the People’s Liberation Army and People’s Republic of China intelligence services, which routinely target American citizens and businesses through cyber operations, and directly threaten the critical infrastructure, economy, and military of America and its allies and partners around the world.”

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Biden, top congressional Democrats demand new economic relief bill before year’s end

EconNov 13. 2020Senate Minority Leader Charles Schumer, D-N..Y. MUST CREDIT: Washington Post photo by Jahi Chikwendiu Photo by: Jahi Chikwendiu — The Washington Post 

By The Washington Post · Erica Werner · NATIONAL, POLITICS, CONGRESS 

WASHINGTON – Congressional Democratic leaders accused Republicans on Thursday of refusing to confront the dramatically worsening coronavirus pandemic and instead acquiescing to President Donald Trump’s false insistence that he won last week’s presidential election.

Republicans dismissed the attacks and Trump didn’t weigh in at all, with his only public comments coming through a series of Twitter posts that falsely claimed he won last week’s presidential election. As Washington has become paralyzed over the past 10 days, 1 million new people have tested positive for the virus as death numbers are climbing rapidly.

President-elect Joe Biden joined congressional Democratic leaders on Thursday and demanded a new economic relief package to address the dramatically worsening coronavirus pandemic before the end of the year.

Senate Majority Leader Mitch McConnell, R-Ky., flatly rejected such a proposal, while Sen. Susan Collins, R-Maine, implored both sides to begin negotiating as the virus appeared to be sending a new shudder through the U.S. economy.

There have been more than 100,000 new cases each day for the past nine days and the crush is leading a number of state and local leaders to pause or reverse reopening plans. Chicago Mayor Lori Lightfoot issued a stay-at-home advisory for the nation’s third-largest city Thursday and asked residents to cancel Thanksgiving plans. Maryland has recently issued its own new restrictions, and other jurisdictions have signaled they could invoke similar moves. Biden campaigned on much more stringent policy measures to stop the spread of the coronavirus, but Trump has not weighed in at all.

After rallying earlier in the week amid optimism about a new vaccine, the Dow Jones industrial average fell 317 points, or 1%, amid new worries.

Federal Reserve Chair Jerome Powell on Thursday said Congress could need to provide more economic relief to help sustain growth, though he didn’t endorse any specific proposal.

“The path forward is going to be challenging for a number of reasons,” he said, speaking on a virtual panel hosted by the European Central Bank. “My sense is that we will need to do more and that Congress may need to do more as well.”

And Trump’s refusal to acknowledge Biden’s presidential win and participate in a normal transition process seemed likely to stall the federal response even more, depriving Biden and his team of some of the resources they could use to put a quick response in place.

Democrats have pushed for a stimulus package that would exceed $2 trillion since this summer, and before the election Trump said he would support something even more substantial. The president tweeted incessantly about the need for a giant economic relief bill before the Nov. 3 election but he has been silent on the matter since.

Biden discussed the matter Thursday on a phone call with House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Charles Schumer, D-N.Y. In a joint readout following the call, the Democrats said they had talked about “the urgent need for the Congress to come together in the lame duck session on a bipartisan basis to pass a bill that provides resources to fight the COVID-19 pandemic,” including relief for families and businesses and support for state and local governments.

At a separate news conference, Pelosi and Schumer insisted that Biden’s election win constitutes a mandate for their demands for an enormous new relief bill, particularly given how coronavirus case numbers are skyrocketing.

“They’re engaged in an absurd circus right now refusing to accept reality . . . making it even harder to address the massive health and economic crisis that we are facing,” Pelosi said at a joint news conference with Schumer at the Capitol.

The economy contracted sharply earlier this year when the coronavirus struck the United States, particularly in March and April. The U.S. economy has partially recovered, though millions of Americans remain unemployed. But this new spike in cases and deaths has caught Washington mostly flat-footed, particularly as Trump has soured on many of his health advisers and he continues to refuse to accept the results of last week’s election. 

Nor has Trump acknowledged the recent surge in cases on his Twitter feed, which is his primary method of communicating at the present time. On Oct. 28, he predicted that after the election the “talk will be how low the death rate is, plenty of hospital rooms, & many tests of young people.”

In fact, the death rate is climbing rapidly, and hospitals are nearing capacity in a number of places, with parts of Iowa, Wisconsin, Illinois, Michigan, Pennsylvania, and multiple other states scrambling to deal with the surge.

Democrats have called for a wide-ranging bill that would extend new unemployment benefits, send another round of $1,200 checks to American households, provide more small business aid, money for states and cities, and expand access to testing, among other things. Cases are rising so rapidly in some parts of the country that some local leaders are reinstating or weighing whether to reinstate business restrictions.

“The longer Senate Republicans are playing this sad game is the longer they are denying families much needed relief from the covid health and economic crisis,” Schumer said.

Senate Majority Leader Mitch McConnell, R-Ky., and other top GOP leaders have declined to acknowledge Biden won the election, instead arguing that Trump has the right to pursue the legal avenues available to him.

The election also has not changed the GOP’s views on economic relief. Congressional Republicans have long rejected a relief bill along the lines of the $2 trillion package Pelosi and Schumer are seeking.

Instead, McConnell has said that third-quarter economic news showing the unemployment rate has dropped makes a case for a smaller relief package.

In response to Pelosi and Schumer’s remarks, McConnell on Thursday flatly rejected their call for a big economic relief bill.

“My view is the level at which the economy is improving further underscores that we need to do something at about the amount that we put on the floor in September and October,” he said, referring to a roughly $500 billion package Democrats blocked. “I gather [Pelosi and Schumer] are looking at something dramatically larger. That’s not a place I think we’re wiling to go. But I do think there needs to be another package.”

Behind the scenes, no negotiations are happening whatsoever, according to aides in both parties. That means it’s highly unlikely that an economic relief deal will come together during the lame duck session, and it would become the first order of business for Biden once he takes office on Jan. 20.

Congress has not acted to provide any relief since approving $3 trillion in aid in the spring. It appears that Americans will have to continue to wait. The economy continues to strain. Another 709,000 Americans filed new unemployment claims last week, a level that remains elevated and higher than any period before the pandemic began.

Congress is confronting a Dec. 11 deadline when government funding will expire, and lawmakers are at work on a spending package to forestall a government shutdown. Senate Appropriations Chairman Richard Shelby, R-Ala., said Thursday he would like to see some covid relief measures attached to the spending bill – but that seems unlikely if Republicans and Democrats remain far apart.

Shelby said he spoke with Pelosi on Wednesday about spending bills, “And I also mentioned a smaller targeted stimulus bill. Well she’s got, her view is a bigger one, you know, so I don’t know,” Shelby said.

“As far as the big package for everything like that Democrats were doing over in the House, that’s not going anywhere,” Shelby said.

House Minority Leader Kevin McCarthy, R-Calif., blamed the stalemate on Pelosi, accusing her of playing politics in refusing to agree to modest relief measures such as repurposing unspent small business funds.

“The only thing that’s standing in the way in my view is Speaker Pelosi,” McCarthy said at a news conference. “People need some relief and we can provide it.”

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Stocks slump on lockdown angst amid stimulus limbo

EconNov 13. 2020

By Syndication Washington Post, Bloomberg · Rita Nazareth, Claire Ballentine · BUSINESS, US-GLOBAL-MARKETS 
Stocks slumped and Treasurys rallied as a resurgence in coronavirus cases added to concern about tougher restrictions that could slow down the economic recovery without further stimulus.

The S&P 500 sank as much as 1.5% as New York City — the early epicenter of the pandemic in the U.S. — prepared for the possibility of closing its schools while Chicago issued an advisory urging residents to avoid leaving home except for work and other essential activities. The Trump administration is stepping back from talks on a relief package and leaving it up to Congress to revive negotiations with House Speaker Nancy Pelosi, according to people familiar with the situation. All major groups in the American equity benchmark fell, led by energy companies, commodity producers and banks. Benchmark 10-year Treasury yields moved away from the cusp of 1%.

Three of the world’s top central bankers warned that the prospect of a covid-19 vaccine isn’t enough to put an end to the economic challenges created by the pandemic. Coronavirus infections and hospitalizations are rising in 49 U.S. states, compared with a week ago, according to Covid Tracking Project data. Deaths, a lagging indicator, are climbing in 35. And the velocity at which records are being shattered suggests any decline may yet be far off. New York State saw nearly 10,000 new coronavirus cases over two days, as Gov. Andrew Cuomo, D, urged people to “buckle down.”

“We’re experiencing a bit of exhaustion for the market as we focus on the troubling near-term covid trends and the potential for a few tough months ahead,” said Yousef Abbasi, global market strategist at StoneX.

JPMorgan Asset Management is cutting its projections for cross-asset returns over the next decade and signaling more pain for 60/40 allocations that have long formed the bedrock of traditional portfolios. Strategists at the firm reduced their estimate for global equities by 1.4 percentage point to 5.1% a year in the next decade, citing elevated valuations in U.S. large caps. They forecast negative inflation-adjusted returns across almost all sovereign bonds over the next 10 to 15 years, with yields remaining low even after rates normalize.

On the trade front, President Donald Trump signed an order prohibiting U.S. investments in Chinese firms determined to be owned or controlled by the country’s military. Relations between the U.S. and China have deteriorated following the signing of a deal early in the year. Trump also repeatedly vowed to punish Beijing over the coronavirus pandemic, its treatment of Muslim minorities and the crackdown on protesters in Hong Kong.

These are some of the main moves in markets:

Stocks

– The S&P 500 dipped 1% as of 4 p.m. EST.

– The Stoxx Europe 600 Index dipped 0.9%.

– The MSCI Asia Pacific Index rose 0.2%.

Currencies

– The Bloomberg Dollar Spot Index climbed 0.2%.

– The euro climbed 0.2% to $1.1803.

– The Japanese yen strengthened 0.3% to 105.10 per dollar.

Bonds

– The yield on 10-year Treasurys declined 10 basis points to 0.88%.

– Germany’s 10-year yield sank three basis points to -0.54%.

– Britain’s 10-year yield sank seven basis points to 0.348%.

Commodities

– The Bloomberg Commodity Index fell 0.4%.

– West Texas Intermediate crude dipped 1% to $41.03 a barrel.

– Gold strengthened 0.5% to $1,875.68 an ounce.

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Consumer confidence edges up as govt stimulus fuels fragile recovery 

EconNov 12. 2020Thanawat Polvichai, chief adviser to the UTCC’s Centre for Economic and Business Forecasting 

By The Nation

The consumer confidence index rose only slightly in October to 50.9, from 50.2 the month before, the University of the Thai Chamber of Commerce (UTCC) reported on Thursday.

Meanwhile confidence in the economy increased from 42.9 43.9, with public sentiment on jobs rising from 48.2 to 49 and on future income from 59.4 to 59.9. 

The economic indicators underlined the fragile nature of Thailand’s recovery from the Covid-19 crisis, said Thanawat Polvichai, chief adviser to the UTCC’s Centre for Economic and Business Forecasting.

He credited government financial aid plus new stimulus packages for contributing to the rise in confidence.

The rising price of farm products – namely rice, rubber, and palm oil – had also boosted consumer spending, despite concerns over political unrest, he said.

However, the centre predicted that most consumers would delay their spending until the fourth quarter this year as they wait to see the Covid-19 infection rate and how government stimulus will boost the economy.

Thanawat expects government measures to stimulate consumption and domestic travel will inject about Bt100 billion into the economy for the rest of this year.

On external factors, he said Joe Biden winning the US presidential election would boost Thai exports as well as oil prices.

The centre forecast that the Thai economy will contract 7 to 7.5 per cent this year, better than its previous projection of a 7.8 per cent contraction. It expects to see the economy begin growing again by the second quarter of next year, or the first quarter if the government launches more stimulus packages.

The recovery remains fragile, with the absence of foreign tourists sapping about Bt600 billion per month from the economy while government stimulus injects only between Bt150 billion and Bt200 billion.

Risk factors being closely monitored by consumers include political unrest, Covid-19, the strengthening baht, rising cost of living, and the US decision to cut trade privileges under the Generalised System of Preferences, Thanawat added.