#SootinClaimon.Com : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

https://www.nationthailand.com/business/40001891

Markets wrap: U.S. stocks, government bonds rally after CPI

U.S. equities rallied toward all-time highs and benchmark Treasury yields extended declines to the lowest since March as investors bet that the Federal Reserve will maintain its ultra-accomodative policies even after data showed consumer prices rose more than forecast last month.

The S&P 500 touched a record as all the main American equity indexes advanced in afternoon trading. The tech-heavy Nasdaq 100 was set for its highest level since late April as megacap technology stocks rallied. The 10-year Treasury yield fell to as low as 1.45% following an initial surge in the wake of the inflation report.

The consumer price index data released Thursday showed that the increase in May was driven largely by categories associated with a broader reopening of the economy as vaccinations bring the pandemic under control. The report comes amid a debate about whether the Fed can maintain the dovish stance that has helped lift markets in the face of a strengthening economy that brings the risk of destabilizing inflation. Rangebound trading in equities and falling yields have characterized the start of June as investors awaited some impetus from progress reports on the recovery. A frenzy in meme stocks and gyrations in cryptocurrencies have been among the few sources of pronounced market volatility.

“The frothiness in CPI continues for now but between base effects and pent-up demand pressures, it is probably not giving a definite answer to the great inflation debate, and you need to read the bond market tea leaves,” said Anu Gaggar, senior global investment analyst at Commonwealth Financial Network. “The 10-year Treasury yield is back at levels last seen in early March, signaling that the bond market is falling in line with the Fed’s thinking that inflation is transitory and does not warrant tapering of monetary stimulus any time soon.”

Eight of the main 11 S&P 500 industry groups climbed, with health-care stocks leading the advance. Financial stocks were the outliers, with large banks including JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. among the biggest laggards in the broader index. Amazon.com Inc., Microsoft Corp. and Tesla Inc. contributed the most to the Nasdaq 100’s gain. The Dow Jones Industrial Average was around 0.7% below it’s all-time closing high.

GameStop Corp. fell after the company said it planned to offer more shares and disclosed that regulators are investigating trading of its stock. Other retail trader favorites were mixed, with some of the stocks that surged amid the frenzy on Wednesday giving back gains.

European stocks closed little changed at a record high, with defensives rallying after the European Central Bank raised its inflation forecast and renewed its pledge to maintain faster emergency bond-buying to sustain the euro area. The Stoxx Europe 600 Index was up less than 0.1% at the close, with banks outperforming. With European equities notching several fresh records in June, investors are growing increasingly sensitive to data and policy statements on inflation that could signal an earlier end to central-bank largesse than expected.

Commodities, one of the leading reflation plays, resumed gains, with the Bloomberg Commodity Index trading around the highest since 2015.

– – –

Here are key events to watch this week:

– Group of Seven leaders’ summit starts in Cornwall, England Friday.

These are some of the main moves in markets:

– – –

– The S&P 500 rose 0.5% as of 3:16 p.m. New York time

– The Nasdaq 100 rose 1%

– The Dow Jones Industrial Average rose 0.2%

– The MSCI World index rose 0.4%

– – –

– The Bloomberg Dollar Spot Index fell 0.2%

– The euro was little changed at $1.2175

– The British pound rose 0.4% to $1.4173

– The Japanese yen rose 0.2% to 109.37 per dollar

– – –

– The yield on 10-year Treasuries declined four basis points to 1.45%

– Germany’s 10-year yield declined one basis point to -0.26%

– Britain’s 10-year yield advanced two basis points to 0.75%

– – –

– West Texas Intermediate crude rose 0.4% to $70 a barrel

– Gold futures rose 0.2% to $1,899 an ounce

Published : June 11, 2021

By : Syndication Washington Post, Bloomberg · Kamaron Leach

#SootinClaimon.Com : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

https://www.nationthailand.com/business/40001890

Inflation continued climb in May as prices rose 5% over last year. Policymakers say its temporary.

WASHINGTON – Prices rose by 5% in May compared with a year ago, the largest increase since the Great Recession, continuing a steady climb in inflation even as policymakers insist on staying the course.

Price spikes often coincide with downturns, and officials from the White House and Federal Reserve have predicted that prices will climb over the coming months, especially compared with a year ago, when the economy was reeling from coronavirus pandemic shutdowns. However, the move adds new fuel to criticism from Republicans, and at least one prominent liberal economist, that too much government spending could wreak havoc and lead to an overheated economy.

It could take months before it’s clear whether the current rise in inflation is temporary. But the steady climb is already weighing on numerous policy debates. Republicans pushed back hard on President Joe Biden’s proposal to spend $4 trillion on infrastructure and other proposals, complaining that it amounted to an infusion of too much money at a time when prices on certain products were rising much faster than wages. GOP opposition has led the White House to rethink its spending strategy in recent weeks.

The most recent inflation figures, released Thursday by the Bureau of Labor Statistics, do not seem to have forced any course-correction decisions inside the Biden administration or at the Fed. Both predict that prices will continue to rise until supply chains and consumer demand recalibrate and the economy recovers. The Fed, which is charged with keeping prices stable and unemployment low, says it won’t rush to raise interest rates and tamp down on inflation until the labor market has time to heal.

“As the virus is contained, the economy is improving, step-by-step,” tweeted Heather Boushey of the White House’s Council of Economic Advisers. “Today’s data on inflation is the latest indicator that things are both moving in the right direction and that we have supply-chain hiccups.”

The White House and Democrats in Congress argue that rising inflation is not only temporary, but that it’s also a feature of a rebounding economy. More widespread vaccinations and lower coronavirus case counts are helping Americans return to their old spending habits and unleash months of pent-up savings. The economy added 559,000 jobs in May, and the first four months of Biden’s presidency have seen more than 2 million jobs added back on the payrolls.

Yet Republicans have a much different diagnosis of the economy, and they seized on Thursday’s inflation data to issue their latest warnings. The GOP points to the $1.9 trillion stimulus package Biden signed in March, arguing that such a sprawling bill will overwhelm the economy and put the Fed behind the curve when it comes to reigning in inflation.

“There’s no question that it feeds political narratives,” said Grant Thornton chief economist Diane Swonk of Thursday’s data. “It’s not clear that it solves the political debate.”

Sen. Patrick Toomey, R-Pa., pointed to the Fed’s commitment to keeping interest rates low and not yet dialing back its other economic supports. Toomey told The Post that the Fed “will eventually have to react in a more draconian way because they’re so far behind the curve.”

“How do you know if something’s been transitory until enough time has passed, and it hasn’t been?” Toomey said. “Given especially the fact we have known for a very long time that monetary policy acts with long and unpredictable lags, it’s a very dangerous position we’ve put ourselves in.”

Sen. Mike Crapo, R-Idaho, called out the “explosive spending here in Congress.”

“The correct policy is to control our deficits and start to get back to a much more stable fiscal policy in terms of spending,” Crapo told The Post.

The labor data also showed that prices rose 0.6% in the past month.

A large share of May’s inflation gains came from the car market. The price of used cars and trucks continued to surge, rising 7.3% in May compared with April. That followed a 10% increase in April.

A complicated and unusual range of factors have seized on the market for used cars and rental cars, triggering nationwide shortages. Many rental car companies sold their fleets during the pandemic, leaving them short as Americans start traveling again. On the supply-chain side, a shortage of semiconductors has also made it hard for companies to restock their lots.

Prices for household furnishings and services increased 1.3% in May, its largest monthly increase since January 1976, according to the Bureau of Labor Statistics. The indexes for domestic services, along with categories tracking furniture and bedding, helped drive the increase.

Gas prices have surged 56.2% during the past year, and the energy index overall is up 28.5% compared with May 2020.

The Fed is charged with keeping prices stable and the unemployment rate low. For now, it is not rushing to control inflation until substantial progress has been made in the labor market, which is still down 7 million jobs.

On Saturday, Treasury Secretary Janet Yellen said inflation could rise as high as 3% over the entire year, which would be considered high for the United States. Still, it’s unclear just how high inflation will be allowed to climb, and for how long, before policymakers in the administration and the Fed see cause for concern.

Former treasury secretary Lawrence Summers, a Democrat who has been openly critical of Biden’s economic agenda, said that it is time policymakers “adjust to economic reality.”

“Six months ago, it was reasonable to see continued covid, inadequate demand, a return to a recession and possible deflation as central risks,” Summers told The Post. “That is now not remotely plausible. . . . Ultimately there is more confidence when policymakers are in touch with the reality that people are seeing.”

Michael Strain, director of economic policy studies at the right-leaning American Enterprise Institute, said inflation could eventually simmer back down to more sustainable levels. But Strain said that right now, the Fed could go further in sending a simple yet important message: There’s still plenty of uncertainty ahead.

“I do think the Fed needs to do a better job at convincing markets that it’s at least aware of what’s happening, and that it’s aware that there are risks there,” Strain said. “The blasé attitude the Fed has had toward inflation, and toward these risks, has been really surprising, and I think it’s time for that attitude to change.”

Fed and administration officials point to factors that they say are temporarily driving up prices. Demand for goods and services – including on things such as concert tickets and restaurants – is rebounding as more people are vaccinated and eager to spend. Meanwhile, supply chains are struggling to catch up. Economists say those bottlenecks will smooth out over time – and require patience from consumers and policymakers alike.

“I sort of look at what we’re going through as friction upon reentry,” Swonk said. “We still have a while before parachutes open and we hit the cool waters of splashdown.”

Airline tickets are a prime example. Prices rose 7% in May after surging 10.2% in April.

But in some instances, prices are already starting to cool. Data show prices for hotels and motels rose 7.6% in April. They increased only 0.4% in May.

Some economists are watching the cost of rent, which makes up a large share of many Americans’ budgets. Rental prices didn’t swing wildly during the pandemic and only increased 0.2% in May. But it’s still up 1.8% from last year. Once rent rises and tenant are locked into leases, it may be harder for rent to come back down. Only time will tell.

Generally, policymakers expect inflation figures to taper off in the year to come. That’s in part because the super-low readings from the pandemic’s early days will gradually shift out of the calculation.

ADVERTISEMENT

“While, no doubt, the top-line increase in inflation will command the attention of policymakers at the Federal Reserve, the underlying tone and tenor of the data will not result in any change of policy,” wrote Joe Brusuelas, chief economist at RSM, in an analyst note.

Published : June 11, 2021

By : The Washington Post · Rachel Siegel, Tony Romm

#SootinClaimon.Com : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

https://www.nationthailand.com/business/40001883

TCC and deputy PM discuss easing access to soft loans for cash-strapped SMEs

The Thai Chamber of Commerce (TCC) said it had discussed its “Connect the Dots” plan to revitalise the economy in 99 days with Energy Minister and Deputy PM Supattanapong Punmeechaow and come up with three strategies to boost business.

The TCC will focus on boosting access to soft loans for liquidity-strapped companies while also easing regulations for doing business and accelerating vaccination in the private sector.

TCC chairman Sanan Angubolkul said many businesses, especially SMEs, have been forced to take high-interest informal loans as they cannot access soft loans from the government.

The chamber has teamed up with Central Retail Corp Plc (CRC) and Kasikornbank (KBank) to create a loan facility worth 5 billion baht for small suppliers of CRC.

Sanan said it had also urged the government to give financial institutions more freedom to exercise their discretion in extending business loans.

The Bank of Thailand should also consider unlocking debtors from credit scores or NPLs so they can access funding sources during the Covid-19 crisis, said Sanan.

The TCC approved two measures to boost SMEs’ liquidity:

1. Reduce the credit term for SME suppliers (farmers, community enterprises, individuals) to 7-15 days, and 30 days for bigger suppliers.

2. First phase of 5-billion-baht soft loan programme covering 6,000 SMEs (1,000 approvals already given) through the Thai Bankers’ Association, Thai Retailers Association and other allies. In the next phase, the TCC has set a target of delivering loans of up to 5 million baht to 500,000 SMEs nationwide within six months.

As for guidelines for economic recovery in the tourism and service sectors, the TCC is working on the “Hug Thais” project to stimulate domestic consumption and prepare for the country’s reopening to tourists next month under the Phuket sandbox scheme. The “Hug Thais Hug Phuket” project is expected to generate more than 270 billion baht over the next 6 months, accounting for 1.6 per cent of national GDP and supporting more than 2 million jobs.

Sanan said he also discussed the Ease of Doing Business Act with Deputy PM Supattanapong, focusing on its pledge of “Easier, Faster, and Cheaper”.

Published : June 11, 2021

By : The Nation

#SootinClaimon.Com : ขอบคุณแหล่งข้อมูล : หนังสือพิมพ์ The Nation.

https://www.nationthailand.com/business/40001881

Thai stocks level off as investors await key US data

The Stock Exchange of Thailand (SET) Index closed at 1,625.27 on Thursday, down 1.00 point or 0.06 per cent. Transactions totalled THB105.96 billion with an index high of 1,636.22 and a low of 1,623.57.

In the morning session, Krungsri Securities forecast the SET Index on Thursday would fluctuate between 1,620 and 1,640 points amid hopes of a Thai economic recovery after mass vaccination commenced nationwide, and the US bond yield fell.

It also advised investors to follow the US Consumer Price Index for May as this would affect foreign fund flows, adding that the CPI is expected to rise by 4.7 per cent.

The 10 stocks with the highest trade value today were KBANK, TTA, RCL, BDMS, AOT, PTTGC, CPALL, EA, HANA and IVL.

Other Asian indices were mixed:

ADVERTISEMENT

Japan’s Nikkei Index closed at 28,958.56, up 97.76 points or 0.34 per cent.

China’s Shanghai SE Composite Index closed at 3,610.86, up 19.46 points or 0.54 per cent, while the Shenzhen SE Component Index closed at 14,893.59, up 175.19 points or 1.19 per cent.

Hong Kong’s Hang Seng Index closed at 28,738.88, down 3.75 points or 0.013 per cent.

South Korea’s KOSPI closed at 3,224.64, up 8.46 points or 0.26 per cent.

Taiwan’s TAIEX closed at 17,159.22, up 193.00 points or 1.14 per cent.

Published : June 10, 2021

By : The Nation