The US stock market oscillated between gains and losses throughout yesterday’s session where the S&P 500 started the day lower by -0.9% but eked out a meagre gain of +0.30% Almost all S&P sectors were in the green except for health care (-0.50%); consumer discretionary and energy almost unchanged. In addition, the Nasdaq 100 rose by -0.6%.

However, market breadth had remained weak for the US stock market with more declining stocks versus advancing stocks for both NYSE (1436 advanced & 1513 declined) and Nasdaq Composite (1356 advanced & 1928 declined).

On the economy front, the US initial jobless claims for the week ending September 19 increased by 4,000 to 870,000 above 840,000 consensus estimate. The key takeaway is US businesses are still facing challenges to get back on a pre-pandemic environment where initial jobless claims were 215,000 in the same period a year ago.     

The dollar was mixed against the major currencies with the pound and euro managed to record slight gains but remained below resistances at 1.1770 and 1.2875 for the EUR/USD and GBP/USD respectively. UK Chancellor Rishi Sunak unveiled fresh stimulus plans to protect jobs and businesses that helped ease fears over the negative impact of newly imposed lockdown measures in UK that may have led to a firmer GBP/USD seen overnight. 

Index compiler, FSTE Russell had allowed China sovereign bonds to be included in its FTSE World Government Bond Index (WGBI) and the inclusion will start in October 2021.

3 Things To Look Forward

Singapore’s industrial production for August; manufacturing activities had been facing headwinds as the Singapore recorded three consecutive months of negative growth for industrial production since May 2020. Consensus is set for a reversal of fortune with a return to positive growth at 2.2% year-on-year above July’s figure of -8.4% year-on-year.

US’s core durable goods order for August; consensus estimate is set at 1.2% month-on-month, below July’s figure of 2.4% month-on-month. A weaker than expected durable goods data is likely to indicate the initial recovery seem in the past three months is not sustainable.

China’s highly leveraged property sector at risk again; bellwether Chinese property developer Evergrande warned market participants of its liquidity crunch and announced that it may face a potential default on its debts unless regulators approve the company’s overdue stock listing on the Shenzhen stock exchange. Hence, a default by Evergrande can trigger a negative shock wave in China’s US$50 trillion financial system.


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