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Macro Roundup (Dec 23)

iconDec 23, 2020 09:07
Source:SMM
President Donald Trump, in a stunning Tuesday night tweet, called the $900 billion Covid relief bill passed by Congress an unsuitable “disgrace” and urged lawmakers to make a number of changes to the measure, including bigger direct payments to individuals and families.

SHANGHAI, Dec 23 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

President Donald Trump, in a stunning Tuesday night tweet, called the $900 billion Covid relief bill passed by Congress an unsuitable “disgrace” and urged lawmakers to make a number of changes to the measure, including bigger direct payments to individuals and families.

Trump also suggested that his administration might be the “next administration,” despite his loss to President-elect Joe Biden. The relief legislation passed by Congress Monday was negotiated in part by a senior Trump administration official, Treasury Secretary Steven Mnuchin.

The president’s tweet, which included a video of him discussing what he considers the bill’s many flaws, including funding headed overseas, came less than 24 hours after the Senate passed the measure. The foreign aid provisions are part of a $1.4 trillion measure to keep the government funded, which was paired with the Covid relief bill.

Trump did not threaten a veto in the video, and he had been expected to sign the legislation into law, along with the bill to keep the government open. The legislation passed both houses of Congress with veto-proof majorities.

The dollar rose on Tuesday in thin trading, as concerns about a coronavirus variant raging in Britain that has caused lockdowns and travel restrictions have dampened optimism about a U.S. stimulus bill that Congress passed overnight.

Investors overall remained concerned about the new coronavirus variant even as medical experts sought to ease concerns about it.

The U.S. Centers for Disease Control (CDC) said on Tuesday the coronavirus variant had not yet been detected in the United States, while Health Secretary Alex Azar told Fox News the Pfizer/BioNTech and Moderna vaccines, which received U.S. emergency use authorizations this month, should be effective at preventing illness from the variant of the virus.

On Wall Street, the Dow Jones Industrial Average shed 200 points, despite a 2.9% jump in Apple’s stock. The S&P 500 slipped 0.2% for its third day of losses. Travel-related stocks came under pressure amid lingering concerns about the new coronavirus strain from the U.K.

Oil dropped towards $50 a barrel on Tuesday, adding to losses from the previous session, as a mutant variant of the coronavirus in Britain revived concerns over demand recovery.

Detection of the new variant prompted several countries to close their borders to Britain.  France’s Europe Minister said that the two countries would announce a deal to restart freight by Wednesday.

Brent crude fell 83 cents, or 1.63%, to $50.08 per barrel, while West Texas Intermediate (WTI) crude settled 95 cents, or 2%, lower at $47.02 per barrel.

Gold prices fell on Tuesday as the dollar benefited from safe-haven buying driven by fears over a new coronavirus variant in the United Kingdom.

Spot gold fell 0.7% to $1,862.55 per ounce, while U.S. gold futures settled down 0.7% at $1,870.30.

The U.K. and EU remain deadlocked over post-Brexit trade relations as the Dec. 31 deadline approaches, with disputes over issues such as fisheries plaguing talks. British Prime Minister Boris Johnson said Monday that the country could still crash out without a deal.

“The position is unchanged, there are problems,” British Prime Minister Boris Johnson told reporters Monday. “It’s vital that everybody understands that the U.K. has got to be able to control its own laws completely and also that we’ve got to be able to control our own fisheries.”

“It remains the case that WTO terms would be more than satisfactory for the U.K. and we can certainly cope with any difficulties that are thrown in our way.”

Official data showed U.K. GDP grew by a record 16% in the third quarter, but that still didn’t make up for an 18.8% decline in the previous quarter when much of the economy was shut down.

The U.S. economy grew at a record pace in the third quarter, fueled by more than $3 trillion in pandemic relief, the government confirmed on Tuesday, but appears to have lost momentum as the year drew to an end amid raging new Covid-19 cases and dwindling fiscal stimulus.

Gross domestic product rebounded at a 33.4% annualized rate last quarter, the Commerce Department said in its third estimate of GDP. That was revised slightly up from the 33.1% pace reported last month. It followed a 31.4% rate of contraction in the April-June quarter, the deepest since the government started keeping records in 1947.

After five consecutive months of gains, closed sales of existing homes turned lower in November.

They fell 2.5% on a month-to-month basis to a seasonally adjusted annualized rate of 6.69 million units, according to the National Association of Realtors. Sales were a strong 25.8% higher from a year earlier.

U.S. consumer confidence dropped for a second straight month in December as a deterioration in the labor market amid renewed business restrictions to slow the raging pandemic offset the rolling out of a vaccine for Covid-19.

The Conference Board’s consumer confidence index dropped to a reading of 88.6 this month, the lowest since August, from 92.9 in November.

Key economic data slated for release today include US initial fillings for jobless benefits in the week ended December 19, durable goods orders for November, University of Michigan's consumer sentiment index for December, and crude inventory from the US Energy Information Administration (EIA).

Macroeconomics

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