Friday, November 27, 2020

Markets edge higher as Nasdaq reaches a new record

Dow went up 41, advancers & decliners were pretty much even & NAZ gained 126.  The MLP index gave back 1+ yo 142 & the REIT index was off 2+ to 369.  Junk bond funds crawled high & Treasuries were purchased.  Oil fell in the 45s & gold plunged 24 to 1786.

AMJ (Alerian MLP index tracking fund)

CL=FCrude Oil45.25

GC=F   Gold1,783.40



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Some shoppers may be avoiding stores during the coronavirus pandemic, but they're still putting many items in the virtual shopping cart.  Thanksgiving Day spending rose by 22% year over year to $5.1B, hitting a new record, according to Adobe Analytics data.  Online sales were $4.2B on Thanksgiving Day in 2019.  The company analyzes traffic on retail websites & transactions from 80 of the top 100 US online retailers.  Nearly ½ of those purchases were made on a smartphone.  Retailers that offer curbside pickup had a 31% higher conversion rate of traffic to their sites — a reflection of how popular it's become for people to buy online & retrieve purchases without stepping into stores.  The strong online shopping data reflects a trend that many retailers and industry watchers expected:  More consumers are avoiding malls & buying gifts from their couch during the pandemic.  Like just about every aspect of 2020, the global health crisis has shaken up holiday shopping. Retailers kicked off sales in mid-Oct to coincide with AMAZON Prime Day.  They've stretched out one-day sales events, giving shoppers less of a reason to rush to the store this Black Friday.  One of the country's top retail trade groups said the global health crisis won't dampen enthusiasm for shopping.  The National Retail Federation estimated holiday sales will be 3.6-5.2% year over year, amounting to $755-767B.  Last year, they rose 4% to $729B.  On average, holiday sales have increased 3.5% for the past 5 years.  The trade group, however, said it expects more of those $s will be spent online, rather than in stores.  It projected a 20-30% jump in online & other non-store sales compared to last year.  Adobe anticipates Black Friday & Cyber Monday to be the 2 largest online sales days in history.  It expects Black Friday sales will add up to $8.9-10.6B & online sales for the full holiday season will add up to $189B.

Thanksgiving Day online sales hit record $5.1 billion, up 21.5% from last year, Adobe says

Hardly any lines. Empty parking lots.  More employees than customers in stores.  These are just some of the scenes playing out across the US the morning of Black Friday 2020, a shopping holiday that in the past has drawn hoards of people to stores to score doorbuster deals before daylight even breaks.  But this year Black Friday looks a lot different. The coronavirus pandemic has instilled in many consumers a heightened sense of anxiety around going to stores.  Most retailers had their doors closed on Thanksgiving, & opened at later hours the morning of Black Friday, as they moved more doorbuster deals online to allow people to shop safely from the comfort of their home.  Even the Centers for Disease Control & Prevention has advised consumers to shop deals online on Black Friday, to use curbside pickup if they are venturing to stores, & to favor open-air shopping centers over enclosed malls.

Black Friday 2020 looks bleak at stores, malls, as shoppers stick to couch

The US set a fresh record for hospitalizations with the coronavirus illness COVID-19 on Thanksgiving Day, with more than 90K Americans in hospitals, the most since the start of the pandemic.  The US counted at least 103K new cases on yesterday.  That's below recent daily tallies that have come closer to 200K, but some states did not report their numbers for the holiday, which means the true tally is likely higher.  There are now 90K COVID-19 patients in hospitals, breaking the record of 89.9K set a day earlier.  Case numbers have been rising across the US in recent weeks & health-care workers are reported to be exhausted & stressed as hospitals & intensive-care unit beds fill.  The governors of Iowa & North Dakota have reversed their stance on face masks & mandated them in public spaces.  In medical news, the UK gov has asked its medicine regulator to evaluate the COVID-19 vaccine candidate being developed by AstraZeneca (AZN) & Oxford University, the first step toward getting it approved for deployment.  CEO Pascal Soriot said that an additional study of the vaccine is needed following efficacy data released on Mon, which has since been questioned by a number of experts.  The data showed the experimental vaccine was at least 70% effective in protecting individuals from Covid-19 in late-stage trials in the UK & Brazil.  That rose to 90% when volunteers were given ½ a dose, followed by a full dose a month later.  However, it was only 62% effective when 2 full doses were given.

U.S. sets record of more than 90,000 COVID-19 patients in hospitals and health-care workers warn situation is dire

Not much happening in sluggish trading.  Buying is is concentrated largely in the sexy tech stocks while the Dow is close to its record..  Have a great holiday weekend!!    😀😀

Dow Jones Industrials


Wednesday, November 25, 2020

Markets dip after Fed minutes show no change in asset puchase plan

Dow dropped 173, decliners over advancers 4-3 & NAZ went up 57.  The MLP index was steady in the 144s & the REIT index hardly budged in the 371s.  Junk bond funds fluctuated & Treasuries were pretty much even.  Oil rose to the mid 45s & gold was flattish at 1904 (more on both below).

AMJ (Alerian MLP Index tracking fund)

Live 24 hours gold chart [Kitco Inc.]

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Federal Reserve officials took part in a detailed discussion about their asset purchase program during the meeting earlier this month, at which some members said they expect several changes to be enacted.  At the Nov 4-5 meeting officials voted to keep benchmark short-term borrowing rates anchored near zero.  Market participants were looking to the minutes to gauge where policymakers stand on possibly ramping up or adjusting the asset purchase program, which currently has the Fed buying $120B of Treasurie's & mortgage-backed securities a month.  The Fed could choose to increase the purchases or to lengthen the duration of those bonds.  While members said the current pace of purchases was helping keep financial conditions accommodative, they noted that changes could be enacted if necessary.  “Participants noted that the Committee could provide more accommodation, if appropriate, by increasing the pace of purchases or by shifting its Treasury purchases to those with a longer maturity without increasing the size of its purchases,” the minutes said.  “Alternatively, the Committee could provide more accommodation, if appropriate, by conducting purchases of the same pace and composition over a longer horizon.”  FOMC officials also expressed concern about the pace of the economic recovery, noting that growth was still well off the pace before the coronavirus pandemic hit in Mar.  During his post-meeting news conference, Fed Chair Jerome Powell said he feels the Fed still has plenty of policy “ammunition” and pledged that the committee is “strongly committed to using these powerful tools to support the economy.”  Since then, the Fed has learned that it start 2021 without some of the weapons in its arsenal, as Treasury Secretary Steve Mnuchin has directed the central bank to return collateral funding it received for multiple pandemic-era lending programs.  They include corp bond purchases, loans to state & municipal govs & the Main Street Lending Program for small- & medium-sized businesses.

Fed weighed adjusting bond purchases to provide more help to subpar economy, meeting minutes show

A senior Federal Reserve official said he expects the economic recovery to forge ahead despite a record increase in coronavirus cases, saying businesses have learned how to cope with the pandemic.  James Bullard, pres of the St Louis Federal Reserve Bank, said he thinks the economy is likely to expand at a steady pace in the waning months of 2020 & into early next year.  While recent economic data “has not been as strong as it’s been,” Bullard acknowledged, he said businesses have learned how to keep their workers & customers safe.  They are likely to continue to hire, produce & even invest more in anticipation of vaccines being widely available next year.  Most of the increase in coronavirus cases recently, he contended, have occurred outside the workplace, at home or other social gatherings.  At the same time, Bullard said, he expects Americans to modify their behavior again as they did last summer to slow the latest spread of the coronavirus.  For now Bullard doesn't expect a change in the Fed's aggressive approach to supporting the economy.  “I think we have a great policy right now,” said Bullard, though he remained open to additional measures if the economy needed more help.  Bullard has been one of the more relatively optimistic voices at the Fed on the current recovery.  He said the US has learned a lot during the pandemic, allowing most businesses to work toward precrisis levels of production.  “A lot of learning has already occurred,” he added.  “It seems to me there is light at the end of the tunnel in terms of seeing an end to the crisis. It’s very much a realistic view.”

Fed’s Bullard sees ‘light’ at end of coronavirus tunnel

Gold futures booked a meager gain, as the precious metal attempted to recover from a series of sharp declines that were prompted partly by progress on vaccines & treatments for the economy-disrupting coronavirus.  Dec gold added 1 to settle at $1805 an ounce.  The precious metal is on track for a weekly decline of almost 4%.  Metals trading will be closed in observance of Thanksgiving in the US. 

Gold ends slightly higher day before Thanksgiving but on track for 4% weekly skid

Consumer spending moderated in Oct, the gov said.  Spending rose 0.5% after a revised 1.2% gain in the prior month.  This is the smallest gain since Apr.  The forecast expected a 0.4% rise.  Incomes sank 0.7% in Oct as gov programs ended.  The forecast was expecting a 0.5% drop.  The PCE index, the Federal Reserve's inflation barometer slowed to a 1.2% annual rate down from a 1.4% gain in Sep.  The core measure that strips out food & energy increased at a 1.3% annual rate, down from 1.5% in the prior month.  The Fed is farther away from its 2% inflation target.  The savings rate dipped to 13.6% from 14.3%.  Wages & salaries rose 0.7% in the prior month.  The US is suffering another major wave of COVID-19 cases at the same time that gov stimulus funds are waning & consumer confidence fell to a 3-month low.

U.S. consumer spending moderates in October

Nordstrom (JWN) reported that Q3 sales picked up more than expected, suggesting it might have a stronger holiday season than some investors expected if trends continue.  CEO Erik Nordstrom said the retailer has made strides with its online business, especially since its stores were temporarily shuttered.  Digital sales were $1.6B & represented 54% of its business.  He said the company is “continuing to amplify categories that are relevant with customers during the pandemic, such as activewear & wellness products.”  He added it's also looking toward the future with the Covid-19 vaccine & anticipates “pent-up customer demand, particularly around occasions like travel or in-person social events.”  The retailer's off-price store, Nordstrom Rack, could be a major growth driver because it’s one of the few in this category with a large online presence.. EPS was 34¢, down from 81¢, down from last year.  The forecast called for a loss of 6¢.  Total revenue fell to $3.09B from $3.67B a year ago, & was lower than the $3.10B expected.  JWN was among the retailers that were forced to close their doors in the early days of the coronavirus pandemic.  Total sales were down 40% in Q1 & 53% in Q2 compared with the same period a year earlier.  In Q3, total sales were down only 16%.  That includes an approximately 10-percentage point impact from the Anniversary Sale.  CFO Anne Bramman said expects sales to decrease in the low 20-percentage range in Q4, although the company expects to deliver positive operating cash flow.  Yet she acknowledged the outlook is uncertain because of the pandemic & said that its expectations are based on stores remaining open.  The stock climbed 2.85 (12%).
If you would like to learn more about JWN, click on this link:

Nordstrom shares rise as retailer shows signs of recovery

Oil futures extended gains, with the US & global benchmarks ending at their highest level since Mar 5 for a 2nd straight session as investors remained cheered by optimism over progress toward COVID-19 vaccines & data that showed a fall in US crude inventories last week.  West Texas Intermediate crude for Jan rose 80¢ (1.8%) to end at $45.71 a barrel.  The global benchmark, Jan Brent crude advanced 75¢ per barrel (1.6%) to finish at $48.61 a barrel.

Oil futures rally to end at more-than-8-month high

This was a quiet day with many traders starting their holiday early.  Enjoy the holiday & keep safe & healthy.

Dow Jones Industrials


Markets fall as jobless claims rise

Dow was off 133, decliners over advancers about 2-1 & NAZ gained 27.  The MLP index slid back 1+ to the 142s & the REIT index fell 1+ to the 369s.  Junk bond funds did little today & Treasuries edged higher.  Oil rose above 45, another multi month high, & gold recovered 3 to 1808.

AMJ (Alerian MLP index tracking fund)

CL=FCrude Oil45.30

GC=FGold  1,808.90



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The number of Americans applying for state unemployment benefits rose again last week as a surge in coronavirus cases across the country threatens to undermine the economy's recovery.  The latest jobless claims figures from the Labor Department, which cover the week ending Nov. 21, show that 778Kworkers sought aid last week, about 4 times the pre-crisis level.  While it's well below the peak of nearly 7M in late Mar, when states first implemented lockdown measures to curb the spread of COVID-19, it marks the 2nd consecutive week of an increase in claims.  It's a slight uptick from last week's revised figure of 748K & well above the 730K new claims forecast.  Close to 68M Americans  roughly 40% of the nation's labor force ‒ have applied for aid since the coronavirus lockdowns began in mid-Mar.  The number of people who are continuing to receive unemployment benefits fell to a little more than 6M, a decline of 299K from the previous week.  While the decline suggests that employers are calling their workers back, it may represent laid-off Americans who have used up the maximum number of payments available thru state unemployment programs (typically about 6 months) & are now receiving benefits through a separate federal program that extends the aid by 13 weeks.  Congress created the extra federal benefits earlier this year with the passage of the CARES Act.  But those key federal jobless aid programs created in Mar are slated to expire at the end of the year, leaving about 12M workers with no income on Dec 26.  Up to 4.4M workers are expected to exhaust their unemployment benefits before Dec 26, with 3.5M Americans using up the extended Pandemic Emergency Unemployment Compensation & 925K running out of the Pandemic Unemployment Assistance.  Job losses remain elevated and, as COVID-19 cases surge across the country, prompting state & local govs to implement new lockdown measures, economists are increasingly warning of a bleak winter.

Jobless claims increase as coronavirus cases rise, lockdowns return

The US economy grew at a record pace during the 3rd qtr, according to a 2nd estimate released by the Commerce Dept.  GDP increased 33.1% during the 3 months, unrevised from the first estimate & in-line with the expectations.  The initial estimate released last month showed record growth as the US economy battled back from its COVID-19-induced slowdown.  The US economy, the world's largest, contracted at a 32.9% annualized pace in the 2nd qtr as lockdowns aimed at slowing the spread of the virus caused activity to grind to a halt.  The 2nd estimate included upward revisions to nonresidential fixed investment, residential investment & exports.  Those were offset by downward revisions to state & local gov spending, private inventory investment & personal consumption expenditures.  Imports, which reduce GDP, were revised higher.  A 3rd estimate will be released on Dec 22.

US economy grows at record 33.1%, according to second estimate

The Food & Drug Administration (FDA) authorized one of the first Covid-19-19 tests that measures the amount of neutralizing antibodies produced by the body's immune system after exposure to the virus — a “new generation” of coronavirus test that is designed to tell how well someone is protected against infection.  A person's immune system produces antibodies to combat viruses & other foreign pathogens that invade the body.  When it comes to Covid-19, it remains unclear how much protection antibodies provide & how long that might last, but this test could help researchers better understand the role of Covid antibodies in immune protection.  Unlike many previously authorized antibody tests that can tell if you've had the virus or not, the COVID-SeroKlir test measures your specific levels of Covid-19 neutralizing antibodies.  The FDA has previously authorized some tests that estimate the level of antibodies, but not specifically for neutralizing antibodies.  The FDA cautioned that much remains unknown about the nature of Covid-19 neutralizing antibodies in humans & that a high level of antibodies does not necessarily guarantee immunity against the virus.  But the new test is important because it can be used by researchers to further study the relationship between Covid-19 antibodies & protection against the virus.  That's relevant for protection generated by both previous Covid-19 exposure & by a vaccine, once one is distributed, which could be next month in the US.

FDA clears a ‘new generation’ of Covid antibody test that measures level of neutralizing antibodies

While the news on jobless claims was not a great surprise, it was still disturbing & a reminder that more work will be needed to fix the economy.  Meanwhile advances on research to fight the virus are making progress & impressive.

Dow Jones Industrials