Dow went up 159 (below earlier highs), advancers over decliners 3-1 & NAZ gave back 86. The MLP index surged 6+ to the 133s & the REIT index was only fractionally higher in the 342s. Junk bond funds continued strong & Treasuries rose in price. Oil gained 1 to the 41s & gold soared 41 to 1841 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
The 27 EU govs have reached a breakthrough agreement over new fiscal stimulus, following marathon talks in Brussels that lasted 4 days. The European Commission, the exec arm of the EU, has been tasked with tapping financial markets to raise an unprecedented €750B ($857B). The funds will be distributed among the countries & sectors most impacted by the coronavirus pandemic, & will take the form of grants & loans. European Council Pres Charles Michel said that he believes this deal will be seen as a “pivotal moment” for Europe. “Europe, as a whole, has now a big chance to come out stronger from the crisis,” European Commission Pres Ursula von der Leyen also said. The heads of state had been locked in talks since Fri to discuss the proposed fund & the EU’s next budget. However, deep differences on how to divide the amount between grants & loans, how to oversee its investment & how to link it with the EU's democratic values prolonged the talks into one of the longest EU summits in history. In the end, they agreed to distribute €390B, out of the total 750B fund, in the form of grants — a significant reduction from an initial proposal made by France & Germany in May for €500B of grants. The EU also agreed that net debt issuance will end in 2026 & that they will repay all the new debt by 2058. In the meantime, member states will also have to develop plans outlining how they will invest the new funds. These Reform & Recovery plans will have to be approved by their European counterparts, by qualified majority — rather than by unanimity as had been insisted upon by the Netherlands at one point. In addition to the recovery fund, the EU said its next budget, which will fund initiatives from 2021-2027, will total €1.074T. The 2 combined bring upcoming investments to the level of €1.824T. “This recovery fund will help us to almost double the European budget for the years to come,” French Pres Emmanuel Macron said. The recovery fund will be available from Jan 2021 & there will be no new bridge financing until then. This is because the EU has taken other measures since the crisis struck to provide liquidity to the member states if they are needed.
EU leaders reach $2 trillion deal on recovery plan after marathon summit
Treasury Secretary Steve Mnuchin said the Trump administration is prepared to "spend what we need to spend" in the next coronavirus relief package, which officials hope to be complete by the end of the month. "We're going to spend what we need to spend," Mnuchin said as the Trump administration is pushing a package with a price tag of $1T. Pres Trump is continuing to push for a cut in the payroll tax – levies that companies pay on behalf of their employees to fund Social Security & other benefits – as part of the package. Many Reps are reluctant to approve such a reduction, though, over deficit concerns. However, advocates in the administration believe the payroll tax would jolt the economy quickly. "That will be in there," one senior source close to the talks said of the payroll tax, characterizing it as Trump's "number one ask." Meanwhile, Mnuchin had said the administration was "focused on starting with another trillion dollars." "We think that will make a big impact," Mnuchin said, while noting that "the focus is kids and jobs," & that the goal is to have the package in place by the end of this month. Mnuchin also said lawmakers are aiming to pass the new legislation before the end of Jul, when the current "enhanced unemployment insurance" expires.
China said it would take unspecified “necessary measures" after the US gov imposed trade sanctions on 11 companies it says are implicated in human rights abuses in China's Muslim northwestern region of Xinjiang. The sanctions add to US pressure on Beijing over Xinjiang, where the ruling Communist Party is accused of mass detentions, forced labor & other abuses against Muslim minorities. Xinjiang is among a series of conflicts including human rights, trade & technology that have caused US-Chinese relations to plunge to their lowest level in decades. The Trump administration also has imposed sanctions on 4 Chinese officials over the accusations. Beijing responded by announcing unspecified penalties on 4 US senators who are critics of its human rights record. The Dept of Commerce said the addition of the 11 companies to its Entity List will limit their access to US goods & technology. It gave no details of what goods might be affected. “This action will ensure that our goods and technologies are not used in the Chinese Communist Party’s despicable offensive against defenseless Muslim minority populations,” said Commerce Secretary Wilbur Ross. The Chinese foreign ministry rejected the sanctions as interference in its affairs & an attempt by the US to hurt Chinese companies. “What the United States is concerned about is not the human rights issues at all, but to suppress Chinese companies, undermine the stability of Xinjiang, and smear China’s Xinjiang policies,” said a Chinese spokesperson. “We urge the United States to correct its mistakes, revoke relevant decisions and stop interfering in China’s internal affairs." He said Beijing will “take all necessary measures” to protect Chinese businesses, but gave no indication of possible retaliation. China has detained an estimated 1M members of the Uighur & other Muslim ethnic minority groups in internment camps.
Gold futures climbed to settle at a nearly 9-year high, lifted by an agreement on a fiscal rescue plan by European leaders & expectations for additional spending by the US gov. EU leaders ended a grueling 4-day summit with an agreement on a €1.8T ($2.1T) budget & rescue-fund package aimed at shoring up the worst-hit economies in the wake of the COVID-19 pandemic. The EU deal also lent support to equities, with US benchmark stock indices headed higher. However, gold, a traditional haven asset, was also boosted on expectations fiscal stimulus efforts could stoke inflation & lead to a weaker $. Gold for Aug rose a whopping $26 (1.5%) to settle at $1843 an ounce, after touching a high of $1844.
Oil futures ended sharply higher, with prices marking their highest settlement since early Mar, as markets grow more positive about the world's ability to address the COVID-19 pandemic which has crushed demand for crude & its byproducts. A historic stimulus package forged by the 27-nation EU after marathon negotiations since Fri, helped to set the stage for a climb higher for oil. Investors also may also becoming more assured that countries can beat back a surge in COVID-19 cases. Investors cheered the positive results from at least 2 experimental COVID-19 vaccines yesterday. The EU agreed a €750B ($860B) coronavirus rescue fund, & investors also are watching for developments with additional fiscal stimulus measures from the US, which could help curtail the recession that has been wrought by the pandemic. Against that backdrop, West Texas Intermediate (WTI) crude for Aug delivery rose $1.15 (2.8%) to settle at $41.96 a barrel, after gaining 0.5% yesterday. The front-month contract ended at its highest level since Mar 5. The Aug contract expired at the end of the day's session. Sep WTI crude, which is now the front month, settled up $1 (2.4%) at $41.92 a barrel. Sep Brent crude climbed by $1.04 (2.4%) to $44.32 a barrel, after the global benchmark rose 0.3% in the previous session. Today's gain lifted Brent to the highest level since Mar 6. The global tally for confirmed cases of the coronavirus that causes COVID-19 climbed to 14.7M, according to data aggregated by Johns Hopkins University, & the death toll rose to 610K.
Oil prices surge over 3% to four-month high as EU agrees stimulus package
The Dow was elevated all day, but pulled back 150 in the last hour which trimmed the advance. Traders are watching developments on the new stimulus bill which is on a very bumpy road. NAZ gave back some of yesterday's gain, probably related to profit selling. Winning the war against coronavirus remains a key ingredient for any market advance & that is going to take time as will any successful work on a new vaccine. Overall, stocks are holding up very well with all the commotion in daily news stories. But gold, & now silver, keep rising in price.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The 27 EU govs have reached a breakthrough agreement over new fiscal stimulus, following marathon talks in Brussels that lasted 4 days. The European Commission, the exec arm of the EU, has been tasked with tapping financial markets to raise an unprecedented €750B ($857B). The funds will be distributed among the countries & sectors most impacted by the coronavirus pandemic, & will take the form of grants & loans. European Council Pres Charles Michel said that he believes this deal will be seen as a “pivotal moment” for Europe. “Europe, as a whole, has now a big chance to come out stronger from the crisis,” European Commission Pres Ursula von der Leyen also said. The heads of state had been locked in talks since Fri to discuss the proposed fund & the EU’s next budget. However, deep differences on how to divide the amount between grants & loans, how to oversee its investment & how to link it with the EU's democratic values prolonged the talks into one of the longest EU summits in history. In the end, they agreed to distribute €390B, out of the total 750B fund, in the form of grants — a significant reduction from an initial proposal made by France & Germany in May for €500B of grants. The EU also agreed that net debt issuance will end in 2026 & that they will repay all the new debt by 2058. In the meantime, member states will also have to develop plans outlining how they will invest the new funds. These Reform & Recovery plans will have to be approved by their European counterparts, by qualified majority — rather than by unanimity as had been insisted upon by the Netherlands at one point. In addition to the recovery fund, the EU said its next budget, which will fund initiatives from 2021-2027, will total €1.074T. The 2 combined bring upcoming investments to the level of €1.824T. “This recovery fund will help us to almost double the European budget for the years to come,” French Pres Emmanuel Macron said. The recovery fund will be available from Jan 2021 & there will be no new bridge financing until then. This is because the EU has taken other measures since the crisis struck to provide liquidity to the member states if they are needed.
EU leaders reach $2 trillion deal on recovery plan after marathon summit
Treasury Secretary Steve Mnuchin said the Trump administration is prepared to "spend what we need to spend" in the next coronavirus relief package, which officials hope to be complete by the end of the month. "We're going to spend what we need to spend," Mnuchin said as the Trump administration is pushing a package with a price tag of $1T. Pres Trump is continuing to push for a cut in the payroll tax – levies that companies pay on behalf of their employees to fund Social Security & other benefits – as part of the package. Many Reps are reluctant to approve such a reduction, though, over deficit concerns. However, advocates in the administration believe the payroll tax would jolt the economy quickly. "That will be in there," one senior source close to the talks said of the payroll tax, characterizing it as Trump's "number one ask." Meanwhile, Mnuchin had said the administration was "focused on starting with another trillion dollars." "We think that will make a big impact," Mnuchin said, while noting that "the focus is kids and jobs," & that the goal is to have the package in place by the end of this month. Mnuchin also said lawmakers are aiming to pass the new legislation before the end of Jul, when the current "enhanced unemployment insurance" expires.
Trump admin to 'spend what we need to spend' on relief package: Mnuchin
China said it would take unspecified “necessary measures" after the US gov imposed trade sanctions on 11 companies it says are implicated in human rights abuses in China's Muslim northwestern region of Xinjiang. The sanctions add to US pressure on Beijing over Xinjiang, where the ruling Communist Party is accused of mass detentions, forced labor & other abuses against Muslim minorities. Xinjiang is among a series of conflicts including human rights, trade & technology that have caused US-Chinese relations to plunge to their lowest level in decades. The Trump administration also has imposed sanctions on 4 Chinese officials over the accusations. Beijing responded by announcing unspecified penalties on 4 US senators who are critics of its human rights record. The Dept of Commerce said the addition of the 11 companies to its Entity List will limit their access to US goods & technology. It gave no details of what goods might be affected. “This action will ensure that our goods and technologies are not used in the Chinese Communist Party’s despicable offensive against defenseless Muslim minority populations,” said Commerce Secretary Wilbur Ross. The Chinese foreign ministry rejected the sanctions as interference in its affairs & an attempt by the US to hurt Chinese companies. “What the United States is concerned about is not the human rights issues at all, but to suppress Chinese companies, undermine the stability of Xinjiang, and smear China’s Xinjiang policies,” said a Chinese spokesperson. “We urge the United States to correct its mistakes, revoke relevant decisions and stop interfering in China’s internal affairs." He said Beijing will “take all necessary measures” to protect Chinese businesses, but gave no indication of possible retaliation. China has detained an estimated 1M members of the Uighur & other Muslim ethnic minority groups in internment camps.
US sanctions Chinese companies over Muslim abuse complaints
Gold futures climbed to settle at a nearly 9-year high, lifted by an agreement on a fiscal rescue plan by European leaders & expectations for additional spending by the US gov. EU leaders ended a grueling 4-day summit with an agreement on a €1.8T ($2.1T) budget & rescue-fund package aimed at shoring up the worst-hit economies in the wake of the COVID-19 pandemic. The EU deal also lent support to equities, with US benchmark stock indices headed higher. However, gold, a traditional haven asset, was also boosted on expectations fiscal stimulus efforts could stoke inflation & lead to a weaker $. Gold for Aug rose a whopping $26 (1.5%) to settle at $1843 an ounce, after touching a high of $1844.
Gold settles at a nearly 9-year high and silver scores highest finish since 2014 on fiscal stimulus moves
Oil futures ended sharply higher, with prices marking their highest settlement since early Mar, as markets grow more positive about the world's ability to address the COVID-19 pandemic which has crushed demand for crude & its byproducts. A historic stimulus package forged by the 27-nation EU after marathon negotiations since Fri, helped to set the stage for a climb higher for oil. Investors also may also becoming more assured that countries can beat back a surge in COVID-19 cases. Investors cheered the positive results from at least 2 experimental COVID-19 vaccines yesterday. The EU agreed a €750B ($860B) coronavirus rescue fund, & investors also are watching for developments with additional fiscal stimulus measures from the US, which could help curtail the recession that has been wrought by the pandemic. Against that backdrop, West Texas Intermediate (WTI) crude for Aug delivery rose $1.15 (2.8%) to settle at $41.96 a barrel, after gaining 0.5% yesterday. The front-month contract ended at its highest level since Mar 5. The Aug contract expired at the end of the day's session. Sep WTI crude, which is now the front month, settled up $1 (2.4%) at $41.92 a barrel. Sep Brent crude climbed by $1.04 (2.4%) to $44.32 a barrel, after the global benchmark rose 0.3% in the previous session. Today's gain lifted Brent to the highest level since Mar 6. The global tally for confirmed cases of the coronavirus that causes COVID-19 climbed to 14.7M, according to data aggregated by Johns Hopkins University, & the death toll rose to 610K.
Oil prices surge over 3% to four-month high as EU agrees stimulus package
The Dow was elevated all day, but pulled back 150 in the last hour which trimmed the advance. Traders are watching developments on the new stimulus bill which is on a very bumpy road. NAZ gave back some of yesterday's gain, probably related to profit selling. Winning the war against coronavirus remains a key ingredient for any market advance & that is going to take time as will any successful work on a new vaccine. Overall, stocks are holding up very well with all the commotion in daily news stories. But gold, & now silver, keep rising in price.
Dow Jones Industrials
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