Dow finished up a meager 10 (550 under session highs), decliners over advancers 3-2 & NAZ gave back 226 (400+ below earlier highs). The MLP index fell 2+ to the 122s & the REIT index dropped 4+ to the 339s. Junk bond funds slid lower & Treasuries were pretty much even. Oil declined to the 39s & gold added only 2 to 1804 (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)
White House economic adviser Larry Kudloe said he could "conclusively" confirm a phase 4 coronavirus relief package is on its way as many Americans' financial futures remain uncertain because of coronavirus. "As you read the reports and talk to people on both sides of the aisle on the Hill, it is increasingly clear that there will be an additional package," Kudlow said. "We will try to make it targeted, we will try to incentivize not just work, although work is crucial, and going back to work. We want to incentivize investments, we want a pro-growth package." The pres has publicly supported provisions like a payroll tax holiday, "modest" return to work bonuses, unemployment reform, a Paycheck Protection Program extension, targeted direct assistance and a capital gains tax holiday, Kudlow added Kudlow also address the US's strained relationship with China in light of the Phase 1 trade deal that was finished up earlier this year. "The president is not in a good mood about China, nor is anybody in the administration," Kudlow said. "Having said all that, we are still engaging on the phase one trade deal," he said. "China says they will implement their side of the deal. Let’s take a look and see. I hope that is correct. But the relationship with China on national security grounds, by the way, on investor protection and fraud grounds, that’s another issue that’s coming up."
As Congress prepares to take up the next coronavirus stimulus package, the Trump administration is exploring proposals to send a 2nd cash payment more limited in size & scope to some Americans still reeling from the pandemic. But the direct payment could face opposition from Senate Reps, who have voiced concerns about the nation's ballooning deficit & worried the checks were ineffective in providing aid to the Americans who most needed it. “It was a massive amount of money, not at all targeted to the people who really needed it," Sen Pat Toomey said last week. "So, I’m a skeptic about whether we should do another round of that.” Toomey is not alone in wondering whether more cash payments are necessary to blunt the economic pain of the virus-induced recession, the worst downturn since the depression. Sen John Kennedy noted last week the US owes $3T & "climbing," which does not include the $3T added to the Federal Reserve's balance sheet. “If you put a gun to my head and said, ‘Tell me what’s going to happen, give me your best guess,’ I’d have to tell you honestly, I don’t know," he said. There's some concern among White House officials that Americans pocketed the money rather than spending it. Since the pandemic started, bank deposits have surged by $2T, buoyed by the gov's massive relief efforts. Negotiations between Congress & the Trump administration on another round of virus-related stimulus are set to intensify next week once Senate lawmakers return to DC from their 2-week Fourth of Jul break. That gives lawmakers just 2 weeks to reach an agreement on legislation: The House is scheduled to start its recess by Aug 3 & the Senate is expected to follow one week later. Senate Majority Leader Mitch McConnell has said he wants to finish work on the next round of aid before Aug. The earliest we may see a vote would be in late Jul. The White House wants to limit the cost of the 4th coronavirus relief package at $1T or less in order to maintain pivotal support from conservative Reps who are starting to balk at the unprecedented debt & spending levels. In the first 8 months of the fiscal year, the US deficit soared to $2.7T, the Congressional Budget Office said last week. The gap between what the gov spends & what it collects for fiscal 2020 is expected to hit $3.7T, a record. The current record for a fiscal year deficit is $1.4T, set in 2009.
China announced “corresponding sanctions” against the US after the US penalised senior Chinese officials over the treatment of minority Uighur Muslims in the western region of Xinjiang. China's move comes as relations between the world's 2 biggest economic powerhouses have slumped over disagreements on issues including the coronavirus pandemic, trade, Huawei & a sweeping national security law imposed on Hong Kong. The sanctions targeted Senators Ted Cruz & Marco Rubio, US Representative Chris Smith, Ambassador at Large for Intl Religious Freedom Sam Brownback & the US Congressional-Executive Commission on China. Rubio & Cruz have both sponsored legislation that would punish China's actions in Xinjiang. Smith has also been a vocal critic of China on issues ranging from Xinjiang to Hong Kong & the coronavirus. “The U.S. actions seriously interfere in China’s internal affairs, seriously violate the basic norms of international relations and seriously damage Sino-U.S. relations,” Chinese Foreign Ministry spokeswoman Hua Chunying said. “China will make further responses based on how the situation develops.” Hua did not elaborate. UN experts & activists say at least 1M ethnic Uighurs & other Muslims are held in detention centers in Xinjiang. China describes them as training centers helping to stamp out terrorism & extremism & give people new skills. The Congressional-Executive Commission on China monitors human rights & the development of the rule of law & submits an annual report to Trump & Congress. These measures against Chinese officials, including the Communist Party secretary of Xinjiang, involve freezing US assets, US travel bans & prohibiting Americans from doing business with them.
It is the perfect storm for the nation’s homebuilders. A sharp decline in the supply of existing homes for sale, increasing consumer preference for brand-new, high-tech homes with all the amenities for working & schooling, as well as an accelerating flight to the suburbs & exurbs made for remarkable housing demand in Jun. While the official gov count isn't out until the end of the month, sales of newly built homes jumped 55% annually in Jun, according to a monthly survey by John Burns Real Estate Consulting, which has historically mirrored the US Census report. It was the largest annual gain since homebuilding began again following the epic housing crash a decade ago. It is also the highest pace of sales growth since the height of the unprecedented housing boom in 2005. That expansion was driven by negligent lending in the subprime mortgage market & this boom appears to be driven by the coronavirus pandemic. Sales of new homes were strongest in the Northeast, with an 86% annual jump, & in Florida, where sales popped 84%. California saw gains, but it was the laggard. Those sales are allowing builders to raise prices. About 57% of those surveyed said they had bumped prices higher, only in California did prices pull back some. About 14% of Southern California builders reduced net prices in Jun, the most of any region. Nationally, home prices for new construction in Jun were 4.5% higher annually. Builders can raise prices because they are seeing a new buyer today, more serious & more impatient than ever. Buyer traffic is converting into sales at a record rate. In addition, consumers are largely choosing homes already built, even in the luxury segment. That is why the inventory of unsold, newly built homes dropped 20% annually in Jun to just a 1.5-month supply. The issue for builders now is how to ramp up production quickly, when they never expected this kind of recovery. Most builders stopped buying land in Mar & laid off workers. Now they need more communities but are up against all kinds of hurdles, including high prices for finished lots & issues with local permitting offices which are not all open or running normally yet.
The federal gov's budget deficit soared in Jun to a record $864B as the US doled out huge sums of money to try to stave off a depression & save the economy from the coronavirus. The increase last month pushed the budget gap for the current fiscal year to a record $2.7T, compared to $747B in the same 9-month period last year, the Treasury Dept said. The gov operates on annual budget that runs from Oct 1 to Sep 30 instead of using the calendar year more common in the business world. The last time the US ran such huge deficits, measured as a percentage of the economy, was during World War II. The gov spent $1.11T last month, up from $572B in May. In the same month a year earlier, outlays were a much smaller $342B. Tax & other revenue totaled just $241B in Jun. A year earlier, the gov took in $333B. Tax receipts have fallen because of a depressed economy & an extended deadline for payment because of the pandemic. Deferments were pushed out to Jul from Apr for many tax filers. The US is on track to register a record $3.7T deficit this year owing to an unprecedented effort to prop up the economy during the pandemic. The gov has already funneled huge sums of money into direct payments to households, extended unemployment benefits, small-business loans & bailout of industries deemed critical such as airlines. Congress could also add more than $1T in additional emergency-relief measures before the end of summer. The economy is likely to need lots of help at least thru the end of the year with tax revenues down & so many people & companies in need of support.
Gold prices tallied their first gain in 3 sessions, with analysts tying support to a global rise in the number of COVID-19 cases and strong investment in gold-backed exchange-traded funds. Gold for Aug delivery rose $12 (0.7%) to settle at $1814 an ounce. Gold pulled back Thurs & Fri after ending Wed at its highest level since 2011. The yellow metal remained positive for the week, rising 0.7% for its 5th straight weekly gain to leave it up by around 18% YTD. Total US coronavirus cases exceeded 3.3M today & the nation's death toll topped 135.
Gold tallies first gain in 3 sessions as coronavirus infections extend rise
Oil futures ended lower as major oil-producing countries were said to consider easing output curbs as global crude demand has seen improvement as some economies have reopened from closures due to the coronavirus pandemic. West Texas Intermediate crude for Aug fell 45¢ (1.1%) to settle at $40.10 a barrel. The global benchmark, Sep Brent crude, lost 52¢ (1.2%) at $42.72 a barrel. A reportl on Sat sai8d that an alliance of crude producers led by Saudi Arabia was pushing OPEC & its allies (OPEC+) to ease oil output curbs as planned beginning in Aug due to signs that demand is returning to normal after cratering in the wake of coronavirus-related lockdowns. The next monthly meetings for OPEC's Joint Technical Committee, which provides a review of the oil market & makes recommendations to OPEC+, & the Joint Ministerial Monitoring Committee, which oversees compliance with output cuts, are scheduled for Tues & Wed, respectively.
Oil prices end lower with OPEC+ seen preparing to ease production curbs
After a nice rally, profit taking hit stocks in the last 2 hours. Optimism about a new stimulus package may have brought out buyers, then later they heard negative thoughts from some senators. US-China trade relations have been heading south for some time. And there is the inability to control the coronavirus epidemic. The recent rally is taking time to rest.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
White House economic adviser Larry Kudloe said he could "conclusively" confirm a phase 4 coronavirus relief package is on its way as many Americans' financial futures remain uncertain because of coronavirus. "As you read the reports and talk to people on both sides of the aisle on the Hill, it is increasingly clear that there will be an additional package," Kudlow said. "We will try to make it targeted, we will try to incentivize not just work, although work is crucial, and going back to work. We want to incentivize investments, we want a pro-growth package." The pres has publicly supported provisions like a payroll tax holiday, "modest" return to work bonuses, unemployment reform, a Paycheck Protection Program extension, targeted direct assistance and a capital gains tax holiday, Kudlow added Kudlow also address the US's strained relationship with China in light of the Phase 1 trade deal that was finished up earlier this year. "The president is not in a good mood about China, nor is anybody in the administration," Kudlow said. "Having said all that, we are still engaging on the phase one trade deal," he said. "China says they will implement their side of the deal. Let’s take a look and see. I hope that is correct. But the relationship with China on national security grounds, by the way, on investor protection and fraud grounds, that’s another issue that’s coming up."
Coronavirus phase 4 stimulus bill coming, Kudlow says 'conclusively'
As Congress prepares to take up the next coronavirus stimulus package, the Trump administration is exploring proposals to send a 2nd cash payment more limited in size & scope to some Americans still reeling from the pandemic. But the direct payment could face opposition from Senate Reps, who have voiced concerns about the nation's ballooning deficit & worried the checks were ineffective in providing aid to the Americans who most needed it. “It was a massive amount of money, not at all targeted to the people who really needed it," Sen Pat Toomey said last week. "So, I’m a skeptic about whether we should do another round of that.” Toomey is not alone in wondering whether more cash payments are necessary to blunt the economic pain of the virus-induced recession, the worst downturn since the depression. Sen John Kennedy noted last week the US owes $3T & "climbing," which does not include the $3T added to the Federal Reserve's balance sheet. “If you put a gun to my head and said, ‘Tell me what’s going to happen, give me your best guess,’ I’d have to tell you honestly, I don’t know," he said. There's some concern among White House officials that Americans pocketed the money rather than spending it. Since the pandemic started, bank deposits have surged by $2T, buoyed by the gov's massive relief efforts. Negotiations between Congress & the Trump administration on another round of virus-related stimulus are set to intensify next week once Senate lawmakers return to DC from their 2-week Fourth of Jul break. That gives lawmakers just 2 weeks to reach an agreement on legislation: The House is scheduled to start its recess by Aug 3 & the Senate is expected to follow one week later. Senate Majority Leader Mitch McConnell has said he wants to finish work on the next round of aid before Aug. The earliest we may see a vote would be in late Jul. The White House wants to limit the cost of the 4th coronavirus relief package at $1T or less in order to maintain pivotal support from conservative Reps who are starting to balk at the unprecedented debt & spending levels. In the first 8 months of the fiscal year, the US deficit soared to $2.7T, the Congressional Budget Office said last week. The gap between what the gov spends & what it collects for fiscal 2020 is expected to hit $3.7T, a record. The current record for a fiscal year deficit is $1.4T, set in 2009.
Second coronavirus stimulus check faces opposition
China announced “corresponding sanctions” against the US after the US penalised senior Chinese officials over the treatment of minority Uighur Muslims in the western region of Xinjiang. China's move comes as relations between the world's 2 biggest economic powerhouses have slumped over disagreements on issues including the coronavirus pandemic, trade, Huawei & a sweeping national security law imposed on Hong Kong. The sanctions targeted Senators Ted Cruz & Marco Rubio, US Representative Chris Smith, Ambassador at Large for Intl Religious Freedom Sam Brownback & the US Congressional-Executive Commission on China. Rubio & Cruz have both sponsored legislation that would punish China's actions in Xinjiang. Smith has also been a vocal critic of China on issues ranging from Xinjiang to Hong Kong & the coronavirus. “The U.S. actions seriously interfere in China’s internal affairs, seriously violate the basic norms of international relations and seriously damage Sino-U.S. relations,” Chinese Foreign Ministry spokeswoman Hua Chunying said. “China will make further responses based on how the situation develops.” Hua did not elaborate. UN experts & activists say at least 1M ethnic Uighurs & other Muslims are held in detention centers in Xinjiang. China describes them as training centers helping to stamp out terrorism & extremism & give people new skills. The Congressional-Executive Commission on China monitors human rights & the development of the rule of law & submits an annual report to Trump & Congress. These measures against Chinese officials, including the Communist Party secretary of Xinjiang, involve freezing US assets, US travel bans & prohibiting Americans from doing business with them.
China trades sanctions with US in row over Uighur Muslims
It is the perfect storm for the nation’s homebuilders. A sharp decline in the supply of existing homes for sale, increasing consumer preference for brand-new, high-tech homes with all the amenities for working & schooling, as well as an accelerating flight to the suburbs & exurbs made for remarkable housing demand in Jun. While the official gov count isn't out until the end of the month, sales of newly built homes jumped 55% annually in Jun, according to a monthly survey by John Burns Real Estate Consulting, which has historically mirrored the US Census report. It was the largest annual gain since homebuilding began again following the epic housing crash a decade ago. It is also the highest pace of sales growth since the height of the unprecedented housing boom in 2005. That expansion was driven by negligent lending in the subprime mortgage market & this boom appears to be driven by the coronavirus pandemic. Sales of new homes were strongest in the Northeast, with an 86% annual jump, & in Florida, where sales popped 84%. California saw gains, but it was the laggard. Those sales are allowing builders to raise prices. About 57% of those surveyed said they had bumped prices higher, only in California did prices pull back some. About 14% of Southern California builders reduced net prices in Jun, the most of any region. Nationally, home prices for new construction in Jun were 4.5% higher annually. Builders can raise prices because they are seeing a new buyer today, more serious & more impatient than ever. Buyer traffic is converting into sales at a record rate. In addition, consumers are largely choosing homes already built, even in the luxury segment. That is why the inventory of unsold, newly built homes dropped 20% annually in Jun to just a 1.5-month supply. The issue for builders now is how to ramp up production quickly, when they never expected this kind of recovery. Most builders stopped buying land in Mar & laid off workers. Now they need more communities but are up against all kinds of hurdles, including high prices for finished lots & issues with local permitting offices which are not all open or running normally yet.
Homebuilders saw the strongest June sales since the last housing boom
The federal gov's budget deficit soared in Jun to a record $864B as the US doled out huge sums of money to try to stave off a depression & save the economy from the coronavirus. The increase last month pushed the budget gap for the current fiscal year to a record $2.7T, compared to $747B in the same 9-month period last year, the Treasury Dept said. The gov operates on annual budget that runs from Oct 1 to Sep 30 instead of using the calendar year more common in the business world. The last time the US ran such huge deficits, measured as a percentage of the economy, was during World War II. The gov spent $1.11T last month, up from $572B in May. In the same month a year earlier, outlays were a much smaller $342B. Tax & other revenue totaled just $241B in Jun. A year earlier, the gov took in $333B. Tax receipts have fallen because of a depressed economy & an extended deadline for payment because of the pandemic. Deferments were pushed out to Jul from Apr for many tax filers. The US is on track to register a record $3.7T deficit this year owing to an unprecedented effort to prop up the economy during the pandemic. The gov has already funneled huge sums of money into direct payments to households, extended unemployment benefits, small-business loans & bailout of industries deemed critical such as airlines. Congress could also add more than $1T in additional emergency-relief measures before the end of summer. The economy is likely to need lots of help at least thru the end of the year with tax revenues down & so many people & companies in need of support.
The U.S. budget deficit soared to $864 billion in June, higher than all of 2019
Gold prices tallied their first gain in 3 sessions, with analysts tying support to a global rise in the number of COVID-19 cases and strong investment in gold-backed exchange-traded funds. Gold for Aug delivery rose $12 (0.7%) to settle at $1814 an ounce. Gold pulled back Thurs & Fri after ending Wed at its highest level since 2011. The yellow metal remained positive for the week, rising 0.7% for its 5th straight weekly gain to leave it up by around 18% YTD. Total US coronavirus cases exceeded 3.3M today & the nation's death toll topped 135.
Gold tallies first gain in 3 sessions as coronavirus infections extend rise
Oil futures ended lower as major oil-producing countries were said to consider easing output curbs as global crude demand has seen improvement as some economies have reopened from closures due to the coronavirus pandemic. West Texas Intermediate crude for Aug fell 45¢ (1.1%) to settle at $40.10 a barrel. The global benchmark, Sep Brent crude, lost 52¢ (1.2%) at $42.72 a barrel. A reportl on Sat sai8d that an alliance of crude producers led by Saudi Arabia was pushing OPEC & its allies (OPEC+) to ease oil output curbs as planned beginning in Aug due to signs that demand is returning to normal after cratering in the wake of coronavirus-related lockdowns. The next monthly meetings for OPEC's Joint Technical Committee, which provides a review of the oil market & makes recommendations to OPEC+, & the Joint Ministerial Monitoring Committee, which oversees compliance with output cuts, are scheduled for Tues & Wed, respectively.
Oil prices end lower with OPEC+ seen preparing to ease production curbs
After a nice rally, profit taking hit stocks in the last 2 hours. Optimism about a new stimulus package may have brought out buyers, then later they heard negative thoughts from some senators. US-China trade relations have been heading south for some time. And there is the inability to control the coronavirus epidemic. The recent rally is taking time to rest.
Dow Jones Industrials
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