Dow jumped 161 (not far from session highs), advancers over decliners 2-1 & NAZ went up 70 to a new record. The MLP index rose 2+ to the 127s & the REIT index added 1+ to the 361s. Junk bond funds continued higher & Treasuries were also higher. Oil was off pennies taking it under 43 & gold rocketed ahead 39 to 1972 (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)
An effort to resume coronavirus relief talks between White House officials & top Dems stalled this week, with House Speaker Nancy Pelosi saying it's fruitless to revive the negotiations until the GOP agrees to a $2.2T price tag. She spoke with White House chief of staff Mark Meadows for 25 minutes yesterday for the first time in close to a month, since the stimulus package efforts collapsed. But she said the 2 sides remain at a "tragic impasse" over another round of emergency aid. "We have said again and again that we are willing to come down, meet them in the middle — that would be $2.2 trillion," Pelosi said. "When they're ready to do that, we'll be ready to discuss and negotiate. I did not get that impression on that call." One of the biggest points of contention between the parties is the cost of the proposal. Dems have offered to come down $1T from the roughly $3T HEROES Act, which the House passed in May. But the White House & Rep leaders want to keep the price tag closer to $1T amid growing concerns over the nation's ballooning deficit. “That could be a very short conversation if they’re not willing to meet in the middle,” Pelosi said. “We’re not budging. They have to move." Treasury Secretary Steve Mnuchin has called the $2T figure a "non-starter," & has urged Dems to return to the bargaining table & compromise on a $1T package. Senate Reps are trying to finalize a smaller aid package, which is expected to include $300 in extra weekly federal unemployment benefits until Dec 27, another round of money for the Paycheck Protection Program & an additional $10B for the Postal Service & liability protections. The proposal would also allocate additional funding for schools & education. The revised measure, which is expected to cost somewhere around $500B, would represent a scaled-back version of the $1T HEALS Act introduced by Reps at the end of Jul. Senate Majority Leader Mitch McConnell has suggested that at least 20 Rep senators will not support the HEALS Act. “I think we’re going to take another shot at it," Sen. Marco Rubio said. "We're very close to having a bill that Republicans are prepared to move on, hopefully as early as next week."
Pelosi declares stimulus talks at 'tragic impasse,' says GOP must agree to this
Global sales at Japanese automakers slipped 12.2% in Jul from last year, the 5th straight month of losses, as demand for cars remains sluggish after factories & dealerships reopened following coronavirus-related lockdowns earlier this year. The country's 7 major automakers sold a combined 2.01M vehicles last month based on sales data released by the companies. The decline in monthly sales has slowed significantly since a 50% drop posted in Apr, & compared with a 21.3% fall in Jun. Sales in China increased on the year for most automakers, while Toyota (TM), the country's biggest automaker, also saw growth in Europe. Total global production at Japan's 7 major automakers fell 14.4% year-on-year to 1.99M units last month, improving from a 26.1% tumble in Jun. Global demand for cars has been weak since Mar due to virus-related stay-at-home orders in many countries, which led to a drop in visits to car dealerships & potential customers also reconsidered big purchases. Many countries have been easing the lockdown restrictions, but industry experts anticipate that it could take up to 5 years for demand to recover to 2019 levels.
Japan automakers post 12% slide in July global vehicle sales
Coca-Cola (KO), a Dow stock & Dividend Aristocratic, announced a major global reorganization of its workforce that will lead to thousands of job cuts & buyouts for employees in the US & Canada. The beverage giant said that in order to "minimize the impact" from
the structural changes, it will offer voluntary separation packages to
4K employees working in the continental US, Canada & Puerto Rico
that were hired on or before Sep, 2017. The company is forecasting its overall global severance program will cost $350-550M. KO has more than 86K employees worldwide of which more than 10K were in the US. "We have been on a multi-year journey to transform our organization," CEO James Quincey said. "The
changes in our operating model will shift our marketing and drive more
growth and put execution closer to customers and consumers while
prioritizing a portfolio of strong brand and a disciplined innovation
framework. As we implement these changes, we're continuing to evolve our
organization, which will include significant changes in the structure
of our workforce." The
company also announced that 9 new divisions will replace 17 business
units & will focus on scaling new products while getting rid of the
duplication of resources. KO had one of its worst qtrs in its 134-year history this spring as the COVID-19 crisis closed down theaters, restaurants & sporting events. The company gets about ½ of its sales from public events. Q2 revenue fell 28% to $7.2N & net income dropped 32% to $1.8B from a year earlier. KO
has more than 500 brands of beverages in more than 200 countries &
territories. Its portfolio includes Dasani, Minute Maid, SmartWater & Sprite. The stock advanced 1.59.
If you would like to learn more about KO, click on this link:
club.ino.com/trend/analysis/stock/KO?a_aid=CD3289&a_bid=6ae5b6f7
Coca-Cola plans layoffs, offers 4,000 buyouts amid global reorganization
Gold futures rose, leaving prices higher to end the week, after the Federal Reserve announced a policy shift yesterday that would allow employment & inflation to run hotter than in the past, implying that the central bank may keep benchmark interest rates lower for longer. The Fed is shifting to a policy of average inflation targeting which would effectively see policy makers end the practice of preemptively hiking interest rates to stave off inflation. Instead, the Fed would allow inflation to run above its 2% target to make up for periods when inflation runs below it — signaling that a long period of ultralow interest rates lies ahead. After volatile trading yesterday, which briefly sent bullion surging higher immediately after the announcement by the Fed, gold ended sharply lower, with investors attributing that decline to investors profit-taking & attempting to interpret the implications of the historic move by the Fed. Against that backdrop, Dec gold rose $42 (2.2%) to settle at $1974 an ounce. For the week, gold saw a weekly rise of 1.4%. Gold prices have been mostly marching higher as investors purchase precious metals as a perceived safe play against the uncertainty created by the COVID-19 pandemic. Responses to the deadly disease by govs & central banks have also bolstered appetite for gold, which is seen as a hedge against money printing & an asset the prospers in a low-rate environment. In US economic reports, data on personal-consumption expenditure rose 0.3% in Jul, while core inflation for the month rose 0.3%, & a reading of consumer spending rose 1.9% last month, while personal incomes climbed 0.4% in Jul. The final consumer sentiment survey in Aug, meanwhile, rose to 74.1 from a preliminary reading of 72.8, according to the Univ of Mich.
Gold turns higher for the week as investors parse Fed’s historic policy shift
Oil futures ended modestly lower, but tallied a weekly gain a day after Hurricane Laura made landfall on the Gulf Coast as a Category 4 storm but refineries were spared from extensive damage. West Texas Intermediate crude for Oct fell 7¢ to settle at $42.97 a barrel. Based on the front-month contracts, prices saw a weekly climb of 1.5%, which represents their 4th weekly rise in a row. Oct Brent crude, the global benchmark, lost 4¢ at $45.05 a barrel, ahead of the contract's expiration at Mon's settlement. For the week, front-month contract prices climbed by 1.6%. Hurricane Laura was responsible for at least 6 deaths & caused extensive damage as it came ashore & moved inland yesterday. However, production from oil rigs in the Gulf of Mexico & activity at refiners in the Gulf Coast, the heart of the US oil-processing industry, was expected to rebound quickly. Baker Hughes reported a decline of 3 in this week's number of active US oil rigs. Last week, it was up by 11 rigs, following 3 weeks of declines.
Oil prices edge lower, but tally a weekly gain after Hurricane Laura spares refineries
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