Dow was up 46 (session high) with buying into the close, advancers over decliners 3-2 & NAZ fell 97. The MLP index was fractionally lower in the 132s & the REIT index added 4+ to the 362s. Junk bond funds were mixed & Treasuries continued weak. Oil drifted lower in the 41s (more below) & gold dropped 23 to 2045 on profit raking after its run in the last couple of weeks.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Treasury Secretary Steve Mnuchin rejected an offer from Dem leaders for a roughly $2T coronavirus relief package amid growing concerns that negotiations between the 2 parties are on the brink of collapsing. "That's a non-starter," Mnuchin said. House Speaker Nancy Pelosi proposed the $2T price tag during a closed-door meeting yesterday, an attempt to reconcile the 2 party's drastically different aid proposals. Dems offered to reduce their $3.4T aid package by $1T if Reps would agree to raise their estimated $1T proposal by the same amount. That would result in legislation that costs somewhere between $2T & $2.4T. “Yesterday I offered to them, we’ll take down a trillion if you add a trillion in,” Pelosi said. “They said absolutely not.” The clock is ticking for both parties to meet their self-imposed a Fri deadline to cut a deal on the next round of emergency aid for American families & businesses. If they miss it, White House Chief of Staff Mark Meadows has suggested there's "no sense" in continuing discussion. The top negotiators, Meadows, Mnuchin, Pelosi & Senate Minority Leader Chuck Schumer, are meeting currently. The impasse in negotiations puts at risk potentially Ts of $s in aid for families, businesses & the economy, including a fresh round of $1200 stimulus checks, extra unemployment aid for out-of-work Americans, $100B to help reopen schools & relief for cash-strapped state & local govs. Whether to extend the supplemental $600 a week in jobless aid has proven to be a key sticking point in negotiations. Demts have maintained the sweetened benefits need to be extended through the end of the year, while Reps have argued that it disincentivizes Americans from returning to jobs that pay less. GOP lawmakers have proposed a $200-a-week replacement instead until states could adopt a more complicated system that would cap aid at 70% of a worker's former salary. But after nearly 2 weeks of talks that have yielded no substantial progress, Pres Trump has threatened to act unilaterally & issue exec orders to continue expanded unemployment benefits, reinstate an eviction moratorium, cut payroll taxes and continue a suspension of student loan repayments.
Mnuchin rejects $2T coronavirus stimulus offer from Democrats
Canada will slap retaliatory tariffs on $2.7B worth of US goods, the latest development in a new trade feud sparked by Pres Trump's decision to reimpose aluminum duties on the US ally. “Canada will respond swiftly and strongly,” Canadian Deputy Prime Minister Chrystia Freeland said. “We will impose dollar-for-dollar countermeasures in a balanced and perfectly reciprocal retaliation,” she added. “We will not escalate and we will not back down.” Freeland said Prime Minister Justin Trudeau will spend the next 30 days consulting with Canadian citizens & businesses on a broad list of aluminum-containing products. Canada's new duties on US imports will total $3.6B Canadian $s ($2.7B). Trump, yesterday announced that he had signed a proclamation reimposing 10% tariffs on aluminum imports from Canada that had been lifted more than a year earlier. The pres complained that Canada was putting American workers in the aluminum industry at a disadvantage. “The aluminum business was being decimated by Canada,” he said. Trudeau vowed to enact countermeasures against the US just hours after Trump's announcement.
Canada to impose tariffs on $2.7 billion in U.S. goods after Trump reignites trade feud
In Jul, China posted a trade surplus of $62.3B, beating the $42B forecast. China's trade surplus was $46.4B in Jun. Despite the coronavirus pandemic hitting global demand, exports from China have held up as exports in medical supplies jumped in H1. Senior officials from both countries are reportedly planning to review the implementation of their “phase one” trade deal next week.
China’s exports rose 7.2% on-year in July due to demand for medical supplies
Oil futures lost ground, but remained on track for weekly gains, with pressure tied to rising tensions between the US &China after Pres Trump imposed a sweeping but unspecified ban on dealings with the Chinese owners of consumer apps TikTok & WeChat. West Texas Intermediate crude for Sep was down 71¢ (1.7%) at $41.24 a barrel, while Oct Brent crude fell 70¢ (1.6%) to $44.39 a barrel. WTI had for a 2.5% weekly rise, while Brent is up 2.1%. The pair of exec orders banning transactions with Chinese social-media companies signed by Trump yesterday take effect in 45 days. Investors have remained fairly upbeat in the face of a reduction in production curbs by major producers that took effect on Aug 1. Saudi Arabia yesterday lowered its official selling price (OSP) for crude into Asia & Europe by 30¢. Analysts said the move came as a relief to traders who had feared a steeper cut in a bid to take market share from rivals. A further decline in the number of US oil rigs did little to move prices in the PM. Oil-field services firm Baker Hughes said the number of rigs fell by four this week to 176. A lack of progress in talks between congressional Dems & the White House over additional coronavirus aid was also a potential weight on crude prices.
Oil lower as U.S.-China tensions mount, dollar rises
Traders & investors are waiting to hear about the stimulus package. As expected, it will come out after the deadline (assuming those guys in DC come out with something). Trade tensions with China hurt tech stocks in the NAZ today, although they have had an excellent year already. Speaking of excellent years, gold is still flying high even after today's retreat. The Dow was flat this week while the NAZ was up 2%, setting a new record over 11K. As mentioned previously, Aug is shaping up as an exciting time for stocks.
Dow Jones Industrials
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