Dow went up 50, advancers over decliners 3-2 & NAZ jumped 99. The MLP index was fractionally lower to the 124s & the REIT index was flattish at 358. Junk bond funds crawled higher & Treasuries slid lower in price. Oil rose pennies in the 43s & gold added 4 to 1983.
AMJ (Alerian MLP Index tracking fund)
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Interest rates near zero likely will stay in place not for months but years as the Federal Reserve seeks to reengineer an economy characterized by low inflation & an uneven labor market. Traders are prepping for a return to the post-recession days, when rock-bottom short-term rates prevailed for 7 years before the Fed even tried moving them higher. Fed officials have outlined a revised policy in which it now will target “average inflation,” meaning a higher tolerance for inflation above 2% before hiking interest rates from current levels. In the past, the Fed would look to rate cuts when unemployment began to fall as a sign that inflation would not be far behind. In the present circumstances, then, the remaining question will be how deep the Fed's commitment to inflation will run, what will be considered full unemployment, & how many years that will mean for zero interest rates. Fed Chairman Jerome Powell laid out the strategy Thurs, when he spoke of an enhanced approach to inflation & a philosophy on employment that isn't merely looking at a certain level anymore but rather is targeting the distribution of gains along the income spectrum.
The Fed could be locked into zero rates for five years, or even longer
White House chief of staff Mark Meadows said that aid to state & local govs poses the
biggest obstacle to a pandemic relief deal, even as “real progress” was
being made between Dems & Reps. Dems have
pushed for nearly $1T in aid to municipalities hit by revenue
shortfalls as a result of the coronavirus crisis, but Meadows said that figure was not “based on reality.” Meadows
said the GOP would support only $150B in new funding to state & local govs. That figure, on top of a previously allocated
$150B, would rectify what he said was an approximately $275B loss in revenues sustained during the recession. “As we
look at the number of things that we actually agree to, and the amounts
of money allocated to those areas, probably the biggest stumbling block
that remains is the amount of money that would go to state and local
help,” Meadows said. Talks between the White House & Dem
congressional leaders broke down last month after the 2 sides failed
to agree on the terms of a 5th package designed to contain the
economic fallout caused by the Covid-19 pandemic.
Meadows says state and local aid is the biggest road block to stimulus deal, despite ‘real progress’
The US reported its lowest level of coronavirus infections in more than 2 months yesterday, with fewer than 34K new cases according to data compiled by Johns Hopkins University. The US now has more than 6.03M reported cases of Covid-19, the
highest count of any country in the world, as well as the most deaths
at more than 183K. Medical experts have attributed the drop in the
US infection rate on the wave of state & local reactions to the
summer surge of cases across the Sunbelt region, such as mask orders &
the rollback of reopenings for bars & gyms.
U.S. Reports Lowest Level of Covid-19 Infections in Months
Not much going on in this semi-holiday period of trading stocks. Next week there will be a lot more excitement. Tech stocks again are getting the bulk of attention by investors & traders hope to push the tech rich NAZ over 11K soon. Currently that needs to go up only 105, chump change in today's world (although Sep traditionally has been the toughest month for stocks).
Dow Jones Industrials
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