Dow dropped a big 632 (near session lows), decliners over advancers better than 3-1 & NAZ sank 465 to session lows. The MLP index was off 2+ to the 118s & the REIT index fell 3+ to the 356s. Junk bond funds drifted lower & Treasuries were bid high. Oil plunged 2+ to 37 (not seen since Jun) on low demand fears & gold gained 5 to 1939 (more on both below).
| CL=F | Crude Oil | 36.61 | -3.16 | -8.0% |
| GC=F | Gold | 1,946.30 | +12.00 | +0.6% |
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
White House economic adviser Larry Kudlow said he expects the Senate GOP's latest coronavirus relief proposal to target small businesses, health care & education. Senate Majority Leader Mitch McConnell announced that he and other GOP leaders will be introducing a more "targeted" coronavirus relief package after Senate Dems rejected their $1.3T HEALS Act proposal in Jul. "Targeted areas ... could be very helpful. Maybe even make the recovery even stronger. For example, the Senate majority leader Mitch McConnell is coming out with a package today. It's going to be targeting healthcare, education and the economy," Kudlow. Kudlow added that he thinks the Small Business Administration's Payment Protection Program aimed at helping small businesses retain employees "will be extended" in McConnell's bill. The White House economic adviser said earlier that he believes it's "very plausible" the US could add 10M jobs per month over the next 10 months, adding that the country has "picked up almost 11 million jobs" per month over the last four months. In terms of another round of "targeted checks" for Americans, "that's fine, too," Kudlow said. "We have always wanted to help the kids," the economic adviser said of federal relief for schools. "We've always wanted to help reopen the schools to help the kids and get more jobs." Kudlow did not expand on how McConnell's relief package would specifically target health care & education, but a statement from the Kentucky Rep confirms that the proposal will focus on "on some of the very most urgent healthcare, education, and economic issues." "It does not contain every idea our party likes. I am confident Democrats will feel the same. Yet Republicans believe the many serious differences between our two parties should not stand in the way of agreeing where we can agree and making law that helps our nation," the statement reads.
COVID relief bill to extend PPP loans, target health care, education: Kudlow
Pres Trump is considering decoupling the US' & China's economies. "When you mention the word decouple, it’s an interesting word,” Trump said. “We lose billions of dollars and if we didn’t do business with them we wouldn’t lose billions of dollars. It’s called decoupling, so you’ll start thinking about it.” The pres also threatened to block companies who choose to outsource jobs to China from receiving federal contracts & vowed to bring manufacturing jobs & supply chains back to the US if re-elected in Nov. We will make America into the manufacturing superpower of the world and will end our reliance on China once and for all,” he added. “Whether it’s decoupling, or putting in massive tariffs like I’ve been doing already, we will end our reliance on China, because we can’t rely on China.” Trump previously floated decoupling from China & he also claimed that Beijing could intefere in the Nov election on behalf of former VP Joe Biden. "China owns Joe Biden. His son got a billion and a half dollars. His son with no experience, no brainpower, no anything, never did it, not only Ukraine, he got hundreds of thousands of dollars of money from Ukraine and the upfront payment and then with China he walks up with a billion and half dollars in fees. It's ridiculous," Trump said. "They own Joe Biden. They own him and they want me to it lose so badly." The decoupling comments come as China has been in the Trump administration's crosshairs on multiple fronts, from trade to intellectual property theft to the country's handling of the coronavirus pandemic. In addition, the pres touted his administration's efforts to rebuild the US economy in the wake of the coronavirus pandemic, saying the country is in the midst of a “V-shaped recovery” after adding 1.4M new jobs in Aug.
Trump eyes 'decoupling' from China
White House coronavirus advisor Dr Anthony Fauci said a coronavirus vaccine probably won't be ready by the presidential election even as the Centers for Disease & Prevention asks states to ready distribution facilities by Nov 1. At a health conference, Fauci said it's more likely a vaccine will be ready by “the end of the year” as drug companies Moderna (MRNA) & Pfizer (PFE) race to complete patient enrollment for their late-stage vaccine trials by the end of Sep. “It’s unlikely we’ll have a definitive answer” by the Nov 3 election, the director of the National Institute of Allergy & Infectious Diseases said. The comments are also at odds with Pres Trump, who suggested that a vaccine could be ready for distribution by Election Day. “We could have a vaccine soon, maybe even before a very special day. You know what day I’m talking about,” Trump said. The CDC has asked governors & health departments to prepare to distribute a vaccine as soon as Nov 1, 2 days before the election. Dr Stephen Hahn, commissioner of the Food & Drug Administration, has also said the agency is prepared to bypass the full federal approval process in order to make a vaccine available as soon as possible. Earlier today, 9 drugmakers released a public letter pledging to “uphold the integrity of the scientific process” as they work toward potential global regulatory filings & approvals of the first Covid-19 vaccines.
Fauci says a coronavirus vaccine is ‘unlikely’ by U.S. election
Gold futures reversed course to finish at their highest in nearly a wee, with the haven metal finding support as global stocks sank & as the $ eased back a bit from its earlier highs. Pres Trump said yesterday that he intends to “end reliance on China once and for all, whether it’s decoupling or putting in massive tariffs like I’ve been doing already.” Dec rose $8 (0.5%) to settle at $1943 an ounce, after trading as low as $1911. Prices for the most-active contract, which saw a 2.1% decline last week, marked its highest finish in a week. Prices for the metal had traded lower in early dealings, as concerns about lofty valuations for highflying, technology-related stocks, which had led the rally in equities amid the COVID-19 pandemic, dragged most benchmark global stock market indices lower. That may have prompted some investors to sell gold to cover losses in other assets.
Gold prices end higher as traders take cues from a dollar rally and a global, tech-led stock selloff
Oil futures fell to their lowest settlement since Jun,
unable to shake off worries about crude demand due to a continued rise
in coronavirus cases globally, the end of US summer holiday driving
season & a report that Saudi Arabia plans to cut its oil prices in
Oct. The US benchmark, West Texas Intermediate crude for Oct delivery fell $3.01 (7.6%) to $36.76 a barrel. Nov Brent crude, the global benchmark, lost $2.23 (5.3%) at $39.78 a barrel, after a 1.5% decline yesterday, when US markets
were closed. Brent crude was pressured yesterday after Saudi Arabia lowered its
official selling price for Asian buyers which was taken
as a sign of weak demand. Prices were expected to be cut for Asia-bound crude by $1-2 a barrel. The decline for oil prices also comes as U.S. driving season, the period between Memorial Day & Labor Day, comes to an end, pointing to seasonal weakness in demand for gasoline.
Oil prices settle at lowest since June, with Brent prices below $40
Dow Jones Industrials
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