Markets pare early losses in a wild day of trading

Dow finished down 159 (after falling 900 from the early peak & then recovering), decliners over advancers 4-3 & NAZ retreated 144 (again well off early lows).  The MLP index was steady in the 121s & the REIT index fell 1+ to the 359s.  Junk bond funds fluctuated & Treasuries saw a lot of selling today.  Oil was off 1+, dropping below 40, & gold edge up 4 to 1942.

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The White House has asked US gov agencies for extensive details of any funding that seeks to counter China's global influence and business practices, or supports Beijing, amid growing tensions between the two countries.  According to an Aug 27 White House Office of Management & Budget (OMB), the administration directed US agencies to submit “cross-cutting data on federal funding that aids or supports China, or that directly or indirectly counters China’s unfair competition and malign activities and influence globally.”  China denies it engages in unfair competitive practices.  The document, titled “Strategic Competition with China Crosscut,” does not say how the information will be used other than that it will “inform policymakers” of the myriad ways US gov spending involves China.  The US & China have grown antagonistic toward each other with disagreements that stretch from a 2-year-old trade war, to the Trump administration blaming Beijing for a lack of transparency about the spread of COVID-19.  The sweeping budget data request will be used to help policymakers & notes all funding should “reflect strategic priorities” when responding to China.  Some US programs & spending under review date back a decade or more.  The document directs federal agencies to respond by Sep 21.  A spokesman for OMB confirmed the effort, saying that “to ensure that the United States remains strong and in a position of strength against rival nations like China, OMB has asked federal agencies for all funding meant to counter China, or which could aid China.”  The memo includes instructions on how to submit both classified & unclassified US spending details & seeks details of all US gov funding directed for spending inside China.  The White House document asks for data for all US gov funding used to “counter malign Chinese influence or behavior incongruent with American interests.”  It cites as examples “funding for programming to counter the One Belt One Road (OBOR) or Belt and Road Initiative (BRI)" as well as "funding for military operations, equipment and infrastructure, the primary purpose of which is to deter aggressive Chinese behavior.”  It also seeks details of “secondary” US efforts on China like “marginal contributions which were necessary to maintain a U.S. lead over China in terms of voting power within key international organizations” & funding for other US efforts.

White House asks US agencies to detail China-related spending

Pres Trump indicated a coronavirus vaccine could be available next month.  He noted that 3 vaccines are in the final stages of clinical trials.  “Under Operation Warp Speed we remain on track to produce a safe and effective vaccine in that record time that we talked about,” Trump said.  “It will be delivered before, in my opinion, before the end of the year – but it really might even be delivered before the end of October.”  The pres denied the timing had anything to do with the election, but that it would be nice because “we want to save people.”  Trump specifically mentioned Pfizer (PFE) which he said is expecting results from ongoing trials within the coming weeks.  PFE CEO said this week that it should know whether its vaccine works in Oct, at which time it would immediately seek approval.  Other companies that are conducting large clinical trials include Moderna (MNRA) & AstraZeneca (AZN).  Top US infectious diseases expert Dr Anthony Fauci, however, has cautioned against rushing the widespread distribution of a potential vaccine that has not proven safe & effective in large trials.

Trump claims coronavirus vaccine could be delivered next month

Gold futures ended lower for a 3rd straight session, logging a weekly loss of around 2%, as better-than-expected monthly US employment data helped to strengthen the $.  The US regained 1.4M jobs in Aug & the unemployment rate posted a surprisingly large decline to 8.4% from 10.2%, marking a 4th straight decline.  Dec gold fell $3 to settle at $1934 an ounce, the lowest finish for a most-active contract in a week.  For the week, gold saw a 2.1% weekly fall.  The moves for precious metals come as investors have unwound bullish bets in equities & repositioned their overall portfolios amid expectations for further turbulence in financial markets.  Stocks erased their gains for the week, which may have sent some traders scrambling to cover losses by selling other assets, including gold

Gold down a third straight session to post a 2% weekly loss

Oil futures declined, with the US benchmark ending below $40 a barrel for the first time since early Jul, contributing to a loss for the week as concerns over prospects for demand, losses in the stock market, & strength in the $ pushed prices to their lowest since Jul.  West Texas Intermediate (WTI) crude for Oct fell $1.60 (3.9%) to settle at $39.77 a barrel.  Nov Brent, the global benchmark, lost $1.41 (3.2%) at $42.66 a barrel.  Both crude benchmarks settled at their lowest since Jul 9.  WTI crude logged a nearly 7.5% weekly fall, on the heels of 4 consecutive weeks of gains, while Brent marked a 6.9% weekly decline.  Baker Hughes, meanwhile, showed that the number of active US rigs drilling for oil rose by 1 to 181 this week, following a decline of 3 rigs last week.

U.S. oil benchmark ends below $40 a barrel, down over 7% for the week

Traditionally, this should have been a quiet week with many traders on holiday. The week started without major excitement, but the last 2 days were memorable.  Yesterday the markets plunged.  Today the Dow began with gains, then fell 900 from the peak.  However buyers returned to bring it up slightly int the black.  But selling into the close spoiled the day for the bulls.  Next week traders return in full force.  This can be a turbulent time for stocks in what has been the month that has given stocks the toughest time in the past.

Dow Jones Industrials