Dow retreated 691 (off session lows), decliners over advancers 3-1 & NAZ plunged 550. The MLP index went down 1 to the 123s & the REIT index fell 5 to 361. Junk bond funds pulled back & Treasuries were being purchased. Oil dropped 1, going below 41, & gold was off a mild 5 to 1939.
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 40.95 | -0.56 | -1.4% |
| GC=F | Gold | 1,943.20 | -1.50 | -0.1% |
The number of laid-off Americans applying for unemployment benefits
fell again last week, reflecting a steady — if slow — recovery from the
coronavirus pandemic & a new gov technique in measuring claims. The
latest jobless claims figures from the Labor Dept show that 881K workers sought aid last
week, pushing the total number since the shutdown began to more
than 59M. The forecast called for 950K new claims. The drop in claims is likely the result of an improving jobs market,
as well as the department changing the way it adjusts state jobless
claim figures for seasonal patterns, such as accounting for temporary
holiday workers who are laid off in Jan, or school employees who are
let go in Jun. The tweak is intended to improve the figure's accuracy. (One estimate showed that if the Labor Dept had used this
calculation method since the beginning of the pandemic, claims would be
roughly 4M lower since mid-Mar). Although
the figure marks a drop from last week's number, those numbers were
unrevised, making it difficult to compare: For the latest week, the unadjusted figures show that 821K new claims were filed,
while the seasonally adjusted figure was a little more than 1M. Continuing claims, the number of people receiving benefits after an
initial week of aid, fell sharply by 1.24M to a little more than
13.2M. Roughly
1M unemployed Americans have been seeking aid each week for the
past 6 months, when the COVID-19 crisis triggered an unprecedented
shutdown of the nation's economy, pointing to a sluggish turnaround. It's down from the peak of more than 6M claims in late Mar, but
remains well above the 200K reported in Feb. Before the
pandemic, the record high was 695K, set in 1982.
Another 881,000 Americans filed for unemployment aid last week
Pfizer (PFE), no longer a Dow stock, could have results from its late-stage coronavirus vaccine trial as early as Oct, CEO Albert Bourla said. The
pharmaceutical company has already enrolled 23K volunteers in the
phase 3 trial that began in late Jul, Bourla said. It hopes to enroll at least 30K
participants, he said. "We expect by the end of October, we should have enough ... to say whether the product works or not," he added. US health officials have previously said results from late-stage vaccine trials could come in Nov or sooner. PFE's
potential vaccine is one of 3 backed by the US that's currently
in late-stage testing. The US-based pharmaceutical giant has been
working alongside German drugmaker BioNTech. The experimental
vaccine contains genetic material called messenger RNA, or mRNA. In
Jul, the company released promising data from its early-stage trial. The
phase 3 trial is expected to include up to 30K participants
between the ages of 18-85 across 120 sites globally, including 39
US states. If it is successful, they expect to
submit it for final regulatory review as early as Oct. They plan to
supply up to 100M doses by the end of 2020 & approximately 1.3B doses by the end of 2021. The stock declined 66¢.
If you would like to learn more about PFE, click on this link:
club.ino.com/trend/analysis/stock/PFE?a_aid=CD3289&a_bid=6ae5b6f7
Pfizer CEO confirms coronavirus vaccine trial may have results in October
The part of the economy that employs the vast majority of Americans
expanded again in Aug, but companies still haven’t brought most of
their workers back amid persistent anxiety over the coronavirus. A closely followed index of non-manufacturing companies — retailers, banks, airlines, health-care providers & the like — slipped to 56.9% last month from 58.1% in Jul, the Institute for Supply Management (ISM) said. That was in line with the forecast. Any number above 50% means more companies are expanding. The last 2 ISM readings of the “service” economy were
actually quite high by historical standards, but not because the US. is
doing so much better. The ISM survey of senior execs basically
asks if business is better or worse compared to the prior month. It
doesn't reveal how much better. By most measures, the economy is still considerably weaker now
than it was before the pandemic. Ms of Americans remain out of
work, Congress is deadlocked over another financial-aid package & many
industries such as travel, tourism & entertainment are just a shell
of their former selves. New orders & production both grew more slowly in Aug, but they still showed a marked improvement from several months ago. The index of new orders dropped to 56.8% from 67.7% & the gauge for production slipped to 62.4% from 67.2%. Employment levels, meanwhile, continued to stabilize after a
huge cascade of layoffs & furloughs earlier in the year. The ISM's
employment gauge rose to 47.9% from 42.1%, marking the highest level
since the pandemic began in Mar. Still, there are plenty of warning signs that could signal more trouble ahead. A slew of companies have announced new furloughs & layoffs with their businesses still in a deep slump. They warn many of the job losses could become permanent without more
gov help or a faster rebound in the economy, an outcome that
seems unlikely given the persistence of the coronavirus. A similar employment measure in the ISM's manufacturing survey
released earlier this week also indicated companies aren't in a rush to
add more workers. Roughly 80% of all Americans work in a service job, meaning they
provide a service to other people instead of making a product. The
service side of the economy has struggled more than manufacturing to
recoup all the ground lost during the pandemic & it’s unlikely the
pain will go away anytime soon. Tens of Ms of Americans are still working from home &
largely shunning brick-&-mortar retail stores, indoor dining, public
transportation, airplane travel, hotel stays & even elective medical
procedures. Until most Americans feel safe again, these industries are
going to tread water & so will the US economy. Whatever progress
that takes place is likely to be slow.
Sep selling is the main emotion driving trading today. The chart below shows the Dow has had an excellent run in the last couple of months, so selling is in order. On Mon the Dow replaced 3 stocks. PFE was replaced by Amgen (AMGN) & an adjustment was made for Apple.s (AAPL) stock split on Aug 28.
Dow Jones Industrials
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