Dow fell 60, decliners over advancers about 2-1 & NAZ went up 16. The MLP index dropped another 2+ to the 103s & the REIT index aaded 3+ to the 336s after recent selling. Junk bond funds were slightly lower & Treasuries inched higher in price. Oil was off pennies in the 39s & gold fell 4 to 1863.
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 40.04 | +0.11 | +0.3% |
| GC=F | Gold | 1,863.80 | | -4.60 | -0.3% |
The number of people seeking unemployment aid rose slightly last week to 870K, a historically high figure that shows that the viral pandemic is still squeezing restaurants, airlines, hotels & many other businesses 6 months after it first erupted. The figure coincides with evidence that some newly laid-off Americans are facing delays in receiving unemployment benefits as state agencies intensify efforts to combat fraudulent applications & clear their pipelines of a backlog of jobless claims. California has said it will stop processing new applications for 2 weeks as it seeks to reduce backlogs & prevent fraudulent claims. Pennsylvania has found that up to 10K inmates are improperly receiving aid. The Labor Dept said that the number of people who are continuing to receive unemployment benefits declined to 12.6M. The steady decline in that figure over the past several months reflects that some of the unemployed are being re-hired. Yet it also indicates that others have exhausted their regular jobless aid, which last 6 months in most states. In addition to those receiving aid on state programs, about 105K others were added to an extended jobless-benefits program that provides 13 additional weeks of aid. This program, established in the economic relief package that Congress passed earlier this year, is now paying benefits to 1.6M people. Applications for jobless aid soared in the spring after the viral outbreak suddenly shut down businesses across the country, slashed tens of Ms of jobs & triggered a deep recession. Since then, as states have slowly reopened their economies, about ½ the jobs that were initially lost have been recovered. Yet job growth has been slowing. In most sectors of the economy, employers appear reluctant to hire new workers in the face of deep uncertainty about the course of the virus.
How many Americans filed for unemployment relief last week
Federal Reserve Chair Jerome Powell said another iteration of the Paycheck Protection Program (PPP) is likely the best way to continue supporting small businesses suffering as a result of the coronavirus pandemic. When asked whether the Main Street Lending Program could be modified to help smaller businesses, Powell said the Paycheck Protection Program would be a better way of reaching these companies. The Fed would encounter difficulties trying to underwrite the credit for a large number of very small businesses, according to the Fed chair. Powell told lawmakers that it is not practical for the Fed to create a facility for small businesses & that PPP could continue to do “a lot of good,” since it may take longer than officials initially thought for some small- & medium-sized business to come back online. The minimum loan threshold for the facility is $250K. Treasury Secretary Steve Mnuchin said he would be “fine” lowering that threshold to $100K during his testimony, but Powell noted there is very limited demand in the facility below $1M. The Main Street Lending Program, announced in Apr, acts as a complement to the Small Business Administration's Paycheck Protection Program in some ways, by helping to provide loans to companies that might be too large to take advantage of PPP funding, but too small to access credit through capital markets. The central bank is not issuing loans, but encourages lending among local banks to businesses by buying back the majority of the loan from the bank – about 95% – thereby assuming the risk.
PPP round 2 could do a lot to support small business, Fed chair Powell says
Sales of new US single-family homes increased to their highest level in nearly 14 years in Aug, suggesting the housing market continued to gain momentum even as the economy's recovery from the COVID-19 recession appears to be slowing. The Commerce Dept said new home sales rose 4.8% to a seasonally adjusted annual rate of 1.01M units last month, the highest level since 2006. New home sales are counted at the signing of a contract, making them a leading housing market indicator. Jul's sales pace was revised upward to 965K units from the previously reported 901K units. The forecast called for new home sales, which account for more than 10% of housing market sales, slipping 1% to a rate of 895K-units.
U.S. new home sales rise to near 14-year high
Markets continue to slosh around after a somewhat disappointing jobless claims report. The housing market is strong & autos is so-so all considered, the the service sector which includes restaurants, movies, retail, etc. accounts for about 2/3 of GDP & that is stumbling along. As a result, they are not hiring aggressively. Meanwhile, the virus is fighting back hard against against efforts to get it under control. Jobless claims data helps analysts understand how the economic recovery is going since it is reported weekly.
Dow Jones Industrials
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