Dow was off 155 (losses pare with buying into the close), decliners over advancers 2-1 & NAZ led the decline with a fall of 274. The MLP index was off 1+ to 111 & the REIT index pulled back 4+ to the 332s. Junk bond funds continued lower & Treasuries were sold. Oil closed below 36 & gold rebounded 11 to 1979 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Top policymakers in Washington sent mixed signals today about how quickly Congress could pass new coronavirus stimulus after the election. Progress toward a relief deal ground to a halt in recent weeks as Reps & Dems differed over how much money they need to inject into efforts to slow record new infections in the US & boost a sluggish economy. Despite the impasse, negotiators have acknowledged they will need to send aid in some form eventually. Senate Majority Leader Mitch McConnell & House Speaker Nancy Pelosi, who have not agreed on much related to the virus response in recent months, differed again today when asked about when stimulus could pass. The Rep said that he expects to handle relief “right at the beginning of the year,” with legislation “targeted particularly at small businesses that are struggling & hospitals that are now dealing with a 2nd wave of the coronavirus.” Pelosi said she expects Congress “certainly will have something [done] at the start of the new presidency.” But she said that “we don’t want to have to wait that long, because people have needs.” The winner of the presidential election will get inaugurated on Jan 20 & the speaker said she believes Joe Biden will take the oath of office that day. At the same time, Pres Trump pushed for even more rapid passage of stimulus than the top Senate Rep & Dem did. Speaking to reporters today, he said “we will have a tremendous stimulus package immediately after the election.” The mixed messages follow a day of tense correspondence between Pelosi & the Trump administration as the sides struggle to break a monthslong impasse over stimulus. How they could craft a bipartisan deal capable of passing the Rep-held Senate & Dem-controlled House remains unclear.
McConnell foresees coronavirus stimulus in 2021, while Pelosi and Trump push for a deal sooner
The US reported a record 88K new coronavirus cases yesterday as the pandemic seeps into every area of the country & scientists warn of exponential growth ahead of the holidays. “We’re starting to find ourselves on a steep slope of the epidemic curve, so I think you’re going to see cases accelerate,” Dr Scott Gottlieb, the former head of the Food & Drug Administration, said. The positivity rate, or the percentage of total tests that are positive, is greater than 10% in roughly 15 states, a sign that “there’s more infection out there that we’re not turning over,” he added. Gottlieb predicted that the US could hit 100K new cases by tomorrow. The US is continuing its upward climb on what's now the pandemic's 3rd peak, with cases growing by 5% or more in 45 states as of yesterday, according to data compiled by Johns Hopkins University. Over the last week, the US reported an average of 76K new cases every day, the highest 7-day average recorded yet & up more than 25% compared with a week ago. The surge in the US follows a wave of new Covid-19 cases in countries across Europe that have prompted new, stringent lockdown measures on their businesses. Germany Wed announced a “light lockdown,” with bars, restaurants, gyms, cinemas & theaters to close. France said it would adopt a 2nd nationwide lockdown beginning today, ordering people to only leave their home for essential purposes. Covid-19 hospitalizations are also on the rise — a sign that the pandemic has taken a turn for the worse in some parts of the country, particularly in the Midwest. As of yesterday, 17 states reached record-high hospitalizations based on a 7-day average, including Iowa, Indiana, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota & Wisconsin, according to Covid Tracking Project.
U.S. reports record new Covid cases as experts warn of ‘exponential growth’
Starbucks (SBUX) reported that sales in the US & China are recovering from the coronavirus pandemic more quickly than expected, helping global same-store sales shrink just 9%. The coffee chain's sales have been boosted by customers spending
more on their Pumpkin Cream Cold Brew & Frappuccinos, although foot
traffic remains down. The company's outlook for fiscal 2021 is
projecting a faster rebound than expected by analysts. Last qtr, EPS was 33¢, down from 67¢ a year earlier. Excluding
items, the coffee chain earned 51¢, beating the 31¢ expected. Net sales
dropped 8% to $6.2B, topping expectations of $6.06B. The
company estimates that it lost $1.2B in sales because of the
coronavirus pandemic. Global same-store sales fell 9%. While
the number of transactions has fallen, customers are spending more on
their coffee orders. Execs said that customers are buying more cold
beverages & plant-based options, both of which tend to be higher
priced, & more upsizing, because customers are choosing to treat
themselves. In the US, same-store sales fell 9%. Active
membership in SBUX' US loyalty program rose 10% to 19.3M & drove 47% of transactions. Demand improved throughout the
qtr. In Sep, US same-store sales fell just 4%, bolstered by
the return of Pumpkin Spice Lattes. SBUX expects EPS of $2.70-2.90, after
adjustments, on revenue of $28-29B in fiscal 2021. Global
same-store sales are expected to grow 18-23% for the year, with
US same-store sales forecast to increase 17% to 22% . The forecast
assumes that US dining rooms will be fully reopened by the end of the
fiscal Q2, when same-store sales are also expected to
rebound. China's same-store sales growth is expected to reach 27-32%.. For fiscal Q1, the company projects adjusted EPS of 50-55¢. The
company raised its div to 45¢. The stock fell 1.34.
If you would like to learn more about SBUX, click on this link:
club.ino.com/trend/analysis/stock/SBUX?a_aid=CD3289&a_bid=6ae5b6f7
Starbucks sales fall less than expected as U.S. and China markets rebound
Gold ended higher to recoup some of the recent losses that pulled prices to their lowest level in weeks, but the yellow metal posted a 3rd-weekly loss after failing to find haven-related support despite a stock-market selloff. Gold for Dec delivery climbed $11 (0.6%) to settle at $1879 an ounce after settling yesterday at $1868, the lowest most-active contract finish since Sep 25. Gold futures, based on the most-active contract, ended 1.3% lower for the week, which marked their 3rd-straight weekly decline. Prices also lost 0.8% for the month. Gold has failed to find support despite a rise in COVID-19 cases that has seen European countries impose new restrictions on activity & raised worries about the strength of the US & global economic recovery.
Gold ends higher, but posts a third-weekly decline
China will promote “technological self-reliance” under the ruling Communist Party's latest 5-year plan but will open further to trade, officials said. The comments reflect growing official urgency about nurturing Chinese producers of processor chips & other technology at a time when a tariff war with tmhe US & US export curbs have reduced access to components needed by China's fledgling tech industries. “We will take scientific and technological self-reliance as a strategic support for national development,” Han Wenxiu, an adviser to Pres Xi Jinping, said. The ruling party leadership said that its Five-Year Plan will speed up China's development as a “technology power." It gave no details of which industries might be targeted or what support they might receive. The full plan is due to be released in Mar, followed by legal changes & plans for individual industries after that. Previous Chinese plans that called for creating competitors in electric cars, telecoms, solar power & other industries triggered complaints Beijing might support them with improper market barriers or subsidies. Han and other officials appeared to be trying to head off complaints. They promised Beijing will press ahead with market-oriented reforms including more opening to trade. “No matter how the international situation changes, we will never waver in our basic national policy of opening up,” Han said. “China will provide countries around the world with larger markets and more opportunities.”
Chinese promise market opening amid technology push
A measure of consumer confidence rose in late Oct to a new pandemic high, largely reflecting growing optimism among Dems that Joe Biden will win the presidential election. The final reading of consumer sentiment index edged up to 81.8 in Oct from an initial 81.2, the Univ of Mich said. The increase occurred despite a surge in coronavirus cases toward the end of the month, as Americans turned their attention to the presidential election. Rising optimism was mostly felt by Dems. 53% of the people surveyed thought Biden would defeat Trump while 42% expected the pres to win reelection. Optimism among Dems about their own finances also rose sharply, & for the first time in near 4 years, it nearly matched the expectations of Reps. In 2016, it should be pointed out, 2/3 of survey respondents in the final sentiment poll before the election expected Hillary Clinton to defeat Trump, who scored a surprise upset. An index that measures current conditions, meanwhile, rose to 85.9 from 84.9 earlier in the month, though it was still below Sep's level. The rise in coronavirus cases & slower pace of hiring put Americans more on edge. Consumers still think the situation will improve by early next year, particularly Dems. An index that measures expectations for the next 6 months rose to 79.2 in late Oct from 78.5 earlier in the month & 75.6 in Sep.
Consumer sentiment rises in late October as Democrats anticipate Biden victory
Oil futures declined, building on their loss for the month, with US prices down roughly 11% from the end of Sep. Dec West Texas Intermediate crude fell 38¢ (1.1%) to settle at $35.79 a barrel, the lowest front-month contract finish since Jun 1,
Oil futures finish lower for the session, with U.S. prices down roughly 11% for the month
Dow Jones Industrials
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