Markets fall on fading hopes for a stimulus bill

Dow sank 410 (near session lows), decliners over advancers better than 5-2 & NAZ dropped 192.  The MLP index was off 1+ to the 116s & the REIT index fell 5 to the 349s.  Junk bond funds fluctuated & Treasuries continued weak.  Oil finished lower, remaining under 41, & gold was steady at 1905 (more on both below).

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US housing remains red-hot & that's good news for the nation's builders benefiting from record low-interest rates & those individuals leaving big cities for the suburbs.  Builder confidence, in the market for newly built single-family homes, rose to a reading of 85 from 83 in Sep, the previous all-time high, according to the National Association of Homebuilders (NAHB).  “The housing market continues to be a bright spot for the economy, supported by increased buyer interest in the suburbs, exurbs and small towns,” said NAHB Chief Economist Robert Dietz.  Mortgage rates for a 30-year fixed-rate remain below 3% as the Federal Reserve keeps its foot on the stimulus pedal.  Yesterday, Federal Reserve Vice Chair Richard Clarida said that additional fiscal & monetary support would be needed to aid the struggling US economy, noting it could take another year before the economy returns to pre-pandemic levels.  Fed officials have indicated they'll keep current policies in place until the economy stabilizes from the COVID-19 hit which should further benefit the housing the market.

Homebuilder confidence hits record, helped by urban exodus

Chinese officials said that GDP expanded by 4.9% in Q3 from a year earlier, putting China's economy back toward its pre-coronavirus trajectory half a year after the pandemic gutted its economy.  The 4.9% growth figure for Q3 fell short of expectations but brings China’s trajectory closer in line with forecasts made at the beginning of the year for 2020 growth of 5.5-6%—forecasts made before the pandemic swept across the globe, killing more than 1M people & crushing the global economy.  The 3rd-qtr expansion builds on the 2nd qtr's 3.2% growth, which follows a historic contraction of 6.8% in the first t3 months of the year, when authorities locked down the central Chinese city of Wuhan in a bid to curb the fast-spreading virus.  The IMF is projecting China's economy to expand by 1.9% in 2020, putting it on track to be the only major world economy to grow this pandemic-hit year.  By contrast, the American economy is expected to shrink by 4.3%, while the eurozone is forecast to contract by 8.3%, the IMF said in its latest update this month.  The Q3 growth number offers further evidence of China's relative strength & moves the country's economy into positive territory for the first 9 months of the year, expanding 0.7% from a year earlier.

China's third quarter GDP expanded by 4.9% from year earlier: report

China  passed a law restricting exports of controlled items, allowing the gov to act against countries that abuse export controls in a way that harm's China's interests, according to state media.  The Xinhua news report did not name any target countries, but the US last month angered Beijing with curbs on exports to Semiconductor Manufacturing Intl, China's biggest chipmaker, & it has taken various steps against Huawei Technologies & other companies.  China & the US have clashed over issues including trade, human rights, technology & the new coronavirus, which was first detected in China.  The new Chinese law, passed by the National People's Congress Standing Committee, the country's top legislative body, will take effect on Dec 1, Xinhua said.  Controlled items include military & nuclear products, as well as other goods, technologies & services & relevant data, according to the National People's Congress.  It said the law was "formulated for the purpose of safeguarding national security and interests."  In Aug, China's commerce ministry issued a revised list of technologies that are banned or restricted for export.

China passes export-control law following US moves

Gold prices ended higher to start the week, with talk of a last-ditch effort to strike a deal by US lawmakers on a fresh round of fiscal relief before the presidential elections helping to drive buying appetite.  A weaker $ also provided support for bullion because weakness for the buck can draw interest in gold from buyers using currencies that are relatively weaker than the buck.  Dec gold rose $5 (0.3%) to settle at $1911 an ounce, after bullion posted a 1% weekly decline on Fri.  Investors have been attuned to the back-&-forth negotiations between House Speaker Nancy Pelosi & Treasury Secretary Steve Mnuchin on a new round of funds for American businesses & workers hard hit by the economic weakness caused by the COVID-19 pandemic  Pelosi spoke on Sat with Mnuchin but appeared to suggest that a deal before the presidential election was unlikely to be achieved if a fiscal deal isn't struck soon.  Additional relief, should it come, is viewed as bullish for gold which is being used by some as a hedge against govs dialing up spending & lowering interest rates to combat the pandemic that has seen more than 40M people infected across the globe.

Gold prices end higher as investors focus on talks on coronavirus relief

Oil futures finished with a modest loss, failing to find much support as an OPEC+ committee reiterated its commitment to output cuts & said it “encouraged” some producers to fully compensate for production above their quotas.  Prices had briefly moved higher shortly after Saudi Arabia's energy minister said OPEC+ will do “what is necessary” to rebalance the oil market.  Oil traders also monitored accelerating COVID-19 infections in the US & Europe & the potential loss of energy demand, adding pressure to prices.  Saudi Energy Minister Prince Abdulaziz bin Salman said that the OPEC & its allies (OPEC+) has shown that it has the “flexibility” to adapt to changes in the oil market & will “do what is necessary in the interest of all.”  OPEC+ must comply with 3 key principles: “predict, prevent and be proactive” in the oil market, said Prince Abdulaziz, in his opening statement for the Joint Ministerial Monitoring Committee.  The group must base decisions on the best available data & information, & always be forward looking in its decision making, he added.  West Texas Intermediate (WTI) crude for Nov, the front-month contract, fell 5¢ to settle at $40.83 a barrel.  The Nov contract expires at the end of tomorrow's session.  The most-active Dec WTI contract lost 6¢ to $41.06 a barrel.  Dec Brent, the global benchmark, fell 31¢ (0.7%) to $42.62 a barrel.

Oil ends lower even as OPEC+ committee reiterates output-cut pledge

Those guys in DC are demonstrating "all talk but no action."  Talk is cheap, especially in DC.  They could not figure out how to put together a bill because is all politics.  There is likely not enough time to come up with a bill before the election, so the buyers stayed home.  Any relief bill will have to wait until after the election & that is highly uncertain.  More earnings are coming which could bring back buyers.

Dow Jones Industrials