Dow shot up 267, advancers over decliners about 5-4 & NAZ rose 40. The MLP index was fractionally lower to the 119s & the REIT index declined 1+ to the 355s. Junk bond funds fluctuated & Treasuries were sold. Oil slid under 41 & gold fell 3 to 1905.
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Retail sales rose in Sep for the fif month in a row, as Americans spent more on clothing, cars & sporting goods. The Commerce Dept said that retail sales grew 1.9% last month, up from Aug's increase of 0.6%. Retail sales have been recovering since plunging in the spring as stores & malls were ordered closed to help prevent the spread of the coronavirus. Much of last month's growth came from clothing stores, where sales rose 11%. At auto dealerships & repair shops, sales were up 3.6%. And those looking to go camping or buy exercise equipment for their homes sent sales at sporting goods stores up 5.7%. Consumer spending makes up 2/3 of all economic activity & is watched closely to gauge the country's economic health. The retail sales report covers only about a 1/3 of overall consumer spending. Services such as haircuts & hotel stays are not included in the report. All of those types of businesses have been badly hurt by the pandemic.
Store sales grow for 5th month in a row
Industrial production fell for the first time in 5 months in Sep, surprising many who had expected more steady growth from the factory sector. Industrial output fell 0.6%, the first decline after 4 straight months of gains, the Federal Reserve reported. The decline was well below expectations of a 0.4% gain. Output remains 7.1% below its pre-pandemic level. The declines were widespread. Manufacturing alone fell 0.3% after a 1.3% rise in Aug, & output of motor vehicles & parts fell 4%. Utilities output fell a sharp 5.6% after a 1% decline in the prior month. Mining production rose 1.7% after a 2.4% fall in Aug. Capacity utilization fell to 71.5% in Jul, the highest/lowest rate since Jun. The capacity utilization rate reflects the limits to operating the nation’s factories, mines & utilities. Activity in the factory sector has been picking up in recent months, reversing the plunge that occurred at the start of the pandemic. On its face, the decline in Sep shows it may be difficult for the sector to continue to expand until the virus pandemic subsides.
U.S. industrial output declines unexpectedly in September
House Speaker Nancy Pelosi & Treasury Secretary Steve Mnuchin have reached an agreement on Dems' language for a national strategic testing plan for the coronavirus with "minor" edits. A Treasury Dept said that the language of the plan will be shared toiday. In addition, the source said that the pair continued to negotiate on a new stimulus package & that staff for Mnuchin & Pelosi will exchange language on several areas for review. Pelosi's Deputy Chief of Staff, Drew Hamill, confirmed the news, saying she "looks forward to reviewing" the updated language for the testing plan & also noted that Mnuchin indicated that Pres Trump would weigh in with Senate Majority Leader McConnell should an agreement on a stimulus package be reached. "Staff will be exchanging language on several areas which the Speaker and the committees of jurisdiction will review," he added. Pelosi had previously rejected a $1.8T proposal by the White House, arguing that it did not go as far as the $2.2T relief bill passed in the House last month. McConnell said Tues the Senate would vote on a "targeted" coronavirus relief bill next week, including another round of funding for a key small-business rescue program, money for schools, liability protections for businesses & boosted unemployment benefits. Yesterday, however, Pres Trump reiterated that he is willing to raise his offer for a relief package above the White House's current $1.8T proposal. "I would," he said. "Absolutely, I would. I would say more. I would go higher. Go big or go home, I said it yesterday."
Pelosi, Mnuchin reach agreement for national COVID testing plan
There is definitely a lot of confusion about the stimulus talks. More will be reported later. Meanwhile the retail data was encouraging although service parts of the economy are & will be struggling for some time. The Dow is taking the news well & is less than 1K away from setting a new record.
Dow Jones Industrials
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