Markets retreat as hopes for a stimulus bill fade

Dow fell 157 (but off session lows), decliners over advancers 2-1 & NAZ was off 12.  The MLP index was fractionally lower to the 117s & the REIT index continued weak, down 6+ to the 339s.  Junk bond funds did little & Treasuries continued in demand.  Oil rose above 40 again & gold tumbled 33 to 1895 (more on both below). 

AMJ (Alerian MLP Index tracking fund)

 

Free Apple Analysis!

Bring Your Portfolio Into The 21st Century

Four Days, Four Trades, +40% Average Returns
Learn to trade options with MarketClub!

The Senate will vote on a limited coronavirus stimulus bill this month, Majority Leader Miych McConnell said, as lawmakers stumble in their push to send aid to Americans before the election.  He said the Senate would take up aid legislation after the full chamber returns on Mon   McConnell called the plan “targeted relief for American workers, including new funding” for Paycheck Protection Program small business loans.  He added that the bill would also include money for schools, an unemployment insurance boost & liability protections for businesses.  McConnell added that the Senate would have enough time to both pass the relief proposal & confirm Supreme Court nominee Amy Coney Barrett “unless Democrats block this aid for workers.”  Dems have in recent days targeted Reps for moving forward with Barrett's nomination while Ms of Americans left jobless by the virus outbreak await federal assistance.  Dems, who blocked a roughly $500B Rep plan in the Senate last month, could dismiss the latest GOP proposal as inadequate.  McConnell announced plans for a vote as hopes for new spending to boost the health-care system & economy.  Dems & the Trump administration have failed to strike a relief deal as the US creeps closer to Election Day.  Meanwhile, the White House and Senate Reps appear more out of sync than ever on what the federal response will require.

McConnell plans coronavirus aid vote as Pelosi says White House stimulus plan falls short

Gold futures dropped back below $1900 an ounce, with prices marking their first loss in 4 sessions, as hope for a US fiscal stimulus package faded & strength in the $ dulled the appeal of the precious metal.  Dec fell by $34 (1.8%) to settle at $1894 an ounce, after posting gains in each of the past 3 trading sessions. 

Gold prices log first loss in 4 sessions

Johnson & Johnson (JNJ), a Dow stock & Dividend Aristocrat, reported a strong Q3 performance on following an announcement that it is pausing its coronavirus vaccine research study.  While the stock fell on the news that the 60K-patient clinical trial was temporarily halted, the drug maker's worldwide sales from Jul-Sep jumped 1.7% to $21.1B.  Adjusted EPS rose 3.8% to $2.20.  CFO Joe Wolk said that “all three segments performed extremely well especially considering the pandemic dynamics.”  The company's consumer health sales rose 1.3% to $3.5B, while pharmaceutical sales jumped 5% to $11.4B.  Wolk said medical device sales impacted earnings the most.  The segment was down almost 35% in Q2.  But as elective procedures returned, sales fell 3.6% to $6.2B in Q3.  “I also have to give a tremendous amount of credit to the hospital systems out there,” he said.  “They are making patients feel safe. They can run their hospital systems in a manner that treats all patients and not just shut down for the potential to treat COVID patients.”  Wolk added that “unexpected, adverse effects” in a 60K-patient study should be expected to some degree.  He noted that this new information will be analyzed by an independent board before the study can resume, but the company remains confident in its safety.  “We have not altered our investment plans in terms of expanding our manufacturing capacity,” Wolk he continued.  “We’re still on the timeline for first quarter next year for potential approval. And we’re going to let the science dictate how we proceed.”  The stock dropped 3.44.
If you would like to learn more about JNJ, click on this link:
club.ino.com/trend/analysis/stock/JNJ?a_aid=CD3289&a_bid=6ae5b6f7

Johnson & Johnson posts strong third quarter earnings after pause in coronavirus vaccine study 

Eli Lilly (LLY) late-stage trial of its leading monoclonal antibody treatment for the coronavirus has been paused by health regulators over potential safety concerns, the company confirmed.  “Safety is of the utmost importance to Lilly. We are aware that, out of an abundance of caution, the ACTIV-3 independent data safety monitoring board (DSMB) has recommended a pause in enrollment,” a spokesperson said.  “Lilly is supportive of the decision by the independent (Data Safety Monitoring Board) to cautiously ensure the safety of the patients participating in this study.  The ACTIV-3 trial is designed to test a monoclonal antibody developed by LLY in combination with remdesivir, an anti-viral with emergency use authorization for the virus.  It’s one of several ongoing trials that are part of the National Institute of Health's “Activ” program, which is designed to accelerate the development of Covid-19 vaccines & treatments.  It is also backed by Operation Warp Speed, the Trump administration's effort to manufacturer & distribute vaccines to fight Covid-19.  The stock fell 4.33.
If you would like to learn more about LLY, click on this link:
club.ino.com/trend/analysis/stock/LLY?a_aid=CD3289&a_bid=6ae5b6f7

U.S. pauses Eli Lilly’s trial of a coronavirus antibody treatment over safety concerns

Oil futures finished higher, with US prices reclaiming the $40 mark a day after settling at their lowest in a week, as data showed a jump in Chinese crude imports.  The Bureau of Safety & Environmental Enforcement estimated that 43% of Gulf oil output was shut in.  That’s an improvement from 69% yesterday.  West Texas Intermediate crude for Nov rose 77¢ (2%) to settle at $40.20 a barrel.  The global benchmark, Dec Brent crude tacked on 73¢ (1.8%) to $42.45.  In a monthly report, OPEC left its outlook for 2020 oil demand relatively unchanged, penciling in a decline of 9.5M barrels a day, year on year, to reach 90.3M barrels a day.  For 2021, however, OPEC revised demand lower by 80K barrels a day, forecasting growth of 6.5M barrels a day to reach 96.8M barrels per day, with the cut largely reflecting a lower growth outlook for both developed & emerging market regions compared to the Sep forecast.

Oil ends higher after sharp jump in Chinese imports

The buyers returned late in the day to trim earlier losses, but the stock market remains under pressure after its recent run.  The Dow chart below shows it has risen 2K in the last 3 weeks while the stimulus bill has gone nowhere & the virus keeps fighting back.  The bulls are happy to see that the popular stock averages still near record highs.

Dow Jones Industrials