Markets went higher on hopes for third quarter earnings

Dow went up 250 to a 6 week high, advancers over decliners about 2-1 & NAZ advanced 296.  The MLP index was fractionally higher to the 118s & the REIT index added 2+ to the 266s.  Junk bond funds had another good day & Treasuries remained slightly lower.  Oil fell 1+ to the 39s & gold inched up 1 to 1927 (more on both below).

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Ms of Americans are hoping another $1200 stimulus check will make it to their bank accounts.  Whether that happens or not depends on Congress.  Reps, Dems & the White House still have not been able to strike a compromise on how much to spend & where to provide aid for the next coronavirus stimulus package.  That means the fate of another round of one-time payments hangs in the balance.  Congress approved the first disbursement of $1200 checks with the CARES Act that was passed in Mar.  The payments were targeted at low- to middle-income individuals & families. Individuals & married couples who file jointly were eligible for up to $1200 or $2400, respectively, plus $500 per child under age 17.  The IRS & Treasury Dept sent more than 160M of those payments thru direct deposit or mail in the following months.  As talks on Capitol Hill turned to another stimulus relief package, a 2nd round of $1200 checks has at times seemed like a sure thing &, at other times, a long shot. 

Lawmakers have debated second $1,200 stimulus checks for 5 months. Why they’re still uncertain

Crude-oil futures finished at their lowest price in a week, with production in Libya, Norway & the Gulf of Mexico set to recover.  Libya lifted force majeure at its largest oil field, producers began restoring output in the Gulf of Mexico following Hurricane Delta, & crude output in Norway looked to recover following the end of an oil-worker strike.  West Texas Intermediate (WTI) crude for Nov fell $1.17 (2.9%) to settle at $39.43 a barrel.  Dec Brent crude lost $1.13 (2.6%) at $41.72 a barrel.  Front-month WTI, the US benchmark, & global benchmark Brent both marked their lowest settlements in week.  Hurricane Delta hit Louisiana as a Category 2 storm with sustained winds of over 100 miles an hour on Fri.  The Bureau of Safety & Environmental Enforcement estimated that 69% of oil output in the Gulf of Mexico remained shut in due to the storm, along with 47% of natural-gas production.  That's a big improvement from Sun, when 91% of oil output & 62% of natural-gas production were shut in.

Oil prices log lowest finish in a week as constrained supplies come back on line

Gold futures ended higher as uncertainty surrounding the presidential election & expectations for an eventual agreement on a COVID-19 stimulus package prompted prices to hold ground at a roughly 3-week high.  Gains for global equities were seen limit ing upside for the metal, however.  Bullion trading continues to be inspired by uncertainty around the US election contest 3 weeks from tomorrow. Fear of a contested election, although seemingly diminishing as Biden's lead in national polls has widened, has been a big source of concern for investors hedging that the election loser may not quickly concede defeat.  Worries that results may not come out quickly due to measures to limit the spread of the spread of coronavirus also have raised some anxieties.  Dec gold  rose $2 to settle at $1928 after the most-active contract ended Fri with a roughly 1% weekly gain.  Some investors say that gold has remained buoyant despite the rise in stocks due to the prospects of higher deficits, which would result from Congress passing an additional coronavirus aid package.  Hope for stimulus, viewed as additional support for a stock-market rally, had shown some signs of flagging amid fears that a lack of a fresh boost to the economy would lead to a deterioration in the rebound from the worst pandemic in recent memory.  

Gold ends higher, but rise in global equities caps gains

Is the economy at a crossroads?  A lot of  economy watchers think so.  How could that be?  After all, the US likely grew at a record 30%-plus annual pace in Q3, recovering much of the historic damage caused by the coronavirus pandemic in the spring.  The 3rd qtr ended more than a week ago however, & it won't tell us much about how the final 3 months of the year are shaping up.  The most recent data still suggests the economy is growing at a steady if somewhat slower clip right now.  Consumer confidence just hit a pandemic peak, the savings rate is very high, manufacturers are boosting production, & more people are going back to work than losing their jobs.  The pessimists acknowledge the economy has held up better than assumed after the end of most federal aid for families, businesses & the unemployed in Aug.

The U.S. economy is still rising from the rubble, but anxiety is growing about another setback

The British gov has outlined further restrictive measures for England, including a 3-tier system of local lockdowns, as it attempts to curb a rapid increase in coronavirus infections.  Speaking to the House of Commons, Prime Minister Boris Johnson said he understood the frustration of those who had been “chafing” under the current restrictions.  However, he added: “We can’t let the virus rip ... I believe not to act would be unforgivable.”  He outlined a 3-tier system of local Covid-19 alert levels — “medium,” “high” & “very high” — which will classify regions based on the severity of their infection rate, with differing levels of restrictions for each level.  The prime minster said the “medium” level applied to the majority of England, & encompassed the current restrictions which include banning groups of more than six people meeting up & forcing pubs & restaurants to close at 10 PM.  The “high” level applied to the areas of England already in local lockdown, where residents are not allowed to mix with other households or meet up unless outside.  Local lockdowns are currently in place across much of northern England, & some other areas where infection rates have soared since the national lockdown was lifted in the summer.

UK’s Boris Johnson outlines tiered system of lockdowns, dividing the country with stricter rules

The latest stimulus package is stuck in the mud, but investors have not given up their optimistic attitude.  Expectations for earnings are high led by a sharp rebound in the economy.  The Dow was flat with a 300 gain for much of the day, but sellers trimmed the the advance with selling in the last 30 mins.  NAZ had an outstanding day helped by Apple (AAPL), a Dow & NAZ stock, with its annual Prime Day event today.  Unfortunately, the virus keeps fighting back hard.

Dow Jones Industrials