Dow rose 470 to a new record, advancers over decliners about 5-1 & NAZ climbed 94. The MLP index jumped 5+ to 130 & the REIT index added 3 to the 378s. Junk bond funds remained in demand & Treasuries slid lower. Oil went up 1+ to the 41s & gold was pretty much even, off 1 to 1884 (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)
The Food & Drug Administration (FDA) will move “as quickly as possible” to clear Pfizer (PFE) & Moderna's (MRNA) coronavirus vaccines for emergency use, the top official at the Dept of Health & Human Services said. HHS Secretary Alex Azar said that the “incredible” interim results from MRNA that its vaccine candidate is more than 94% effective in preventing Covid-19, paired with similar results from Pfizer last week make for a “historic day in public health.” Azar, who heads the federal agency that oversees the FDA, said it has dedicated teams working with both companies to “remove any unnecessary bureaucratic barriers” & are completing their authorization applications “as we speak.” “We hope those applications from both Pfizer and Moderna will get in as quickly as possible,” Azar added. “We will independently call those balls and strikes on the data and evidence, but we’re going to do so as quickly as possible, consistent with just making sure the science, the evidence and the law support authorization.” The US has already invested more than $2B in MRNA's vaccine, which it developed in collaboration with the National Institute of Allergy & Infectious Diseases as part of the Trump administration’s Operation Warp Speed. The program is led by several departments within the federal gov to accelerate the development, manufacturing and distribution of vaccines. In Aug, Moderna announced that it had reached a deal with the gov to supply 100 million doses of its vaccine. The agreement gives the federal gove the option to purchase up to 400M additional doses. The US also struck a near $2B deal with Pfizer (PFE) in Jul for 100M doses of its vaccine. Under the agreement, the US can acquire 500M additional doses. There should be roughly 40M doses of coronavirus vaccines from MRNA & PFE produced by the end of this year, enough to inoculate about 20M people since both vaccines require 2 shots, said Azar, who oversees Operation Warp Speed. The federal gov also has supply agreements for Covid-19 vaccines from Johnson & Johnson (JNJ), a Dow sock & Dividend Aristocrat, Sanofi (SNY) & GlaxoSmithKline (GSK); Novavax (NVAX); & AstraZeneca (AZN). The goal is to provide enough coronavirus vaccine doses to all Americans who want to be vaccinated against the disease by Q2-2021 once all the drugs are authorized.
HHS chief Azar says FDA will move ‘as quickly as possible’ to OK Moderna and Pfizer’s Covid vaccines
The US economy still needs fiscal help from Congress even with the
increased probability that widespread vaccine availability is now in
sight, former New York Federal Reserve President Bill Dudley said. For the 2nd time in a week, a pharmaceutical company
has announced a breakthrough in the coronavirus pandemic fight (above). Even
with the good news, Dudley said additional bridge money of $1-2T will be needed to get impacted individuals & businesses
to the other side. “So I think it makes the case for fiscal
stimulus even more compelling, because you basically want to prevent
scarring to the economy in terms of people’s balance sheets, in terms of
small businesses being forced to close, and a little fiscal stimulus
can go a long way in reducing the scarring in the economy so that you
can have a stronger recovery on the other side” he added. Opposing factions have been unable to come up with a compromise
measure to buttress the $2.2T CARES Act passed in Mar. Most
of the funding from that legislation has expired while 11M
workers remain without employment. Gov red ink has
continued to pile up during the crisis. The budget was $3.1T in
the hole for fiscal 2020 & started off the new year down $284B
in Oct. Dudley acknowledged that the deficit spending could be a
problem down the road but is needed now, particularly to help state &
local govs that may have to start laying off essential personnel
to balance their budgets. One problem is that he doesn't think the economy will get much more help from his former Fed colleagues who already have cut benchmark borrowing rates to near zero & expanded the central bank's balance sheet past $7T. “People
can look through the bad news & see good news on the other side. That
said, it doesn't change the fact that the Fed really doesn’t have much
firepower to protect the economy over the near term,” Dudley said. “I
think the economy is going to suffer as go through fall into winter.”
More fiscal stimulus is needed even with vaccines, Bill Dudley says
Gold tallied a 3d gain in a row, with prices for the haven metal
edging higher following some fresh economic restrictions amid
efforts to reduce the spread of COVID-19, as well as data showing a
slowdown in New York factory activity. Still, a fresh update on coronavirus vaccine progress helped to limit gains for gold. Dec gold edged up by $1 to settle at $1887 an ounce,
marking a 3rd straight climb. The yellow metal posted a 3.4% decline
last week, based on the most-active contract, which was the largest
since the week ended Sep 25. A decline in Nov factory activity in New York also contributed to gold's climb. The New York Fed's Empire State business conditions index fell 4.2 points to 6.3 in Nov. The forecast called for a reading of 13.5. Gold had been under pressure the AM after MRNA announced that its 2-shot vaccine candidate so far
in late-stage studies has proven to be 94.5% at cutting the rate of
infection of the disease caused by the novel strain of coronavirus,
SARS-COV-2. Overall, bullion has been bolstered during the COVID-19 crisis because
investors have flocked to the perceived safety of such assets. Gold also
is historically seen as a hedge against central bank & gov
spending efforts to prevent major economic damage from the viral
outbreak.
Gold tallies a third straight gain, buoyed by virus-related economic restrictions
Oil futures rallied, with the US benchmark finishing 3% higher after MRNA said its vaccine candidate was highly effective in preventing new COVID-19 infections. Meanwhile, mild weather forecasts & US supplies near record highs pulled natural-gas futures down by 10%. West Texas Intermediate crude for Dec jumped $1.21 (3%) to settle at $41.34 a barrel. Jan Brent crude, the global benchmark, added $1.04 (2.4%) to finish at $43.82 a barrel. Crude was trading higher ahead of the MRNA announcement, with support tied to upbeat data out of Asia, including a 6.9% rise in Oct Chinese factory output year over year. Retail sales gained 4.3% over a year ago, up 1 percentage point from the previous month. Investment in factories & other fixed assets rose 1.8% in the first 10 months of 2020, up 1 percentage point from the first 9 months.
Oil rallies, with U.S. prices up 3% after positive Moderna vaccine results
While the vaccine rally was impressive, the Dow was not able to crack thru 30K. There are no shortage of problems starting with spreading virus cases, especially in the US & Europe, & a stimulus bill that is going nowhere fast. However the bulls are feeling very good.
Dow Jones Industrials
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