Dow finished up 44 after being in the red for most of the day, advancers over decliners 3-2 & NAZ gained 103. The MLP index rose 4+ to the 135s & the REIT index went up 1+ to 371. Junk bond funds were bid higher & Treasuries rose in price. Oil was steady in the 41s & gold fell 10 to 1863 (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)
Home construction rose 4.9% in Oct as home building remains as one of the bright spots of the economy. The increase pushed home construction to a seasonally adjusted annual rate of 1.53M homes & apartments & followed a more modest gain of 1.9% in Sep. Building permits, a good barometer of future activity, remained at a seasonally adjusted rate of 1.55M annualized units, effectively unchanged from Sep. The figure remains up 2.8% from a year earlier, showing how strong the housing market was over the summer despite the pandemic. Several reports over the last 2 months have shown the housing market cooling off after a tremendous summer, but that is not surprising. The fall & winter are typically slow times for home buying & home construction, mostly due to the weather.
Home building remains a bright spot for the economy
About 12M Americans will lose unemployment benefits in Dec when CARES Act provisions lapse, absent an extension, according to a new analysis. Another 4M-plus will have already run out of their allotted benefits by then. Unemployment benefits will terminate for more than ½ of current recipients at the end of the year, coinciding with a lapse in federal protections for renters & a resumption in student loan payments. That intersection may spell financial catastrophe for jobless workers without action from Congress or the White House, according to economists. Meanwhile, Americans had already been reporting higher levels of food insecurity & trouble paying bills, & poverty levels have been steadily increasing in recent months. The economic recovery under way seems to be losing steam, signaled in part by slowing job growth & retail sales. Rising Covid-19 infections, hospitalizations & deaths have led state officials to reimpose some shutdown measures, putting more people out of work.
12 million Americans set to lose unemployment benefits by year’s end
The Centers for Disease Control & Prevention (CDC) advised Americans not to travel for the Thanksgiving holiday to help prevent the spread of the coronavirus. Dr Henry Walke, the CDC's Covid-19 incident manager, said there is “no more important time than now for each and every American to redouble our efforts to watch our distance, wash our hands and, most importantly, wear a mask.” “CDC is recommending against travel during the Thanksgiving period,” he added. “For Americans who decide to travel, CDC recommends doing so as safely as possible by following the same recommendations for everyday living.” Walke added that the CDC is concerned “about the transportation hubs.” He said he's worried people won't be able to maintain social distancing while waiting in line, for example, to board buses & planes. “We’re alarmed,” Walke said, adding that the country has seen an “exponential increase” in cases, hospitalizations & deaths recently. “One of our concerns is that as people over the holiday season get together, they may actually be bringing infections with them to that small gathering and not even know it.” Roughly 30-40% of Covid-19′s spread is driven by people without symptoms, he said. “From an individual household level, what’s at stake is basically increased chance of one of your loved ones becoming sick and then hospitalized and dying,” Walke added. “We certainly don’t want to see that happen. These times are tough. It’s been a long outbreak.”
CDC urges against traveling for Thanksgiving as virus outbreak worsens
Dallas Fed Pres Rob Kaplan said the economy was slowing & a double-dip recession is possible given the renewed strength of the coronavirus & people slowing down their activity. “We will have to see what the fourth quarter looks like. It is possible we could have negative growth if this resurgence [of COVID-19] gets bad enough and mobility falls off enough,” Kaplan said. “The next couple of quarters are going to be very challenging,” Kaplan added. The promising vaccines will help the economy eventually, but not in the short-term, he said. If there is any good news, it is that if the economy stalls & there is negative growth, any downturn will be temporary, Kaplan continued. Next year could even see a growth rate of 3.5% or greater, mainly starting after Jun. When asked what the Fed could do to help the economy, Kaplan said the central bank's emergency loan programs should be extended into next year. Some of those programs, which provide attractive loans to small businesses & key parts of the financial system, are set to expire on Dec 31. Kaplan said he wasn’t sure that increasing the size of Fed bond-buying was needed. The Fed is buying $80B of Treasuries & $40B of mortgage securities per month. If the downturn got bad enough, the central bank might shift the purchases to concentrate on the long end of the yield curve, he added.
Fed’s Kaplan says double-dip recession is a possibility
Gold futures settled lower for a 3rd session in a row,
with demand for bullion subsiding in the wake of modest strength in the $, as traders weighed a worrying rise in cases of COVID-19
throughout the globe. A stronger $ against some of its major currency rivals on
the session also was blamed for some of the weakness in bullion. A stronger
greenback can influence trading in assets pegged to the monetary unit,
making prices of assets like gold relatively more expensive to those
using other currencies. Some commodity experts say that
gold's inability to gather momentum substantially this week, even as the $ has generally weakened, signals that the path higher for bullion
may be eroding. Dec gold lost $12 (0.7%) to settle at $1861 an ounce, following
declines in each of the past 2 sessions. Prices, based on most-active
contract, marked their lowest finish since Nov 9. That data come as the global tally for confirmed cases of the
coronavirus that causes COVID-19 climbed to 56.3M &
deaths increased to 1.35M, according to data provided by Johns Hopkins University. The surge in cases has prompted more states & cities to implement new restrictions, including New York City, which announced that it was reclosing its public school system.
Gold logs a third straight session decline
Oil futures fell,
giving back a small portion of what they gained a day earlier, on
concerns that new restrictions on the back of growing cases of COVID-19
will weaken energy demand. Traders also weighed signs of rising tensions
within OPEC+ after said officials from the United Arab Emirates questioned the benefits of
being in the alliance of oil producers. Dec West Texas
Intermediate crude fell 8¢ to settle at $41.74 a barrel after gaining 0.9% on yesterday on signs of rising OPEC+ tensions.
Oil futures finish lower on signs of rising OPEC+ tensions
Oil futures edged lower, with US prices posting their
first loss in 4 sessions, as a persistent rise in COVID-19 cases in
the US & around the world highlighted worries about crude demand,
overshadowing positive news on the vaccine front. Concerns about unity within OPEC also pressured prices. The front month Dec West Texas Intermediate crude,
which expires at Friday’s settlement, fell 8¢ to
settle at $41.74 a barrel. The U.S.
benchmark had posted gains in each of the last 3 sessions. Jan
W,
the most actively traded contract, declined by 11¢ at $41.90 a barrel. Jan Brent crude,
the global benchmark, lost 14¢ at $44.20 a barrel. Analysts noted signs of rising tensions within OPEC+, the alliance between the cartel & other major producers. A report said that officials from the United Arab Emirates, speaking on the condition
of anonymity, questioned the benefits of being in the alliance. Speculation
this week has centered on whether OPEC+ would decide at a Nov 30-Dec 1
meeting to extend existing output cuts or stick with a schedule that
would ease those restrictions in Jan.
Oil posts a loss as rising COVID cases feed prospects for lower demand
Buyers returned in the PM to bring the Dow into the black for the day. There is a report that Schumer said McConnell agrees to discus a relief bill. The Dow jumped 200 on the news. Aides are working on details, but, obviously, nothing has been decided. The markets will react to this story tomorrow.
Dow Jones Industrials
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