Dow fell 215, decliners over advancers better tan 3-2 & NAZ slid back 8. The MLP index was fractionally lower to the 128s & the REIT index declined 1+ to 375. Junk bond funds fluctuated & Treasuries were purchased today. Oil fell under 41 & gold was steady at 1887.
AMJ (Alerian MLP index tracking fund)
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US retail sales increased less than expected in Oct & could slow further, restrained by spiraling new COVID-19 infections & declining household income as Ms of unemployed Americans lose gov financial support. Retail sales rose 0.3% last month, the Commerce Dept said. Data for Sep was revised down to show sales
surging 1.6% instead of shooting up 1.9% as previously reported. The forecast was for a gain of 0.5%
in Oct. Excluding
automobiles, gasoline, building materials & food services, retail
sales nudged up 0.1% after a downwardly revised 0.9% increase in
Sep. These core retail sales correspond most closely
with the consumer spending component of GDP. They
were previously estimated to have risen 1.4% in Sep. Daily
new coronavirus cases have been exceeding 100K since early this
month, pushing the number of infections in the US above 11M. Some state & local govs
have imposed new restrictions on businesses. Restrictions & consumer avoidance of crowded places like bars &
restaurants could undercut spending & trigger another wave of layoffs,
further squeezing incomes following the loss of a gov weekly
unemployment subsidy. The supplement, which was part of more than
$3T in gov coronavirus relief, has lapsed for Ms of
unemployed & underemployed workers. Ms more will lose benefits
next month when a gov-funded program for the self-employed, gig
workers & others who do not qualify for the regular state unemployment
programs expires.
US retail sales miss expectations in October
Walmart (WMT), a Dow stock & Dividend Aristocrat, Q3 profit soared 56% from a year ago as customers
stocked up on health & wellness products, groceries and electronics
amid the COVID-19 pandemic. The retailer had
adjusted EPS of $1.34, as revenue rose 5.2% to $134.7B. Thje forecast expected adjusted EPS
of $1.18 on revenue of $132B. “This was another strong quarter on the top and bottom line,” CEO Doug McMillon said. E-commerce sales spiked 79% year-over-year while comparable sales rose 6.4% versus the prior year. The
grocery category saw comparable sales increase by mid-single digits
amid strong demand for pickup & delivery services. Meanwhile, health & wellness & general merchandise categories saw comparable sales
grow by high-single digits. The average US ticket grew 24% from last year as the number of transactions fell by 14%. The stock inched up 2 pennies.
If you would like to learn more about WMT, click on this link:
club.ino.com/trend/analysis/stock/WMT?a_aid=CD3289&a_bid=6ae5b6f7
Walmart earnings surge as coronavirus pandemic boosts grocery, electronics sales
Atlanta Federal Reserve Pres Raphael Bostic said the central bank is prepared to step in with more policy help if needed to help businesses & people get thru what could be some tough months ahead. Even with the prospects of at least 2 vaccines becoming available in the coming months, Bostic said there are multiple pockets of the economy that will need assistance. “The vaccine is definitely positive news and will definitely lead to I think a pretty robust recovery once it gets into the population deep enough,” Bostic said. “But we really have short-term and intermediate-term concerns with the spike in the virus and what that’s going to do for business in terms of the things that they’re able to produce, in terms of consumers and their willingness to go out and buy things.” He spoke just minutes after the Oct retail sales report came in a bit softer than expected & with concerns mounting over how consumers would navigate rising coronavirus cases & the prospect of restrictions on activities & business. With fiscal aid from Congress running out & little progress made recently in getting a bill thru, the focus has shifted to what else the Fed might do to help. The Fed already has sliced short-term borrowing rates to zero & implemented a slew of programs aimed at market functioning & lending, though they have been lightly used for the most part. “We are committed to using all of our tools. They have some juice and we’ll deploy them as necessary,” he added. “The retail sales number gives us a sign, but there are lots of other things that we’re going to learn between now and then and that will give us some guidance as to how we should think about our next move in terms of assets.” Though the take-up on the Fed's Main Street lending & other programs has been relatively light compared to their capacity, Bostic said he thinks they should continue. Fed & Treasury officials are in talks on whether to keep the facilities going when they expire at the end of the year. The Treasury collateral is necessary for that to happen. Bostic said he thinks the programs should continue “until we are well beyond the crisis period.” One of his chief concerns is over the potential for an uneven recovery & complacency that could occur if some businesses recover & others don’t. That's where he thinks the Fed should be aggressive. “I think the economy is fine, but I do believe the recovery could be more robust than it is currently playing out to be,” he added. “We know there are communities that are hurting. The virus has hit them extremely hard. We know small businesses have been on the edge for quite some time. We need to be thinking what ways we can act to help them get through this with minimum damage.”
Bostic says Fed’s tools still have ‘juice’ and will be used if the economy slows
Dow Jones Industrials
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