Dow sank 124 (holding above 30K) with buying into the close, decliners over advancers better than 3-2 & NAZ dropped 9. The MLP index was off 1+ to the 145s & the REIT index declined 7+ to the 367s. Junk bond funds hardly budged & Treasuries edged lower in price. Oil shot up to almost 49 & gold retreated 3 to 1885 (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)
A last-minute fight over the Federal Reserve's lending powers has become the latest hurdle for lawmakers of both parties hoping to pass a $900B coronavirus stimulus bill. Though the atmosphere on Capitol Hill remained upbeat on the odds of a deal, Dems are criticizing Sen Pat Toomey, in the hopes he will drop stipulations about a new sticking point: the Fed's lending programs. If the senator's language is adopted, it would ensure that the incoming administration won't be able to revive the Fed's emergency lending programs. “This is the most important thing to me,” Toomey said. He added that his stance is about “preventing the Fed from being politicized” & “not at all an effort to in any way hamstring the Biden administration or weaken our economy.” “Undermining that authority could mean less lending to Main Street businesses, higher unemployment, and greater economic pain across the nation,” he continued. Congress granted the Fed extraordinary lending powers in Mar thru the $2.2T CARES Act, allowing the central bank to provide loans to small- & medium-sized business, as well as to state & local govs, as many struggled with sharp revenue losses thanks to Covid-19. The Fed said it wanted the programs extended but will now have to return the unused capital committed to the facilities. Those expanded lending powers will expire at the end of the year after Treasury Secretary Steve Mnuchin declined to ask Congress for an extension. Janet Yellen, Biden's nominee for Treasury secretary, could in theory ask lawmakers for the power to reinstitute the programs if Toomey's language is omitted.
Last-minute fight over Fed’s lending powers is hampering Covid stimulus deal
Dec is on pace to become the deadliest month of the Covid-19 pandemic in the US, surpassing Apr when more than 60K Americans lost their lives to the coronavirus. Hospitals across the US are becoming overwhelmed & people are dying in record numbers once again — even as US & state officials rush to get lifesaving vaccine doses across the nation. Dec is already the 2nd-deadliest month of the pandemic in the US with more than 42K Covid-19 deaths as of yesterday & with 2 weeks left to the month. At the early height of the pandemic in Apr, hospitals in the New York City region were overwhelmed by Covid patients & doctors had little knowledge of how to treat them. The country also wasn't testing as many people for the virus in Apr, so the death toll for that month could be higher than original data shows, epidemiologists caution. The US is currently reporting more than 2600 deaths per day, based on a weekly average, versus an average of roughly 2025 fatalities a day in Apr. The record is coming even as the US begins to roll out a vaccine against the disease. But health officials & medical personnel are cautioning that a vaccine won't give the country immediate relief from the outbreak. The country reported more than 233K new infections yesterday & more than 3200 deaths. Many hospitals across the country are running out of available intensive-care unites, standard beds & staff to handle the surge in patients, data published by the Dept of Health & Human Services shows. Large states like Texas, Illinois, Pennsylvania & California have each reported nearly 3K deaths or more this month, driving a significant portion of the national total. But many smaller states have been hit disproportionately hard by the virus, with the Dakotas, Iowa, New Mexico & Kansas topping the list when adjusting for population. Despite some signs of daily new cases slowing in the Midwest, new case counts are still increasing nationwide, hitting a fresh peak of nearly 217K average cases per day as yesterday.
December is shaping up to be the Covid pandemic’s deadliest month yet in the U.S.
Gold prices made modest moves, taking a pause from a recent series of gains that have lifted prices to around a 6-week high, but the precious metal had its 3rd consecutive weekly advance. A weak $, which appears set to produce 2 straight months of declines greater than 2%, contributed to a rise in $-denominated gold futures yesterday to an intraday high of more than $1900 an ounce for the first time since early Nov. Feb gold fell by $1 to $1889 an ounce, following a 1.7% gain yesterday that pushed the metal to its highest finish since Nov 6. The FOMC offered its last policy update of 2020 on Wed, when it emphasized its intention to keep interest rates pinned near 0% to at least 2023 & to keep buying bonds until the economy fully recovers from the viral pandemic. For the week, gold had a gain of 2.3% following 2 consecutive weekly climbs. Congressional leaders in the US are racing to hammer out a $900B coronavirus relief aid package to out-of-work Americans & businesses troubled by the COVID-19 pandemic. Lawmakers are scrambling to achieve a fiscal spending deal before federal funding lapses & the gov faces a shutdown at 12:01 AM Sat.
Gold futures tally a 3rd straight weekly gain
The Philadelphia Fed's business activity index fell 15 points to 11.1 in Dec, it’s lowest level since May, the regional Federal Reserve bank said. The figure came in well below expectations of 21.1. Any reading above zero indicates improving conditions. The headline index of the Philadelphia business outlook survey is based on a single stand alone question about business conditions, unlike the national ISM manufacturing index which is a composite based on components. This month, the subindices of the Philadelphia report were also weak. New orders fell to 2.3 in Dec from 37.9 from the prior month & shipments dropped to 14.4 from 24.9 in Nov. Demand for labor is also slackening in the region, with fewer firms reporting increases in manufacturing employment in Dec, while the average workweek index fell 8 points to 18. The Philadelphia numbers, which describe factory activity in much of Pennsylvania, New Jersey & Delaware, echoed data out of New York State, with the New York Fed announcing that factory activity growth there had slowed for the 3rd straight month. Together, the reports indicate a possible softer reading for the ISM's national reading of manufacturing in Dec. That report, a crucial barometer of the health of the economy, will be released early next year. In Nov, the ISM factory index inched down to 57.5 from 59.3 in the prior month. That level is consistent with a healthy expansion of activity, where any number above 50 is an expansion.
Philly Fed factory activity slowed in December
Oil futures ended higher to score a 7th straight weekly climb, as traders remained optimistic about vaccine rollouts & prospects for US lawmakers to reach a deal on an economic relief package. The move lifted prices to their highest settlement since late Feb. Adding further support to prices, a lower oil-demand forecast from OPEC this week makes it unlikely that OPEC & its allies will significantly increase global supply when it meets in early Jan. West Texas Intermediate (WTI) crude for Jan rose 74¢ (1.5%) to settle at $49.10 a barrel, the highest front-month contract finish since Feb 25. The Jan contract expires at the end of Mon's session. Feb Brent crude, the global benchmark, tacked on 76¢ (1.5%) to $52.26 a barrel. The US oil benchmark WTI, based on the front-month contract, logged a 5.4% weekly rise, while Brent climbed 4.6% over the same stretch. Both benchmarks have posted increases for 7 weeks straight & for Brent, that was the longest winning streak since 2010. Analysts said evidence of strong physical demand continued to underpin the market. Traders were likely to keep an eye on production in the US, however. Data from Baker Hughes showed that the number of active domestic rigs drilling for oil rose by 5 to 263 this week, marking a 4th consecutive weekly climb, raising the potential for higher oil production.
Oil prices settle at highest since February, up a 7th week in a row
Dow Jones Industrials
No comments:
Post a Comment