Dow dropped off 13 after a strong start, decliners over advaners 3-2 & NAZ was about even. The MLP index crawled higher in the 139s & the REIT index fell 1+ to the 369s. Junk bond funds did little & Treasuries were a tad lower. Oil went over 48 again & gold added 1 to 1883.
AMJ (Alerian MLP index tracking fund)
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Lawmakers in the House of Representatives passed a standalone bill that would raise the direct payment amounts distributed to American households under new Covid-19 relief legislation to $2000, from $600. The measure – supported by Pres Trump & Dems – was approved by a margin of 275 to 134. It will be sent to the Senate for approval where it faces slimmer chances in the Rep-controlled chamber. On Sun, Pres Trump signed a $900B relief appropriation, which calls for $600 direct payments to Americans. The pres initially said he would not approve the measure, motivated by resistance rooted partially in the size of the direct payments. He has, however, continued to advocate for increasing those payments to $2000 & Dems largely agree. Some Reps, however, are wary of ballooning federal spending figures. A senior Treasury Dept official said that the gov was still aiming to start delivering stimulus payments to direct deposit accounts at the end of this week. It is unclear how the timetable could be affected if the measure to hike payment amounts passes the Senate.
House passes bill to hike stimulus payments to U.S. households
China has not fully recovered from the shock of the coronavirus pandemic, business leaders said in a survey by the China Beige Book. After about a year since Covid-19 first emerged in the Chinese city of Wuhan, roughly 2/3 of execs polled by the 3rd-party firm said they don't expect sales, profitability & hiring to return to 2019 levels until at least 3 months from now. The survey's tepid outlook contrasts with generally optimistic forecasts for China, the only major economy in the world expected to grow this year in the wake of the pandemic. Gov commentary in the last few weeks have also signaled concerns about overall economic growth. While economists predict China's GDP will likely expand about 2% this year, consumers have so far spent less than they did last year as many remain uncertain about future income. For Q4, the China Beige Book found sharp drops in sales growth for luxury goods, food & apparel compared to the prior qtr. “Firms in these sub-sectors noted narrower margins as well as weaker sales volumes and hiring growth,” the report said. That was in contrast with the better performance of auto dealers & vendors for furniture & appliances, indicating that richer households might be boosting overall consumption by spending on big-ticket items, the Beige Book noted. Creditors were also more concerned about retail businesses. While the loan rejection rate held fairly steady among most sectors — around 10-20% — that of the retail industry surged to 38% in Q4. In the services sector, the China Beige Book also found that Q4 gains were not driven by consumers, but by industries meeting business needs such as telecoms, shipping & financial services. Chain restaurants didn't see as much growth, while travel saw no growth & hospitality recorded the weakest revenues. The Beige Book also pointed out that compared with a surge in exports, China's imports have stalled since an initial recovery from the shock of Q1.
China’s economy is still months away from a full recovery, business survey finds
The cost of buying a home surged again in Oct, a closely followed index showed, & prices rose at the fastest rate in 6 years in a clear sign the housing market is still booming despite a raging pandemic. A measure of home prices in 20 large cities rose at a 7.9% yearly pace in Oct, according to the S&P CoreLogic Case-Shiller price index, from 6.6% in the prior month. A broader measure by Case-Shiller that covers the entire country, meanwhile, showed a similarly large 8.4% increase in home prices over the past year. That's also up sharply from 7% in the prior month. Prices have risen at the fastest clip since 2014 owing to record-low mortgage rates & an influx of people leaving cities to escape the coronavirus & find more space. A short supply of homes for sale has also been a contributing factor. On a monthly basis, the Case-Shiller 20-city index rose 1.3% in Oct. Prices rose in at least 19 of the 20 large cities tracked. Detroit was excluded once again because not enough information could be collected. A state lockdown to try to slow the spread of the virus has led to delays in record keeping. The biggest yearly increases in home prices took place in Phoenix (12.7%), Seattle (11.7%) & San Diego (11.6%). The smallest increases occurred in New York (6%), Chicago (6.3%) & Las Vegas (6.4%) — cities that have been hit hard from the virus or whose local economies have suffered the most. Home sales aren’t expected to slow much, if at all, even amid a record coronavirus outbreak. Super-low rates & the growing prospects of the economy gradually returning to normal are likely to keep demand high.
U.S home prices surge to 6-year high as more people flee cities, Case-Shiller finds
The Dow began trading with 150 gain for a new record. Then the sellers returned & took it into the red. There is plenty of confusion coming out of DC over what Congress is doing about the budget & relief payments for individuals & small businesses. Until those guys in DC get organized, the stock market will have a difficult time attracting buyers.
Dow Jones Industrials
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