Dow shot up 114 sfter late day selling, advancers over decliners 5-2 & NAZ slid back 36. The MLP index went up 1+ to the 143s & the REIT index fell 3 to the 364s. Junk bond funds were mixed & Treasuries continued weak as stocks rallied. Oil gained 1 to go over 48 & gold added 4 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)
Household spending dropped for the first time in 7 months & layoffs remained elevated as a surge in virus cases weighed on economic recovery. After going on a shopping spree this summer, consumers closed their wallets last month, cutting spending by 0.4%, the Commerce Dept said. They cut spending on services such as restaurant meals, as well as purchases of goods, including big-ticket items like cars & appliances. Household incomes also took a hit as the effects of federal aid programs put in place earlier this year fade. Household income—measuring what Americans received in wages, investment returns & gov aid—fell 1.1%, the 3rd drop in 4 months. In the aggregate, households are decently positioned to spend. Household income remains up 2% from Feb, the month before the pandemic crashed the economy, & Americans’ savings are at historically high levels. Yet Ms remain unemployed, & a new wave of virus infections this fall prompted states & cities to order businesses to close or scale back operations. The short-term outlook is mixed. The number of workers seeking unemployment benefits fell last week, retreating from a3-month high. But jobless claims, a proxy for layoffs, are still hovering at their highest levels since recent peaks in Sep, as states & local municipalities impose fresh restrictions on social & business activity to combat a surge in coronavirus cases. New jobless claims were 803K last week, down from an upwardly revised 892K the prior week, the Labor Department reported. The weekly figures can be volatile around the holidays due to seasonal-adjustment issues. Orders for durable goods—a measure of how many big-ticket goods factories planned to make—rose 0.9% last month, the Commerce Dept reported. The rise in part reflected increasing business investment—companies, taking advantage of low interest rates, are buying equipment & software. Also, factories may be preparing for another increase in consumer spending on durable goods next year as the pandemic clears. Existing-home sales, which had been a bright spot in recent months, fell 2.5% in Nov from Oct & new homes sales dropped 11% in Nov. An index of consumer confidence from data firm the Conference Board declined in Dec compared with Nov. Next year’s economic outlook is brighter. Congress on Mon passed a roughly $900B pandemic-relief package that includes a new round of $600 stimulus checks for most individuals & enhanced unemployment benefits, though Pres Trump hasn't signed it and criticized the package late yesterday. Authorities this month began giving some essential workers & other vulnerable Americans the vaccine against the virus, the start of a monthslong process that could eventually lead the economy to more fully reopen. Some economists think GDP could grow by a robust 5% or more next year.
US household spending drops for first time in 7 months
The gov is close to a deal to acquire tens of Ms of additional doses of Pfizer's (PFE) vaccine in exchange for helping the pharmaceutical giant gain better access to manufacturing supplies. A
leaker said that the deal is under discussion & could be finalized
shortly. The
vaccine was the first to gain approval from the Food & Drug
Administration & initial shipments went to states last week. Another deal with PFE would move the nation closer to the goal of vaccinating all Americans. A
law dating back to the Korean War gives the gov authority to
direct private companies to produce critical goods in times of national
emergency. Called the Defense Production Act, it's expected to be
invoked to help PFE secure some raw materials needed for its vaccine. PFE said in a statement that “we continue to work collaboratively
with the U.S. government to get doses of our COVID-19 vaccine to as many
Americans as possible. The company is not able to comment on any
confidential discussions that may be taking place with the U.S.
government.” The stock rose 70¢.
If you would like to learn more about PFE, click on this link:
club.ino.com/trend/analysis/stock/PFE?a_aid=CD3289&a_bid=6ae5b6f7
Pfizer deal close for millions more vaccine doses
Gold futures ended higher, with the precious metal halting a 3 day decline, as the $ softened. A series of US economic reports, published early due to the holiday-shortened week, saw bullion enjoy a pop higher as the $ retreated. Consumer spending, the backbone of the US economy, declined in Nov as COVID-19 cases picked up across the country & damped activity. New applications for US unemployment benefits fell to a 3-week low of 803K right before Christmas, but the relatively high level still reflected a fresh wave of layoffs tied to the record COVID-19 outbreak. Bullion enthusiasts see the precious asset as a potential hedge heading into 2021, with fears of aggressive gov spending, ultralow bond yields & lofty stock valuations buttressing the commodity. Feb gold traded $7 (0.4%) higher to close at $1878 an ounce, after a 0.6% slide yesterday. If the metal had closed lower today it would have represented its longest bout of weakness since Apr.
Gold prices halt 3-session slide as U.S. dollar stumbles
While good news on the COVID-19 vaccine front keeps coming, the US just suffered one of its worst days this year as the daily death toll spiked back above the grim 3K mark & hospitalizations jumped by nearly 2500 to another record. The daily number of new COVID-19 cases slipped to 201K yesterday from 202K the day before. The average new cases per day over the past week was 216K, up 4% from the average 2 weeks earlier. Then it goes downhill from there. At least 3239 people died from COVID-19 yesterday, up from 1963 on Mon. While that is below the one-day record of 3611 seen on Dec 16, it's the 3rd-highest one-day total. It was the 5th time the daily death toll topped the 3000 mark since the pandemic began & all 5 of those days have occurred this month. And hospitalizations jumped to a record 118K on yesterday, shattering the previous record of 115K the day before. The one-day increase in hospitalizations of 2426 was the most since the 2475 seen on Dec 8 & the daily record was the 18th set this month. Overall, the US has now recorded a total of 18.3M COVID-19 cases & the total death toll rose to 324K. On the bright side, PFE & BNTX announced a 2nd agreement with the Trump administration to supply an additional 100M doses of their COVID-19 vaccine from production facilities in the US, doubling the total number of doses delivered to the US.gov. The companies said Trump administration will pay $1.95B for the additional 100M doses. Meanwhile, reported of vaccinations keep growing. There have now been 30 states, up from 23 yesterday, that have publicly reported vaccinations. And total reported vaccinations nearly doubled to 472K as of today from 244K the day before.
U.S. COVID-19 deaths surge back to more than 3,000 a day as hospitalizations spike to another record
Crude-oil futures closed sharply higher as a report from the Energy Information Administration (EIA) showed a drop in US inventories & favorable geopolitical developments appeared to clear possible roadblocks to further demand for energy assets. EIA reported that a fall of 562K barrels last week, compared with a decline of 4.7M barrels forecast. A report from the less closely followed American Petroleum Institute (API) yesterday showed that US crude supplies rose by 2.7M barrels for the week. It isn'’t unusual for the API data & EIA weekly reports to be out of sync but investors tend to be more attuned to the gov's EIA report. The EIA data also showed crude stocks at the Cushing, Okla, storage hub edged down by 26K barrels for the week. In geopolitics, a report indicated that a Brexit deal is “in sight” & could be struck as soon as Wed or Christmas Eve, helping to foster more hope of avoiding a hard Brexit, where Britain crashes out of the EU trade bloc without a trade pact in hand. Pres Trump yesterday criticized the roughly $900B coronavirus relief deal passed by Congress & called on lawmakers to increase direct payments to Americans to $2000 from $600. Oil is recovering from a weekly slide induced by concerns that a fast-spreading variant of the coronavirus would lead to tighter global lockdowns, hobbling energy demand. Investors, however, have taken some solace in signs of loosening restrictions against travel originating from the UK., where reports of the COVID mutation have been associated with a surge in infections. West Texas Intermediate crude for Feb closed up $1.10 (2.3%) at $48.12 a barrel, after a 2% drop yesterday. Feb Brent crude added $1.12 (2.2%) to settle at $51.20 a barrel, following a 1.6% slide in the previous session. For the week, WTI is on pace for a weekly slump of 2.5%, while Brent is on track for a weekly decline of 2.1%.
U.S. oil books over 2% gain as weekly crude stockpiles seen falling; Brexit deal nears
Pres Trump just vetoed the sweeping defense bill that authorizes a topline of $740B in spending & outlines Pentagon policy. “Unfortunately, the Act fails to include critical national security measures, includes provisions that fail to respect our veterans and our military’s history, and contradicts efforts by my administration to put America first in our national security and foreign policy actions,” Trump wrote. “It is a ‘gift’ to China and Russia,” the pres added, without citing specific details. Earlier this month, the National Defense Authorization Act passed both houses of Congress by veto-proof margins, meaning that any veto by Trump would likely be overridden. Congress must now vote again to override Trump. Lawmakers are slated to return from the holidays on Mon.
Trump vetoes colossal $740B defense bill, breaking with Rep-led Senate
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