Markets retreat while waiting for the new relief package from Congress

Dow dropped 148 (finishing above 30K), decliners over advancers about 3-2 but NAZ was up 55.  The MLP index was off 3 to 150 & the REIT index pulled back 4+ to 371.  Junk bond funds fluctuated & the Treasuries were bid higher.  Oil fell into the 45s & gold jumped 22 to 1862 (more on both below).

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Congress aims to scrape together a coronavirus relief package this week & prevent a lapse of benefits that could send Ms of Americans spiraling further into financial peril at the end of the year.  A bipartisan group of lawmakers hopes to release a more detailed outline of its $908B aid proposal as it prepares legislative text.  Dem leaders have backed the plan as the basis for an emergency relief bill as a sustained Covid-19 infection surge stresses hospitals across the country.  Lawmakers aim to pass both pandemic aid & spending legislation before the gov shuts down Sat.  They will have to quickly resolve several sticking points to meet the deadline.  Sen Bill Cassidy, part of the bipartisan group that crafted the $908B plan, said that state & local gov support & business liability from coronavirus-related lawsuits are the biggest remaining issues in the relief package.  He believes the proposal has a better chance of getting thru a divided Congress & past Pres Trump's desk than existing bills written by only one party.  “I think in some way this package passes,” Cassidy said.  Senate Majority Leader Mitch McConnell has urged passage of what he calls a “targeted” package worth about $500B.  House Speaker Nancy Pelosi & Senate Minority Leader Chuck Schumer had called for more than $2T in spending before they embraced the bipartisan plan.  Yesterday, Schumer described the compromise as a stopgap to buoy the country until next year.  He hopes DC can pass a “much bigger bill” after Pres-elect Biden takes office Jan 20.  “We’re at the last minute, we have a bipartisan compromise. It should be the framework for the emergency we have now, to deal with things in the next few months,” he added.

Congress looks for last-minute Covid relief deal as benefits cliff looms

Gold futures finished higher, with prices for the haven metal getting a strong lift from progress toward another coronavirus aid package and the further spread of COVID-19 in the US.  A breakdown in talks on Brexit between the UK & Eurozone& a rise in coronavirus cases in the US also contributed to gold's gain today.  Over the weekend, UK Prime Minister Boris Johnson held talks with European Commission Pres Ursula von der Leyen, as negotiators try to reach a Brexit deal, according to reports.  In the US, Dr Deborah Birx, the White House’s coronavirus response coordinator, warned that the coronavirus surge “is the worst event that this country will face,” as hospital systems are overrun.  Against that backdrop, Feb gold rose $26 (1.4%) to settle at $1866 an ounce.  The yellow metal lost a smidgen on Fri but put in a 2.9% weekly gain, snapping a 3-week streak of losses.

Gold prices finish higher, buoyed by progress toward a U.S. fiscal stimulus deal

The CEOS of America's biggest companies are much more upbeat about the prospects for the US economy, according to a quarterly survey from the Business Roundtable.  The survey indicated execs expect their companies to hire more people & invest more in the next 6 months.  The index that measures CEOs’ outlook for the economy jumped 22.2 points to 86.2 in Q4 from the prior 3-month period.  It’s the 2nd straight sharp gain in the index, which rose 29.7 points in Q3.  That was the first gain after 9 qtrs of decline.  The index now stands above its historic average although it is still well below the all-time high of 118.6 reached in Q1-2018 after passage of Pres Trump's tax cuts.  The business leaders expect the economy to grow at a 1.9% annual rate in 2021.  That would be a welcome improvement from the negative growth rate this year resulting from the shutdown of the economy last Mar which triggered a steep recession.  For 2020 as a whole, economists have penciled in a negative growth rate in the neighborhood of 3%.  Even below the surface, the Business Roundtable survey was strong.  The sub-index for sales growth jumped 29.9 points to 116.4, while the sub-index for capital spending rose 25.2 points.  The outlook for employment wasn’t as robust but increased 11.5 points to 58.1. The pace of job growth slowed in Nov & economists are worried it will decelerate even more in Dec & Jan as COVID-19 cases skyrocket.  In a separate question, 40% of the top execs polled said labor is their biggest cost pressure.  The Roundtable represents large companies that employ some 15M people & generate $7.5T in annual revenue.  The group has been doing its quarterly survey since 2002.

CEOs are much more upbeat about U.S. economy, survey finds

The Food & Drug Administration (FDA) could authorize a coronavirus vaccine as early as the end of this week.  The move would be a pivotal moment in the pandemic as public health officials say the US is likely to face its worst public health crisis in history this winter.  The FDA is scheduled to convene a meeting of its Vaccines & Related Biological Products Advisory Committee, known as VRBPAC, on Thurs to review PFE's Covid-19 vaccine with German drugmaker BiioNTech (BNTX).  2 days before the meeting, the FDA is expected to release a roughly 100-page document evaluating the companies’ clinical trial data, said Dr Paul Offit, a voting member of the advisory committee, offering a glimpse of the agency's view of the vaccine.  “The public will see everything that we see,” said Offit, who is also the director of the Vaccine Education Center at Children's Hospital of Philadelphia.  If the meeting goes well & the advisory committee formally votes to OK the vaccine, the FDA could announce its authorization “within days,” Health & Human Services Secretary Alex Azar said.  “But it’s going to go according to FDA’s gold-standard process and I’m going to make sure it does,” he added.  The vaccine could not come at a more crucial time.  Hospitals across the US already have a higher load of Covid patients than ever before & the country's outbreak is primed to set even more grim records  this week.  Dr Deborah Birx, the White House coronavirus response coordinator, warned yesterday that the escalating coronavirus surge is likely to be the most trying event in US history.  “This is not just the worst public health event. This is the worst event that this country will face, not just from a public health side,” she said.  “This fall/winter surge is combining everything that we saw in the spring with everything we saw in the summer — plus the fall surge going into a winter surge. I think that’s why Dr. Redfield made this absolute appeal to the American people,” she added.  The authorization would also mark a record-breaking time frame for a process that normally takes about a decade.  The fastest-ever vaccine development, mumps, took more than 4 years & was licensed in 1967.  Last week, the UK authorized PFE's vaccine for emergency use, becoming the first country to do so.  The stock rose 90¢.
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   

FDA could authorize Pfizer’s Covid vaccine this week as U.S. deaths surge

Oil futures settled lower, pulling back from a 9-month high as COVID-19 cases continued to surge, underlining worries about fuel demand.  West Texas Intermediate (WTI) crude for Jan fell 50 (1.1%) to settle at $45.76 a barrel.  Feb Bre, the global benchmark, lost 46¢ (0.9%) at $48.79 a barrel.  The losses for both benchmarks followed gains in each of the last 3 sessions.  On Fri, prices for WTI, based on the front-month contract, logged a weekly gain of 1.6% on Fri, their 5th consecutive weekly climb & Brent saw a 2.1% weekly rise, with both ending that session at their highest since Mar.  Crude rallied last week as OPEC & allies (OPEC+) agreed after a protracted set of negotiations to relax output cuts more slowly than previously planned, beginning next month.  Meanwhile, near-term demand prospects were clouded by a continued surge in COVID-19 cases, renewed restrictions on activity & expectations that people will travel less and socially distance over the holidays.

Oil settles lower in pull back from 9-month high as COVID cases surge

There is a lot riding on the new relief package in Congress.  While other drug companies have vaccines awaiting approval, PFE's appears to be ready & should be approved in a few days.  The battle against the virus has not been going well, but approvals will be warmly greeted by investors.

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