Dow dropped 569 (near session lows), decliners over advancers about 4-1 & NAZ retreated 423. The MLP index was off 1+ to the 182s & the REIT index lost 2+ to the 448s. Junk bond funds continued lower & Treasuries saw much more selling. Oil slid back to 75 & gold fell 18 to 1733 (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)
The Business Roundtable, a large & powerful group consisting of prominent corp leaders, said that Dems' proposed corporate tax hike is one of the greatest threats to companies' investment, hiring & growth plans in the foreseeable future. The organization said its Q3 CEO survey showed that chief execs have 3 primary concerns: difficulty finding & retaining qualified workers, a possible rise in the corp tax rate & slow Covid-19 vaccine uptake. “Increasing taxes on America’s largest job creators by almost $1 trillion—nearly three times the net corporate tax cut from 2017 tax reform—would be one of the largest corporate tax increases in history,” said Business Roundtable Pres & CEO Joshua Bolten. “Tax increases on job creators would make it harder for U.S. companies to compete and would hinder investment in America.” The Biden administration & congressional Dems are working to pass a $3.5T bill to modernize & expand the US public safety net that would impact most Americans. The legislation broadly seeks to tackle poverty, address critical climate risks & provide expanded worker benefits. The final price tag will likely be lower as centrist Democrats push for cuts. To help pay for what would be one of the largest bills in the nation's history, Dems have proposed raising the corp tax rate to 26.5%. Former Pres Trump’s 2017 tax legislation lowered the rate to 21% from 35%. The party has also proposed a top individual income tax rate of 39.6%, a 3% surcharge on individual income above $5 million & a capital gains tax of 25%. The Roundtable survey also showed CEOs remain upbeat on the overall US economy, but indicated they are now slightly less optimistic than they were in the Q2 given a decline in expectations for sales. The organization’s survey suggested CEOs are trying harder to bolster payrolls & continue to warm to big-ticket capital projects like new factories, equipment and the like.
CEOs worried about corporate tax hikes as Dems push bills aimed at boosting working families
Dr Scott Gottlieb said that he believes up to 90% of US residents will have some form of immunity protection against the coronavirus by the time the delta variant wave passes. The former Food & Drug Administration commissioner said reaching that amount of coverage is important, even if the country never fully eradicates the disease. “I’m optimistic that we’re peaking in Covid for the grim truth that the delta wave is so pervasive and infecting so many people that on the back end of this we’re going to have immunity in, at least, 85%, maybe 90% of the population,” Gottlieb added. “Some will have acquired that immunity through vaccination. Some will have acquired that immunity through infection. Some will have been both vaccinated and infected.” As a result, the highly transmissible delta variant — which currently accounts for nearly all new US infections — will no longer spread from person to person as effectively. “On the back end of this, you’re going to have so much immunity in the population that the virus isn’t going away — I don’t think we’re going to reach true herd immunity where this just disappears — but it’s certainly not going spread at the kind of levels we’re seeing right now,” Gottlieb said. “The prevalence will decline.” Gottlieb expects infection rates to decline substantially around Thanksgiving, “barring something unforeseen” such as a new coronavirus variant that pierces prior immunity. There have been roughly 43M confirmed coronavirus infections in the US since the pandemic began early last year, according to Johns Hopkins University. However, experts say that's likely an undercount because not every person who is actually infected gets tested & shows up as an official Covid case. Currently, 213M people in the US (64.4% of the population) have received at least one Covid vaccine dose.
Gottlieb says up to 90% of Americans may have Covid immunity after delta wave
More than 400K Americans received a Covid-19 booster shot at pharmacies over the weekend after the CDC cleared third doses of Pfizer (PFE) & BioNTech's (BNTX) vaccine to a wide array of Americans, White House coronavirus response coordinator Jeff Zients said. Nearly 1M people have scheduled to get their extra dose at a pharmacy over the coming weeks, he told reporters, adding that the state & federal preparations for boosters have “propelled a strong start.” “At the same time, our top priority remains first and second shots,” he added. Overall, roughly 2.8M Americans have received an extra dose since health officials authorized the 3rd shots of the vaccines to people with weakened immune systems in Aug, according to data compiled by the Centers for Disease Control & Prevention (CDC). His comments come as federal health officials say they are seeing a decline in protection against infection several months after people received their first 2 doses. The shots remain highly effective against severe disease, hospitalizations & deaths. CDC Director Dr Rochelle Walensky on Fri signed off on a series of recommendations, including distributing the shots to older Americans & adults with underlying medical conditions at least 6 months after their first series of shots. She also approved booster shots for those in high-risk occupational & institutional settings, a move that overruled the agency's Advisory Committee on Immunization Practices after it rejected the same proposal hours earlier.
White House says more than 400,000 Americans got a Covid booster shot at pharmacies over the weekend
Gold futures posted their lowest settlement in 7 weeks, weighed down by steadily rising Treasury yields and a strengthening $. Dec gold fell $14 (0.8%) to settle at $1737 an ounce, with the most-active contract at the lowest settlement since Aug 10. Bullion inched up yesterday, even as Treasury yields were climbing. However, today the commodity succumbed to a rise in the benchmark 10-year Treasury note yield to above 1.5%, amid expectations for tighter monetary policy, & a 0.4% rise in the $, as gauged by the ICE U.S. Dollar Index , a measure of the $ against a ½-dozen currencies. Gold prices did manage to pare some losses following data showing a fall in the index of US consumer confidence to 109.3 this month, the lowest reading since Feb, from a revised 115.2 in Aug. Washington policy makers have struggled to raise the federal borrowing limit, or debt ceiling, before the gov runs out of money to pay its bills sometime over the next month or so. A failure to raise the debt limit could rattle markets & presumable push gold higher. Precious metals investors also weighed comments from Federal Reserve Chairman Jerome Powell, who spoke in front of the Senate Banking Committee when he said some of the supply-side bottlenecks behind the surge in inflation have “gotten worse.”
Gold futures settle at a 7-week low as yields, dollar pop
Oil futures pulled back, after the front-month contract for Brent crude touched highs above $80 a barrel for the first time in almost 3 years. Weeks of declining US crude inventories & recent supply outages prompted prices for US & global benchmark oil to climb to their highest settlements since 2018 yesterday, but losses in the stock market & a drop in US consumer confidence raised concerns about near-term energy demand. Meanwhile, natural-gas prices pared some of their earlier gains, but were still on track to mark another finish at the highest in about seven years amid tight US supplies. Nov Brent crude fell $1.07 (1.4%) to $78.46 a barrel after trading as high as $80.75. Dec Brent, the most actively traded contract, was down $1.01 (1.3%) at $77.71 a barrel. Nov West Texas Intermediate crude, the US benchmark, declined by 99¢ (1.3%) to $74.46 a barrel. Yesterday, both front-month contracts for WTI & Brent crude had marked their highest settlements since Oct 2018. Prices, however, started to ease back after a reading on US consumer confidence for September from the Conference Board revealed a decline to 109.3 in Sep, the lowest in 7 months. In an annual report, OPEC said demand for energy has strengthened in the wake of last year's pandemic-related drop & will continue to rise in the long term, led by renewable energy sources, but coal is likely to see demand decline from 2020 to 2045.
Oil prices pull back after Brent touches $80 a barrel
This was a major down day, but a rally was attempted in the last 2 hours. Then sellers returned in the last hour. Dreary reading on consumer confidence & CEO confidence added to very unsettling news from DC. Dow continues down over 1K in Sep, around where it was in late Apr (shown below). 34K could be a critical line of support for the Dow & needs to be watched in Oct.
Dow Jones Industrials
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