Dow fell 74. advancers over decliners better than 3-2 & NAZ went up 32. The MLP index was off a fraction to the 181s & the REIT index hardly budged in the 483s. Junk bond funds drifted lower & Treasuries saw more selling. Oil slid back to the 69s & gold soared 17 to 1832 (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)
Sen Joe Manchin told his fellow Dems to pause the controversial & massive $3.5T spending bill currently being debated in Congress. "Hit the pause button," Manchin said. "Let’s sit back. Let’s see what happens. We have so much on our plate. We really have an awful lot. I think that would be the prudent, wise thing to do." Manchin represents the linchpin vote on the package which needs the support of every Dem senator in order to move it thru a divided Senate "I want to be able to take care of our military that can defend us anywhere in the world if it's called upon. I want to make sure our economy is still robust," Manchin added. "I want to make sure we're bringing manufacturing back in opportunities. I don't want to have debt over our head to where we basically can't service the debt that we have." Manchin acknowledged that there’s a "lot of good stuff" in the bill but not "anything that we need immediately." Manchin has voiced concerns about the bill in the past few weeks & wrote in an op-ed explaining why he will not support the bill in its current form. "The nation faces an unprecedented array of challenges and will inevitably encounter additional crises in the future," Manchin wrote. "Yet some in Congress have a strange belief there is an infinite supply of money to deal with any current or future crisis, and that spending trillions upon trillions will have no negative consequence for the future. I disagree."
Manchin tells Dems to 'hit the pause button' on $3.5T spending plan
Congressional Dems are weighing a raft of new taxes to help pay for their $3.5T budget bill that would target corp bigwigs & the nation’s largest companies that buy back shares. On a discussion list of several new & expanded potential taxes is a proposal to impose an excise tax on publicly traded companies that repurchase a “significant” amount of stock. The list also includes a tax on firms with CEO pay that exceeds a to-be-determined ratio to the company's average worker. A discussion list is a draft of ideas that lawmakers assemble before formally pitching them in the House or Senate. Representatives will often circulate a list to determine which, & how many, members of the caucus support aspects of the plan. As such, key details like the threshold at which certain taxes would apply & size of the payment have not yet been ironed out. The Dems' plan also includes taxes related to carbon emissions which would likely be opposed by Pres Biden & other moderate Dems. The proposed carbon taxes include a per-ton tax on the carbon dioxide content of leading fossil fuel producers upon extraction starting at $15 & escalating over time. Another suggests a per-ton tax on carbon emissions assessed on major industrial emitters, such as steel & cement makers. A 3rd offers a simple, per-barrel tax on crude oil. A related plan would repeal major tax subsidies for fossil fuels, including tax credits & accelerated tax deductions for extraction, preferential treatment of foreign income, & ability to avoid corporate income tax for pipeline companies. But the would-be taxes aren't exclusive to corps. The Dems note that the current 37% top ordinary tax rate expires at the end of 2025, when it will return to its prior 39.6%. Their plan would hasten that timeline & reinstate the 39.6% in 2022. The plan also seeks to address the long-criticized carried interest loophole by requiring fund managers to pay taxes annually at ordinary rates & subject to self-employment taxes. Asset managers often get paid about 20% of profits accrued above a certain annual return, which can represent the majority of an individual's income if their market bets led to significant gains. But that 20% commission is taxed at the capital gains rate of 20% — Dems want to tax that income every year, realized or not, at the ordinary income tax levels.
Democrats consider new taxes aimed at CEO pay, stock buybacks for $3.5 trillion budget plan
Pres Biden urged Congress to pass his more than $4T economic agenda in order to boost sluggish job growth. The pres made his case for spending on infrastructure, climate policy & the social safety net after the Labor Dept said the country added 235K jobs in Aug. The figure fell well short of the 720K jobs economists had expected. Biden pinned the poor report on the highly contagious delta variant of the coronavirus & the reluctance of many eligible Americans to get a Covid-19 vaccine. He said the US could boost its economy by reining in the virus & passing his 2 economic plans, which he said would help the middle class & make the country more resilient to the kind of extreme weather that knocked out power in New Orleans & crippled transit in New York City in recent days. “Our country needs these investments,” Biden continued. “I’m not asking for anything other than some fairness being injected into the system.” His push for his economic agenda comes a day after Sen.Joe Manchin complicated his party's plans to pass it in Congress. Manchin, whose vote Dems will need to approve an up to $3.5T budget reconciliation bill in the Senate, urged congressional leaders to “pause” consideration of the measure. The senator, who helped to negotiate the Senate-passed bipartisan infrastructure bill, cited inflation & long-term debt as reasons for a delay. He did not rule out voting for a proposal that costs less than $3.5T.
Biden pushes for his economic plans after weak jobs report: ‘Our country needs these investments’
Gold futures climbed, with data showing a lower-than-expected increase in new US jobs in Aug prompting prices for the precious metal to notch a gain for the week & mark their highest finish since mid-Jun. Dec gold rose $22 (1.2%) to settle at $1833 an ounce. For the week, gold saw a 0.8% rise, based on most-active contract, with prices settling at their highest since Jun 16. Gold moves have been mostly tied to the vagaries of the $ & yields for Treasury debt. The greenback edged lower after the today's jobs report. The economy created a small 235K new jobs in Aug amid another major coronavirus outbreak. The increase was the smallest in 7 months & fell well short of the 720K rise forecast.
Gold climbs for the week to highest in 11 weeks after downbeat August U.S. jobs data
Oil futures ended lower, on the back of a smaller-than-expected gains in US nonfarm payrolls in Aug, but a slow post-hurricane recovery in energy operations at the Gulf of Mexico contributed to a gain in prices for the week. Investors also assessed the Gulf Coast, where the aftermath of Hurricane Ida last weekend has left a swath of destruction & oil refineries in Louisiana shut in. Remnants of the storm also buffeted the US's Northeast on Thurs, leaving at least 45 people dead. The Bureau of Safety & Environmental Enforcement reported today that 93% of Gulf oil production & 89% of natural-gas production have been shut-in. Baker Hughes reported the largest weekly drop in US oil-drilling rigs so far this year, following evacuations in the Gulf of Mexico due to the hurricane last weekend. The number of active US rigs drilling for oil dropped by 16 at 494 this week. West Texas Intermediate crude for Oct lost 70¢ (1%) to settle at $69.29 a barrel. It closed up 2% yesterday & logged the highest front-month contract settlement in a month. Prices for the US benchmark finished 0.8% higher for the week. Global benchmark Nov Brent crude declined 42¢ (0.6%) to $72.61 a barrel, marking a weekly rise of 1.3%. Oil futures this week were supported by data that showing a sharp drop in US crude inventories for last week, even as OPEC & its allies decided to stick to a plan to increase oil production by 400K barrels a day each month from Aug.
The Dow was in the red all day, although late day buying trimmed the loss. This week the Dow fell 85 while gold was in strong demand. On Tues, the markets reopen & this should be an exciting week as market participants are back to full strength.
Dow Jones Industrials
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