Markets retreat on confusion over government funding

Dow finished down 546 at session lows, decliners over advancers about 3-2 & NAZ lost 63.  The MLP index was steady in the 183s & the REIT index dropped 5+ to the 445s.  Junk bond funds were mixed & Treasuries saw a little buying.  Oil was flattish in the high 74s but higher for the month & qtr & gold rebounded a huge 35 to 1758 (more on both below).

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The Senate approved a bill to fund the gov thru Dec 3 & avert a gov shutdown for now.  It's one of several political issues being followed closely by the markets, which have fallen today amid uncertainty about the passage of a bipartisan infrastructure bill & Pres Biden's $3.5T spending package.  65 senators voted in favor of the short-term funding bill, which did not include a provision to raise the debt ceiling.  35 no votes were not enough to sink the bill, which needed 60 votes to pass.  Treasury Secretary Janet Yellen has said that the US could run out of money to pay its bills by Oct 18 if the debt limit is not raised.  "This vote says we are keeping the government open," said Senate Majority Leader Chuck Schumer ahead of the vote, calling it a "glimmer of hope."  Now the bill heads to the House, which has until midnight to send it to Biden's desk before the close of the federal gov's fiscal year.

Senate approves short-term funding bill to keep government open, House to act

House Speaker Nancy Pelosi said the House was still on track to hold a vote on a bipartisan infrastructure bill today, even as members of her own Dem caucus said she did not yet have the support of enough progressives to pass the bill.  “We’re on a path to have something, that I can say to my colleagues with integrity and certainty is the path we’re on” Pelosi said.  But she added, “And in terms of timing and the rest, I wish we had more time.”  Pelosi & Pres Biden have tried to win support for the infrastructure bill among progressives, who say they will not vote for it unless the House is also ready to pass a sweeping budget reconciliation bill to expand the social safety net & climate policy.  But fundamental parts of that bill are still being debated in the Senate.  House progressives are worried that if they vote to pass an infrastructure bill championed by moderates, they will lose any leverage they have in pushing these same moderates to back a transformative budget bill later on.  Progressives insist that any budget reconciliation bill be at least $3T & include provisions like free pre-school & community college, child care subsidies & an expansion of Medicare to cover dental, vision & hearing care.  But a few hours ago, centrist Dem Sen Joe Manchin released a signed agreement he reached with Senate Majority Leader Chuck Schumer, more than 2 months ago, in Jul, that spells out what Manchin would support in a budget bill.  The maximum topline spending that Manchin would vote for is $1.5T.  This leaves both House & Senate progressives & Manchin far apart.  Even some of Pelosi's closest allies in House leadership are pessimistic about the bipartisan infrastructure bill's chances.  While Pelosi was speaking to reporters in the Capitol, another journalist asked Majority Leader Steny Hoyer, her deputy, what he thought the odds were of passage.  “Are you confident it will pass?”  “Nope,” Hoyer replied.

High stakes House infrastructure vote still on schedule for Thursday, Pelosi says

The co-founder & chief medical officer of BioNTech (BNTX), the German firm which developed a Covid-19 vaccine alongside Pfizer (PFE) said that the world “should not live in fear” of the virus.  “Covid will become manageable. It already has started to become manageable” Dr Ozlem Tureci said.  However, she added that we will “need to go back to a new normality, because this virus will accompany us for, still, some years.”  Asked about concerns over new coronavirus variants, she said BNTX “continuously assess those upcoming variants, and there will be more.”  “For all these variants which are currently circulating, it seems that boosters alone, bringing the waning immune responses back to high levels, are suitable and do protect,” she added.  “However, we have to continue to screen because there might be variants upcoming for which this is not the case. And for this we have a second pillar, namely that we prepare ourselves to be quick and fast in the case that we need to adapt to a variant ... And we are doing those dry runs, not alone, together with regulators, so that they are also prepared for the potential need to switch,” Tureci continued.

BioNTech co-founder says the virus will be with us for years

Centers for Disease Control & Prevention Director Dr Rochelle Walensky said that Covid-19 deaths among pregnant women reached a record high of 21 in Aug, urging expectant mothers to get vaccinated against the virus.  Just 31% of pregnant women nationwide are vaccinated, even though pregnant women with Covid are likelier to experience dangerous symptoms that jeopardize their infants' health, she said.  Her comments came just a day after the CDC announced a health advisory for pregnant women to get vaccinated to reduce the risk of contracting a severe case of Covid.  “Compared with pregnant women without Covid, pregnant women with Covid are more likely to have a preterm birth or a stillbirth,” Walensky said.  “And this very much demonstrates with a huge amount of evidence that pregnant women are at high risk of Covid-19, and their babies are at high risk as well.”  More than 120K pregnant women in the US have been diagnosed with Covid & Walensky added that more than 5K pregnant women have participated in the agency's vaccine safety monitoring programs.  Roughly ½ of those studied received the Pfizer (PFE) vaccine, about 44% got Moderna's (MRNA) & approximately 5% were immunized by Johnson & Johnson (JNJ), a Dow stock & Dividend Aristocrat,.  Walensky said that studying the participants enabled the CDC to determine that Covid vaccines have no impact on increasing the potential for miscarriage.  CDC officials expanded on those findings at a Sep 22 meeting of the agency's vaccine advisory committee, reporting a 12.8% risk of miscarriage by the 20^th week of gestation among 2456 pregnant individuals inoculated with PFE or MRNA.  The risk of miscarriage measured in the study aligns with the normal risk of miscarriage after adjusting for the mom's age, officials said.  But unvaccinated pregnant women are more than twice as likely than non-pregnant women to need intensive care & a ventilator when they contract Covid, Walensky added.

CDC director says U.S. Covid deaths among pregnant women peaked in August

Gold futures climbed, but settled lower for the month, as well as the qtr.  Gold rose today following recent declines fueled by investors' need to cover margin calls due to the potential Chinese real estate crash, linked to property giant Evergrande.  Bargain hunters are picking up gold as a safe haven as smart investors are concerned about a Chinese real estate crash & slowdown, & if that toxic debt can spread virally.  Dec gold rose $34 (2%) to settle at $1757 an ounce.  Based on the most-active contract, prices saw losses of about 3.4% for the month & 0.8% for the qtr,

Gold futures end higher, but post losses for the month and quarter

Oil futures finished higher, finding support from expectations for higher oil demand after a report that China ordered state-owned energy companies to secure winter supplies at all costs.  OPEC+ will hold a meeting Mon to decide on future production levels.  The group is considering adding more oil to the global market, behind the production boost it previously agreed to.  West Texas Intermediate crude for Nov rose 20¢ to settle at $75.03 a barrel.  Prices, based on the front-month contracts, gained 9.5% for the month & ended 2.1% higher for the qtr.

Oil futures finish higher, contributing to gains for the month and quarter

This was a day in the stock market that resembled the wild, wild west.  The Dow was in the red all day.  For the month it fell 1500 & was down 660 in Q3.  Another way to look at the performance, it has been going nowhere for about 6 months.  With all the confusion in DC, that can be expected to continue.  Increased selling the last 30 mins suggests all is not going well in DC.

Dow Jones Industrials