Dow climbed 73, decliners barley ahead of advancers & NAZ dropped 125. The MLP index was steady in the 198s & the REIT index added 2 to the 474s. Junk bond funds were mixed & Treasuries continued higher. Oil rose 1+ to the 83s & gold went up 12 to 1793 (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)
House Majority Leader Steny hoyer aims to strike a deal on Pres Biden's social safety net plan before Mon as Dems scramble to salvage their economic agenda. “We’d like to get a framework by the end of – frankly today, but no later than the end of the weekend,” the #2 House Dem said. Top Dems have held a string of talks in recent days as they try to get centrists & progressives to sign off on a sprawling plan to invest in child care, paid leave, education, health care & climate policy. The party has to resolve disputes — over what to include in the package & how to pay for it — before it can agree to an outline. Party leaders hoped to pass what they bill as the biggest investment in working families in decades by the end of the month. They view it as complementary to a Senate-passed bipartisan infrastructure bill, which House progressives have threatened to block until the chamber can vote on the larger safety-net plan. While Dems still have to get past multiple sticking points, party leaders have sounded hopeful about reaching a deal in the coming days. During a town hall yesterday, Biden said the talks have come down to “four or five” unspecified issues. “I do think I’ll get a deal,” he added. Asked if he believes Dems will reach an agreement before he leaves for Europe in a week, Biden said, “Sure.” The economic plan as first outlined would have invested in child care, paid leave, a Medicare expansion, universal pre-K, free community college, an extension of the enhanced child tax credit & green energy adoption. It would have raised tax rates for corps & the wealthiest individuals to offset the spending. Dems have had to scrap chunks of the bill to cut its price tag from $3.5-$2T (or less). Lawmakers aim to slash costs to appease centrist Sens Joe Manchin & Kyrsten Sinema.
House Majority Leader wants framework for Biden’s social spending plan before Monday
US health officials are keeping a close eye on an emerging Covid-19 subvariant, dubbed “delta plus,” that some scientists say may be more contagious than the already highly transmissible delta variant. Formally known as AY.4.2, delta plus includes 2 new mutations to the spike protein, A222V & Y145H, which allow the virus to enter the body. Those mutations have been found in other Covid variants, so it’s unclear how dramatically those changes affect the virus. Francois Balloux, director of the Genetics Institute at University College London, said it could be 10%-15% more contagious than delta, which first appeared in India & spreads easier than Ebola, SARS, MERS & the 1918 Spanish flu, according to the Centers for Disease Control & Prevention (CDC). Delta has an R-naught, or reproductive rate, of 8 or 9, according to CDC Director Dr Rochelle Walensky, meaning that every person who has Covid will spread it to up to 9 other people. The “wild type” or original strain of Covid had an estimated R-naught of about 3. Someone infected with the delta variant carries 1000 times the viral load of the original Covid strain. The mutation has been detected in the US, but there hasn't been a noticeable uptick in delta plus cases nationwide, Walensky said. “We particularly monitor for sublineages that could impact therapeutics, such as monoclonal antibodies and vaccines,” Walensky said. “At this time, there is no evidence that the sublineage AY.4.2 impacts the effectiveness of our current vaccines or therapeutics.” The AY.4.2 subvariant has been detected in at least 5 cases in the US since Aug: in DC, California, North Carolina, Washington state & Massachusetts. Top health authorities have cautioned for weeks that more powerful and potentially vaccine-resistant Covid variants could develop as long as widespread outbreaks continue to occur, fueled by Bs of people worldwide who remain unvaccinated. White House chief medical advisor Dr Anthony Fauci said in Aug that the US could be “in trouble” if another mutation surpassed delta, asking the unvaccinated to get their shots in hopes of curbing a surge that crushed the nation’s health-care systems this summer.
U.S. officials keep close watch on the ‘delta plus’ Covid mutation as it spreads in the U.K.
China Evergrande Group wired funds to a trustee account yesterday for a $ bond interest payment due Sep 23, a source said yesterday, days before a deadline that would have plunged the embattled developer into formal default. The source corroborated a story in the state-backed Securities Times today that the company had remitted $83.5M in coupon payments to a trustee account at Citibank on yesterday, allowing it to pay out to all bond holders before the grace period expires on Oct 23. "They seem to be avoiding short-term default and it's a bit of a relief that they have managed to find liquidity," said a Hong Kong-based restructuring lawyer representing some bondholders. But still, Evergrande does need to restructure its debt. This payment might be a way for them to get some sort of buy-in with stakeholders before the heavy work needed on the restructuring. News of the wired payment comes a day after financial information provider REDD reported yesterday that the company had secured more time to pay a defaulted bond issued by Jumbo Fortune Enterprises & guaranteed by Evergrande. A string of Chinese officials in recent days have sought to reassure investors, saying that creditors' interests would be protected. Market participants nevertheless expressed shock at news of the payment.
China Evergrande wires funds for bond coupon, averting default
Gold futures climbed, but bullion ended below the day's best levels after remarks from Federal Reserve Chair Jerome Powell raised the likelihood that the central bank will soon start to slow, or taper, its monthly bond purchases. The comments offset some of gold's earlier support from concerns that rising inflation in the aftermath of COVID-19 may erode purchasing power. Powell said that elevated US inflation readings are likely to last into next year & the central bank is alert to the risk that consumers start to expect higher inflation. He also said it was “time to taper” the Fed's $120B in monthly asset purchases. The central bank's policymakers hold their next meeting on Nov 2-3. Powell also added that inflation will be longer than previously expected & that monetary tools will be used if inflation rises for longer than expected. He also said the US labor market might continue to improve so it reaches “maximum employment” next year & if that happens, it would remove what likely is the last major hurdle for any interest rate hikes. Dec gold rose $14 (0.8%) to settle at $1796 an ounce, after trading as high as $1815 during the trading session. For the week, however, gold was up 1.6% & notched a 4th weekly gain in 5 weeks. That was the sharpest weekly rise for a most-active contract since the period ended Aug 27.
Gold climbs, but ends below the session’s high after Powell’s ‘time to taper’ remarks
Oil futures climbed, with US. prices tallying a record streak of weekly gains, up 9 weeks in a row, on the back of easing travel restrictions, a slow recovery in US crude production and expectations for higher energy demand for the holidays. West Texas Intermediate crude for Dec rose $1.26 (1.5%) to settle at $83.76 a barrel. Prices for the front-month contract saw a 2.6% weekly rise. That marked a 9th weekly climb in a row for the US crude benchmark, the longest-ever weekly winning streak for front-month WTI contracts, based on records going back to 1983. Dec Brent crude the global benchmark, rose 92¢ (1.1%) at $85.53 a barrel. WTI earlier this week closed at a 7-year high, while Brent has traded at its highest in 3 years. Data from Baker Hughes also suggested a potential decline in oil production, with the number of active US rigs drilling for oil posting their first weekly decline in 7 weeks, down 2 at 443 this week.
U.S. oil futures score the longest weekly winning streak on record
There was a little selling after Powell spoke. But Oct has been been a very good month for stocks. Dow was up 400 for the week & almost 2K in Oct. Investors have been encouraged with the earnings reports & the bull market for oil while ignoring the dark clouds (starting with inflation & higher interest rates).
Dow Jones Industrials
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