Markets slip but pare early losses

Dow closed up 145 & above early lows, decliners over advancers 3-1 & NAZ was still off 31.  The MLP index fell 3+ to the 214s & the REIT index was flattish in the 413s.  Junk bond funds saw more selling & Treasuries remained weak, driving substantially higher yields.  Oil dropped 3+ to the 86s & gold sank 19 to 1706 (more on both below).

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Fall is on the horizon & public health officials are again bracing for another wave of Covid cases.  Over the past 2 years, fall & winter have brought devastating Covid surges that took hundreds of thousands of lives & pushed hospitals to the breaking point.  But US health officials say the nation is in a much different place today due to the arsenal of tools doctors now have to fight the virus.  “We are in a much, much better place. We are in a better place because people have gotten vaccinated and boosted. We’ve got treatments that are widely available,” Dr Ashish Jha, White House Covid response coordinator, said in Aug.  The Centers for Disease Control & Prevention (CDC), in a report published in early Aug, said high levels of immunity in the US population from vaccination & infection have substantially reduced the threat of hospitalization & death from Covid.  The CDC ended its quarantine recommendations for people exposed to the virus last month.  Public health officials are calling on people to stay up to date on their vaccines, but are largely leaving it up to individuals to decide what other precautions they should take based on their health history, risk tolerance & how much Covid is spreading in their communities.  The CDC is taking a more targeted approach that focuses on making sure those at the highest risk of severe illness have access to vaccines, antiviral treatments & other therapeutics to protect their health.

U.S. health officials brace for another fall Covid surge, but with fewer deaths

General Motors (GM) autonomous vehicle unit Cruise has recalled & updated software in 80 self-driving robotaxis after a Jun crash in San Francisco that resulted in minor injuries, according to public filings.  The crash involved a Cruise vehicle, which does not require a human driver, braking harshly while making an unprotected left turn as an oncoming vehicle traveling about 40 mph — 15 mph above the speed limit — switched from a right-turn lane to travel thru the intersection.  In public filings, federal regulators said the recalled software may “incorrectly predict another vehicle’s path or be insufficiently reactive to the sudden path change of a road user.”  Cruise said a software update in Jul was conducted to address the problem.  Following the crash, Cruise said its robotaxi fleet continued to operate but that it temporarily prevented the vehicles from making unprotected left turns.  It said it gradually reintroduced unprotected left turns after the software update.  The crash was especially notable because it occurred a day after California regulators granted Cruise permission to commercialize its robotaxi fleet.  It also happened amid increased scrutiny by the National Highway Traffic Safety Administration, part of the Dept of Transportation, involving such vehicles & advanced driver-assist systems.  The stock was up 20¢.
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GM’s Cruise recalls and updates self-driving software in cars following crash

The southwestern Chinese metropolis of Chengdu announced a lockdown of its 21.2M residents as it launched 4 days of citywide Covid-19 testing, as some of the country's most populous & economically important cities battle outbreaks.  Residents of Chengdu, the capital of Sichuan province, were ordered to stay home today, with households allowed to send one person per day to shop for necessities, the city gov said.  Chengdu, which reported 157 domestically transmitted infections yesterday, is the largest Chinese city to be locked down since Shanghai in Apr & May.  It remained unclear whether the lockdown would be lifted after the mass testing ends on Sun.  Other major cities including Shenzhen in the south & Dalian in the northeast have also stepped up Covid restrictions this week, ranging from work-from-home requirements to the closure of entertainment businesses in some districts.  The moves curtail the activities of tens of Ms of people, intensifying the challenges for China to minimize the economic impact of a “dynamic-zero” Covid policy that has kept China’s borders mostly shut to intl visitors & make it an outlier as other countries try to live with the coronavirus.  Most of the curbs are intended to last a few days for now, although 2 provincial cities in northern China have extended curbs slightly beyond initial promises.  Chengdu's lockdown sparked panic buying of essentials among residents.

Chengdu locks down 21.2 million people as Chinese cities battle Covid-19

Precious metals prices fell again, with gold tumbling to its lowest settlement in about 6 weeks as investors bet that interest rates will remain higher for longer.  Today's weakness comes on the heels of gold cementing its longest monthly losing streak in 4 years.  Dec gold futures retreated $16 (1%) to settle at $1709 per ounce, with prices for the most-active contract poised marking lowest finish since Jul 20.  While gold is typically seen as an inflation hedge, higher interest rates have hurt the yellow metal by making Treasury bonds & the $ more attractive.  The ICE US Dollar Index a gauge of the $'s strength against a basket of rival currencies, was up 0.8%, while the yield on the 10-year Treasury rose 13 basis points to 3.2599%.

Gold ends at 6-week low, as silver drops to lowest since 2020

Oil futures fell, with US benchmark prices down by more than 3%, as new COVID-19 related lockdowns in China fed worries about a slowdown in energy demand.  China is the key question mark for the crude demand outlook & it seems that reopening momentum will remain elusive.  The mood of traders is also risk-off & that is driving the $ to fresh records, which is putting added pressure on all commodities.  Traders, meanwhile, await a decision by OPEC+ Mon on oil production levels.  Oct WTI crude fell $2.94 (3.3%) to settle at $86.61 a barrel.  Prices based on the front-month contract ended at their lowest since Aug 16.

U.S. oil futures settle with a more than 3% loss

After a weak openings, stocks traded higher by midday.  However enthusiasm faded in the last hour, making this another down day.  Dow is down about 650 this week & the short term outlook is glum with higher interest rates in a recession kind of economy.  Also, for 7 months, WTI has been trading between a low under 90 to about 120.  But most the time, it has been near 90.  OPEC has a big meeting Mon to set news production levels.

Dow Jones Industrials