Dow rose 80, decliners over advancers 5-4 & NAZ added 20. The MLP index fell 1+ to the 128s & the REIT index was off 3 to 352. Junk bond funds drifted lower& Treasuries inched higher. Oil slid below 42 & gold crawled up 3 to 1950.
| CL=F | Crude Oil | 42.19 | -0.63 | -1.5% |
| GC=F | Gold | 1,940.60 | -5.90 | -0.3% |
House Speaker Nancy Pelosi shot down calls to extend unemployment benefits thru a smaller
coronavirus relief package, arguing passage of a streamlined bill could derail talks on other Dem funding priorities. Pelosi
explained her position after more than 100 House Dems called on
party leaders to allow a vote on a bill this week to reinstate the
expired $600 weekly unemployment benefit for workers. The speaker said
she supports calls to tie benefits to the unemployment rate, but felt
that it was the wrong “timing” to hold a vote. “I
don't think, strategically, it's where we should go right now, because
the Republicans would like to pass something like that and say, forget
about it,” Pelosi said.
“Forget about state and local. Forget about our investments in stopping
the virus. Forget about other initiatives, about feeding the
food-insecure country in our country, vote-by-mail initiatives, and the
rest.” Pres Trump signed an exec order to reinstate a $300 weekly
unemployment benefit after talks stalled on a comprehensive extension of
coronavirus relief measures. Dem leaders supported a larger $3.4T aid package that would include the full $600 weekly benefit & federal funding to support mail-in ballots, while Reps
supported a smaller $1T package with a smaller weekly benefit. Pelosi said she did not expect any bill to be passed within the next few days. “I
don't think the timing is for us to do it right now, because, imagine,
the Republicans could take that into the Senate, put poison pills all
over it. And it's hard to vote against extending unemployment benefits,”
she added. “And, again, I think, overwhelmingly, our members — who would
not want to extend unemployment benefits? As I say, it's something I
fully support, and the stabilization, but not necessarily in the
negotiation.” Pelosi
called the House back into session to vote Sat on legislation
related to the Postal Service. Lawmakers will vote on whether to
block any changes to its operations ahead of the 2020 presidential
election.
Pelosi rejects call to extend coronavirus unemployment benefits with smaller bill
Sales of existing homes soared 24.7% in Jul from Jun, according to the National Association of Realtors. That's
the strongest monthly gain in the history of the survey, going back to
1968 & the highest sales pace since 2006. Sales were 8.7% higher from Jul 2019. The numbers represent closed sales, meaning contracts signed in May & Jun. The increase in sales came as supply fell, prices rose & mortgage rates stayed low. The
supply of existing homes plummeted 21.1% annually, with just 1.5M homes for sale at the end of Jul. This represents a 3.1-month
supply at the current sales pace, down from a 4.2-month supply a year
earlier. It's the lowest Jul supply in the history of the inventory
survey, which has been tracking single-family supply data since 1982. "The
new listings are running a little higher than one year ago but all
those new listings are being grabbed by the buyers and taken off the
market," said Lawrence Yun, chief economist for the Realtors. That
shortage drove the median price of a home sold in Jul up 8.5% annually
to $304K. This is a record high nominal price but also the highest
price when adjusted for inflation. When adjusted, it is 3.4% higher than
the bubble high set in 2006, when mortgage lending was loose &
borrowers could buy a home with no down payment & little to no
financial documentation. "I think there is a big societal change
concerning housing decisions today," said Yun. "The upper income bracket
has been more stable in terms of jobs, and they are taking advantage of
record low mortgage rates." Low interest rates are adding fuel to
home prices, as they give buyers more purchasing power. Mortgage rates
spiked briefly at the start of Jun but then fell back quickly. The
average rate on the 30-year fixed mortgage hovered just above 3% for
most of June before then falling below that in July. Sales of newly built homes jumped 14% from May to Jun, according to the
US Census. Homebuilder sentiment rose in Aug to the highest score
in the 35-year history of the National Association of Home Builders'
monthly index. Builders are benefiting not just from strong buyer demand
but from the severe shortage of existing homes for sale.
July home sales spike a record 24.7% as prices set a new high
Secretary of State Mike Pompeo addressed a slew of issues lingering over the US & China, ranging from strained trade relations to national security threats to the Nov presidential election. When asked whether the relationship between the world's 2 largest economies could be restored, he said the Trump administration is open to talks with Beijing. Yet he added that the US would maintain its tough stance in the interest of American national security. “This is a serious effort, this is a serious risk and President Trump is serious about protecting our information, our networks and the American people,” Pompeo said. When asked about the Chinese-owned TikTok, Pompeo would not discuss specifics of a US tech firm acquiring the platform. He did reiterate the importance of such a sale in order to protect personal American data. “I predict that TikTok will no longer share its private information that belongs to the American people to the Chinese Communist Party, I’m confident that they won’t be doing that,” Pompeo said of the potential US acquisition. “I promise you when we get to the end of this that won’t be happening,” he added. Pompeo also vowed to “continue to go after” China if the country continues to demand that all Chinese companies are “beholden to their security apparatus.” Earlier this month, the Trump administration announced that it would remove “untrusted” Chinese tech apps like TikTok & WeChat from US app stores. Pompeo detailed the new 5-pronged “Clean Network” effort aimed at curbing potential national security risks. “With parent companies based in China, apps like TikTok and WeChat and others, are significant threats to personal data of American citizens, not to mention tools for Chinese Communist Party content censorship,” Pompeo said 2 weeks ago.
Pompeo vows a tough U.S. stance on China but is open to talks
The latest stimulus bill continues to be stuck in the mud & its prospects for becoming law are dim. However the stock market is rolling with the punches. Housing continues strong & the auto market is making a solid rebound which investors like to see. They keep buying stocks with the averages at or near record highs.
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