Dow finished up 34, decliners slightly ahead of advancers & NAZ lost 23. The MLP index was off fractionally in the 135s & the REIT index hardly budged in the 356s. Junk bond funds drifted lower & Treasuries edged higher. Oil was a little lower in the 42 & gold retreated 20 to 1950 (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)
Pres Trump said that he had directed the Treasury
Dept to prepare a 2nd round of stimulus checks for American
families, but he blamed Dems for holding up the direct payments. "I have directed @stevemnuchin!
to get ready to send direct payments ($3,400 for family of four) to all
Americans," Trump wrote. "DEMOCRATS ARE HOLDING THIS UP!" Both political parties broadly support sending another cash payment
of $1200 for adults & $500 for kids -- meaning that a family of 4
could receive up to $3400, with the necessary qualifications nearly
identical to the first stimulus check. "I’m waiting for the
Democrats to approve it," Trump said during press
briefing, clarifying that he was not planning to act unilaterally on the
stimulus checks. But
Trump's comments come amid a weekslong impasse between White House
officials & top Dems over a 4th virus relief package. The
high-stakes stalemate over the next rescue bill appears likely to drag
on for weeks, possibly into Sep, putting at risk potentially Ts of $s in aid amid a pandemic that's infected more than 5M & triggered the worst economic downturn in decades. The 2 sides indicated yesterday that an agreement is still out of reach
after six days of no in-person meetings. Dems are now saying they
will only sit down with Reps if they agree to a $2T price
tag. Asked yesterday when she thought she might speak with
Reps again, Speaker Nancy Pelosi said: "I don’t know.
When they come in with $2 trillion." The
Senate is now scheduled to be in recess until Labor Day after
technically remaining in session an extra week. But most members
returned to their home districts last week. House lawmakers left last
week & are not slated to return until the 2nd week of Sep.
Trump directs Treasury to ready 2nd round of checks, blames Dems for delay
New coronavirus cases in the US topped 50K for the 2nd day in a row, as countries around the world struggled to curb the virus's spread. Total cases in the US exceeded 5.2M, about a qtr of the world-wide
total, according to data compiled by Johns Hopkins University. The
nation's death toll rose by about 1K to more than 167K. That was
down from the previous day's tally, which was the highest daily total since May 27. The 7-day average of new infections topped the 14-day average in 13 states DC, suggesting that
cases were rising in those areas. When a 7-day average is higher
than a 14-day average it suggests an increase. Looking at averages also
helps smooth out data anomalies. Testing trends, meanwhile, varied
across the country In 17 states, the 7-day moving average of tests
per 1K people was down from a week ago.
It was higher in 14 states. In North Carolina, the state's health dept corrected figures
marking the cumulative number of coronavirus tests it has completed,
reducing its total tally by more than 200K. The error, which the
department reported Wed, resulted from “a discrepancy between
electronic & manual testing data.” The state said the error didn't
impact other metrics, such as its testing positivity rate over time. New
details emerged yesterday about how hundreds of Ms of coronavirus
vaccines will be distributed in the US & who will bear the cost. The
US gov will pay for the vaccines & their distribution, &
is working with commercial health insurers to offer the shots free of charge &
without a copay, according to Dept of Health & Human Services. A
collaboration between the federal gov & the health-care
industry would handle distribution.
New coronavirus cases in US surpass this level for second straight day
Thousands of buyers who dove into the housing market this spring & summer even as the coronavirus upended the US economy. The presence of these buyers, plus a sharp drop in the numbers of homes on the market, drove home prices to record highs in most parts of the US. The average home price in the US in May rose 4.2% compared to a year ago. The data shows that prices for cheaper homes — those found in the lower 3rd of prices in metropolitan areas & a typical target for first-time buyers — grew faster than the rest of the market, rising 6.7% from a year ago.
HOMES SELLING AT RECORD PACE, WITH MEDIAN PRICES HITTING ALL-TIME HIGHS
The
coronavirus pandemic helped shape the housing market by influencing
everything from the direction of mortgage rates to the inventory of
homes on the market to the types of homes in demand & the desired
locations. The pandemic pushed the US economy into a deep
recession as many businesses shut down, which in turn forced the hand of
the Federal Reserve to dramatically lower interest rates. The average
mortgage rate fell from around 3.75% at the beginning of the year to
under 3% in a matter of weeks after the pandemic struck the US. That
sudden drop in mortgage rates was an instant boon to home
affordability, allowing many buyers to afford much more
expensive homes while keeping the same monthly payments. The pandemic also caused sellers to delay putting their homes on the
market. Sellers, who are typically older than buyers, were either
concerned about the economy, worried about their jobs, generally
reluctant to have strangers enter their homes, or some combination of
all 3. The supply of homes available for sale in May dropped nearly
30% from a year earlier. The lack of foreclosed properties for
sale was also a minor factor, as states & the federal
gov-imposed moratoriums on evictions & foreclosures. The pandemic has also temporarily changed the type of homes in demand. Families are looking for homes with rooms, especially if children may be
doing remote learning for the foreseeable future.
Home prices climb to record in coronavirus pandemic as buyers seek space
Gold futures ended lower, pulling back after 2 straight days of gains, with prices registering their first weekly loss in 10 weeks on the back of recent strength in Treasury yields. Dec gold retreated $20 (1.1%) to settle at $1949 an ounce, after climbing 1.1% yesterday. Gold prices saw a weekly decline of about 3.9%, based on the most-active contract’s settlement last Fri, which snapped a 9-week win streak. On Tues, Futures prices suffered the biggest daily $ decline since 2013. Investors yesterday also parsed economic reports in the US to help gauge the impact of the COVID-19 pandemic on the national economy. A report on US retail sales rose 1.2% in Jul, coming in weaker than forecast. Separately, a report on US productivity rose at an annualized rate at 7.3% in Q2, far surpassing expectations for a reading of 1.4%. Industrial production rose by a better-than-expected 3% in Jul, for the 3rd straight monthly gain.
Gold declines for the session, posts first weekly loss since early June
Oil futures finished lower, with pressure attributed in part to
downbeat global demand forecasts from major organizations this week, but
prices still ended the week higher following declines in US supplies. In a monthly report yesterday, the IEA said it expects 2020 global oil demand to contract by 8.1M barrels a day to 91.9M barrels a day, year over year. OPEC’s monthly report issued called
for a larger fall of 9.1M barrels a day in 2020 demand growth
for global petroleum & liquid fuels to 90.6M barrels per day,
while a monthly report from a EIA forecast 2020 for demand at 93.1M barrels a day, down 8.1M from 2019. West Texas Intermediate (WTI) crude for Sep fell 23¢ (0.5%) to
settle at $42.01 a barrel, while the global benchmark, Oct Brent
crude lost 16¢ (0.4%) at $44.80 a barrel. For the week, WTI ended 1.9% higher, while Brent gained 0.9%. Wed
the EIA reported a weekly fall of 300K barrels per day to 10.7M barrels per day in total US oil production, along with a
decline of 4.5M barrels in crude inventories—the 3rd weekly
drop in a row. In a sign of potential further declines, Baker Hughes reported that the number of active US rigs drilling for oil fell for a 3rd straight week, by 4 to 172 this week.
Oil slips on demand worries, but U.S. supply declines help solidify weekly price gains
A US-China trade talks meeting over the weekend was postponed indefinitely. That prompted selling in the last 2 hours. However a few buyers pushed the Dow back into the black just before the close. Otherwise, not too much going on in the stock market. New economic news has been positive, but short of spectacular. With the virus fighting back, markets will mostly be influenced by the goings on at the conventions. Trump is keeping hopes alive for another stimulus bill, but the prospects are not encouraging. The Dow moved up 400 this week & gained 1400 in Aug, For what it's worth, the Dow is about even YTD. Have a good weekend. 😀
Dow Jones Industrials
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