Markets retreat ahead of the presidential debate

Dow fell 131 on a choppy day while in the red, decliners over advancers about 3-2 & NAZ was off 32.  The MLP index rose 1+ to 110 & the REIT index fell 3 to the 346s.  Junk bond funds hardly budged & Treasuries edged higher.  Oil dropped 1+ to 39 & gold rebounded 18 ton 1900.

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Steel production has rebounded alongside the recovery in automotive production this qtr, Cleveland Cliffs (CLF) CEO Lourenco Goncalves said.  US automakers are sprinting to re-stock showrooms & get back on production schedule after plants were shut down earlier this year as the country took action to slow the spread of a novel coronavirus.  “We have been through a very profitable quarter and very strong in terms of the recovery of demand particularly in automotive,” he added.  The US economy quickly fell into a recession as businesses closed up & unemployment shot up across the country, but autos demand, much like demand in the housing market, has been one of the unexpected stronger parts in the economic recovery.  Plants of Detroit's Big Three automaker are now operating at near full-speed to get back on production schedule & deliver new cars to dealerships as the holiday season approaches.  SUVs & pickup truck sales have picked up particularly well among consumer purchases.  CLF is the largest US producer of iron ore pellets, which are used in the production of steel.  The company announced it would purchase the US assets of ArcelorMittal, the world's largest steelmaker, for about $1.4B.  The stock was up a penny.
If you would like to learn more about CLF, click on this link:
club.ino.com/trend/analysis/stock/CLF?a_aid=CD3289&a_bid=6ae5b6f7

Steel production recovered as auto plants resumed operations, Cleveland-Cliffs CEO says

Dems unveiled their latest relief package ahead of renewed negotiations with Treasury Secretary Steve Mnuchin.  The new package, which is being referred to as the updated HEROES Act, proposes to restore popular assistance programs such as the $600 weekly federal unemployment benefit boost & another round of stimulus payments.  Yet to trim the legislation cost from the proposed $3.4T to $2.2T, Dems cut funding for state, local & tribal gov support, as well as reduced funding to the Postal Service.  Other areas saw a slight expansion, including child care & education funding.  The updated HEROES Act provides another round of stimulus payments of up to $1200 to individuals earning an adjusted gross income of up to $75K & $2400 for couples earning up to $150K, as well as an additional $500 per dependent, which includes full-time students below age 24 & adult dependents.  The new legislation restores the $600 weekly enhanced federal unemployment payments thru Jan 2021.  Dems also aim to provide a transition period at the end of Jan 2021 to prevent unemployment benefits from abruptly ending before Mar 31.  The bill also extends the Pandemic Unemployment Assistance program, which specifically covers business owners, self-employed Americans, gig workers & independent contractors who are not typically eligible for unemployment, thru Jan 2021.  Dems are proposing a new program called Pandemic Emergency Unemployment Extension Compensation, which would provide up to 13 additional weeks of federally financed unemployment benefits to any individual who exhausts state or federal unemployment benefits before Jan 31, 2021.  The bill also earmarks $925M to assist states in processing unemployment insurance claims.

What the latest $2.2 trillion stimulus bill from Democrats includes

Global confirmed deaths topped 1M, while US hospitalizations have plateaued after falling for months.suggestinig that the country could see more deaths & illness as it heads toward winter.  In North Dakota, the 7-day average of new cases climbed to a record.  Boris Johnson apologized after wrongly explaining his own gov's coronavirus rules, & responded to reports of concern among colleagues by saying he is heathier than he was before getting the virus in Mar.

Global Deaths Top 1 Million; North Dakota Cases: Virus Update

Federal Reserve Bank of Dallas Pres Robert Kaplan said he dissented at the central bank's Sep meeting so that future policy makers wouldn't be forced to keep rates near zero.  “I would like future committees to have the flexibility to adapt to those future economic conditions so they can use their best judgment in deciding on the appropriate stance of monetary policy,” Kaplan wrote in a letter published today.  The letter outlines his rationale for dissenting as well as his views on the economy & energy markets.  Kaplan also said he's skeptical about the benefits of additional forward guidance right now.  He sees the economy contracting 3% this year & growing 3.5% next year.  The core personal-consumption inflation rate will rise 1.6% at the end of this year & 1.8% by the end of next year.  The unemployment rate will fall to 5.7% by the end of 2021.  Kaplan was one of 2 dissenting voters at the Fed's Sep 15-16 meeting, where policy makers took a more dovish tone. They signaled rates would stay near zero thru 2023 & adapted their post-meeting statement to reflect their new strategy of allowing inflation to rise above 2% after periods of under-performance.  Minneapolis Fed Pres Neel Kashkari dissented in favor of waiting for a rate hike until “core inflation has reached 2% on a sustained basis.”  Kaplan said he expects it'll be appropriate to keep interest rates near zero until the economy is on track to achieve maximum employment & inflation averaging 2% over time, which will take until late 2022 or “sometime in 2023.”  As the economy approaches those benchmarks, keeping rates near zero may mean that policy actually becomes more accommodative, he wrote.

Policymakers Should Have Freedom to Lift Rates, Kaplan Says

The dropped over over 200 in the AM, but a few buyers returned in the PM to trim the loss.  There was not a lot of excitement on the news front.  Improvement in consumer confidence should be a plus for business going forward & the article about CLF is a reminder that steel, an important industry in the economy, is bouncing back to some degree. Going into the last day of trading in Sep, the Dow is down 1K for the month & the NAZ pulled back 700 (the red hot index all year) 

Dow Jones Industrials