Dow advanced 368 to go over 30K & a new record, advancers over decliners 3-1 & NAZ gained 119 to another record. The MLP index added 3+ to 139 & the REIT index went up 5 to 371. Junk bond funds rose in price & Treasuries were sold while stocks were being pruchased. Oil fell 1 to the 44s & gold jumped 33 to 1813.
AMJ (Alerian MLP index tracking fund)
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Treasury Secretary Steve Mnuchin touted continued economic growth as the country recovers from being shut down earlier this year due to the coronavirus pandemic while warning that new restrictive measures are impeding that progress. Mnuchin is testifying before the Senate Banking, Housing & Urban Affairs Committee to discuss a quarterly report on the CARES Act, which he said has helped curb unemployment, which spiked at the height of the pandemic. “The historic, bipartisan CARES Act provided the economic relief critical to supporting our robust recovery,” Mnuchin said. "Additional economic shutdowns, however, continue to impair this remarkable progress and cause great harm to American businesses and workers.” Mnuchin said his prediction for a strong 3rd qtr came true, as the US saw GDP growth at an annual rate of 33.1%. He recognized that “there is more work to be done” & suggested the best approach would be a limited new relief bill in conjunction with the nearly ½B $s remaining that was appropriated for the CARES Act. “Based on recent economic data, I continue to believe that a targeted fiscal package is the most appropriate federal response,” he added. “I strongly encourage Congress to use the $455 billion in unused funds from the CARES Act to pass an additional bill with bipartisan support. The administration is standing ready to support Congress in this effort to help American workers and small businesses that continue to struggle with the impact of COVID-19.” Congress adjourns for the year on Dec 21, but in remarks on the Senate floor, Senate Majority Leader Mitch McConnell, expressed confidence that this is enough time for lawmakers to work thru their differences & pass a bill.
Mnuchin touts economic growth, warns of dangers of new COVID restrictions
Federal Reserve Chair Jerome Powell warned the pace of the US economic recovery from the coronavirus pandemic has moderated in recent months & said the outlook remains "extraordinarily uncertain" amid a recent surge in infections across the country. In congressional testimony, Powell called the rise in COVID-19 cases "concerning," & said it could "prove challenging for the next few months." "As we have emphasized throughout the pandemic, the outlook for the economy is extraordinarily uncertain and will depend, in large part, on the success of efforts to keep the virus in check," Powell added in remarks for the Senate Finance Committee. Powell said recent news of coronavirus vaccines are "very positive," but said he expects "significant challenges and uncertainties including timing, production and distribution, and efficacy across different groups." "It remains difficult to assess the timing and scope of the economic implications of these developments with any degree of confidence," he continued. He reiterated that the central bank remains prepared to utilize all of its tools to prop up the economy. Over the past 4 months, the Fed slashed interest rates to near zero – where it has pledged to hold them for years to come – & injected nearly $2.8T into the economy, an unprecedented amount. The Fed's balance sheet has surged to nearly $7T.
Powell, warning of moderating economic recovery, says outlook is 'extraordinarily uncertain'
Bipartisan lawmakers unveiled a coronavirus stimulus package after months of congressional inaction on curbing the economic damage from the outbreak. The $908B proposal includes $288B in small business aid such as Paycheck Protection Program loans, $160B in state & local gov relief & $180B for supplemental unemployment insurance, according to a draft. It would put $16B into vaccine distribution, testing & contact tracing, funnel $82B into education & allocate funds for rental assistance, child care & broadband. The proposal would not include another direct payment to most Americans. It also would offer temporary federal protection from coronavirus-related lawsuits — a provision Dems have opposed — while states determine their own laws. Dem Sen Mark Warner, a member of the congressional group that has discussed a new relief plan, earlier called it an “interim package” to provide support until Pres-elect Biden takes office in Jan. “If there’s one thing I’m hearing uniformly it’s: ‘Congress, do not leave town for the holidays leaving the country and the economy adrift with all these initial CARES [Act] programs running out,’” Warner said. It is unclear whether congressional leaders will embrace the proposal or if it will lead to a breakthrough before the end of the year, when many programs expire. Dems have opposed liability protections & pushed for a $600 per week supplemental jobless benefit, while the GOP has pushed against new state & local aid. Still, it underscored the rumbling among rank-&-file lawmakers to pass more aid even as party leaders fail to break a months long impasse.
Lawmakers unveil bipartisan $900 billion coronavirus stimulus package as stalemate drags on
Enthusiasm by investors remains high & they are hoping another attempt to pass a relief bill along with advances on the coronavirus vaccines will bring help to a struggling economy. Meanwhile negative thinking investors are buying gold.
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