Dow went up 61, advancers over decliners about 5-4 & NAZ gained 26. The MLP index declined 1+ to 141 & the REIT index rose 1+ to the 366s. Junk bond funds inched higher & Treasuries were weak. Oil was off to the 47s & gold fell 3 to 1882.
AMJ (Alerian MLP index tracking fund)
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House Reps blocked a last-minute attempt by Dems to pass a bill increasing the size of the stimulus checks included in the $900B coronavirus relief package from $600 to $2000 per adult. House Speaker Nancy Pelosi planned to use unanimous consent to swiftly approve larger cash payments for individuals in the stimulus bill that Congress passed Mon after Pres Trump pushed lawmakers to more than triple the size of the checks. Under House rules, a measure can pass by unanimous consent so long as no one member objects. Ways & Means Committee Chair Richard Neal introduced legislation – the Cash Act – shortly after the unanimous consent vote to increase the stimulus check size to $2000 that will be put on the floor Mon. Trump's demands for bigger checks came in a surprise video address Tues alongside a slew of other complaints about the $2.3T package, which included $1.4T in gov funding. The pres did not explicitly say whether he would veto the measure or refuse to sign it, but said that if Congress did not send him revised legislation, "the next administration will have to deliver a COVID relief package." Any delay on the bill's passage could plunge Ms of Americans into financial crisis: Up to 12M laid-off workers could lose their unemployment benefits the day after Christmas, a moratorium on evictions will expire at the end of the month & Bs of $s in aid for vaccine distribution, education & health care would be put on hold. In addition to sending up to $600 checks for Americans earning less than $87K, the stimulus measure would provide temporary relief by extending boosted unemployment benefits by $300 a week thru mid-Mar, reopening the Paycheck Protection Program & providing more funding for vaccine distribution.
Dems fail to pass COVID relief bill changes during Christmas Eve session
Britain & the EU agreed on new Brexit trading arrangements more than 4 years after the UK voted to leave the bloc, narrowly avoiding a potentially disastrous no-deal scenario. Full details of the deal have yet to be released, but the UK gov said it had reached a “zero tariff-zero quota deal” with the EU which will help smooth the trade of goods across the channel. It will bring relief to exporters on both sides that had been facing higher tariffs & costs had a deal not been reached. UK Prime Minister Boris Johnson & EU Commission Pres Ursula von der Leyen praised the agreement. “The arguments with our European partners were at times fierce but this, I believe, is a good deal for the whole of Europe,” Johnson said. Von der Leyen called it a “good deal.” “It is fair, it is a balanced deal and it is the right and responsible thing to do for both sides,” she said & added that Europe would continue to cooperate in all areas with the UK, which she described as a “trusted partner.”
UK and EU strike historic post-Brexit trade deal
Consumer spending, the backbone of the US economy, declined in Nov as COVID-19 cases picked up across the country & damped activity. Consumer spending fell 0.4% in Nov after a revised 0.3% gain in the prior month, the gov said. The decline in Nov was in line with forecasts. Personal income slumped 1.1% in Nov after a revised 0.6% decline in the prior month, led by a decrease in gov social welfare benefits. The forecast called for a 0.3% decline. The 12-month increase in the PCE index, the Federal Reserve's preferred inflation gauge, slipped to 1.1% in Nov from 1.2% in the prior month. The core PCE rate that strips out food & energy remained steady at 1.4% on an annual basis. Consumers cut back on spending on both goods & services in Nov. There were declines in spending on clothes & autos. There was a large gain in take-out orders from restaurants, but spending on eating out & utilities dropped in the month. Wages & salaries, the biggest contributor to income, rose 0.4% after a 0.7% gain in Oct. This was the smallest increase since the lockdown in Apr. But overall income was dragged down by business income as gov loan programs ended & other social programs expired. With income falling more than spending, the savings rate slipped to 12.9% in Nov from 13.6% in the prior month. The surge of COVID-19 cases is causing the economy to lose steam. Retail sales in Nov were also weak. There is some hope that the latest economic relief package will give the economy a 2nd wind.
Consumer spending and personal income both decline in November
Not too much happening prior to Christmas, The UK & EU worked out a trade deal, whatever that means. Those guys in DC will have to try again to come up with a relief package that can get approved in Congress. Price movements for stocks today are not significant with many traders having started their holiday celebrations. The Dow is even in the shortened week. Enjoy the holiday.
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Dow Jones Industrials
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