Good Monday AM,

 

Stocks are screaming higher with the Dow +500 after Nancy Pelosi said yesterday that a last minute aid bill remains on the table. More aid = more money into the system for everyone, including would be investors. This while a continuously weakening dollar is the right recipe today for equities. Bonds, which if this were real directional trading, would be on the move as well, are not. Yes the Fed is backstopping bonds but right now, there is no push to higher yields the Fed needs to put the brakes to. It is business as usual with the 10-yr note at .67 and mortgage bonds up a smidge. The end of the week though brings the first Friday of the month (of October!) and thus the big jobs report–the economic data that has ruled all others throughout bond market history. Before then we have some other interesting data: consumer confidence, GDP, ADP payroll data and of course unemployment claims. And… let’s not forget the first presidential debate which is to take place tomorrow, Tuesday. If Mr. Biden makes a good showing, I would not count out a market sell off.

 

Lots more to share today.

 

Speaking of the economic recovery… it is really a tale of two economies. Equity markets surging give an illusion that the US economy is growing and healthy. However the darker side is that 26 million people are still receiving some sort of unemployment benefit. Still those who are experiencing a recovery (or at least feel economically secure) have been driving up home sales. New home sales in August increased 4.8 to a 1,011,000-annual rate: the highest since September 2006. Existing home sales increased to an annual rate of 6,000,000; the highest since December 2006 and 10.6 percent higher than their level 12 months ago. House prices continue to rise as inventory dropped to a very tight three months’ worth. The median sales price of an existing home rose 11.4 percent over the last year.

 

The for those who are not as fortunate, the Research Institute for Housing America (RIHA), MBA’s think tank, released a special report on housing-related financial distress during the second quarter –  among the report’s findings were that 5.88 million renters, or 11% of the national total, missed, delayed, or reduced payment on at least one rent payment during the pandemic’s first three months, while 5.14 million homeowners, or 8% of the national total, either missed or deferred at least one mortgage payment.

 

 

And with fall here, it is important to share an update (which is a little unsettling) on Covid…

New confirmed cases of the coronavirus are rising by at least 5% in more than half of U.S. states, as of Sunday, according to a CNBC analysis of Johns Hopkins University data. Several states are seeing weekly growth in average daily new cases that far exceeds that 5% benchmark — the seven-day average of new infections in North Carolina is 60% higher than a week ago; in New Mexico, 55% higher; and in Wyoming, 45% higher. Daily infections remain steady in 12 states and are falling in 12 states as well as the District of Columbia. Arizona, which earlier this summer saw a dangerous spike in transmission, now reports a seven-day average of new cases that is 40% lower than the previous period.

 

 

 

Please remain safe and healthy. Make today great!