Archives of “October 21, 2020” day

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Fed’s Beige Book: Economic activity improved at slight to modest pace

  
  Analysis

The latest Fed report on the economy

  • Growth continued but was slight-to-modest
  • Manufacturing generally increased at moderate pace
  • Commercial real estate conditions continued to deteriorate in many districts
  • Consumer spending growth remained positive, but some Districts reported a leveling off of retail sales and a slight uptick in tourism activity.
  • Districts characterized the outlooks of contacts as generally optimistic or positive, but with a considerable degree of uncertainty
  • Banking contacts in many Districts expressed concern that delinquency rates may rise in coming months
  • Overall, consumer prices across Districts rose modestly

There are some worrisome comments on New York real estate in the report, saying condo sales were down nearly 50% y/y with inventories rising sharply. They also noted that office rental rates were down 8% y/y.

Congress likely out of time on per-election stimulus deal – report

  
Analysis, Politics

It’s all political theatre now

It's all political theatre now
A stimulus bill is unlikely to be passed before the election, according to sources in both parties cited by CNN.
There is hope for an agreement in principle but passing it before the Nov 3 vote is probably too big of a hurdle.

That’s because of the sharp disagreements within the GOP, the logistical hurdles of passing legislation quickly of this magnitude through both chambers and the fact that Speaker Pelosi and Treasury Secretary Steven Mnuchin still have many outstanding details to sort through.

Pelosi has not yet told her colleagues if she’ll bring the House back to session next week to vote on the stimulus, sources said. So it’s still possible the House could return next week just days before the election.

But the Senate is likely to adjourn after Monday when Amy Coney Barrett is confirmed to the Supreme Court, though the final schedule has not yet been announced.

Brazil reports that volunteer in Astrazeneca COVID vaccine trial died

  
  Analysis

What killed him/her

Brazil health authority Anvisa says a volunteer in the clinical trials of Astrazeneca/Oxford COVID-19 vaccine has died. The Brazil Federal University Of Sao Paulo says the volunteer was Brazilian.
Now, people die all the time and there are thousands of people doing virus trials so there’s a good chance it’s a coincidence. Brazil’s health authority said the trials will continue, so you can infer it might not be related.
Still, ADRs of AstraZeneca are quickly down almost $2 to $50.62.
Update: The University of Oxford said that it has carefully assessed the case in Brazil and there have been no concerns about the safety of the trial. Shares of AZN have pared nearly all the loss with a clearer message here that the death wasn’t believed to be related to the vaccine.
The bad news is that this is more fodder for the anti-vaxxers.

Goldman Sachs on US stimulus talks – a deal doesn’t seem particularly close

  
  Analysis

Analysts at the investment banks are not bullish on a resolution soon, saying:

 

  • Some of the biggest issues remain unresolved 
  • the thorniest issues – fiscal aid to states and liability protections – are still outstanding

 

there is

 

  • no indication that differences have narrowed since last week

 

and

 

  • a deal doesn’t seem particularly close

 

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If you look across various ‘risk’ assets during the Asian session here you’d have to say they disagree with GS?

New York Times report on Trump holding an account at a Chinese bank

  
  Analysis

The NYT have popped up an article with further on Trump’s tax filings:

  • China is one of only three foreign nations – the others are Britain and Ireland – where Mr. Trump maintains a bank account
  • The foreign accounts do not show up on Mr. Trump’s public financial disclosures, where he must list personal assets, because they are held under corporate names. The identities of the financial institutions are not clear.
It goes on:
  • In response to questions from The Times, Alan Garten, a lawyer for the Trump Organization, said the company had “opened an account with a Chinese bank having offices in the United States in order to pay the local taxes” associated with efforts to do business there. He said the company had opened the account after establishing an office in China “to explore the potential for hotel deals in Asia.”
Seems reasonable.
The NYT have popped up an article with further on Trump's tax filings:

FT report that UK PM Johnson’s 3-year spending master plan to be ditched

  
  Analysis
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Financial Times say that UK Chancellor Sunak has told the PM that current plans should not go ahead due to the chaos of Covid-19.

A decision to scrap the three-year review in favour of a stopgap single-year settlement would be a setback for Mr Johnson, who saw the event as a chance to map out his priorities for a post-Covid world.
Johnson and Sunak have been discussing whether anything can be salvaged from binned plan.
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Brexit trade talks appear to be floundering. Coronavirus outbreak infections surging. Lockdown accelerating, and resisted.  Not a lot of good UK news about at present.
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