WASHINGTON (MaceNews) – The following is Wednesday’s status check of developments in the U.S. that can influence economic, health and political outcomes:
- The VIX mood ring turned a more mellow shade Wednesday, improving a notable 5.27% to settle at 24.10 by day’s end. U.S stocks finished the day’s session +0.61% or 160.29 points, and in early after hours kept a positive tone as did the S&P, up 1.24% or 40 points. The Nasdaq wasn’t left behind, up 1.35% or 140.85 despite some of its stars being grilled on Capitol Hill. Apple was +1.9%, Alphabet/Google/YouTube +1.92%; Facebook +1.4% and Amazon +1.1% as FAANG stocks proved impervious to congressional insults. The rising phoenix, Kodak, settled down to be up only a little more than 300%, just another day for the newest federally subsidized producer of hydroxychloroquine ingredients and other pharma building blocks.
- The credit market yield curve continued to steepen but not dramatically as the FOMC surprised no one by keeping glued to the zero bound. The U.S. 10-year yield was at 0.577%, down a few tenths of a basis point, while the 30-year went the opposite way by 1.9 bps, to 1.242%.
- After the policy announcement Chair Powell’s language was scrubbed of any happy talk about the virus which he and the policy statement said is driving the economy. His measured quotes about the expected “long tail” of unemployed looking for nonexistent jobs is in the story at macenews.com. “We see a big shock to demand. We see core inflation dropping to 1%. I do think for quite some time we’re going to be struggling against disinflationary pressures.”
- The latest virus statistics suggested August is a lost cause, with the pipeline of illness now packed with cases which will be advancing toward the ventilators in the weeks ahead. U.S deaths blew past the 150,000 mark, 1,351 more than Tuesday (NYT Tracker). The mounting daily death toll suggests the 200,000 mark will be hit sooner than forecast, not long after August 31.
- President Trump’s remarks at the ropeline Wednesday morning pretty much obliterated any hopes that his heralded pivot to an increased adherence to his experts’ virus precepts will have any staying power, even if he keeps his mask close by. He doubled down in his defense of the discredited Houston doctor’s advice to take hydroxychloroquine featured in the video he retweeted Monday night. Biden said the doctor is “disgraceful.”
- Trump’s subsequent visit to the Texas Oil Patch saw him renew his pledge to keep the U.S. the world’s export champ, a title already challenged by market circumstances. Mask skeptic Rep. Gohmert missed out on his AF1 flight to Texas with Trump when his virus test proved positive. The House Speaker then made masks mandatory in the House chamber.
- Trump tried to set the White House negotiating stance on Phase 4 virus response legislation as daring the Democrats to throw him in the briar patch. He said, also at the ropeline with Treasury’s Mnuchin beside him, that “We’re so far apart, we don’t care. We really don’t care“ if the negotiations ever lead anywhere as long as there is quick action to extend the federal moratorium on evictions. Markets nevertheless appeared to assume Mnuchin, Speaker Pelosi and the Senate’s Schumer will get it together, perhaps before the Senate is due to leave Aug. 8 for its summer vacation.
- NIH’s Fauci in several interviews during the day said the virus surge is underway in many areas and at one point reminded the virus can enter the body through eyelids. The CDC’s daily count distributed within government said nine of the top 10 hotspots are in Texas and Florida while another 80 counties are areas of concern.
- Scattered school reopenings were good news for the White House, including the private Thales Academy in N.C. where Vice President Pence and Secretary of Education DeVos showed up to help celebrate. All the state’s public schools are 19 days away from opening. DeVos, who skipped the mask bit, said there is “no national school superintendent” hence no national reopening policy.
- President Trump described his order withdrawing 11,400 troops from Germany as a punitive move, saying that country will never catch up on what it owes NATO. No one came forward to welcome the move. Another withdrawal, of militarized federal agents from Portland, was negotiated with many conditions, mainly if the attacks stop and local police take over.. However the DoJ is sending more agents to Detroit, Cleveland and Milwaukee to fight crime, not defend buildings.
- In upcoming economic data, Thursday morning’s worst GDP report on record making the second quarter a historic data point. As much of a reminder it is of the debilitated economy, it’s hardly relevant to the current quarter which may still eke out a positive number. The GDP number is annualized, so four times worse than it seems, in this case, not much of a reassurance. Also at 8:30a ET is the weekly jobless benefit claims number. Last week was the end of four weeks of improvement.
- The potential tropical disturbance headed for Florida on Sunday has not yet earned its own name nor has it decided whether to hit the Gulf or Atlantic coast.
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