Words of consolation and remorse outpoured from the usual sources, but just as quickly the mood turned political as Senate majority leader, Mitch McConnell, and other Republicans began making plans for confirmation hearings once President Trump sends up a nominee to replace the deceased justice. Democrats voiced opposition, suggesting that any Supreme Court appointment should wait until after the elections on November 3rd.
Gnsburg's demise having been widely anticipated, it's likely that President Trump had already developed a short list of potential replacements and will send a nominee to the Senate on short order. With a 53-47 majority, the chances of a nominee surviving what should amount to circus-like hearings and a full senate vote are contentious and will add fire to an election season that already has plenty of divisive issues for the electorate to contemplate.
Trump recently released a list of 20 possible contenders for the vacancy, among them 11 women, including circuit court judges Bridget Bade, Barbara Lagoa, Martha Pacold, Sarah Pitlyk, Allison Jones Rushing, Amy Coney Barrett, Elizabeth Branch, Joan Larsen, Britt Grant, Allison Eid, and Kate Comerford Todd, a former senior vice president and chief counsel for the US Chamber Litigation Center.
On Saturday, President Trump announced that he would name a woman as a nominee to replace Ginsburg and that he would announce his decision this coming week.
As the election approaches, markets face more turbulence from various sources. Politics may begin to overshadow the fading narrative of COVID-19, though it would not be surprising to hear more warnings of another wave of infections from the likes of Anthony Fauci and other pandemic and vaccine proponents.
While the Dow Industrials were essentially flat on the week, Friday's trading was particularly troubling with the intraday low briefly below 27,500, but stocks rallied weakly into the close, shadowing losses that could have been more severe.
Decelines Thursday and Friday erased 850 points from Wednesday's intraday high of 28,351.36. More concering is the Dow's retreat from the September 3 five-month high of 29,164.38. All tolled, the Dow's recent losses put it only 6.4% below its all-time high of 29,551.42 from February of this year, so, despite the pullback, the move is likely to be considered a healthy consolidation from an overheated position by market observers.
The NASDAQ finished up its third straight week of losses as Thursday and Friday's results sent the daily tally under its 50-day moving average for the first time since late April. Leading the way lower were the FAANMGs (FB, AAPL, AMZN, NFLX, MSFT, GOOG), darlings of the tech space, which had put on incredible gains since March and were ripe for a pullback. Somehting
Also falling below its 50-day moving average on the daily chart, the S&P 500 suffered its third consecutive week sustaining losses.
A lone winner on the week was the NYSE Composite, which put in a fractional gain. It's worth mentioning that the NYSE and Dow Industrials have not achieved new highs since the March crash, as opposed to the NASDAQ and S&P, both of which have set multiple records since the COVID Crash. Whether or not the recent losses continue on into a correction will likely play out over the next two weeks, but certianly some direction will be discernable when companies begin reporting third quarter results beginning the second week of October.
Weighing in on recent activity, former Fed governor, Randall Kroszner, opined that the after-effects of COVID-19 would be longer-lasting and more profound than those stemming from either 9-11 or the Great Financial Crisis of 2008-09.
What should be of particular note are bank stocks, among the earliest to report. Giants Bank of America (BAC), JP Morgan Chase (JPM), Citigroup (C), Goldman Sachs (GS) and others begin rolling out third quarter results right after Columbus Day (October 12). Loan loss reserves will be in focus as banks and other financial insitutions like credit card issuers CapitalOne (COF) and Discover Financial (DFS) have been handing out deferrals and forbearances like candy to cardholders and mortgagors unable to make required monthly payments.
With the easy skipping of payments having mostly run its course, credit insitutions are beginning to end these programs, some requiring regular montly payments on credit cards in September. The nationwide program of mortgage forbearance on federally-insured loans continues through the end of 2020. Even with these programs in place, expectations for massive defaults by consumers are going to put a dent in bank stock earnings for the period, as they have done in the first and second quarters.
Volatility returned to markets in a big way in September. The remaining days of the month and into October appear poised to heighten the uncertainty and keep markets from any meaningful andvance. The potential for a correction or a return to bear market conditions are heightened.
During the week, treasuries saw little change, with yields on the 10-year note and 30-year bond rising three basis points, to 0.70% and 1.45%, respectively. Complacency in the bond space may turn out to be short-lived, though the fixed income market has shown to be resilient throughout the COVID crisis. With the Fed pretty much assuring that the federal funds rate will remain at or near zero through 2023 in Wednesday's FOMC policy anouncement that steadfastness should continue in the absence of a severe pullback in stocks. Much of what's currently on the plate of traders and investors has been priced into stock and bond markets. Visions of 2021 may not be as sanguine.
The price of crude oil rose throughout the week, with WTI bouncing off the 9/11 close at $37.33 to finish the most recent week at $41.11 a barrel. Crude remains ranebount between the high 30s and low 40s.
Precious metals were under pressure again, expecially nearing the end of the week, a somewhat contradictory position. Gold was up a mere $10, rising to a Friday close of $1,950.86 from the prior week's finish at $1940.55. Year-to-date, gold is up 28.58%.
Spot silver was barely changed on the week, closing at $26.78 an ounce, up a mere five cents from the previous Friday finish.
While spot prices continue to stagnate, the buying of precious metals as a hedge against everything continued at a rapid pace with stackers and savers gobbling up available inventory from dealers at premium prices. The following are the most recent prices for common items on eBay (numismatics excluded, shipping - often free - included):
Item: Low / High / Average / Median
1 oz silver coin: 32.00 / 37.50 / 35.76 / 36.00
1 oz silver bar: 33.50 / 42.45 / 37.01 / 35.94
1 oz gold coin: 2,000.00 / 2,104.06 / 2,067.29 / 2,057.05
1 oz gold bar: 1,975.13 / 2,071.22 / 2,050.02 / 2,060.86
At the Close, Friday, September 18, 2020:
Dow: 27,657.42, -244.56 (-0.88%)
NASDAQ: 10,793.28, -116.99 (-1.07%)
S&P 500: 3,319.47, -37.54 (-1.12%)
NYSE: 12,833.57, -114.88 (-0.89%)
For the Week:
Dow: -8.22 (-0.03%)
NASDAQ: -60.26 (-0.56%)
S&P 500: -21.50 (-0.64%)
NYSE: +60.53 (+0.47%)
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