On The Money: Pelosi, citing ‘leverage’ over Trump, holds strong to $2.2T in COVID-19 aid | McConnell to force vote on ‘targeted’ relief bill next week

Happy Tuesday and welcome back to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.



a man and a woman wearing a suit and tie: On The Money: Pelosi, citing 'leverage' over Trump, holds strong to $2.2T in COVID-19 aid | McConnell to force vote on 'targeted' relief bill next week | Trump again asks court to shield tax records


© Greg Nash
On The Money: Pelosi, citing ‘leverage’ over Trump, holds strong to $2.2T in COVID-19 aid | McConnell to force vote on ‘targeted’ relief bill next week | Trump again asks court to shield tax records

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THE BIG DEAL-Pelosi, citing ‘leverage’ over Trump, holds strong to $2.2T in COVID-19 aid: Speaker Nancy Pelosi (D-Calif.) on Tuesday shot down entreaties from some Democrats to cut a $1.8 trillion deal

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Business Insider’s best investing stories of the week ended October 13

Dear Readers,

If you’ve noticed more pronounced price swings in the market lately, that’s not just your mind playing tricks on you. After years upon years of relaxed trading, stocks have been jolted out of their slumber.

The volatility is a natural byproduct of the COVID-19 pandemic and everything associated with it: a record-shattering economic pullback and sharp recovery, emergency central bank actions, the race for a working vaccine, and assorted political machinations befitting an election year — most notably talks around a new stimulus package.

Complicating matters further is that each of the four factors listed above is capable of moving the market on a given day. That’s why the Investing team at Business Insider has been on the hunt for guidance from the world’s top experts.

If you aren’t yet a subscriber to Insider Investing, you can sign up here.

At the forefront of our research has been

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Oil prices log lowest finish in a week as constrained supplies come back on line

Crude-oil futures finished Monday at their lowest price in a week, with production in Libya, Norway and the Gulf of Mexico set to recover.

Libya lifted force majeure at its largest oil field, producers began restoring output in the Gulf of Mexico following Hurricane Delta, and crude output in Norway looked to recover following the end of an oil-worker strike.

West Texas Intermediate crude for November delivery
CL.1,
+0.35%

fell $1.17, or 2.9%, to settle at $39.43 a barrel on the New York Mercantile Exchange. December Brent crude
BRN00,
+0.24%

lost $1.13, or 2.6%, at $41.72 a barrel on ICE Futures Europe.

Front-month WTI, the U.S. benchmark, and global benchmark Brent on Monday both marked their lowest settlements since Oct. 5, according to Dow Jones Market Data.

With the passing of the hurricane and the resolution of the strike in Norway, “investors are more concerned about the higher output in

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What A Great Way To Start The Week (Technically Speaking For 10/12)

Let’s start the week by looking at last week’s fund flows from ETF.com:

Both SPY and QQQ had outflows last week, although QQQ’s was massive. IWM stands in contrast. This partially explains why small-caps are doing better than larger caps right now. The long end of the treasury market also had a decent inflow of fresh capital.Only defensive sectors had outflows last week — which is interesting since these securities are rising relative to others. Financial services had the largest inflow. This is a bit odd since this sector is probably about to report increased losses and delinquencies caused by the Spring lockdowns. The other inflows were modest, relatively speaking.

Europe is experiencing a virus resurgence (emphasis added):

Earlier in the week, France, Europe’s second-largest economy, downgraded its forecast for the pace of expansion for the last three months of the year from an already minimal 1 percent to

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POLL-Bank of Korea seen holding rates this week and for the rest of 2020

By Joori Roh and Jihoon Lee

SEOUL, Oct 12 (Reuters)South Korea’s central bank is expected to keep its interest rates on hold on Wednesday as its concerns over rising household debt and property prices would most likely put a bar on any policy changes.

The Bank of Korea (BOK) was seen keeping its base rate KROCRT=ECI unchanged at a record low of 0.50%, according to all 34 analysts surveyed by Reuters, after a total of 75 basis points in rate cuts since the outbreak of coronavirus pandemic.

Among the 27 analysts who provided forecasts for end-2021, 22 saw the BOK standing pat by end of next year, while the other five forecast rate hikes during the second half of 2021.

“The BOK is expected to maintain its accommodative stance due to the COVID-19 uncertainties and slow economic recovery. But further easing will be limited as the board

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New Positions Are Warranted, But Defensive Sector Strength Signals Modest Caution (The ETF Trader And Investor For The Week Of 10/5-10/9)

This column assumes that ETFs are the primary investment tool for the reader.

Please see my weekly market summation for a review of the macro-economic environment and general macro-level market trends.

Investment thesis: the macro-averages are now in a bullish posture; it’s a good time to take a new position. But be careful; defensive sectors are starting to rise, indicating traders are a bit more cautious.

Let’s start by looking at last week’s market activity, beginning with the treasury market:

TLT 5-day

The treasury market moved lower on Monday and then traded sideways for the rest of the week. Volatility was higher on late Tuesday and Wednesday as the market digested the whipsaw activity regarding additional fiscal measures. Also note the sharp sell-off and subsequent rally on Friday, likely due to additional fiscal talk.

SPY 5-day

SPY trended higher for the entire week as shown by the central tendency line

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Bank/Financial Earnings Releases Start This Week. All Eyes On Consumer Credit

JPMorgan (NYSE:JPM) reports its Q3 ’20 financial results on Tuesday morning, October 13th, 2020, followed up by Bank of America (NYSE:BAC) and Wells Fargo (NYSE:WFC) on Wednesday. Goldman Sachs (NYSE:GS) also reports Wednesday morning, while Charles Schwab (NYSE:SCHW) reports Thursday morning before the opening bell.

All in, I have 15-20 banks and financial names reporting this week, which should give bank investors a good look at credit losses, net interest margin compression, and (possibly) the first look at the guidance for 2021, although without stock buybacks, there may be no willingness to give guidance to investors.

For the Schwabs, BlackRocks (NYSE:BLK) and names like Goldman and Morgan Stanley (NYSE:MS), we get to see how further credit market improvements over the third quarter aided bond issuance, and how the robust capital market activity aided the capital-market-sensitive returns for the big banks.

Ed Yardeni (cut and pasted from his blog) starts

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What to know in the week ahead

Third-quarter earnings season kicks off this week in earnest with a plethora of major banks reporting results.

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While analysts have recently upgraded their expectations for earnings results across S&P 500 companies, most companies are still likely to report declines in profits over last year, with the effects of the coronavirus pandemic still lingering.

Q3 earnings season expectations

Second-quarter corporate earnings overwhelmingly topped a low bar of expectations, with Wall Street having braced for businesses to see activity hit a nadir during the worst of virus-related stay-in-place orders in late spring and early summer.

A record 84% of S&P 500 companies reported positive surprises for earnings per share (EPS) in the second quarter, even as EPS declined, in aggregate, by more than 30%, according to data from FactSet.

Those better-than-feared second-quarter results have also led analysts to deliver rare upward revisions to their estimates for third-quarter results – in

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The Week Ahead: A Brexit Showdown, U.S Politics, and Economic Data in Focus

On the Macro

It’s a busy week ahead on the economic calendar, with 68 stats in focus in the week ending 16th October. In the week prior, 53 stats had been in focus.

For the Dollar:

It’s a relatively busy week ahead on the economic data front.

On Monday and Tuesday, September inflation and wholesale inflation figures are due out.

The focus then shifts to manufacturing sector activity and labor market numbers on Thursday.

Expect the Philly FED Manufacturing PMI for October and the weekly initial jobless claims to impact.

At the end of the week, retail sales and industrial production figures are due out, along with October consumer sentiment numbers.

Expect the retail sales and prelim Michigan consumer Sentiment figures to have the greatest impact.

Away from the calendar, the next Presidential debate on 15th October will also provide direction. That is assuming that Trump decides to

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IMF Meets With Global Economy in Historic Recession: Eco Week

(Bloomberg) — The guardians of the global economy will gather this week under the cloud of the worst recession since the Great Depression, and a recovery dependent on scientists finding a coronavirus vaccine.

The International Monetary Fund and World Bank will hold their annual meetings, with both calling on the Group of 20 largest economies to extend a freeze in debt payments from the world’s poorest nations that’s set to expire at year end.

While the fund last month flagged a “small upward revision” to its 2020 growth forecast from its June outlook, it warned the rebound will be long and uneven.



chart, line chart: Goodbye V, Hello L


© Bloomberg
Goodbye V, Hello L

The IMF has been encouraging governments to spend whatever they need to confront the crisis, even while warning that debt as a percentage of GDP will rise to about 100% for the first time.

Fund officials earlier this month proposed reforms to

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