Fears of COVID-19 Impacts Deepen, Fueling Stock Selloff…..

U.S. equities extended a recent fall, as worries surrounding the recent uptick in COVID-19 cases in the U.S. and notably in Europe have intensified, causing investors to ponder the potential ramifications to the global economy. Moreover, hopes of a near-term agreement on fiscal relief measures have faded away, as the highly-contentious presidential election draws near. Earnings season remained in high gear, as Dow members Microsoft and Boeing, along with UPS saw pressure following their results, while GE traded higher in the wake of its release. Treasury yields were little changed and the global uneasiness boosted the U.S. dollar, while gold and crude oil prices fell. In light economic news, mortgage applications rose, a preliminary read on the trade deficit showed that it unexpectedly narrowed, and wholesale inventories surprisingly dipped. Asia closed mixed and Europe finished with widespread losses.

The Dow Jones Industrial Average fell 943 points (3.4%) to 26,520, the S&P 500 Index was down 120 points (3.5%) at 3,271, and the Nasdaq Composite lost 426 points (3.7%) to 11,005. In heavy volume, 1.1 billion shares were traded on the NYSE and 3.8 billion shares changed hands on the Nasdaq. WTI crude oil was $2.18 lower at $37.39 per barrel and wholesale gasoline lost $0.07 to $1.06 per gallon. Elsewhere, the Bloomberg gold spot price fell $30.39 to $1,877.60 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—advanced 0.5% at 93.45.

Mortgage applications rise…..

The MBA Mortgage Application Index rose by 1.7% last week, following the prior week’s 0.6% decline. The increase came as a 2.5% rise in the Refinance Index was accompanied by a 0.2% gain in the Purchase Index. The average 30-year mortgage rate declined 2 basis points (bps) to 3.00%.

The advance goods-trade balance showed that the September deficit unexpectedly narrowed, coming in at $79.4 billion, versus estimates calling for it to increase to $84.5 billion from August’s upwardly-adjusted shortfall of $83.1 billion.

Preliminary wholesale inventories surprisingly dipped 0.1% month-over-month (m/m) for September, compared to expectations of a 0.4% gain, and versus August’s downwardly-revised 0.3% rise.

Treasuries were little changed, with the yields on the 2-year note, 10-year note and 30 year bond all flat at 0.15%, 0.77% and 1.56%, respectively.

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