Dow soared 275 (for another record close), advancers over decliners better than 3-2 & NAZ went up 87. The MLP index added 4+ to the 203s & the REIT index rose 1+ to the 427s for a new record close. Junk bond funds edged higher & Treasuries remained weak. Oil gained 1+ to the 51s on easing fears about the effects of coronavirus & gold was off 1 to 1569 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
US deficit surges 25% in fiscal 2020 and is up $1.1 trillion over the past year
New coronavirus cases in China appear to have stabilized in recent days, but world health officials cautioned the public against reading too much into those numbers. The outbreak could still get worse, World Health Organization officials said. “The outbreak could still go in any direction,” Tedros Adhanom Ghebreyesus, director-general of WHO, warned at a news conference. The slowing number of new cases “must be interpreted with extreme caution.” There are 44,730 cases in China & at least 1114 deaths, Tedros said. Outside of China, there are 441 cases across 2 dozen countries & 1 death, he added. Dr Mike Ryan, exec director of WHO’s emergencies program, said the slowing in cases is due in large part to “the huge public health operation in China.” While new cases appear to have slowed in recent days, Ryan said public health officials must still be vigilant in preparing for the virus to get worse. “We must continue to stop the virus, while preparing countries for the arrival of the virus,” Ryan warned. “I know that sounds contradictory, but it is not a contradiction.” “We hope to see the virus come under control. We are not going to speak about numbers or dates,” he added. “It’s way too early to try and predict the beginning, the middle or the end.” Ryan said public health officials “have a good view on the virus,” adding there are 8 cases globally where officials can not find a plausible explanation of how they were exposed to it. Since emerging in Wuhan in central China about a month ago, the virus has spread from about 300 as of Jan 21 to more than 45K. World health officials have said the respiratory disease, named COVID-19, is capable of spreading through human-to-human contact, droplets carried thru sneezing & coughing & germs left on inanimate objects. Symptoms can include a sore throat, runny nose, fever or pneumonia & can progress to multiple organ failure or death in some severe cases, they said.
WHO says new coronavirus cases in China have stabilized, warns that could change
Gold futures gave up earlier losses to finish higher after Federal Reserve Chair Jerome Powell said the central bank would use quantitative easing as a tool against the next economic downturn. Prices for the metal had been trading lower for much of the session as demand for havens ebbed on signs the spread of COVID-19 in China may be slowing. However, in testimony before the Senate Banking Committee, Powell said the Fed would use gov bond purchases, known as quantitative easing (QE) & communicate clearly with markets about interest-rate policy, known as “forward guidance,” as tools against the next economic downturn. Gold for Apr delivery tacked on $1.50 to settle at $1571 an ounce. China's National Health Commission said 2015 new cases of the disease caused by a new strain of coronavirus that emerged in Wuhan, China, in late 2019, had been reported over the last 24 hours, declining for a 2nd day. That brought the number of cases in mainland China to 44,653, although experts have warned that a substantial number of infections may have gone uncounted. The commission said there were 97 additional deaths from the virus in the last 24 hours, bringing the mainland total to 1113. Analysts said a hit to physical demand in China was also serving to keep a lid on the yellow metal.
Gold gives up earlier loss to finish higher after comments from the Federal Reserve’s Powell
Oil futures finished higher, finding support as a slowdown in the number of new, confirmed cases of COVID-19 in China may translate into a smaller-than-feared hit to crude demand. Prices settled off the session's best levels, however, as US gov showed a 3rd straight weekly rise in crude inventories that was bigger than market expectations. West Texas Intermediate crude for Mar delivery rose $1.23 (2.5%) to settle at $51.17 a barrel after trading as high as $51.73. Apr Brent, the global benchmark, added $1.78 (3.3%) to $55.79 a barrel. Data from the Energy Information Administration (EIA) revealed that US crude supplies rose 7.5M barrels last week. That followed increases in each of the previous 2 weeks. Analysts forecast a rise of 2.3M barrels, while the American Petroleum Institute yesterday reported a rise of 6M barrels. The EIA data also showed a supply decline of 100K barrels for gasoline, while distillate stocks fell by 2M barrels. The S&P Global Platts survey had shown expectations for an increase of 700K barrels for gasoline supplies, but distillates were forecast to fall by 900K barrels.
Oil ends higher as worries ease over coronavirus hit to crude demand, but U.S. supplies rise a third week
The Dow began the trading session rising more than 100 & the buyers did not look back all day. With a substantial gain, it closed near its high as it approaches the 30K milestone (needing less than 500 now). The Volatility Index (VIX) closed in the high 13s, not far from its low levels during last year's bull market. Investors are not afraid to buy risky investments (i.e. stocks).
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The sea of red ink is continuing to swell in DC, with the federal gov already racking up a budget
deficit that is averaging close to $100B a month in the current
fiscal year. Treasury Dept data shows the
shortfall at $389B in the first 4 months of fiscal 2020.
That’s a 25% gain over the same period in the previous year & already
about 40% of the total deficit for fiscal 2019. Over
the past 12 months, the gov has spent $1.06T more than
it has taken in. All the red ink has bought the total national debt to
$23.3T. Receipts actually are on the rise comparatively,
coming in at $1.18T thru Jan compared to $1.1T
for the same period in the prior fiscal year. However, the rate of
spending is adding to the shortfall, with outlays coming in at $1.57T vs. $1.42T for the first 4 months in fiscal 2019.
That’s a 9.6% spending increase. Pres Trump has
insisted that economic growth would cover the cost of the tax cuts
implemented in the 2017 deal he struck with Congress. While GDP rose
2.9% in 2018, it slowed to 2.3% in 2019 as the debt & deficits
continue to rise.
US deficit surges 25% in fiscal 2020 and is up $1.1 trillion over the past year
New coronavirus cases in China appear to have stabilized in recent days, but world health officials cautioned the public against reading too much into those numbers. The outbreak could still get worse, World Health Organization officials said. “The outbreak could still go in any direction,” Tedros Adhanom Ghebreyesus, director-general of WHO, warned at a news conference. The slowing number of new cases “must be interpreted with extreme caution.” There are 44,730 cases in China & at least 1114 deaths, Tedros said. Outside of China, there are 441 cases across 2 dozen countries & 1 death, he added. Dr Mike Ryan, exec director of WHO’s emergencies program, said the slowing in cases is due in large part to “the huge public health operation in China.” While new cases appear to have slowed in recent days, Ryan said public health officials must still be vigilant in preparing for the virus to get worse. “We must continue to stop the virus, while preparing countries for the arrival of the virus,” Ryan warned. “I know that sounds contradictory, but it is not a contradiction.” “We hope to see the virus come under control. We are not going to speak about numbers or dates,” he added. “It’s way too early to try and predict the beginning, the middle or the end.” Ryan said public health officials “have a good view on the virus,” adding there are 8 cases globally where officials can not find a plausible explanation of how they were exposed to it. Since emerging in Wuhan in central China about a month ago, the virus has spread from about 300 as of Jan 21 to more than 45K. World health officials have said the respiratory disease, named COVID-19, is capable of spreading through human-to-human contact, droplets carried thru sneezing & coughing & germs left on inanimate objects. Symptoms can include a sore throat, runny nose, fever or pneumonia & can progress to multiple organ failure or death in some severe cases, they said.
WHO says new coronavirus cases in China have stabilized, warns that could change
Gold futures gave up earlier losses to finish higher after Federal Reserve Chair Jerome Powell said the central bank would use quantitative easing as a tool against the next economic downturn. Prices for the metal had been trading lower for much of the session as demand for havens ebbed on signs the spread of COVID-19 in China may be slowing. However, in testimony before the Senate Banking Committee, Powell said the Fed would use gov bond purchases, known as quantitative easing (QE) & communicate clearly with markets about interest-rate policy, known as “forward guidance,” as tools against the next economic downturn. Gold for Apr delivery tacked on $1.50 to settle at $1571 an ounce. China's National Health Commission said 2015 new cases of the disease caused by a new strain of coronavirus that emerged in Wuhan, China, in late 2019, had been reported over the last 24 hours, declining for a 2nd day. That brought the number of cases in mainland China to 44,653, although experts have warned that a substantial number of infections may have gone uncounted. The commission said there were 97 additional deaths from the virus in the last 24 hours, bringing the mainland total to 1113. Analysts said a hit to physical demand in China was also serving to keep a lid on the yellow metal.
Gold gives up earlier loss to finish higher after comments from the Federal Reserve’s Powell
Oil futures finished higher, finding support as a slowdown in the number of new, confirmed cases of COVID-19 in China may translate into a smaller-than-feared hit to crude demand. Prices settled off the session's best levels, however, as US gov showed a 3rd straight weekly rise in crude inventories that was bigger than market expectations. West Texas Intermediate crude for Mar delivery rose $1.23 (2.5%) to settle at $51.17 a barrel after trading as high as $51.73. Apr Brent, the global benchmark, added $1.78 (3.3%) to $55.79 a barrel. Data from the Energy Information Administration (EIA) revealed that US crude supplies rose 7.5M barrels last week. That followed increases in each of the previous 2 weeks. Analysts forecast a rise of 2.3M barrels, while the American Petroleum Institute yesterday reported a rise of 6M barrels. The EIA data also showed a supply decline of 100K barrels for gasoline, while distillate stocks fell by 2M barrels. The S&P Global Platts survey had shown expectations for an increase of 700K barrels for gasoline supplies, but distillates were forecast to fall by 900K barrels.
Oil ends higher as worries ease over coronavirus hit to crude demand, but U.S. supplies rise a third week
The Dow began the trading session rising more than 100 & the buyers did not look back all day. With a substantial gain, it closed near its high as it approaches the 30K milestone (needing less than 500 now). The Volatility Index (VIX) closed in the high 13s, not far from its low levels during last year's bull market. Investors are not afraid to buy risky investments (i.e. stocks).
Dow Jones Industrials
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