Dow tumbled a whopping 874, decliners over advancers a massive 8-1 & NAZ sank 321. The MLP index dropped 5+ to the 191s & the REIT index fell a relatively mild 2+ to the 432s. Junk bond funds were sold on worries about the global economy & Treasuries soared, taking the yield on the 10 year Treasury to essentially a record low. Oil sank 2+, going below 51 & gold skyrocketed 31 to 1680.
AMJ (Alerian MLP Index tracking fund)
Equity markets were under severe pressure following a surge in the number of coronavirus cases outside China. The Dow plunged as many as 996 points (3.4%), at the open while the S&P 500 & Nasdaq were lower by more than 3% each. Early selling dropped the Dow into negative territory for 2020. The barrage of selling came after South Korea, the country with the 3rd-most cases, reported 161 new cases today, raising its total number of cases to 763 & its death toll by 2 to 7. Italy & Iran said their number of new cases jumped to 152 & 43, respectively. Meanwhile, China's National Health Commission reported 409 new cases & 150 new deaths, raising those totals to 77K & 2592, respectively. The updated figures came after Chinese Pres Xi Jinping warned the outbreak would deliver a blow to the Chinese economy. "The outbreak of novel coronavirus pneumonia will inevitably have a relatively big impact on the economy and society,'' Xi said, adding the crisis is a “big test” for Chinese leadership. Commodities traded mixed with West Texas Intermediate crude oil down 4.7% at $50.85 a barrel & gold up 2.1% at $1684 an ounce. The precious metal hit a 7-year high of $1691 early today. Treasuries soared, pushing the yield on the 10-year note down 10.5 basis points to 1.365%. The yield is on track to close below its Jul, 2016, record low of 1.376%. European markets were hit hard with Britain's FTSE, France's CAC & Germany's DAX all trading lower by at least 3.6%. In Asia, Hong Kong’s Hang Seng paced the decline, down 1.8%, while China's Shanghai Composite & Japan’s Nikkei shed 0.3% & 0.4% , respectively.
Treasury Secretary Steve Mnuchin said he does not expect the coronavirus outbreak to have a material impact on the Phase 1 US-China trade deal, although that could change as more data becomes available in coming weeks. Finance officials from the world's 20 largest economies said yesterday they would keep a close watch on the fast-spreading outbreak, but stopped short of identifying it as downside risk to the global economy. Fears of a coronavirus pandemic mounted even as they met in the Saudi capital of Riyadh, with sharp rises in new cases reported in Iran, Italy & South Korea. Mnuchin cautioned against jumping to conclusions about the impact of what he called a "human tragedy" on the global economy, or on companies' supply chain decisions, saying it was simply too soon to know. China was focused on the virus for now, he added, but the US still expected Beijing to live up to its commitments to buy more US products & services under the trade deal. "I don't expect that this will have any ramifications on Phase 1. Based on everything that we know, and where the virus is now, I don't expect that it's going to be material," he said. Mnuchin met yesterday with Saudi Crown Prince Mohammed bin Salman but details about the meeting were not given. Mnuchin acknowledged the outbreak could also delay the start of negotiations on deepening the trade deal with Beijing & reaching a Phase 2 agreement, but said he was not worried about that at this point. "If we get the right deal before the election, that's great. If we get the right deal after the election, that's great. We don't feel any pressure one way or another," he added, referring to the presidential election.
China will step up policy adjustments to help cushion the blow on the economy from a coronavirus outbreak that authorities are still trying to control, Pres Xi Jinping was quoted as saying yesterday. The situation is showing a positive trend after arduous efforts but there is no room for "weariness and relaxed mentality'' among officials, state television quoted him as saying. "At present, the epidemic situation is still severe and complex, and prevention and control work is in the most difficult and critical stage,'' Xi added. "The outbreak of novel coronavirus pneumonia will inevitably have a relatively big impact on the economy and society,'' Xi said, adding that the impact would be short-term & controllable. The outbreak is one of the most serious public health crises to confront Chinese leaders in decades. "For us, this is a crisis and is also a big test,'' Xi said. Chinese policymakers have implemented a raft of measures to support an economy jolted by the virus, which is expected to have a devastating impact on Q1 growth. Low-risk provinces should focus on restoring work & production in an all-round way, provinces with medium-level risks should aim for an orderly work resumption, while high-risk regions should focus on epidemic controls, Xi said. The gov would step up policy support to help achieve economic & social development targets for 2020, Xi added. China would maintain a prudent monetary policy & roll out new policy steps in a timely way, he said, adding the gov would also study & roll out phased tax cuts to help tide small firms over difficulties.
Investors plowed into safe-haven assets as the spreading coronavirus caused investors to dump stocks & move into the safety of gold & Treasuries. The buying ran gold to a 7-year high & dropped the 10-year yield within a few basis points of its record low as global equity markets were roiled after South Korea, Italy & Iran all reported a surge in the number of new coronavirus cases. South Korea reported 161 new cases & 2 deaths today, raising its respective totals to 763 & 7. Elsewhere, Italy & Iran said the number of new cases jumped to 152 & 43, respectively. Meanwhile, China's National Health Commission reported 409 new cases & 150 deaths, raising the totals on the mainland to 77K & 2592, respectively. The spreading virus caused panic among investors, running front-month gold futures up for an 8th straight day. The precious metal gained more than 2% today, hitting a 7-year high of $1691 an ounce. Futures with an Apr expiration have gained 8.4% since the coronavirus was first to have reported spreading outside of China on Jan 20. As traders bought gold, they also piled into Treasuries. Heavy buying pushed the yield on the 10-year note down 7.88 basis points to 1.392%. The yield was within a handful of basis points of its all-time closing low of 1.376%, set in Jul 2016. The 30-year yield was already at a record low down 6.6 basis points at 1.851%. The virus, which has caused the lockdown of more than 60M in China, has paralyzed supply chains & caused companies to temporarily shut down or reduce operations on the mainland. A number of companies, including Apple (AAPL), a Dow & NAZ stock, have warned disruptions caused by the virus will impact their financial results.
This is an unusually scary time for stock market investors because spreading coronavius puts into grave doubts about China's ability to control this alarming story. Chances are conditions will get worse before they improve. Gold & Treasuries will remain in demand while until stock investors see significant improvement in controlling this crisis.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 51.17 | -2.21 | -4.1% |
| GC=F | Gold | 1,676.80 | +28.00 | +1.7% |
Equity markets were under severe pressure following a surge in the number of coronavirus cases outside China. The Dow plunged as many as 996 points (3.4%), at the open while the S&P 500 & Nasdaq were lower by more than 3% each. Early selling dropped the Dow into negative territory for 2020. The barrage of selling came after South Korea, the country with the 3rd-most cases, reported 161 new cases today, raising its total number of cases to 763 & its death toll by 2 to 7. Italy & Iran said their number of new cases jumped to 152 & 43, respectively. Meanwhile, China's National Health Commission reported 409 new cases & 150 new deaths, raising those totals to 77K & 2592, respectively. The updated figures came after Chinese Pres Xi Jinping warned the outbreak would deliver a blow to the Chinese economy. "The outbreak of novel coronavirus pneumonia will inevitably have a relatively big impact on the economy and society,'' Xi said, adding the crisis is a “big test” for Chinese leadership. Commodities traded mixed with West Texas Intermediate crude oil down 4.7% at $50.85 a barrel & gold up 2.1% at $1684 an ounce. The precious metal hit a 7-year high of $1691 early today. Treasuries soared, pushing the yield on the 10-year note down 10.5 basis points to 1.365%. The yield is on track to close below its Jul, 2016, record low of 1.376%. European markets were hit hard with Britain's FTSE, France's CAC & Germany's DAX all trading lower by at least 3.6%. In Asia, Hong Kong’s Hang Seng paced the decline, down 1.8%, while China's Shanghai Composite & Japan’s Nikkei shed 0.3% & 0.4% , respectively.
Dow craters more than 700 points as deadly coronavirus crisis spirals
Treasury Secretary Steve Mnuchin said he does not expect the coronavirus outbreak to have a material impact on the Phase 1 US-China trade deal, although that could change as more data becomes available in coming weeks. Finance officials from the world's 20 largest economies said yesterday they would keep a close watch on the fast-spreading outbreak, but stopped short of identifying it as downside risk to the global economy. Fears of a coronavirus pandemic mounted even as they met in the Saudi capital of Riyadh, with sharp rises in new cases reported in Iran, Italy & South Korea. Mnuchin cautioned against jumping to conclusions about the impact of what he called a "human tragedy" on the global economy, or on companies' supply chain decisions, saying it was simply too soon to know. China was focused on the virus for now, he added, but the US still expected Beijing to live up to its commitments to buy more US products & services under the trade deal. "I don't expect that this will have any ramifications on Phase 1. Based on everything that we know, and where the virus is now, I don't expect that it's going to be material," he said. Mnuchin met yesterday with Saudi Crown Prince Mohammed bin Salman but details about the meeting were not given. Mnuchin acknowledged the outbreak could also delay the start of negotiations on deepening the trade deal with Beijing & reaching a Phase 2 agreement, but said he was not worried about that at this point. "If we get the right deal before the election, that's great. If we get the right deal after the election, that's great. We don't feel any pressure one way or another," he added, referring to the presidential election.
Mnuchin reveals whether coronavirus outbreak will impact US-China trade
China will step up policy adjustments to help cushion the blow on the economy from a coronavirus outbreak that authorities are still trying to control, Pres Xi Jinping was quoted as saying yesterday. The situation is showing a positive trend after arduous efforts but there is no room for "weariness and relaxed mentality'' among officials, state television quoted him as saying. "At present, the epidemic situation is still severe and complex, and prevention and control work is in the most difficult and critical stage,'' Xi added. "The outbreak of novel coronavirus pneumonia will inevitably have a relatively big impact on the economy and society,'' Xi said, adding that the impact would be short-term & controllable. The outbreak is one of the most serious public health crises to confront Chinese leaders in decades. "For us, this is a crisis and is also a big test,'' Xi said. Chinese policymakers have implemented a raft of measures to support an economy jolted by the virus, which is expected to have a devastating impact on Q1 growth. Low-risk provinces should focus on restoring work & production in an all-round way, provinces with medium-level risks should aim for an orderly work resumption, while high-risk regions should focus on epidemic controls, Xi said. The gov would step up policy support to help achieve economic & social development targets for 2020, Xi added. China would maintain a prudent monetary policy & roll out new policy steps in a timely way, he said, adding the gov would also study & roll out phased tax cuts to help tide small firms over difficulties.
China making moves to soften economic blow, President Xi says
Investors plowed into safe-haven assets as the spreading coronavirus caused investors to dump stocks & move into the safety of gold & Treasuries. The buying ran gold to a 7-year high & dropped the 10-year yield within a few basis points of its record low as global equity markets were roiled after South Korea, Italy & Iran all reported a surge in the number of new coronavirus cases. South Korea reported 161 new cases & 2 deaths today, raising its respective totals to 763 & 7. Elsewhere, Italy & Iran said the number of new cases jumped to 152 & 43, respectively. Meanwhile, China's National Health Commission reported 409 new cases & 150 deaths, raising the totals on the mainland to 77K & 2592, respectively. The spreading virus caused panic among investors, running front-month gold futures up for an 8th straight day. The precious metal gained more than 2% today, hitting a 7-year high of $1691 an ounce. Futures with an Apr expiration have gained 8.4% since the coronavirus was first to have reported spreading outside of China on Jan 20. As traders bought gold, they also piled into Treasuries. Heavy buying pushed the yield on the 10-year note down 7.88 basis points to 1.392%. The yield was within a handful of basis points of its all-time closing low of 1.376%, set in Jul 2016. The 30-year yield was already at a record low down 6.6 basis points at 1.851%. The virus, which has caused the lockdown of more than 60M in China, has paralyzed supply chains & caused companies to temporarily shut down or reduce operations on the mainland. A number of companies, including Apple (AAPL), a Dow & NAZ stock, have warned disruptions caused by the virus will impact their financial results.
Gold spikes to 7-year high, 10-year yield nears record low
This is an unusually scary time for stock market investors because spreading coronavius puts into grave doubts about China's ability to control this alarming story. Chances are conditions will get worse before they improve. Gold & Treasuries will remain in demand while until stock investors see significant improvement in controlling this crisis.
Dow Jones Industrials
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