Dow sank another whopping 740, decliners over advancers better than 10-1 & the NAZ sank 274. The MLP index plunged 9+ to the 168s (a 17 year low) & the REIT index slumped 15+ to the 397s. Junk bond funds declined around 3% (big for this sector) & Treasuries continue in demand by investors. Oil dropped 2+ to the 45s & gold jumped up 12 to 1655 as stocks were being sold.
AMJ (Alerian MLP Index tracking fund)
Pres Trump declared that a widespread US outbreak of the new respiratoryvirus sweeping the globe isn't inevitable even as top health authorities at his side warned Americans that more infections are coming. Shortly after he spoke, the gov announced a worrisome development: Another person in the US is infected — someone in California who doesn't appear to have the usual risk factors of having traveled abroad or being exposed to another patient. At a news conference, Trump sought to minimize fears as he insisted the US is "very, very ready" for whatever the COVID-19 outbreak brings. Under fire about the gov's response, he put VP Mike Pence in charge of coordinating the efforts. "This will end," Trump said of the outbreak. "You don't want to see panic because there's no reason to be panicked." But standing next to him, the very health officials Trump praised for fighting the new coronavirus stressed that schools, businesses & individuals need to get ready. "We do expect more cases," said Dr Anne Schuchat of the Centers for Disease Control and Prevention. If the CDC confirms that the latest US case doesn't involve travel or contact with an infected person, it would be a first in this country & a sign that efforts to contain the virus' spread haven't been enough. "It's possible this could be an instance of community spread of COVID-19," the CDC said. More than 81K cases of COVID-19, an illness characterized by fever & coughing & in serious cases shortness of breath or pneumonia, have occurred since the new virus emerged in China. The newest case from California brings the total number infected in the US to 60, most of them evacuated from outbreak zones.
The US economy maintained a steady pace of growth in Q4 of last year, the gov confirmed. GDP, a measure of how much the US produces in goods & services, increased at a 2.1% annualized rate, the Commerce Dept said in its 2nd reading of the 3-month period from Oct-Dec. That was unrevised from the initial estimate of 2.1% last month. For the full year, the economy grew 2.3%, below the 2.9% increase from 2018 & the 2.4% gain in 2017, amid fading fiscal stimulus from the 2017 Tax Cuts & Jobs Act & an 18-month trade war between the US & China that rattled global financial markets. Consumer spending, which accounts for more than 2/3 of the country's now $21.7T economy, was revised down to a 1.7% increase from 1.8%. Nonresidential fixed investment was revised lower to a 2.3% drop. The report comes amid a stock-selloff brought on by fears of the deadly coronavirus, which has killed close to 3K & infected more than 80K, mostly in China. While most data in the US has yet to reflect the impact of the virus, which has forced China, the world's 2nd-largest economy to all but halt production of consumer goods, some indicators suggest the economy may take a hit. Although it's less trade-reliant than some other countries, like Japan or Germany, which could help shield it from slowing external demand, US companies' bottom lines could still be hurt by the virus.
January pending home sales jump more than expected, up 5.2%
The stock market plunged again in what has become one of the gloomiest times in history for stocks. In just 6 trading days, the Dow has dropped an astounding 3200 (over 10%). Meanwhile the Volatility Index (VIX) shot up 7+ to the 34s today, about triple where it was during the stock market rally. Investors are avoiding risky investments (stocks) with some of that money going into gold & Treasures. The yield on the 10 year Treasury today dropped to 1.25% (another record low). Investors would rather get a meager rate of return on Treasuries than invest in the stock market. While there is a little bargain hunting as this is being written, the short term outlook remains gloomy.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 46.25 | -2.48 | -5.1% |
| GC=F | Gold | 1,656.60 | +13.50 | +0.8% |
Pres Trump declared that a widespread US outbreak of the new respiratoryvirus sweeping the globe isn't inevitable even as top health authorities at his side warned Americans that more infections are coming. Shortly after he spoke, the gov announced a worrisome development: Another person in the US is infected — someone in California who doesn't appear to have the usual risk factors of having traveled abroad or being exposed to another patient. At a news conference, Trump sought to minimize fears as he insisted the US is "very, very ready" for whatever the COVID-19 outbreak brings. Under fire about the gov's response, he put VP Mike Pence in charge of coordinating the efforts. "This will end," Trump said of the outbreak. "You don't want to see panic because there's no reason to be panicked." But standing next to him, the very health officials Trump praised for fighting the new coronavirus stressed that schools, businesses & individuals need to get ready. "We do expect more cases," said Dr Anne Schuchat of the Centers for Disease Control and Prevention. If the CDC confirms that the latest US case doesn't involve travel or contact with an infected person, it would be a first in this country & a sign that efforts to contain the virus' spread haven't been enough. "It's possible this could be an instance of community spread of COVID-19," the CDC said. More than 81K cases of COVID-19, an illness characterized by fever & coughing & in serious cases shortness of breath or pneumonia, have occurred since the new virus emerged in China. The newest case from California brings the total number infected in the US to 60, most of them evacuated from outbreak zones.
Trump says US 'very ready' for virus just before CDC reveals worrisome development
The US economy maintained a steady pace of growth in Q4 of last year, the gov confirmed. GDP, a measure of how much the US produces in goods & services, increased at a 2.1% annualized rate, the Commerce Dept said in its 2nd reading of the 3-month period from Oct-Dec. That was unrevised from the initial estimate of 2.1% last month. For the full year, the economy grew 2.3%, below the 2.9% increase from 2018 & the 2.4% gain in 2017, amid fading fiscal stimulus from the 2017 Tax Cuts & Jobs Act & an 18-month trade war between the US & China that rattled global financial markets. Consumer spending, which accounts for more than 2/3 of the country's now $21.7T economy, was revised down to a 1.7% increase from 1.8%. Nonresidential fixed investment was revised lower to a 2.3% drop. The report comes amid a stock-selloff brought on by fears of the deadly coronavirus, which has killed close to 3K & infected more than 80K, mostly in China. While most data in the US has yet to reflect the impact of the virus, which has forced China, the world's 2nd-largest economy to all but halt production of consumer goods, some indicators suggest the economy may take a hit. Although it's less trade-reliant than some other countries, like Japan or Germany, which could help shield it from slowing external demand, US companies' bottom lines could still be hurt by the virus.
US growth unchanged at 2.1% in fourth quarter
Pending home sales in Jan rose 5.2%, the
National Association of Realtors (NAR) said, crushing expectations of a 2% monthly gain. They were 5.7% higher on an annual
basis. “This month’s solid activity — the second-highest monthly
figure in over two years — is due to the good economic backdrop and
exceptionally low mortgage rates,” said Lawrence Yun, NAR's chief
economist. Pending sales measure signed contracts, not closings, so they are an indicator of future closings 2-3 months out. Very
low mortgage rates should be juicing sales more, but the existing home
market is struggling with a record low supply of homes for sale, the
lowest since 1999. Investors turned about 5M homes into
single-family rentals during the foreclosure crisis, & they continue
to be active in the market, as rents are quite favorable. “Inventory
availability will be the key to consistent future gains,” Yun added.
“Moreover, the latest stock market correction could provide exceptional,
even lower mortgage rates for a few weeks, and that would help bring
about a noticeable upturn in the coming months.” Regionally,
pending home sales in the Northeast rose 1.3% monthly & were 1.2%
higher than a year earlier. In the Midwest, sales increased 7.3% for the
month & were 6.5% higher than in Jan 2019. Pending home
sales in the South grew 8.7% monthly & 7.1% annually. The West was the
only region to see a decline for the month, down 1.1%, but sales were
still 5.5% higher annually. Sales of newly built homes,
which are also measured by signed contracts, jumped to the highest
level in Jan since 2007, according to the US Census. Builders are
increasing production slowly, but they have still not reached even
normal historical levels since the recession. Builders are also starting
to increase production of lower-priced homes, but they continue to be
hindered by high costs for land, labor & materials.
January pending home sales jump more than expected, up 5.2%
The stock market plunged again in what has become one of the gloomiest times in history for stocks. In just 6 trading days, the Dow has dropped an astounding 3200 (over 10%). Meanwhile the Volatility Index (VIX) shot up 7+ to the 34s today, about triple where it was during the stock market rally. Investors are avoiding risky investments (stocks) with some of that money going into gold & Treasures. The yield on the 10 year Treasury today dropped to 1.25% (another record low). Investors would rather get a meager rate of return on Treasuries than invest in the stock market. While there is a little bargain hunting as this is being written, the short term outlook remains gloomy.
Dow Jones Industrials
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