Dow jumped up 348, but decliners modestly ahead of advancers & NAZ went up 190. The MLP index fell 2+ to the 83s & the REIT index lost 3+ to the 306s. Junk bond funds fluctuated & Treasuries rose in price. Oil dropped 1, nearing the important resistance level of 20, (more below), & gold climbed 4 to 1629.
AMJ (Alerian MLP Index tracking fund)
Treasury Secretary Steve Mnuchin said that small business owners could receive instructions on how to file for federal aid set as soon as today, as the coronavirus pandemic batters bars, restaurants & retailers across the US. "These loans will be available starting on Friday," he said. “We hope later today we’ll be releasing the documents and instructions." A key piece of the $2.2T relief bill passed by Congress last week is $350B in funding for small businesses. Businesses with fewer than 500 employees are eligible for up to $10M in loans, which can be used for payroll & other expenses, like insurance premiums, mortgages, rent or utilities. The gov will pay off the loan balance so long as the companies either do not lay off workers or rehire ones they've already let go. Although Mnuchin said he believed $350B would be enough -- he estimated that it covers roughly 50% of the private workforce -- he said the Trump administration was willing to ask Congress for more money if the number of applications surges. "This is a very popular program with Republicans and Democrats, and the president likes it a lot," he added. "If we run out of money, and this is a huge success, we will absolutely go back to Congress and ask for more money." "And by the way, it makes economic sense," he continued. "Because every person we put through this program, we don't have to pay unemployment insurance." Mnuchin said the 3rd stimulus package signed into law by Pres Trump last week, the largest relief bill in recent memory, is slated to last 8-12 weeks. If the pandemic continues to weigh on workers & companies, however, he suggested the Trump administration would be open to a 4th deal -- one that may include hazard pay for front-line workers like nurses, who earn too much to qualify for a $1200 cash check. (Under the legislation, workers who earn less than $99K are eligible for a check of up to $1200. Children receive $500). "We have a lot of money now that we’re deploying," he said. "Our number one job at Treasury right now is making sure we get these programs up and running."
West Texas Intermediate crude oil tumbled after Pres Trump extended COVID-19 social-distancing guidelines to Apr 30. WTI futures for May delivery were down 5.9% at $20.24 per barrel after falling 7.3%, to $19.92 a barrel, last evening & were on track for their lowest close since 2002 before trimming their losses. Pres Trump said that he would speak to Russian Pres Vladimir Putin later today about low energy prices. This slide comes after prices plunged Fri in response to Saudi Arabia saying it has not held talks with Russia regarding a “joint agreement to balance oil markets.” Crude oil prices have crashed 68% this year as the price war between Saudi Arabia & Russia has added to a supply glut at the same time the COVID-19 pandemic has caused demand destruction.
Contracts to buy previously owned homes rose for the 2nd straight month in Feb, the National Association of Realtors (NAR) said. The NAR's pending home sales index increased to 111.5, up 2.4% from the prior month. Jan''s index was revised slightly to 108.9 from 108.8. The forecast pending home sales falling 1.0% last month. Pending home contracts generally are seen as a forward-looking indicator of the health of the housing market because they become sales 1-2 months later. But Lawrence Yun, NAR's chief economist, noted that the data did not capture the significant fallout from the coronavirus pandemic, which is likely to derail the housing market as layoffs surge & the economy falters. US existing home sales surged to a 13-year high in Feb, data earlier this month showed. Compared to one year ago, pending sales were up 9.4% in Feb.
Today's rally is very suspicious. The advance decline line is negative while high yield securities (i.e. junk bond funds & Treasuries) are sliding lower after last week's big gains. Gold & Treasuries are in demand. Making matters worse for the bull scenario, Boeing (BA), a Dow stock, sank 20 after its rebound last week.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 20.11 | -1.40 | -6.5% |
| GC=F | Gold | 1,648.80 | -5.30 | -0.3% |
Treasury Secretary Steve Mnuchin said that small business owners could receive instructions on how to file for federal aid set as soon as today, as the coronavirus pandemic batters bars, restaurants & retailers across the US. "These loans will be available starting on Friday," he said. “We hope later today we’ll be releasing the documents and instructions." A key piece of the $2.2T relief bill passed by Congress last week is $350B in funding for small businesses. Businesses with fewer than 500 employees are eligible for up to $10M in loans, which can be used for payroll & other expenses, like insurance premiums, mortgages, rent or utilities. The gov will pay off the loan balance so long as the companies either do not lay off workers or rehire ones they've already let go. Although Mnuchin said he believed $350B would be enough -- he estimated that it covers roughly 50% of the private workforce -- he said the Trump administration was willing to ask Congress for more money if the number of applications surges. "This is a very popular program with Republicans and Democrats, and the president likes it a lot," he added. "If we run out of money, and this is a huge success, we will absolutely go back to Congress and ask for more money." "And by the way, it makes economic sense," he continued. "Because every person we put through this program, we don't have to pay unemployment insurance." Mnuchin said the 3rd stimulus package signed into law by Pres Trump last week, the largest relief bill in recent memory, is slated to last 8-12 weeks. If the pandemic continues to weigh on workers & companies, however, he suggested the Trump administration would be open to a 4th deal -- one that may include hazard pay for front-line workers like nurses, who earn too much to qualify for a $1200 cash check. (Under the legislation, workers who earn less than $99K are eligible for a check of up to $1200. Children receive $500). "We have a lot of money now that we’re deploying," he said. "Our number one job at Treasury right now is making sure we get these programs up and running."
Mnuchin: Virus relief directions for small businesses released today
West Texas Intermediate crude oil tumbled after Pres Trump extended COVID-19 social-distancing guidelines to Apr 30. WTI futures for May delivery were down 5.9% at $20.24 per barrel after falling 7.3%, to $19.92 a barrel, last evening & were on track for their lowest close since 2002 before trimming their losses. Pres Trump said that he would speak to Russian Pres Vladimir Putin later today about low energy prices. This slide comes after prices plunged Fri in response to Saudi Arabia saying it has not held talks with Russia regarding a “joint agreement to balance oil markets.” Crude oil prices have crashed 68% this year as the price war between Saudi Arabia & Russia has added to a supply glut at the same time the COVID-19 pandemic has caused demand destruction.
Oil flirts with first sub-$20 close since 2002
Contracts to buy previously owned homes rose for the 2nd straight month in Feb, the National Association of Realtors (NAR) said. The NAR's pending home sales index increased to 111.5, up 2.4% from the prior month. Jan''s index was revised slightly to 108.9 from 108.8. The forecast pending home sales falling 1.0% last month. Pending home contracts generally are seen as a forward-looking indicator of the health of the housing market because they become sales 1-2 months later. But Lawrence Yun, NAR's chief economist, noted that the data did not capture the significant fallout from the coronavirus pandemic, which is likely to derail the housing market as layoffs surge & the economy falters. US existing home sales surged to a 13-year high in Feb, data earlier this month showed. Compared to one year ago, pending sales were up 9.4% in Feb.
Pending home sales rise 2.4% in February
Today's rally is very suspicious. The advance decline line is negative while high yield securities (i.e. junk bond funds & Treasuries) are sliding lower after last week's big gains. Gold & Treasuries are in demand. Making matters worse for the bull scenario, Boeing (BA), a Dow stock, sank 20 after its rebound last week.
Dow Jones Industrials
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