Dow rebounded 611 (but well off highs at the opening), advancers over decliners 9-1 & NAZ bounced back 217. The MLP index gained 4+ ot the 103s & the REIT index jumped up 12 to 335. Junk bond funds were purchased again & Treasuries slid back slightly, bringing the 10 year Treasury up 1 basis point to 0.86% (still quite low). Oil went up 1+ to 33 & gold pulled back 12 from its recent rally.
AMJ (Alerian MLP Index tracking fund)
Pres Trump urged Congress to approve a payroll tax cut until the end of the year, as the novel coronavirus continues to weigh on the US economy. "If you want to get money into the hands of people quickly & efficiently, let them have the full money that they earned, APPROVE A PAYROLL TAX CUT until the end of the year, December 31,” Trump tweeted. “Then you are doing something that is really meaningful. Only that will make a big difference!” In a rare Oval Office address on Wed, Trump called on Congress to pass a cut to the federal payroll tax in order to stimulate the economy. That idea, however, has been dismissed by many lawmakers on both sides of the aisle. Also today, Trump renewed his calls for the Federal Reserve to lower its key interest rate to better position the US economy globally. "The Federal Reserve must FINALLY lower the Fed Rate to something comparable to their competitor Central Banks. Jay Powell and group are putting us at a decided economic & physiological disadvantage. Should never have been this way. Also, STIMULATE!"
Treasury Secretary Mnuchin says White House and Congress close to getting coronavirus bill done
Pres Trump said that testing for coronavirus will happen on a “very large scale,” while taking a shot at the former administration’s response to the swine flu. “The changes have been made and testing will soon happen on a very large scale basis. All Red Tape has been cut, ready to go!” Trump tweeted. He accused former Pres Obama of making changes "that only complicated things further … Their response to H1N1 Swine Flu was a full scale disaster, with thousands dying, and nothing meaningful done to fix the testing problem, until now.” Trump, however, did not provide details on the changes to the testing, which has come under scrutiny since the outbreak has spread in the US. "The system is not really geared to what we need right now,” Dr Anthony Fauci, the top infectious disease expert at the National Institutes of Health, said. “That is a failing. It is a failing, let’s admit it.” US health officials, for example, promised nearly a month ago to tap into a national network of labs that monitor for flu. That system is just getting started. Large-scale testing is a critical part of tracking the spread of infectious diseases & allocating resources for treatment. The lack of comprehensive figures means US health providers could quickly be overwhelmed by undetected cases.
The big boys got the message about the stock market crash & they are throwing everything they can find at the stock market. Bargain hunters returned. However over the short term fundamental problems still need to be solved. Gov, especially now, is not known for snapping its fingers to get things done. After an explosive opening, the Dow pulled back 700 & NAZ retreated 200. Legislation will have to wait until next week, medical cures take time & too much supply is weighing on the oil market. The chart for the Dow below shows it dropped 8K in a couple of weeks. Major headwinds have not gone away. Extraordinarily high volatility will continue. The Volatility Index (VIX) fell 5 to 70, but remains far above the mid teens last year when the stock market rallied.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 32.60 | +1.10 | +3.5% |
| GC=F | Gold | 1,571.30 | -19.00 | -1.2% |
Pres Trump urged Congress to approve a payroll tax cut until the end of the year, as the novel coronavirus continues to weigh on the US economy. "If you want to get money into the hands of people quickly & efficiently, let them have the full money that they earned, APPROVE A PAYROLL TAX CUT until the end of the year, December 31,” Trump tweeted. “Then you are doing something that is really meaningful. Only that will make a big difference!” In a rare Oval Office address on Wed, Trump called on Congress to pass a cut to the federal payroll tax in order to stimulate the economy. That idea, however, has been dismissed by many lawmakers on both sides of the aisle. Also today, Trump renewed his calls for the Federal Reserve to lower its key interest rate to better position the US economy globally. "The Federal Reserve must FINALLY lower the Fed Rate to something comparable to their competitor Central Banks. Jay Powell and group are putting us at a decided economic & physiological disadvantage. Should never have been this way. Also, STIMULATE!"
Trump urges Congress to approve payroll tax cut until year's end
Treasury Secretary Steve Mnuchin said the White House & Congress are nearing a deal on stimulus &
that the administration is committed to doing whatever it takes to spark
the economy amid the coronavirus pandemic. He did not provide
specifics, though he mentioned previous statements from Pres
Trump advocating for a payroll tax holiday that could last through the
end of the year." I think we're very close to getting this done," Mnuchin said. "The president is absolutely committed that this will be an
entire government effort, that we will be working with the House and
Senate." He also promised that the administration, working with
the Federal Reserve, will take aggressive measures to make sure
businesses have access to capital. "There will be liquidity
available," Mnuchin added. "Whatever we need to do, whatever the Fed
needs to do, whatever Congress needs to do, we will provide liquidity
and this will be an entire whole-of-government approach led by the
president." Mnuchin described the process as being “in the
second inning” amid negotiations that have been contentious at times
despite intense clamoring for massive stimulus during the
coronavirus scare. However, he pledged that the administration is
committed to whatever it takes to addressing the hit the nation has
taken during the crisis. The stock market's longest bull market in history
came to an end this week after 11 years & there's growing consensus
that the global economy is headed for recession. “I can assure you the president is determined. We will do whatever we need,” Mnuchin said. Despite
the frosty relationship between Trump & House Dems, Mnuchin said
the 2 sides are putting aside partisanship and working together for a
solution. Among the priorities he listed are the airline
industry, which he described as being in a situation similar to the
aftermath of the Sep 11, 2001, terror attacks. He also listed cruise
lines, hotels & small business in general.
Treasury Secretary Mnuchin says White House and Congress close to getting coronavirus bill done
Pres Trump said that testing for coronavirus will happen on a “very large scale,” while taking a shot at the former administration’s response to the swine flu. “The changes have been made and testing will soon happen on a very large scale basis. All Red Tape has been cut, ready to go!” Trump tweeted. He accused former Pres Obama of making changes "that only complicated things further … Their response to H1N1 Swine Flu was a full scale disaster, with thousands dying, and nothing meaningful done to fix the testing problem, until now.” Trump, however, did not provide details on the changes to the testing, which has come under scrutiny since the outbreak has spread in the US. "The system is not really geared to what we need right now,” Dr Anthony Fauci, the top infectious disease expert at the National Institutes of Health, said. “That is a failing. It is a failing, let’s admit it.” US health officials, for example, promised nearly a month ago to tap into a national network of labs that monitor for flu. That system is just getting started. Large-scale testing is a critical part of tracking the spread of infectious diseases & allocating resources for treatment. The lack of comprehensive figures means US health providers could quickly be overwhelmed by undetected cases.
Trump: 'Large-scale' virus tests ready soon
The big boys got the message about the stock market crash & they are throwing everything they can find at the stock market. Bargain hunters returned. However over the short term fundamental problems still need to be solved. Gov, especially now, is not known for snapping its fingers to get things done. After an explosive opening, the Dow pulled back 700 & NAZ retreated 200. Legislation will have to wait until next week, medical cures take time & too much supply is weighing on the oil market. The chart for the Dow below shows it dropped 8K in a couple of weeks. Major headwinds have not gone away. Extraordinarily high volatility will continue. The Volatility Index (VIX) fell 5 to 70, but remains far above the mid teens last year when the stock market rallied.
Dow Jones Industrials
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