Dow dropped 256 (well off session lows), decliners over advancers 6-1& NAZ retreated 162. The MLP index plunged 11+ to the 155s (again, it started at 100 about 25 years ago) & the REIT index sank 9+ to the 393s. Junk bond funds saw significant selling (along with stocks) & Treasury yields tumbled with the yield on the 10 year Treasury falling an enormous 22 basis points to about 0.7% Oil plunged 4+ to the 41s & gold went up 7 to 1675 (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)
The White House wants to provide a targeted financial stimulus to areas of the economy that need it, economic adviser Larry Kudlow says. The administration is weighing a “timely and targeted micro approach,” the director of the Trump administration's National Economic Council, said. The money could go toward helping people stranded at home who may lose pay as well as small businesses in specified geographical areas & certain industries impacted by the outbreak of the coronavirus. He added that the Trump administration is "not looking at big, expensive macro cash rebates, helicopter money from the sky" because "that never works." Kudlow says his concern is that commodities, such as gold & oil, are flashing deflationary signals, but that the White House doesn't want to act prematurely because the jobs report shows the economy is "in very good shape." Employment data released just hours before Kudlow's comments showed American employers adding 273K workers in Feb while the jobless rate shrank to 3.5%. Kudlow also noted the Atlanta Fed is forecasting 2.6% growth for Q1, which would be an improvement from the 4th-qtr reading of 2.1%.
Oil prices plunged more than 10% to multi-year lows on Friday as OPEC’s allies rejected additional production cuts that the organization proposed. West Texas Intermediate crude (WTI) slid 10% ($4.62), to settle at $41.28, its lowest level since Aug 2016. It was WTI’s worst day since late in 2014. Earlier in the session WTI traded as low as $41.11 per barrel. Intl benchmark Brent crude slid 9.4% to settle at $45.27 per barrel. Its session low was $45.18, which is a price not seen since Jun 2017. The meeting between OPEC & its allies (OPEC+), concluded with no deal on additional production cuts. The cartel and its allies agreed to meet again to monitor the situation. The current production cuts will be in place until the end of Mar as planned, but it’s uncertain if they will extend beyond this month. Russian Energy Minister Alexander Novak told reporters leaving the meetings that it meant that members could now pump what they liked starting Apr 1. “We have made this decision because no consensus has been found of how all the 24 countries should simultaneously react to the current situation. So as from April 1, we are starting to work without minding the quotas or reductions which were in place earlier but this does not mean that each country would not monitor and analyse market developments,” he said. Yesterday, OPEC recommended additional production cuts of 1.5M barrels per day from the beginning of next month until the end of the year. The proposal was conditional on support from non-OPEC producers, including Russia. OPEC cautioned that the deal could only be applied on a pro-rata basis with core members set to cut 1M barrels per day & non-OPEC partners expected to cut 500K barrels per day. Oil has tumbled into bear market territory as the coronavirus outbreak has led to softer demand, & many traders expected OPEC to step in in a bid to prop up prices.
Oil plunges 10% for worst day in more than 5 years after OPEC+ fails to agree on a massive production cut
Feds: Takeover of auto union amid ongoing corruption probe remains an option
Gold futures finished higher for the day & week as selling in stocks & sliding bond yields helped the precious metal to pick up $105 in the course of a week, marking the sharpest point & percentage gain over that period since 2011. Trading was volatile intraday though with the metal on track for its best weekly gain since 2008 earlier in the session before prices turned down & then recovered. Fear about the economic impact of the coronavirus outbreak has driven appetite for assets perceived as havens, including bullion gov debt. Gold for Apr gained $4.40 (0.3%) to $1672 an ounce, after touching an intraday peak at $1690. For the week, bullion advanced 6.8%, representing its largest weekly gain for a most-active contract since 2011. Prices for gold began to pare sharper early gains after data revealed that the US created 273K new jobs on Feb. The increase was surprisingly strong, compared with the 165K climb forecast, but the report was compiled ahead of the coronavirus contagion spread world-wide.
Gold prices finish higher for day, and match sharpest weekly gain since 2011
This was another ugly week, but buying in the last hour sharply trimmed losses. The Dow climbed about 600 in the last hour today so that it posted a loss of "only" 200 for the day & a gain of 500 for the week. Stocks remain on defense & can be expected to have another wild & woolly time next week.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The White House wants to provide a targeted financial stimulus to areas of the economy that need it, economic adviser Larry Kudlow says. The administration is weighing a “timely and targeted micro approach,” the director of the Trump administration's National Economic Council, said. The money could go toward helping people stranded at home who may lose pay as well as small businesses in specified geographical areas & certain industries impacted by the outbreak of the coronavirus. He added that the Trump administration is "not looking at big, expensive macro cash rebates, helicopter money from the sky" because "that never works." Kudlow says his concern is that commodities, such as gold & oil, are flashing deflationary signals, but that the White House doesn't want to act prematurely because the jobs report shows the economy is "in very good shape." Employment data released just hours before Kudlow's comments showed American employers adding 273K workers in Feb while the jobless rate shrank to 3.5%. Kudlow also noted the Atlanta Fed is forecasting 2.6% growth for Q1, which would be an improvement from the 4th-qtr reading of 2.1%.
White House may pump cash into distressed parts of US economy
Oil prices plunged more than 10% to multi-year lows on Friday as OPEC’s allies rejected additional production cuts that the organization proposed. West Texas Intermediate crude (WTI) slid 10% ($4.62), to settle at $41.28, its lowest level since Aug 2016. It was WTI’s worst day since late in 2014. Earlier in the session WTI traded as low as $41.11 per barrel. Intl benchmark Brent crude slid 9.4% to settle at $45.27 per barrel. Its session low was $45.18, which is a price not seen since Jun 2017. The meeting between OPEC & its allies (OPEC+), concluded with no deal on additional production cuts. The cartel and its allies agreed to meet again to monitor the situation. The current production cuts will be in place until the end of Mar as planned, but it’s uncertain if they will extend beyond this month. Russian Energy Minister Alexander Novak told reporters leaving the meetings that it meant that members could now pump what they liked starting Apr 1. “We have made this decision because no consensus has been found of how all the 24 countries should simultaneously react to the current situation. So as from April 1, we are starting to work without minding the quotas or reductions which were in place earlier but this does not mean that each country would not monitor and analyse market developments,” he said. Yesterday, OPEC recommended additional production cuts of 1.5M barrels per day from the beginning of next month until the end of the year. The proposal was conditional on support from non-OPEC producers, including Russia. OPEC cautioned that the deal could only be applied on a pro-rata basis with core members set to cut 1M barrels per day & non-OPEC partners expected to cut 500K barrels per day. Oil has tumbled into bear market territory as the coronavirus outbreak has led to softer demand, & many traders expected OPEC to step in in a bid to prop up prices.
Oil plunges 10% for worst day in more than 5 years after OPEC+ fails to agree on a massive production cut
A takeover of the United Auto Workers (UAW) union by the US gov to eliminate a “culture of corruption and greed” remains an option, according to federal officials. US
Attorney Matthew Schneider said a civil racketeering case
similar to one that led to a takeover & decades-long oversight of the
Teamsters union is “one of the options” as federal prosecutors continue
investigating corruption in the highest ranks of the UAW. Aside
from implications for the union, a case under the Racketeer Influenced & Corrupt Organizations Act (RICO) could have political
ramifications for the Trump administration. While the UAW has
historically supported Dem, Pres Trump has touted the support of blue-collar workers in unions such as the UAW. For
the union, gove intervention could mean an upheaval of its
leadership & operations & force the union into direct elections
rather than caucuses, a process some believe has assisted the
corruption. “That has worked well for the Teamsters,” Schneider added during a news conference in Detroit to discuss unsealed
charges against ex-UAW Pres Gary Jones. “I think that’s something we should all pay attention to and could potentially be a good model here.” Schneider
said it would be “be premature” to comment any further as the
investigation is ongoing. The multiyear probe has already led to
convictions of 13 others, including 10 people affiliated with the union & 3 Fiat Chrysler (FCAU) execs. Depending on how active a role the gov were to take, the Detroit
automakers could be directly dealing with gov officials rather
than elected union officials during negotiations, grievances & other
discussions.
Feds: Takeover of auto union amid ongoing corruption probe remains an option
Gold futures finished higher for the day & week as selling in stocks & sliding bond yields helped the precious metal to pick up $105 in the course of a week, marking the sharpest point & percentage gain over that period since 2011. Trading was volatile intraday though with the metal on track for its best weekly gain since 2008 earlier in the session before prices turned down & then recovered. Fear about the economic impact of the coronavirus outbreak has driven appetite for assets perceived as havens, including bullion gov debt. Gold for Apr gained $4.40 (0.3%) to $1672 an ounce, after touching an intraday peak at $1690. For the week, bullion advanced 6.8%, representing its largest weekly gain for a most-active contract since 2011. Prices for gold began to pare sharper early gains after data revealed that the US created 273K new jobs on Feb. The increase was surprisingly strong, compared with the 165K climb forecast, but the report was compiled ahead of the coronavirus contagion spread world-wide.
Gold prices finish higher for day, and match sharpest weekly gain since 2011
This was another ugly week, but buying in the last hour sharply trimmed losses. The Dow climbed about 600 in the last hour today so that it posted a loss of "only" 200 for the day & a gain of 500 for the week. Stocks remain on defense & can be expected to have another wild & woolly time next week.
Dow Jones Industrials
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