Dow plunged 663 (off earlier lows), decliners over advancer a massive 9-1 & NAZ dropped 156. The MLP index fell 3+ to the 169s & the REIT index sank 6+ to the 406s. Junk bond funds fell after a recent mini rally & Treasuries were purchased taking the yield on the 10 year Treasury down 6 basis points to 0.93%. Oil slid back slightly in the 46s (more below) & gold jumped 16 to 1659.
AMJ (Alerian MLP Index tracking fund)
The rollercoaster ride for equity markets careened into another slide, with all 3 of the major averages under pressure from signs the new coronaviruws is spreading across the continental US. The Dow slid 690 (2.5%) after rallying 1173 yesterday (the 2nd-biggest point gain in its history). The weakness comes after the number of US cases of COVID-19 climbed to 129 & the death toll ticked up to 11, including the first fatality outside of Washington state. Authorities in both Washington & California declared a state of emergency because of the outbreak, which has infected 93K worldwide & killed 3198. West Texas Intermediate crude oil jumped 0.5% to $47.05 a barrel after OPEC & its allies agreed to cut production by 1.5M barrels per day to combat a supply glut. Gold gained 1% to $1659 an ounce. Demand for Treasuries drove the yield on the 10-year note down 1.9 basis points to 0.973%. European markets are under pressure with France's CAC down 2.4%, Germany's DAX lower by 2.3% & Britain's FTSE off 2%. Asian markets were sharply higher with Hong Kong's Hang Seng up 2.1%, China's Shanghai Composite adding 2% & Japan's Nikkei rallying 1.1%.
OPEC agreed on to cut output by an extra 1.5M barrels per day (bpd) Q2 to support prices amid an outbreak of coronavirus but made it conditional on Russia joining in, 2 OPEC sources said. The oil demand outlook has been hit hard by measures to halt the spread of the virus, disrupting factories, deterring people from traveling & slowing other business activity. Forecasts for crude demand growth in 2020 have been slashed as a result. Saudi Arabia had suggested OPEC & its allies, including Russia, cut up to 1.5M barrels per day (bpd) for Q2 while extending existing cuts of 2.1M bpd, which expire this month, to the end of 2020. But Riyadh, the biggest producer in OPEC, & other members of the group have yet to win Russian support for such a deal. So far, Moscow has indicated it would back an extension but not a deeper cut. Russia, which has co-operated on output policy since 2016 in the informal group known as OPEC+, has in the past been hesitant during talks but signed up at & the last minute. OPEC sources said that OPEC states expected non-OPEC countries, including Russia, to contribute cuts of about 500K bpd out of the overall additional cut of 1.5M bpd. 2 OPEC sources said Russia was on board for the cuts, not just for an extension, although Moscow has yet to comment.
House passes emergency spending, California governor declares state of emergency
The number of Americans applying for unemployment benefits fell slightly at the end of Feb, suggesting the economic damage from the coronavirus is still in the early stages & hasn't caused companies to lay off any workers. Initial jobless claims slipped 3K to 216K last week, the gov said. The forecast called for 217K. So far there's little sign the COVID-19 epidemic has spurred companies to pare payrolls, but economists are watching closely to see if layoffs start to rise. More & more companies say their businesses have been disrupted by the viral outbreak, potentially hurting sales & profits. New applications for unemployment benefits give a sense of how many people are losing their jobs. They touched a 50-year low of 193K in Apr 2019 & have hovered in the low 200Ks since then. The more stable monthly average of jobless claims, meanwhile, rose 3K to 213K. The 4-week figure filters out the weekly ups & downs to give a better sense of labor-market trends. The total number of people already collecting unemployment benefits increased 7K to 1.73M. These claims had soared to as high as 6.6M near the end of the 2007-2009 recession. The unemployment rate fell to a 50-year low of 3.5% late last year to punctuate a decade of strong job gains. More than 20M jobs have been created during the current expansion. Yet hiring has slowed in the past year & the coronavirus could cause more companies to scale back until the outbreak is contained. What might help companies forestall layoffs, economists say, is a tight labor market. If the economy recovers quickly, companies might find it hard to rehire or replace laid-off employees. That could discourage them from cutting payrolls.
U.S. jobless claims dip at end of February, no sign so far of layoffs tied to coronavirus
The news on the virus was getting better, & then it turned south with more cases in the US. The chart for hte Dow below how volatile stock trading has become in the last couple of weeks. The Volatility Index (VIX) is up 4+ to the 36s, another reminder that investors continue to have heavy demand for risk averse investments (gold & Treasuries). The outlook for stock trading continues to be glum.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 46.62 | -0.16 | -0.3% |
| GC=F | Gold | 1,658.60 | +15.60 | +1.0% |
The rollercoaster ride for equity markets careened into another slide, with all 3 of the major averages under pressure from signs the new coronaviruws is spreading across the continental US. The Dow slid 690 (2.5%) after rallying 1173 yesterday (the 2nd-biggest point gain in its history). The weakness comes after the number of US cases of COVID-19 climbed to 129 & the death toll ticked up to 11, including the first fatality outside of Washington state. Authorities in both Washington & California declared a state of emergency because of the outbreak, which has infected 93K worldwide & killed 3198. West Texas Intermediate crude oil jumped 0.5% to $47.05 a barrel after OPEC & its allies agreed to cut production by 1.5M barrels per day to combat a supply glut. Gold gained 1% to $1659 an ounce. Demand for Treasuries drove the yield on the 10-year note down 1.9 basis points to 0.973%. European markets are under pressure with France's CAC down 2.4%, Germany's DAX lower by 2.3% & Britain's FTSE off 2%. Asian markets were sharply higher with Hong Kong's Hang Seng up 2.1%, China's Shanghai Composite adding 2% & Japan's Nikkei rallying 1.1%.
Stocks sink as killer virus cases surge across US, states declare emergencies
OPEC agreed on to cut output by an extra 1.5M barrels per day (bpd) Q2 to support prices amid an outbreak of coronavirus but made it conditional on Russia joining in, 2 OPEC sources said. The oil demand outlook has been hit hard by measures to halt the spread of the virus, disrupting factories, deterring people from traveling & slowing other business activity. Forecasts for crude demand growth in 2020 have been slashed as a result. Saudi Arabia had suggested OPEC & its allies, including Russia, cut up to 1.5M barrels per day (bpd) for Q2 while extending existing cuts of 2.1M bpd, which expire this month, to the end of 2020. But Riyadh, the biggest producer in OPEC, & other members of the group have yet to win Russian support for such a deal. So far, Moscow has indicated it would back an extension but not a deeper cut. Russia, which has co-operated on output policy since 2016 in the informal group known as OPEC+, has in the past been hesitant during talks but signed up at & the last minute. OPEC sources said that OPEC states expected non-OPEC countries, including Russia, to contribute cuts of about 500K bpd out of the overall additional cut of 1.5M bpd. 2 OPEC sources said Russia was on board for the cuts, not just for an extension, although Moscow has yet to comment.
OPEC reportedly agrees to oil output cut under one condition
- Global cases: More than 95K, according to data compiled by Johns Hopkins University.
- Global deaths: At least 3250, according to data compiled by Johns Hopkins University.
- US cases: At least 138, according to data compiled by Johns Hopkins University.
- US deaths: At least 11, according to the CDC & state health officials.
House passes emergency spending, California governor declares state of emergency
The number of Americans applying for unemployment benefits fell slightly at the end of Feb, suggesting the economic damage from the coronavirus is still in the early stages & hasn't caused companies to lay off any workers. Initial jobless claims slipped 3K to 216K last week, the gov said. The forecast called for 217K. So far there's little sign the COVID-19 epidemic has spurred companies to pare payrolls, but economists are watching closely to see if layoffs start to rise. More & more companies say their businesses have been disrupted by the viral outbreak, potentially hurting sales & profits. New applications for unemployment benefits give a sense of how many people are losing their jobs. They touched a 50-year low of 193K in Apr 2019 & have hovered in the low 200Ks since then. The more stable monthly average of jobless claims, meanwhile, rose 3K to 213K. The 4-week figure filters out the weekly ups & downs to give a better sense of labor-market trends. The total number of people already collecting unemployment benefits increased 7K to 1.73M. These claims had soared to as high as 6.6M near the end of the 2007-2009 recession. The unemployment rate fell to a 50-year low of 3.5% late last year to punctuate a decade of strong job gains. More than 20M jobs have been created during the current expansion. Yet hiring has slowed in the past year & the coronavirus could cause more companies to scale back until the outbreak is contained. What might help companies forestall layoffs, economists say, is a tight labor market. If the economy recovers quickly, companies might find it hard to rehire or replace laid-off employees. That could discourage them from cutting payrolls.
U.S. jobless claims dip at end of February, no sign so far of layoffs tied to coronavirus
The news on the virus was getting better, & then it turned south with more cases in the US. The chart for hte Dow below how volatile stock trading has become in the last couple of weeks. The Volatility Index (VIX) is up 4+ to the 36s, another reminder that investors continue to have heavy demand for risk averse investments (gold & Treasuries). The outlook for stock trading continues to be glum.
Dow Jones Industrials
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