Dow sank 1225 (to 20K), decliners over advancers 20-1 & NAZ dropped 328 (to 7K). The MLP index sank 14 to only 70 & the REIT index plunged 22 to 283 (off 150 from its record highs a month ago). Junk bond funds saw more selling & long Treasuries were sold (more below). Oil plunged 4+ to the 22s (nearing its lowest price in history) & gold tumbled 31 to 1494.
AMJ (Alerian MLP Index tracking fund)
Equity markets plunged at the opening, gutting a rebound on Mon. The Dow fell 1268 (5.9%) while the S&P 500 & NAZ were lower by about 5.4% each. Trading is halted if the S&P 500 falls by 7%. The early selling comes as the Trump administration & Congress hammer out the details of a $1T stimulus package designed to prop up the most harshly pummeled sectors of the US economy and give cash to those out of work. Elsewhere, the yield curve steepened as buyers crowded into shorter-dated Treasuries & sold longer ones. The yield on the 2-year note was down 4.1 basis points at 0.42% while the yield on the 10-year note was up 7.1 basis points at 1.067%. European markets were sharply lower, with France's CAC falling 6.2%, Germany's DAX sliding 5.7% & Britain's FTSE tumbling 5%. Hong Kong's Hang Seng paced the decline in Asia, falling 4.2%, while China's Shanghai Composite & Japan's Nikkei were each off about 2%.
The coronavirus crisis stands to do damage to the economy – & job market – with the potential to send the unemployment rate much higher. Treasury Secretary Steve Mnuchin said during a luncheon with Senate Reps yesterday, that it was possible the unemployment rate could reach as high as 20% if the administration did not take actions to stabilize the economy. In Feb the unemployment rate was 3.5%. However, that is only one potential scenario, which the White House doesn't view as likely since it believes it has taken appropriate steps – with additional measures down the pipeline. "During the meeting with Senate Republicans today, Secretary Mnuchin used several mathematical examples for illustrative purposes, but he never implied this would be the case," an assistant secretary for public affairs for the Dept of the Treasury, said. However, both the administration & the Federal Reserve have been proactively implementing programs in order to make sure the financial markets function properly & that the consumer can keep spending. For example, in addition to cutting interest rates to 0% ??over the weekend, the Fed yesterday reopened 2 financial crisis-era programs that are aimed to increase liquidity in markets by boosting lending. Additionally, the IRS is allowing individuals & businesses owing up to $1M this tax season to defer payments for 90 days. Businesses, corps & sole proprietorships owing up to $10M would be offered the same option. Mnuchin said that the White House is considering a relief package valued at $1T, which could include direct cash relief for Americans. A source familiar with the matter said that those checks could be valued at more than $1000. A senior administration official said that because of these measures, a 20% unemployment rate scenario would not likely materialize.
A 5.7 magnitude earthquake shook Salt Lake City & its suburbs early tosday, sending spooked residents fleeing their homes, knocking out power and bringing the city's light rail system to a halt. The epicenter was just southwest of Salt Lake City & an estimated 2.76M probably felt the quake, the US Geological Survey reported. There were no initial reports of major damage to buildings or injuries. Residents reported feeling shaking across a 100-mile area, with the heaviest impact in Salt Lake County. Some residents ran from their homes & into the streets as they felt the earthquake shake buildings for 10-15 seconds. About 32K lost electricity in the Salt Lake City Area. It was the largest earthquake to hit Utah since a 5.9 magnitude quake shook southern Utah in 1992, according to Utah Emergency Management.
The Trump administration requested an additional $45.8B from Congress — beyond existing funding requests that could total more than $1T — to cover “unanticipated” costs incurred by agencies responding to the crisis. Acting Director of the Office of Management & Budget Russell Vought said in a letter to congressional leaders that the additional money will be used “to address ongoing preparedness and response efforts.” The request includes:
White House seeks $45.8 billion to cover ‘unanticipated’ coronavirus costs
All the negative news is difficult to comprehend for investors. For the time being, prayers are needed.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 24.04 | -2.91 | -10.0% |
| GC=F | Gold | 1,512.00 | -13.80 | -0.9% |
Equity markets plunged at the opening, gutting a rebound on Mon. The Dow fell 1268 (5.9%) while the S&P 500 & NAZ were lower by about 5.4% each. Trading is halted if the S&P 500 falls by 7%. The early selling comes as the Trump administration & Congress hammer out the details of a $1T stimulus package designed to prop up the most harshly pummeled sectors of the US economy and give cash to those out of work. Elsewhere, the yield curve steepened as buyers crowded into shorter-dated Treasuries & sold longer ones. The yield on the 2-year note was down 4.1 basis points at 0.42% while the yield on the 10-year note was up 7.1 basis points at 1.067%. European markets were sharply lower, with France's CAC falling 6.2%, Germany's DAX sliding 5.7% & Britain's FTSE tumbling 5%. Hong Kong's Hang Seng paced the decline in Asia, falling 4.2%, while China's Shanghai Composite & Japan's Nikkei were each off about 2%.
Stocks dive, oil craters to 18-year low as Congress mulls $1T booster
The coronavirus crisis stands to do damage to the economy – & job market – with the potential to send the unemployment rate much higher. Treasury Secretary Steve Mnuchin said during a luncheon with Senate Reps yesterday, that it was possible the unemployment rate could reach as high as 20% if the administration did not take actions to stabilize the economy. In Feb the unemployment rate was 3.5%. However, that is only one potential scenario, which the White House doesn't view as likely since it believes it has taken appropriate steps – with additional measures down the pipeline. "During the meeting with Senate Republicans today, Secretary Mnuchin used several mathematical examples for illustrative purposes, but he never implied this would be the case," an assistant secretary for public affairs for the Dept of the Treasury, said. However, both the administration & the Federal Reserve have been proactively implementing programs in order to make sure the financial markets function properly & that the consumer can keep spending. For example, in addition to cutting interest rates to 0% ??over the weekend, the Fed yesterday reopened 2 financial crisis-era programs that are aimed to increase liquidity in markets by boosting lending. Additionally, the IRS is allowing individuals & businesses owing up to $1M this tax season to defer payments for 90 days. Businesses, corps & sole proprietorships owing up to $10M would be offered the same option. Mnuchin said that the White House is considering a relief package valued at $1T, which could include direct cash relief for Americans. A source familiar with the matter said that those checks could be valued at more than $1000. A senior administration official said that because of these measures, a 20% unemployment rate scenario would not likely materialize.
Mnuchin: US unemployment rate could spike to 20% — unless this happens
A 5.7 magnitude earthquake shook Salt Lake City & its suburbs early tosday, sending spooked residents fleeing their homes, knocking out power and bringing the city's light rail system to a halt. The epicenter was just southwest of Salt Lake City & an estimated 2.76M probably felt the quake, the US Geological Survey reported. There were no initial reports of major damage to buildings or injuries. Residents reported feeling shaking across a 100-mile area, with the heaviest impact in Salt Lake County. Some residents ran from their homes & into the streets as they felt the earthquake shake buildings for 10-15 seconds. About 32K lost electricity in the Salt Lake City Area. It was the largest earthquake to hit Utah since a 5.9 magnitude quake shook southern Utah in 1992, according to Utah Emergency Management.
Massive earthquake rocks Salt Lake City
The Trump administration requested an additional $45.8B from Congress — beyond existing funding requests that could total more than $1T — to cover “unanticipated” costs incurred by agencies responding to the crisis. Acting Director of the Office of Management & Budget Russell Vought said in a letter to congressional leaders that the additional money will be used “to address ongoing preparedness and response efforts.” The request includes:
- More than $11.5B for the Dept of Health & Human Services;
- More than $3.1B for the Homeland Security Dept, including $2B for the Federal Emergency Management Agency;
- $8.3B for the Defense Dept to “minimize the impacts of the virus” on service members & missions;
- $150M for the Education Dept to address school clean-up efforts, student loan issues & costs for about 5K staff to work remotely.
White House seeks $45.8 billion to cover ‘unanticipated’ coronavirus costs
All the negative news is difficult to comprehend for investors. For the time being, prayers are needed.
Dow Jones Industrials
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