Dow tumbled 945, decliners over advancers a massive 13-1 & NAZ sank 253. The MLP index fell 5+ to the 119s & the REIT index sank 16 to the 365s. Junk bond funds remained under selling pressure & Treasuries were in demand, taking the yield on the 10 year Treasury under 0.7%. Oil slid back to the 33s (more below on increased Saudi Arabia oil production) & gold was off 1 to 1259.
AMJ (Alerian MLP Index tracking fund)
Saudi Arabia's oil company Aramco said it will increase production capacity to 13M barrels per day, up from 12M per day, part of a strategy to dominate market share amid a slowdown in demand due to the outbreak of a new virus. The majority state-owned company's announcement, made on the Saudi Tadawul stock exchange, did not say when that capacity increase would happen. Aramco said the decision was a directive from the Saudi Energy Ministry. The kingdom's energy policy is largely directed by Crown Prince Mohammed bin Salman & the country's Energy Minister Prince Abdulaziz bin Salman. The 2 are ½-brothers & sons of the king. Saudi Arabia has been producing around 9.8M barrels per day, carrying the bulk of cuts that were agreed upon by OPEC members & other major oil producers, namely Russia, to stave off an oversupply in the market that would further push prices down. Over the weekend, the kingdom's strategy dramatically pivoted when Russia refused to cooperate on further & deeper production cuts. Aramco now says it will increase its crude oil production to 12.3M barrels a day starting in Apr, 300K barrels per day more than Aramco's current maximum sustained capacity. By increasing output & production, & slashing its official selling prices to Asia, analysts say it appears Saudi Arabia is now looking to dominate market share since it was unable to secure market price. The moves led to a 25% plunge in the price of crude on Mon, the sharpest decline seen since the 1991 Gulf War. The price of intl benchmark Brent crude recovered some yesterday & was trading around $37 a barrel today.
Pres Trump has summoned top U.S. health officials to an emergency meeting at the White House, cutting a congressional hearing on Capitol Hill short, said Rep Carolyn Maloney, chairwoman of the House Oversight & Reform Committee. “This morning we were informed that President Trump and Vice President Pence have called our witnesses to an emergency meeting at the White House. We don’t know the details, just that it’s extremely urgent,” Maloney said before opening a hearing on the nation's preparedness & response to the coronavirus outbreak that has swept across the nation. Maloney said the witnesses needed to leave by 11:45 AM, significantly cutting short lawmakers’ opening statements so they could get to the questions & answers before the witnesses had to leave. Speakers at the hearing include Dr Anthony Fauci, director of the National Institute of Allergy & Infectious Diseases, CDC Director Robert Redfield, & Terry Rauch, director of the defense medical research & development program for the National Institute of Health. A White House official told reporters the meeting was scheduled yesterday as “part of the Administration’s ongoing whole-of-gov response to the Coronavirus.” The number of confirmed cases of COVID-19 in the US surpassed 1K, according to data from Johns Hopkins University (JHU). At least 29 people in the US have died after contracting the virus. Almost ½ of all US cases are in Washington state, California & NY, where the governors have all declared states of emergency to free up funding. Globally, there are more than 119K confirmed cases & 4K deaths, according to JHU.
Trump calls emergency meeting with top health officials at White House, top lawmaker says
60% to 70% of the German population will be infected by the coronavirus, Merkel says
This is turning into another dreary day for stocks, something that has become common in recent weeks (shown in the chart for the Dow below). There is plenty of confusion about what to do & how do deal with the spreading virus. Most disturbing is that number of virus case is spreading outside of eastern Asia. The Dow chart is ugly with no improvement in sight & the Dow is setting a new 52 week low, something that hasn't been seen in years.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 33.45 | -0.91 | -2.7% |
| GC=F | Gold | 1,661.60 | +1.30 | +0.1% |
Saudi Arabia's oil company Aramco said it will increase production capacity to 13M barrels per day, up from 12M per day, part of a strategy to dominate market share amid a slowdown in demand due to the outbreak of a new virus. The majority state-owned company's announcement, made on the Saudi Tadawul stock exchange, did not say when that capacity increase would happen. Aramco said the decision was a directive from the Saudi Energy Ministry. The kingdom's energy policy is largely directed by Crown Prince Mohammed bin Salman & the country's Energy Minister Prince Abdulaziz bin Salman. The 2 are ½-brothers & sons of the king. Saudi Arabia has been producing around 9.8M barrels per day, carrying the bulk of cuts that were agreed upon by OPEC members & other major oil producers, namely Russia, to stave off an oversupply in the market that would further push prices down. Over the weekend, the kingdom's strategy dramatically pivoted when Russia refused to cooperate on further & deeper production cuts. Aramco now says it will increase its crude oil production to 12.3M barrels a day starting in Apr, 300K barrels per day more than Aramco's current maximum sustained capacity. By increasing output & production, & slashing its official selling prices to Asia, analysts say it appears Saudi Arabia is now looking to dominate market share since it was unable to secure market price. The moves led to a 25% plunge in the price of crude on Mon, the sharpest decline seen since the 1991 Gulf War. The price of intl benchmark Brent crude recovered some yesterday & was trading around $37 a barrel today.
Saudi Aramco boosts oil production capacity amid price war with Russia
Pres Trump has summoned top U.S. health officials to an emergency meeting at the White House, cutting a congressional hearing on Capitol Hill short, said Rep Carolyn Maloney, chairwoman of the House Oversight & Reform Committee. “This morning we were informed that President Trump and Vice President Pence have called our witnesses to an emergency meeting at the White House. We don’t know the details, just that it’s extremely urgent,” Maloney said before opening a hearing on the nation's preparedness & response to the coronavirus outbreak that has swept across the nation. Maloney said the witnesses needed to leave by 11:45 AM, significantly cutting short lawmakers’ opening statements so they could get to the questions & answers before the witnesses had to leave. Speakers at the hearing include Dr Anthony Fauci, director of the National Institute of Allergy & Infectious Diseases, CDC Director Robert Redfield, & Terry Rauch, director of the defense medical research & development program for the National Institute of Health. A White House official told reporters the meeting was scheduled yesterday as “part of the Administration’s ongoing whole-of-gov response to the Coronavirus.” The number of confirmed cases of COVID-19 in the US surpassed 1K, according to data from Johns Hopkins University (JHU). At least 29 people in the US have died after contracting the virus. Almost ½ of all US cases are in Washington state, California & NY, where the governors have all declared states of emergency to free up funding. Globally, there are more than 119K confirmed cases & 4K deaths, according to JHU.
Trump calls emergency meeting with top health officials at White House, top lawmaker says
German Chancellor Angela Merkel said that up to 70% of the German population will likely contract
the coronavirus, suggesting that the gov's priority is about
“slowing its spread.” Germany has so far reported 1565 cases of
the virus 3 three deaths, according to Johns Hopkins University, &
the chancellor has come under fire for her gov's handling of the
response. “When
the virus is out there, the population has no immunity and no therapy
exists, then 60 to 70% of the population will be infected,” Merkel told a
news conference. “The process has to be focused on not overburdening the health system by slowing the virus’s spread. It’s about winning time.” Czech Prime Minister Andrej Babis has since been quoted by CTK news agency as saying that Merkel's statements “cause panic.”
Merkel
said Berlin would spend whatever was necessary to contain the virus in
Germany, but declined to commit to providing direct material aid to
virus-stricken Italy. Confirmed cases in Italy have surpassed
10K with deaths spiking to 631 & Merkel told reporters that her
gov would play its part in combating the fallout from the
epidemic, insisting a proposed EU package of fiscal measures
would not fail because of Germany. More than 121K cases & 4368 deaths have now been confirmed around the world.
60% to 70% of the German population will be infected by the coronavirus, Merkel says
This is turning into another dreary day for stocks, something that has become common in recent weeks (shown in the chart for the Dow below). There is plenty of confusion about what to do & how do deal with the spreading virus. Most disturbing is that number of virus case is spreading outside of eastern Asia. The Dow chart is ugly with no improvement in sight & the Dow is setting a new 52 week low, something that hasn't been seen in years.
Dow Jones Industrials
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