Dow shot up 495 (sellling into the close trimmed earlier gains), advancers over decliners 4-1 & NAZ lost 33. The MLP index rose 5+ to the 89s & the REIT index went up 14 to 289. Junk bond funds continued in strong demand to lock up the high yields & Treasuries declined in price. Oil finished higher in the 24s & gold gave back 20, falling to 1640 (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)
Cuomo says Senate’s $2 trillion coronavirus bill would be ‘terrible’ for New York
The coronavirus crisis has brought another first to US financial markets — negative yields on gov debt. Yields on both the 1-month & 3-month Treasury bills dipped below zero today, a week & a ½ after the Federal Reserve cuts its benchmark rate to near zero & as investors have flocked to the safety of fixed income amid general market turmoil. It was the first time that happened in 4½ years, when both bills briefly flashed red & yields fell to minus-0.002% each. The readings today were well below those. The one-month traded at minus-0.053% while the 3-month was at minus-0.033%. The US now joins large swaths of Europe & Japan that also have negative-yielding debt. In Germany, the move was even more prevalent, with all gov fixed income instruments except the 30-year bond carrying rates below zero. Denmark, France & Sweden are among other European nations also in the category. Negative yields are largely a function of demand, as prices & yields move in opposite direction for bonds. Investors pay a large premium above par on the bonds & can receive less than their initial investment at maturity. Deposit rates also can be negative. The negative rates, however, are not directly related to central bank policy. Fed officials have rejected the notion that the central bank might eventually take its policy rate below zero. However, that might not matter if current market trends hold. While longer-duration Treasuries are still a good ways from negative territory, the trend for yields is lower.
Negative rates come to the US: 1-month and 3-month Treasury bill yields are now below zero
Jobless claims expected to spike to a record-breaking number in the millions
Gold prices settled lower, giving up some gains from a day earlier when bullion registered its largest percentage rise in more than a decade. Some commodity analysts attributed the retrenchment to some exhaustion after two powerful sessions of gains for the yellow metal, as the Congress draws closer to passing a $2T rescue package to help lessen the economic pain of the coronavirus pandemic. Gold for Apr fell $27.40 (1.7%) to settle at $1633 an ounce, after surging 6% yesterday. A report showing that US orders for long-lasting, or durable, goods climbed 1.2% in Feb didn’t appear to impact bullion trading today. The outbreak of COVID-19, the infectious disease that has infected more than 450K & killed over 120K, has been one of the biggest supports for buying of assets perceived as havens. Investors are watching for the response by govs across the globe to the deadly pathogen, including the US where lawmakers agreed upon a $2T coronavirus relief package, one that must still pass votes in both the Senate & House. Gold prices yesterday booked the largest one-day $ gain based on records dating back to 1984 & biggest daily percentage rise since 2009.
Gold prices settle lower after sharpest daily rise in over a decade
China's National Health Commission has reported 47 new COVID-19 cases, all of which it says were imported infections in recent arrivals from abroad. No new cases were reported in the central Chinese city of Wuhan, the epicenter of the country's outbreak. Wuhan will remain locked down until Apr 8, while the 2-month lockdown of surrounding Hubei province ended at midnight. As the number of domestic community transmissions has dwindled, China is shifting its focus to individuals coming into the country from affected regions like the US & Europe. Starting today, all individuals arriving in China's capital from overseas must take a COVID-19 test in addition to being quarantined, the Beijing municipal gov said. Those who have entered the city within the last 14 days will also undergo mandatory testing.
China reports 47 new coronavirus cases, but none on Wuhan
Oil futures ended higher, giving up earlier declines as optimism surrounding the $2T US econonic stimulus package eventually helped to calm some worries about growing supply amid a price war between Saudi Arabia & Russia. Weekly data from the Energy Information Administration, meanwhile, revealed a smaller-than-expected weekly climb in US crude inventories, but the rise also marked a 9th weekly increase in a row. The data also showed a hefty decline in weekly gasoline production, boosting futures prices for the fuel. West Texas Intermediate crude for May tacked on 48¢ (2%) to settle at $24.49 a barrel after trading as low as $22.91. May Brent crude, the global benchmark, rose 24¢ (0.9%) at $27.39 a barrel. Oil found support on the back of progress on a US stimulus package & a report that said the US plans to pressure Saudi Arabia, head of the virtual Group of 20 major economies, to restrain its scheduled oil production boost. Dem & Rep lawmakers and the Trump administration reached a deal on a $2T relief package aimed to tide over US citizens & businesses as the economy grinds to a near halt as a result of the global COVID-19 pandemic. The deal must still pass votes in both the Senate & House. Expectations for a deal had helped lift oil futures & sent stocks soaring yesterday.
Oil prices end higher as move toward U.S. stimulus package fuels optimism
This was another wild day for investors. After stumbling in the first hour of trading, investors returned to bid up prices for most of the day. However there was heavy selling into the close. Buyers were attracted to high yields, espeially in junk bond funds & REITs which have had excellent rebound in the last 2 days. The challenge for the bulls will be to keep the rally going. Late day selling suggests the bulls will need help. Tomorrow's report on unemployment claims promises to be dreary. Additionally, more paperwork has to be signed in DC to get money to Americans & that is not expected to go quickly.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The Senate's $2T coronavirus relief bill may be the largest rescue package in US history, but it doesn't provide nearly enough for New York state, Gov Andrew Cuomo said. The
bill, tentatively approved early Wednesday, “would really be terrible
for the state of New York,” Cuomo said at his daily briefing. His criticism came as White House officials made clear that Pres Trump plans to sign the massive relief bill into law as soon as Congress sends it to him. Cuomo said the bill provides $3.8B for New York State, of which only $1.3B will be sent to New York City. “Sounds
like a lot of money,” Cuomo said. But it's far below the shortfall in
revenue that the state projects it will face, which the governor said
could total $15B. “That is a drop in the bucket” compared
with what New Yorkers need, he said. “How do you plug a $15 billion hole
with $3.8 billion? You don’t.” New York has become the epicenter of the US coronavirus outbreak. More than 30K COVID-19 cases have been counted across the state, accounting for more than ½ of all confirmed cases in the country. New York City may close parks, playgrounds & some streets to reduce density in the latest effort to contain the virus, the governor said.
Cuomo says Senate’s $2 trillion coronavirus bill would be ‘terrible’ for New York
The coronavirus crisis has brought another first to US financial markets — negative yields on gov debt. Yields on both the 1-month & 3-month Treasury bills dipped below zero today, a week & a ½ after the Federal Reserve cuts its benchmark rate to near zero & as investors have flocked to the safety of fixed income amid general market turmoil. It was the first time that happened in 4½ years, when both bills briefly flashed red & yields fell to minus-0.002% each. The readings today were well below those. The one-month traded at minus-0.053% while the 3-month was at minus-0.033%. The US now joins large swaths of Europe & Japan that also have negative-yielding debt. In Germany, the move was even more prevalent, with all gov fixed income instruments except the 30-year bond carrying rates below zero. Denmark, France & Sweden are among other European nations also in the category. Negative yields are largely a function of demand, as prices & yields move in opposite direction for bonds. Investors pay a large premium above par on the bonds & can receive less than their initial investment at maturity. Deposit rates also can be negative. The negative rates, however, are not directly related to central bank policy. Fed officials have rejected the notion that the central bank might eventually take its policy rate below zero. However, that might not matter if current market trends hold. While longer-duration Treasuries are still a good ways from negative territory, the trend for yields is lower.
Negative rates come to the US: 1-month and 3-month Treasury bill yields are now below zero
About 1-4M may have filed
for unemployment benefits last week, the largest number ever in such a
short time. The filings figure, which will be released tomorrow
before US markets open, will be the first indication of how hard the
labor force is being hit by the abrupt shutdown of a large part of the
US economy by the coronavirus pandemic. The speed at which the economy shut down is unprecedented &
economists usually look to a slow build in weekly unemployment claims as
an early warning signal of an economic slowdown. Economists now expect the economy has entered recession & the trough
will be in Q2, with many forecasts of a record
double-digit decline in GDP. The economy is expected to be less impacted
or recover in Q3 & then rebound in Q4. The speed at which employees can return to their jobs, & the economy
rebound, will depend on how quickly the virus can be stopped from
spreading. The duration of the shutdown & job losses will also
determine how many of them become more permanent.
Jobless claims expected to spike to a record-breaking number in the millions
Gold prices settled lower, giving up some gains from a day earlier when bullion registered its largest percentage rise in more than a decade. Some commodity analysts attributed the retrenchment to some exhaustion after two powerful sessions of gains for the yellow metal, as the Congress draws closer to passing a $2T rescue package to help lessen the economic pain of the coronavirus pandemic. Gold for Apr fell $27.40 (1.7%) to settle at $1633 an ounce, after surging 6% yesterday. A report showing that US orders for long-lasting, or durable, goods climbed 1.2% in Feb didn’t appear to impact bullion trading today. The outbreak of COVID-19, the infectious disease that has infected more than 450K & killed over 120K, has been one of the biggest supports for buying of assets perceived as havens. Investors are watching for the response by govs across the globe to the deadly pathogen, including the US where lawmakers agreed upon a $2T coronavirus relief package, one that must still pass votes in both the Senate & House. Gold prices yesterday booked the largest one-day $ gain based on records dating back to 1984 & biggest daily percentage rise since 2009.
Gold prices settle lower after sharpest daily rise in over a decade
China's National Health Commission has reported 47 new COVID-19 cases, all of which it says were imported infections in recent arrivals from abroad. No new cases were reported in the central Chinese city of Wuhan, the epicenter of the country's outbreak. Wuhan will remain locked down until Apr 8, while the 2-month lockdown of surrounding Hubei province ended at midnight. As the number of domestic community transmissions has dwindled, China is shifting its focus to individuals coming into the country from affected regions like the US & Europe. Starting today, all individuals arriving in China's capital from overseas must take a COVID-19 test in addition to being quarantined, the Beijing municipal gov said. Those who have entered the city within the last 14 days will also undergo mandatory testing.
China reports 47 new coronavirus cases, but none on Wuhan
Oil futures ended higher, giving up earlier declines as optimism surrounding the $2T US econonic stimulus package eventually helped to calm some worries about growing supply amid a price war between Saudi Arabia & Russia. Weekly data from the Energy Information Administration, meanwhile, revealed a smaller-than-expected weekly climb in US crude inventories, but the rise also marked a 9th weekly increase in a row. The data also showed a hefty decline in weekly gasoline production, boosting futures prices for the fuel. West Texas Intermediate crude for May tacked on 48¢ (2%) to settle at $24.49 a barrel after trading as low as $22.91. May Brent crude, the global benchmark, rose 24¢ (0.9%) at $27.39 a barrel. Oil found support on the back of progress on a US stimulus package & a report that said the US plans to pressure Saudi Arabia, head of the virtual Group of 20 major economies, to restrain its scheduled oil production boost. Dem & Rep lawmakers and the Trump administration reached a deal on a $2T relief package aimed to tide over US citizens & businesses as the economy grinds to a near halt as a result of the global COVID-19 pandemic. The deal must still pass votes in both the Senate & House. Expectations for a deal had helped lift oil futures & sent stocks soaring yesterday.
Oil prices end higher as move toward U.S. stimulus package fuels optimism
This was another wild day for investors. After stumbling in the first hour of trading, investors returned to bid up prices for most of the day. However there was heavy selling into the close. Buyers were attracted to high yields, espeially in junk bond funds & REITs which have had excellent rebound in the last 2 days. The challenge for the bulls will be to keep the rally going. Late day selling suggests the bulls will need help. Tomorrow's report on unemployment claims promises to be dreary. Additionally, more paperwork has to be signed in DC to get money to Americans & that is not expected to go quickly.
Dow Jones Industrials
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