Dow rose 532, advancers over decliners 2-1 & NAZ slid back 2. The MLP index was flattish in the 84s & the REIT index recovered another 10 to 285. Junk bond funds continued in demand offering extraordinarily high yields & Treasuries had modest gains in price. Oil slid back to the 23s & gold fell 27 to 1633 on profit taking.
AMJ (Alerian MLP Index tracking fund)
New orders for long-lasting US manufactured goods unexpectedly rose in Feb, but are set to decline as strict measures to contain the coronavirus pandemic sap demand & push the economy into recession. Orders for durable goods, items ranging from toasters to aircraft that are meant to last 3 years or more, accelerated 1.2% last month. Data for Jan was revised up to show durable goods orders gaining 0.1% instead of slipping 0.2% as previously reported. The forecast called for durable goods orders dropping 0.8% in Feb.
Detroit's Big 3 automakers plan to extend a current shutdown of vehicle production in North America into Apr as the coronavirus pandemic continues, people briefed on the matter said. The automakers had said on Mar 18 they would halt production until at least Mar 30. Ford (F) said it was "not planning to restart our plants in the US, Canada & Mexico on Monday, March 30 as originally hoped." Leakers said Ford does not plan to restart production until at least Apr 6 but warned it could be further delayed into Apr. General Motors (GM) & Fiat Chrysler (FCAU) also do not plan to resume production on Mar 30 & it was unclear when they may resume production or if some plants could restart before others. GM said last week when it announced the shutdown it would last "until at least March 30. Production status will be reevaluated week-to-week after that." Michigan Governor Gretchen Whitmer issued an order on Mon barring non-essential businesses from operating until Apr 13. Michigan has declared vehicle sales by auto dealers to be impermissible under the order, but dealerships & other facilities can make repairs. United Auto Workers Pres Rory Gamble said in a letter that Fiat Chrysler had told the union that it would comply with the Michigan governor's order & had "no plans to reopen on March 30." The UAW also said 2 FCAU union members -- one in Indiana & one in Michigan -- have died after contracting the coronavirus. Gamble's letter said the union is "waiting to hear from GM and are demanding that they put our members’ safety first and adhere to government and health officials’ recommendations to stay-at-home." A group representing major US & foreign automakers warned in a letter to US lawmakers with other industry groups on Mon that "Auto industry analysts are expecting sales to be down by as much as 40 percent in March compared to 2019." The letter said 95% of North American auto plants are currently closed.
The White House & Senate leaders reached a deal early this AM on a massive $2T relief bill — said to be the largest rescue package in American history — to combat the economic impact of the coronavirus outbreak. “At last we have a deal,” Senate Majority Leader Mitch McConnell said on the floor of the Senate. Efforts to pass the measure have taken on urgency as hospitals, companies, states & individuals have all pleaded for needed resources to battle the pandemic. Its impact has now reached into the Senate: Sen Rand Paul earlier this week announced he has tested positive for coronavirus. “In effect, this is a war-time level of investment into our nation,” said McConnell, who promised the bill would rush financial assistance to Americans through direct checks to households, enhanced unemployment insurance, hundreds of Bs of $s in emergency loans to small businesses, & more resources for hospitals & medical equipment. The Senate has yet to release the final terms of the deal. An earlier draft would provide cash payments of up to $1200 for individuals, $2400 for married couples & $500 per child, reduced if an individual makes more than $75K or a couple makes more than $150K. The draft language also stipulated a $350B fund for small businesses to mitigate layoffs & support payroll. Employers will get a deferral of payroll taxes, but & pay them back on a staggered in coming years, the administration official said. The deferral only applies to employers, not employees. McConnell said the bill would “stabilize key national industries” to prevent as many layoffs as possible. US passenger & cargo airlines have sought $58B in gov relief to help manage a financial blow that they say is worse than 9/11. The details of that aid package was one of the last major outstanding issues last night. The deal will allocate $150B to states & localities battling the pandemic & $55B more for the health-care system.
Fed’s James Bullard says after a short-term ‘unparalleled’ shock, economy will boom again
The drama with those Bozos in DC is not over. After selling in the first hour of trading, more bargain hunting on beaten up stocks returned. But not in force. Now the House will have to approve a version of the Senate bill & then the 2 bills will need to be reconciled so it can be sent to Trump. Don't hold your breath! Even with all that is going on, politics is most important. Bet money nothing will be approved by next Wed. Those Bozos in DC would rather play games than accomplish something good. Last week, the idea was getting money to the people. That thought is history! At least investors are snapping up high yield stocks (starting with junk bond funds) which look very attractive when low yields have become common on investments.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 23.40 | -0.61 | -2.5% |
| GC=F | Gold | 1,642.60 | -18.20 | -1.1% |
New orders for long-lasting US manufactured goods unexpectedly rose in Feb, but are set to decline as strict measures to contain the coronavirus pandemic sap demand & push the economy into recession. Orders for durable goods, items ranging from toasters to aircraft that are meant to last 3 years or more, accelerated 1.2% last month. Data for Jan was revised up to show durable goods orders gaining 0.1% instead of slipping 0.2% as previously reported. The forecast called for durable goods orders dropping 0.8% in Feb.
US durable goods orders unexpectedly rise in February
Detroit's Big 3 automakers plan to extend a current shutdown of vehicle production in North America into Apr as the coronavirus pandemic continues, people briefed on the matter said. The automakers had said on Mar 18 they would halt production until at least Mar 30. Ford (F) said it was "not planning to restart our plants in the US, Canada & Mexico on Monday, March 30 as originally hoped." Leakers said Ford does not plan to restart production until at least Apr 6 but warned it could be further delayed into Apr. General Motors (GM) & Fiat Chrysler (FCAU) also do not plan to resume production on Mar 30 & it was unclear when they may resume production or if some plants could restart before others. GM said last week when it announced the shutdown it would last "until at least March 30. Production status will be reevaluated week-to-week after that." Michigan Governor Gretchen Whitmer issued an order on Mon barring non-essential businesses from operating until Apr 13. Michigan has declared vehicle sales by auto dealers to be impermissible under the order, but dealerships & other facilities can make repairs. United Auto Workers Pres Rory Gamble said in a letter that Fiat Chrysler had told the union that it would comply with the Michigan governor's order & had "no plans to reopen on March 30." The UAW also said 2 FCAU union members -- one in Indiana & one in Michigan -- have died after contracting the coronavirus. Gamble's letter said the union is "waiting to hear from GM and are demanding that they put our members’ safety first and adhere to government and health officials’ recommendations to stay-at-home." A group representing major US & foreign automakers warned in a letter to US lawmakers with other industry groups on Mon that "Auto industry analysts are expecting sales to be down by as much as 40 percent in March compared to 2019." The letter said 95% of North American auto plants are currently closed.
US automakers to extend shutdown into April: sources
The White House & Senate leaders reached a deal early this AM on a massive $2T relief bill — said to be the largest rescue package in American history — to combat the economic impact of the coronavirus outbreak. “At last we have a deal,” Senate Majority Leader Mitch McConnell said on the floor of the Senate. Efforts to pass the measure have taken on urgency as hospitals, companies, states & individuals have all pleaded for needed resources to battle the pandemic. Its impact has now reached into the Senate: Sen Rand Paul earlier this week announced he has tested positive for coronavirus. “In effect, this is a war-time level of investment into our nation,” said McConnell, who promised the bill would rush financial assistance to Americans through direct checks to households, enhanced unemployment insurance, hundreds of Bs of $s in emergency loans to small businesses, & more resources for hospitals & medical equipment. The Senate has yet to release the final terms of the deal. An earlier draft would provide cash payments of up to $1200 for individuals, $2400 for married couples & $500 per child, reduced if an individual makes more than $75K or a couple makes more than $150K. The draft language also stipulated a $350B fund for small businesses to mitigate layoffs & support payroll. Employers will get a deferral of payroll taxes, but & pay them back on a staggered in coming years, the administration official said. The deferral only applies to employers, not employees. McConnell said the bill would “stabilize key national industries” to prevent as many layoffs as possible. US passenger & cargo airlines have sought $58B in gov relief to help manage a financial blow that they say is worse than 9/11. The details of that aid package was one of the last major outstanding issues last night. The deal will allocate $150B to states & localities battling the pandemic & $55B more for the health-care system.
China to lift lockdown in most of coronavirus-hit Hubei province
The US economy is facing a huge shock to the
system over the near term, then will bounce back strongly, St Louis
Federal Reserve Pres James Bullard said. Earlier
this week, the central bank official forecast that the unemployment
rate will skyrocket to 30%, higher than it was even during the Great
Depression. However, he tempered those remarks today
saying that while the near-term damage will be daunting, it's largely an
intentional hit due to efforts to combat the coronavirus & will be
unwound quickly. “This
number will be unparalleled, but don’t get discouraged,” Bullard said.
“This is a special quarter, and once the virus goes away and if we play
our cards right and keep everything intact, then everyone will go back
to work and everything will be fine.” Once the short-term hit
passes, Bullard said, the US economy then could see a “boom quarter
where there’s a lot of production at that point” thanks to “pent-up
demand” resulting from the period of low activity. On the stimulus package making its way thru Congress,
Bullard said the $2T figure is about right, considering
the impact the move to shut down much of American commerce will have on
production. State govs increasingly are ordering residents to
stay inside as the virus runs its course, a move that hits at the heart
of the consumer-driven US economy. Bullard & his colleagues have taken extraordinary steps during the crisis,
pulling short-term borrowing rates to near zero, implementing a slew of
programs aimed at keeping markets functional, & directing funding to
businesses & institutions in need. He said the unemployment rate indeed will spike, but then should settle back to its trend, which had been around a 50-year low. “You’d
have this huge spike mostly centered in the second quarter, but
everyone knows exactly what that is, that’s pandemic relief that’s done
on purpose,” he said. “If we can get this to work right, everything will
snap back to normal once this is over.”
Fed’s James Bullard says after a short-term ‘unparalleled’ shock, economy will boom again
The drama with those Bozos in DC is not over. After selling in the first hour of trading, more bargain hunting on beaten up stocks returned. But not in force. Now the House will have to approve a version of the Senate bill & then the 2 bills will need to be reconciled so it can be sent to Trump. Don't hold your breath! Even with all that is going on, politics is most important. Bet money nothing will be approved by next Wed. Those Bozos in DC would rather play games than accomplish something good. Last week, the idea was getting money to the people. That thought is history! At least investors are snapping up high yield stocks (starting with junk bond funds) which look very attractive when low yields have become common on investments.
Dow Jones Industrials
No comments:
Post a Comment