Dow recovered 133, decliners slightly ahead of advancers & NAZ added 8. The MLP index was fractionally lower to the 172s & the REIT index rebounded 3+ to the 384s. Junk bond funds fluctuated & Treasuries remained in heavy demand, bringing the yield on the 10 year Treasury to a record low below 1.1%. Oil rose 1 to the 45s & gold shot up 30 to 1597.
AMJ (Alerian MLP Index tracking fund)
The number of new virus cases in China dropped to its lowest level in 6 weeks & hundreds of patients at the outbreak's epicenter were being released, while a grimmer reality set in elsewhere, with swelling infection numbers & growing dread that no area could fend off the illness. Clusters of infections in South Korea, Italy & Iran continued to expand & COVID-19 was raising distress & reshaping routines around Europe & across the Atlantic in the US. Major cities including Jakarta, New York & Berlin grappled with their first recorded cases. Schools emptied across Japan, mobile hospitals were planned in Iran, & the Mona Lisa, accustomed to droves of staring tourists, hung in a vacant room of the shuttered Louvre in Paris. More than 60 countries around the world — including 9 of the 10 biggest — have found infections, with a global count of nearly 89K affected by the illness. Even as alarms grew louder in much of the world, today brought positive signs from China, where the outbreak started. China's economy delivered hopeful cues, with mainland Chinese stock benchmarks charging back 3% & data showing progress in restoring factory output after weeks of disruptions related to the outbreak. The country reported 202 new cases of the virus, its lowest daily count since Jan 21, & the stricken heart of the health crisis, Wuhan, said 2570 patients were released. At the largest of 16 temporary hospitals that were hastily built in Wuhan in response to the outbreak, worries over the availability of supplies and protective gear abated & pressure on medical staff eased. Dr. Zhang Junjian, who leads a temporary hospital at an exhibition center in Wuhan which has a staff of 1260, said optimism was high that the facility would no longer be needed in the coming weeks. "If nothing special happens, I expect the operation of our makeshift hospital ... could complete its historical mission by the end of March," Zhang said. China's sunnier news came 2 months into its outbreak. In the places the virus has spread more recently, the problems continued to magnify. South Korea, with the worst outbreak outside of China, said it recorded 599 new cases of the virus, bringing the total to 4335 & the death toll rose to 26. To cope with the influx, the country said hospitals would be reserved for patients with serious symptoms or preexisting conditions, with mild cases now routed to other designated facilities.
Manufacturing activity in the US grew at a slower-than-expected pace last month as the coronavirus outbreak dampened sentiment in the sector, data from the Institute for Supply Management showed. The ISM manufacturing PMI fell to 50.1 in Feb from 50.9 in Jan, the PMI’s lowest level since late 2019, when it fell below 50. The forecast called for the ISM manufacturing PMI to come in at 50.8 for Feb. A reading above 50 indicates expansion while a print below 50 shows contraction. Production fell by 4 percentage points last month while the new orders index fell to 49.8 from 52 in the previous month. The slow growth in US manufacturing last month coincided with the coronavirus spreading throughout China & the rest of the world, denting expectations over global economic growth & corp profits. The Dow, S&P 500 NAZ all posted last week their worst weekly performances in over 10 years. They also tumbled into correction territory, down more than 10% from all-time highs set February.
US manufacturing activity slows in February as coronavirus spreads around the world
Global central banks hint at action after coronavirus sparks market rout
Today's bounce back does not mean much while safe haven gold & Treasuries are soaring. If the numbers from China can be believed, their situation is improving. However the virus is spreading globally & that is damaging business conditions everywhere (shown by US manufacturing data above). The Dow started higher, dipped to around breakeven & has returned to the black. These are nervous times for investors & that is not likely to change very much going forward.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 45.74 | +0.98 | +2.2% |
| GC=F | Gold | 1,601.40 | +34.70 | +2.2% |
The number of new virus cases in China dropped to its lowest level in 6 weeks & hundreds of patients at the outbreak's epicenter were being released, while a grimmer reality set in elsewhere, with swelling infection numbers & growing dread that no area could fend off the illness. Clusters of infections in South Korea, Italy & Iran continued to expand & COVID-19 was raising distress & reshaping routines around Europe & across the Atlantic in the US. Major cities including Jakarta, New York & Berlin grappled with their first recorded cases. Schools emptied across Japan, mobile hospitals were planned in Iran, & the Mona Lisa, accustomed to droves of staring tourists, hung in a vacant room of the shuttered Louvre in Paris. More than 60 countries around the world — including 9 of the 10 biggest — have found infections, with a global count of nearly 89K affected by the illness. Even as alarms grew louder in much of the world, today brought positive signs from China, where the outbreak started. China's economy delivered hopeful cues, with mainland Chinese stock benchmarks charging back 3% & data showing progress in restoring factory output after weeks of disruptions related to the outbreak. The country reported 202 new cases of the virus, its lowest daily count since Jan 21, & the stricken heart of the health crisis, Wuhan, said 2570 patients were released. At the largest of 16 temporary hospitals that were hastily built in Wuhan in response to the outbreak, worries over the availability of supplies and protective gear abated & pressure on medical staff eased. Dr. Zhang Junjian, who leads a temporary hospital at an exhibition center in Wuhan which has a staff of 1260, said optimism was high that the facility would no longer be needed in the coming weeks. "If nothing special happens, I expect the operation of our makeshift hospital ... could complete its historical mission by the end of March," Zhang said. China's sunnier news came 2 months into its outbreak. In the places the virus has spread more recently, the problems continued to magnify. South Korea, with the worst outbreak outside of China, said it recorded 599 new cases of the virus, bringing the total to 4335 & the death toll rose to 26. To cope with the influx, the country said hospitals would be reserved for patients with serious symptoms or preexisting conditions, with mild cases now routed to other designated facilities.
Coronavirus pouring into major cities, while China finally reports drop in new cases
Manufacturing activity in the US grew at a slower-than-expected pace last month as the coronavirus outbreak dampened sentiment in the sector, data from the Institute for Supply Management showed. The ISM manufacturing PMI fell to 50.1 in Feb from 50.9 in Jan, the PMI’s lowest level since late 2019, when it fell below 50. The forecast called for the ISM manufacturing PMI to come in at 50.8 for Feb. A reading above 50 indicates expansion while a print below 50 shows contraction. Production fell by 4 percentage points last month while the new orders index fell to 49.8 from 52 in the previous month. The slow growth in US manufacturing last month coincided with the coronavirus spreading throughout China & the rest of the world, denting expectations over global economic growth & corp profits. The Dow, S&P 500 NAZ all posted last week their worst weekly performances in over 10 years. They also tumbled into correction territory, down more than 10% from all-time highs set February.
US manufacturing activity slows in February as coronavirus spreads around the world
The ECB has become the latest institution to hint at monetary policy action in a
bid to mitigate the potential economic fallout from the coronavirus
outbreak. The statement comes after a series of comments from
central bank heads around the world indicating that a coordinated global
monetary response to the epidemic is a possibility. These
hopes helped boost stock markets across major economies after
their worst week of losses since the financial crisis, as fears of a
global recession were intensified by the rapid spread of the virus
outside of China. ECB VP Luis de Guindos said the bank would “remain
vigilant” & “closely monitor all incoming data.” He warned of an
impact on euro area exports & a disruption to global supply chains. “In
any case, the Governing Council stands ready to adjust all its
instruments, as appropriate, to ensure that inflation moves towards its
aim in a sustained manner,” he added. The
ECB's main deposit rate currently sits at the historic low of -0.5%, &
the central bank is embarking upon a sustained program of quantitative
easing, purchasing assets at a monthly rate of €20B ($22.25B ). US Federal Reserve Chair Jerome Powell issued a statement Fri
reiterating that while the “fundamentals of the U.S. economy remain
strong,” the coronavirus poses “evolving risks to economic activity.” “We will use our tools and act as appropriate to support the economy,” Powell added. The
market is currently pricing in a 50 basis point interest rate cut at
the FOMC's Mar meeting & a total of 100
basis points in cuts by the end of 2020. The current 1.5-1.75% range has been in place since the end of 2019 following 3 cuts throughout the year.
Global central banks hint at action after coronavirus sparks market rout
Today's bounce back does not mean much while safe haven gold & Treasuries are soaring. If the numbers from China can be believed, their situation is improving. However the virus is spreading globally & that is damaging business conditions everywhere (shown by US manufacturing data above). The Dow started higher, dipped to around breakeven & has returned to the black. These are nervous times for investors & that is not likely to change very much going forward.
Dow Jones Industrials
No comments:
Post a Comment