Dow skyrocketed 1173 (session highs), advancers over decliners 5-1 & NAZ soared 334. The MLP index slid back to the 173s & the REIT index jumped up 15 to the 412s. Junk bond funds continued rising & Treasuries were up slightly, taking the yield on the 10 year note just under 1%. Oil was off slightly in the 47s & gold fell 3 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)
Lawmakers reached an agreement on funding a roughly $8 B response to the coronavirus outbreak, racing to approve the spending as the number of people with the illness continued to grow. The House is expected to pass the legislation later today, approving more than $3B for developing treatments for the disease & $2.2B for preventing its spread, among other measures. Under the legislation, which the Senate is expected to pass this week, more than $1B will go overseas. Also, $20M will be made available to increase loans to US small businesses. The agreement between top Reps & Dems caps less than 2 weeks of negotiations that began last week when the White House said it planned to spend roughly $2.5B on fighting the disease. Pres Trump has said he would sign whatever package Congress approves. Negotiations had slowed in recent days as lawmakers haggled over the possible price of a coronavirus vaccine being developed. Dems had pushed to guarantee that the drug would be made available at an affordable price, while Reps warned that price controls could slow development. The final deal includes $300M for the gov to purchase the vaccine & other therapeutics & then make them available to the public.
The US economy continues to move forward but faces risks from both the presidential election & the feared spread of the novel coronavirus, the Federal Reserve reported. In the central bank's periodic “Beige Book” report from its member districts, officials saw activity growing at a “modest to moderate pace.” Threats from the coronavirus specifically did not seem to pose a major threat yet, though business contacts said they were worried about potential ramifications to come. “There were indications that the coronavirus was negatively impacting travel and tourism in the U.S.,” the report added. “Manufacturing activity expanded in most parts of the country; however, some supply chain delays were reported as a result of the coronavirus and several Districts said that producers feared further disruptions in the coming weeks.” The data in the report includes the period thru Feb 24, so it was before some of the recent intensifying of the disease spread & extreme volatility in financial markets. There have been more than 94K cases of COVID-19 reported around the world & more than 3200 deaths. Traders have seen a stock market correction that has come amid worries that the disease's epicenter in China could cause a supply chain constraint thru the world that will slow growth substantially. “Outlooks for the near-term were mostly for modest growth with the coronavirus and the upcoming presidential election cited as potential risks,” the report stated. Across individual districts, Philadelphia reported worries that the coronavirus “has increased uncertainty” about growth prospects, while Richmond saw concerns about lowering imports from China. Chicago, however, reported “little effect.” On the election, multiple districts reported general uncertainty over business conditions related to the political landscape.
Fed ‘Beige Book’ shows business worried about coronavirus and the election
IMF Managing Director Kristalina Georgieva announced a $50B aid package to help fight the coronavirus. Georgieva said that the money is available “immediately” & is for low-income & emerging market countries. Most of the money will be interest-free & countries do not need to have a preexisting program with the IMF to participate. “What we’re doing right now is reviewing country by country what are the financial needs, and engaging with these countries to make sure they are aware of this resource and we can immediately respond to them,” Georgieva said. “We’re in an early stage of engagement, but I can assure you that we will act very quickly as requests come.” There are more than 90K confirmed cases of the coronavirus around the world & the outbreak has spread to 6 continents. The epidemic has led to severe travel restrictions in key economic hubs in China & Italy. The IMF would like to see the money used first to bolster health-care systems & then for targeted fiscal stimulus programs & to help liquidity. The organization is also working with the World Bank to help countries obtain some of the medical equipment, such as medical masks & respiratory equipment, that is used to combat the virus. The World Bank announced a $12B program on Mon to help poor nations deal with the health & economic consequences of the epidemic. Countries around the world should also consider creating measures to help the economy during an economic slowdown, such as offering lines of credit to smaller businesses & programs to pay workers who have to stay home. “We think it is now the time to put in place precautionary measures should the outbreak become more severe,” Georgieva added. She said earlier that, “We are faced with a generalized weakening in demand, and that goes through confidence and through spillover channels, including trade and tourism, commodity prices, tightened financial conditions.” “They call for an additional policy response to support demand and ensure an adequate supply of credit,” she said.
IMF announces $50 billion program to fight coronavirus outbreak
Gold futures ended lower, pressured as global equities rallied, dulling their haven appeal. US gov bond yields, however, remained mostly under pressure in the wake of an emergency interest rate cut a day earlier by the Federal Reserve, limiting losses for the precious metal. Gold for Apr fell $1.40 to settle at $1643 an ounce after an intraday high of $1654. Prices had climbed 3.1% yesterday, posting the largest one-day percentage rise since Jun of last year. The latest move for gold comes as an estimate from ADP & Moody's Analytics showed that US private-sector employment added 183K jobs in Feb, down slightly from 209K in the prior month. Separately, the ISM services index rose to 57.3% in Feb from 55.5%, though the survey showed businesses were more worried about coronavirus.
Gold ends lower as global stocks climb, but falling bond yields underpin the metal
Oil futures settled lower as oil producers struggled to reach an agreement on production cuts in Vienna in an effort to stabilize prices on the heels of a demand slowdown sparked by the COVID-19 epidemic. The Energy Information Administration, meanwhile, reported a 6th straight weekly rise in US crude supplies, adding further pressure on prices. Apr West Texas Intermediate crude fell 40¢, (0.9%) to settle at $46.78 a barrel after trading as high as $48.41. The global benchmark, May Brent crude shed 73¢ (1.4%) at $51.13 a barrel. Data from the Energy Information Administration today revealed that US crude supplies rose 785K barrels for last week. The gov agency had reports increases in each of the previous 5 weeks. The forecast called for the data to show a rise of 3.5M barrels. The American Petroleum Institute yesterday reported a climb of 1.7M barrels. Today, the Joint Ministerial Monitoring Committee (JMMC) which monitors compliance with the earlier production-cut agreement, held a gathering, ahead of the OPEC member meeting tomorrow & the member meeting with allied non-members, a group collectively known as OPEC+, on Fri. At a technical meeting last month, OPEC+ recommended extending existing cuts of 1.7M barrels a day, which conclude at the end of Mar, to the end of the year, & suggested a further output adjustment through the end of Q2. Today, however, the de facto leader of OPEC, Saudi Arabia, & non-member Russia are reportedly at odds, with the Saudis pushing for an additional supply reduction as large as 1.5M barrels a day, while Russia favors maintaining output at current level thru the end of Q2. Oil prices did get a boost on news that Chinese factories are restarting & traffic is emerging on the roads. Still, the viral outbreak has shutdown swaths of China's economy, the biggest importer of crude oil, & the spread of the deadly disease also threatens to have a pronounced impact on global demand on fear that the outbreak could lead to a world-wide recession if left unchecked.
Oil prices settle lower as OPEC+ appears to struggle to reach an agreement on output cuts
The Volatility Index dropped 3+ to the 31s, down from recent highs near 50. However it's still more than double where it was in better times while safe haven gold is near its 7 year highs & the 10 year Treasury yield at sub 1% is close to its record low reached yesterday. Daily moves by the Dow of more than 1K should make any investor nervous. Meanwhile the Dow is still down about 10% in the last 2 weeks of trading. Amateur investors are making rash decisions about buying & selling stocks. That's scary!
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Lawmakers reached an agreement on funding a roughly $8 B response to the coronavirus outbreak, racing to approve the spending as the number of people with the illness continued to grow. The House is expected to pass the legislation later today, approving more than $3B for developing treatments for the disease & $2.2B for preventing its spread, among other measures. Under the legislation, which the Senate is expected to pass this week, more than $1B will go overseas. Also, $20M will be made available to increase loans to US small businesses. The agreement between top Reps & Dems caps less than 2 weeks of negotiations that began last week when the White House said it planned to spend roughly $2.5B on fighting the disease. Pres Trump has said he would sign whatever package Congress approves. Negotiations had slowed in recent days as lawmakers haggled over the possible price of a coronavirus vaccine being developed. Dems had pushed to guarantee that the drug would be made available at an affordable price, while Reps warned that price controls could slow development. The final deal includes $300M for the gov to purchase the vaccine & other therapeutics & then make them available to the public.
Congress reaches deal on funding coronavirus response as US cases surge
The US economy continues to move forward but faces risks from both the presidential election & the feared spread of the novel coronavirus, the Federal Reserve reported. In the central bank's periodic “Beige Book” report from its member districts, officials saw activity growing at a “modest to moderate pace.” Threats from the coronavirus specifically did not seem to pose a major threat yet, though business contacts said they were worried about potential ramifications to come. “There were indications that the coronavirus was negatively impacting travel and tourism in the U.S.,” the report added. “Manufacturing activity expanded in most parts of the country; however, some supply chain delays were reported as a result of the coronavirus and several Districts said that producers feared further disruptions in the coming weeks.” The data in the report includes the period thru Feb 24, so it was before some of the recent intensifying of the disease spread & extreme volatility in financial markets. There have been more than 94K cases of COVID-19 reported around the world & more than 3200 deaths. Traders have seen a stock market correction that has come amid worries that the disease's epicenter in China could cause a supply chain constraint thru the world that will slow growth substantially. “Outlooks for the near-term were mostly for modest growth with the coronavirus and the upcoming presidential election cited as potential risks,” the report stated. Across individual districts, Philadelphia reported worries that the coronavirus “has increased uncertainty” about growth prospects, while Richmond saw concerns about lowering imports from China. Chicago, however, reported “little effect.” On the election, multiple districts reported general uncertainty over business conditions related to the political landscape.
Fed ‘Beige Book’ shows business worried about coronavirus and the election
IMF Managing Director Kristalina Georgieva announced a $50B aid package to help fight the coronavirus. Georgieva said that the money is available “immediately” & is for low-income & emerging market countries. Most of the money will be interest-free & countries do not need to have a preexisting program with the IMF to participate. “What we’re doing right now is reviewing country by country what are the financial needs, and engaging with these countries to make sure they are aware of this resource and we can immediately respond to them,” Georgieva said. “We’re in an early stage of engagement, but I can assure you that we will act very quickly as requests come.” There are more than 90K confirmed cases of the coronavirus around the world & the outbreak has spread to 6 continents. The epidemic has led to severe travel restrictions in key economic hubs in China & Italy. The IMF would like to see the money used first to bolster health-care systems & then for targeted fiscal stimulus programs & to help liquidity. The organization is also working with the World Bank to help countries obtain some of the medical equipment, such as medical masks & respiratory equipment, that is used to combat the virus. The World Bank announced a $12B program on Mon to help poor nations deal with the health & economic consequences of the epidemic. Countries around the world should also consider creating measures to help the economy during an economic slowdown, such as offering lines of credit to smaller businesses & programs to pay workers who have to stay home. “We think it is now the time to put in place precautionary measures should the outbreak become more severe,” Georgieva added. She said earlier that, “We are faced with a generalized weakening in demand, and that goes through confidence and through spillover channels, including trade and tourism, commodity prices, tightened financial conditions.” “They call for an additional policy response to support demand and ensure an adequate supply of credit,” she said.
IMF announces $50 billion program to fight coronavirus outbreak
Gold futures ended lower, pressured as global equities rallied, dulling their haven appeal. US gov bond yields, however, remained mostly under pressure in the wake of an emergency interest rate cut a day earlier by the Federal Reserve, limiting losses for the precious metal. Gold for Apr fell $1.40 to settle at $1643 an ounce after an intraday high of $1654. Prices had climbed 3.1% yesterday, posting the largest one-day percentage rise since Jun of last year. The latest move for gold comes as an estimate from ADP & Moody's Analytics showed that US private-sector employment added 183K jobs in Feb, down slightly from 209K in the prior month. Separately, the ISM services index rose to 57.3% in Feb from 55.5%, though the survey showed businesses were more worried about coronavirus.
Gold ends lower as global stocks climb, but falling bond yields underpin the metal
Oil futures settled lower as oil producers struggled to reach an agreement on production cuts in Vienna in an effort to stabilize prices on the heels of a demand slowdown sparked by the COVID-19 epidemic. The Energy Information Administration, meanwhile, reported a 6th straight weekly rise in US crude supplies, adding further pressure on prices. Apr West Texas Intermediate crude fell 40¢, (0.9%) to settle at $46.78 a barrel after trading as high as $48.41. The global benchmark, May Brent crude shed 73¢ (1.4%) at $51.13 a barrel. Data from the Energy Information Administration today revealed that US crude supplies rose 785K barrels for last week. The gov agency had reports increases in each of the previous 5 weeks. The forecast called for the data to show a rise of 3.5M barrels. The American Petroleum Institute yesterday reported a climb of 1.7M barrels. Today, the Joint Ministerial Monitoring Committee (JMMC) which monitors compliance with the earlier production-cut agreement, held a gathering, ahead of the OPEC member meeting tomorrow & the member meeting with allied non-members, a group collectively known as OPEC+, on Fri. At a technical meeting last month, OPEC+ recommended extending existing cuts of 1.7M barrels a day, which conclude at the end of Mar, to the end of the year, & suggested a further output adjustment through the end of Q2. Today, however, the de facto leader of OPEC, Saudi Arabia, & non-member Russia are reportedly at odds, with the Saudis pushing for an additional supply reduction as large as 1.5M barrels a day, while Russia favors maintaining output at current level thru the end of Q2. Oil prices did get a boost on news that Chinese factories are restarting & traffic is emerging on the roads. Still, the viral outbreak has shutdown swaths of China's economy, the biggest importer of crude oil, & the spread of the deadly disease also threatens to have a pronounced impact on global demand on fear that the outbreak could lead to a world-wide recession if left unchecked.
Oil prices settle lower as OPEC+ appears to struggle to reach an agreement on output cuts
The Volatility Index dropped 3+ to the 31s, down from recent highs near 50. However it's still more than double where it was in better times while safe haven gold is near its 7 year highs & the 10 year Treasury yield at sub 1% is close to its record low reached yesterday. Daily moves by the Dow of more than 1K should make any investor nervous. Meanwhile the Dow is still down about 10% in the last 2 weeks of trading. Amateur investors are making rash decisions about buying & selling stocks. That's scary!
Dow Jones Industrials
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