Dow tumbled 969 (near session lows), decliners over advancers a huge 9-1 & NAZ dropped 334. The MLP index plunged 5+ to the 167s (the index started at 100 about 25 years ago) & the REIT index dropped 9 to the 403s. Junk bond funds were sold again & demand for Treasuries remained strong bringing record low yields under 1% (more below). Oil fell 1 to the 45s & gold soared 31 to 1674 (near 7 year record highs). 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)
The 10-year Treasury note fell to an all-time low as rekindled coronavirus angst sparked fresh bids for US debt at the expense of riskier assets like stocks. The yield on the benchmark 10-year note sank to a new record low of 0.899% at midday, below its former all-time low of 0.906% hit earlier in the week. The yield was last seen slightly higher around 0.925%. The yield on the 30-year Treasury bond, meanwhile, fell 7 basis points to 1.57%. & the 2-year note yield was last seen at 0.585%, off a new all-time low of 0.554% hit earlier in the session. New headlines documenting the spread of the virulent coronavirus also helped fuel demand for the relative safety of US debt today. In the US, California declared a state of emergency after a coronavirus-related death in the state, where there are at least 53 confirmed cases. Princess Cruises, meanwhile, held a ship off the coast of San Francisco after Governor Gavin Newsom said he asked that the Grand Princess not return to the state until its passengers are properly tested for the disease. The World Health Organization said yesterday that there are now more than 93K confirmed cases worldwide & more than 3K deaths. Japan's confirmed coronavirus infections rose above 1K yesterday, Italy said its death toll is up to 107 & shut all schools & Australia banned travelers from South Korea to help slow the illness. The US gov announced an $8B spending package yesterday to help combat the spread of the virus, while the IMF also unveiled a $50B aid program. The Federal Reserve has already implemented an emergency 50-basis-point cut to interest rates in a bid to contain the expected economic fallout from the outbreak, with other central banks set to follow suit. That funding appeared to temporarily stanch investor fears yesterday, when the Dow posted its 2nd-highest point gain ever & all 3 major US equity indices exited correction territory.
10-year Treasury yield hits all-time low below 0.9% as virus fears fuel demand for US debt
The Federal Reserve is not done cutting interest rates. That’s the view from traders. Economists for leading financial firms expect the central bank to follow up this week’s emergency ½-point interest-rate cut with another move at its Mar 17-18 meeting. The reasoning is not that the Fed is trying to hold the stock market's hand. Instead, Fed officials want to cushion the blow to the economy expected from the coronavirus outbreak. But economists aren’t confident the US can get by unscathed. There will be a slew of Fed speakers over the next day & a ½ before the central bank goes into the normal quiet period ahead of its Mar meeting. NY Fed Pres John Williams, a member of Powell's inner-circle, will speak this evening in NY.
Gold futures marked their highest settlement in over a week, supported by weakness in the $, stocks & a slide in gov bond yields as investors continued to worry about the outbreak of COVID-19 & its economic implications. Bullion attracted haven bids as California declared a state of emergency, and more cases of the epidemic were cropping up globally, including in Australia & South Korea, making containment of the disease increasingly challenging. Gold for Apr rose $25 (1.5%) to settle at $1668 an ounce. That was the highest most-active contract finish since Feb 24.
Oil futures ended lower, with US global benchmark prices at their lowest since 2017. OPEC recommended that its members and allies cut production by an additional 1.5M barrels a day to alleviate the hit to demand from the COVID-19 epidemic, but the market expressed doubts over cooperation from non-member Russia. In a press release after a meeting in Vienna today, OPEC Conference said it recommends that Fri's meeting between OPEC & its allies (collectively known as OPEC+) extend the current production agreement to the end of the year. The deal to cut output by 1.7M barrels a day, from an Oct 2018 baseline, was due to expire at the end of Mar. OPEC also recommends a further output cut of 1.5M barrels per day until the end of Jun, with OPEC's share of that at 1M barrels a day & non-OPEC members, primarily Russia, cutting 500K barrels per day. OPEC+ is expected to announce its final decision at its meeting tomorrow. May Brent crude, the global benchmark, shed $1.14 (2.2%) to end at $49.99 a barrel. That was the lowest front-month contract finish since Jul 2017. West Texas Intermediate crude for Apr fell 88¢ (1.9%) to settle at $45.90 a barrel, the lowest finish month to date.
Brent oil ends at lowest since 2017 as OPEC recommends further output cuts, but doubts over Russia’s cooperation weigh
Investors vacillate form one day to the next, bringing enormous swings in stock prices (shown in the chart below). As a result, buying is directed to gold & Treasuries. Treasuries yielded almost 4% 10 years ago, but today nervous investors are wiling to accept annual yields of less than 1%. Hard to believe. The Volatility Index (VIX), shot up 10 to the 42s today. That's triple where it was during better times last year. Many investors are nervous & eager the park their money in safe investments with zero or near yields. Troubling times for stocks continue & the outlook is still grim.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The 10-year Treasury note fell to an all-time low as rekindled coronavirus angst sparked fresh bids for US debt at the expense of riskier assets like stocks. The yield on the benchmark 10-year note sank to a new record low of 0.899% at midday, below its former all-time low of 0.906% hit earlier in the week. The yield was last seen slightly higher around 0.925%. The yield on the 30-year Treasury bond, meanwhile, fell 7 basis points to 1.57%. & the 2-year note yield was last seen at 0.585%, off a new all-time low of 0.554% hit earlier in the session. New headlines documenting the spread of the virulent coronavirus also helped fuel demand for the relative safety of US debt today. In the US, California declared a state of emergency after a coronavirus-related death in the state, where there are at least 53 confirmed cases. Princess Cruises, meanwhile, held a ship off the coast of San Francisco after Governor Gavin Newsom said he asked that the Grand Princess not return to the state until its passengers are properly tested for the disease. The World Health Organization said yesterday that there are now more than 93K confirmed cases worldwide & more than 3K deaths. Japan's confirmed coronavirus infections rose above 1K yesterday, Italy said its death toll is up to 107 & shut all schools & Australia banned travelers from South Korea to help slow the illness. The US gov announced an $8B spending package yesterday to help combat the spread of the virus, while the IMF also unveiled a $50B aid program. The Federal Reserve has already implemented an emergency 50-basis-point cut to interest rates in a bid to contain the expected economic fallout from the outbreak, with other central banks set to follow suit. That funding appeared to temporarily stanch investor fears yesterday, when the Dow posted its 2nd-highest point gain ever & all 3 major US equity indices exited correction territory.
10-year Treasury yield hits all-time low below 0.9% as virus fears fuel demand for US debt
The Federal Reserve is not done cutting interest rates. That’s the view from traders. Economists for leading financial firms expect the central bank to follow up this week’s emergency ½-point interest-rate cut with another move at its Mar 17-18 meeting. The reasoning is not that the Fed is trying to hold the stock market's hand. Instead, Fed officials want to cushion the blow to the economy expected from the coronavirus outbreak. But economists aren’t confident the US can get by unscathed. There will be a slew of Fed speakers over the next day & a ½ before the central bank goes into the normal quiet period ahead of its Mar meeting. NY Fed Pres John Williams, a member of Powell's inner-circle, will speak this evening in NY.
Fed expected to continue cutting interest rates, beginning as soon as later this month
Gold futures marked their highest settlement in over a week, supported by weakness in the $, stocks & a slide in gov bond yields as investors continued to worry about the outbreak of COVID-19 & its economic implications. Bullion attracted haven bids as California declared a state of emergency, and more cases of the epidemic were cropping up globally, including in Australia & South Korea, making containment of the disease increasingly challenging. Gold for Apr rose $25 (1.5%) to settle at $1668 an ounce. That was the highest most-active contract finish since Feb 24.
Gold prices end at highest in over a week as coronavirus spread fuels safe-haven buying
Oil futures ended lower, with US global benchmark prices at their lowest since 2017. OPEC recommended that its members and allies cut production by an additional 1.5M barrels a day to alleviate the hit to demand from the COVID-19 epidemic, but the market expressed doubts over cooperation from non-member Russia. In a press release after a meeting in Vienna today, OPEC Conference said it recommends that Fri's meeting between OPEC & its allies (collectively known as OPEC+) extend the current production agreement to the end of the year. The deal to cut output by 1.7M barrels a day, from an Oct 2018 baseline, was due to expire at the end of Mar. OPEC also recommends a further output cut of 1.5M barrels per day until the end of Jun, with OPEC's share of that at 1M barrels a day & non-OPEC members, primarily Russia, cutting 500K barrels per day. OPEC+ is expected to announce its final decision at its meeting tomorrow. May Brent crude, the global benchmark, shed $1.14 (2.2%) to end at $49.99 a barrel. That was the lowest front-month contract finish since Jul 2017. West Texas Intermediate crude for Apr fell 88¢ (1.9%) to settle at $45.90 a barrel, the lowest finish month to date.
Brent oil ends at lowest since 2017 as OPEC recommends further output cuts, but doubts over Russia’s cooperation weigh
Investors vacillate form one day to the next, bringing enormous swings in stock prices (shown in the chart below). As a result, buying is directed to gold & Treasuries. Treasuries yielded almost 4% 10 years ago, but today nervous investors are wiling to accept annual yields of less than 1%. Hard to believe. The Volatility Index (VIX), shot up 10 to the 42s today. That's triple where it was during better times last year. Many investors are nervous & eager the park their money in safe investments with zero or near yields. Troubling times for stocks continue & the outlook is still grim.
Dow Jones Industrials
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