Dow plunged once again, down 2352 & near today's lows, only 76 stocks on the NYSE managed gains & NAZ lost a massive 750 as it approaches 7K on the way down. The MLP index dropped 20 to 99 (below the 100 starting point 25 years ago) & the REIT index retreated a massive 35 to 323. Junk bond funds (stocks with high yields) remained weak & Treasuries saw some profit taking, sending yields a little higher. Oil dropped 1+ to the 31s & gold sank 70 to 1572 (more on both declines 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 NY Federal Reserve moved to calm financial markets, saying by the end of business tomorrow it will offer $1.5T in repurchase operations for Treasury securities, where market liquidity had become strained. The operations include $500M of 3-month operations conducted today which settle tomorrow & $500B of both 1-month & 3-month operations conducted tomorrow & settling the same day. The Fed conducts repo operations by buying Treasuries or similar securities from counterparties with an agreement that it will sell them back at some point in the future. The operations are designed to increase the amount of reserves available in the banking system. “These changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak,” the New York Fed said in a statement. US equity markets more than halved their losses following the announcement with the Dow briefly trimming its drop from 2K to 800 in a matter of minutes. But the Dow fell back near session lows as traders digested the announcement.
The Senate will cancel its recess planned for next week as Congress scrambles to respond to the economic effects of the coronavirus outbreak, Majority Leader Mitch McConnell said. “Notwithstanding the scheduled state work period, the Senate will be in session next week,” McConnell said in a tweet. “I am glad talks are ongoing between the Administration and Speaker Pelosi. I hope Congress can pass bipartisan legislation to continue combating the coronavirus and keep our economy strong.” Currently, the House had not announced plans to scrap its recess set for next week. House Speaker Nancy Pelosi spoke to Treasury Secretary Steve Mnuchin 4 times today as they discussed “language” in the legislation designed to help workers displaced by the global pandemic, according to a Dem spokesman. House Dems released a proposal last evening that they initially planned to vote on today. However, Pres Trump, McConnell & House Minority Leader Kevin McCarthy all opposed it. Earlier today, McCarthy urged Pelosi to push the recess back by 24 to 48 hours to allow more time for negotiations on a revised plan. Pelosi later responded in her weekly news conference. “We don’t need 48 hours,” she said. “We just need to decide to help families right now.”
Senate will cancel next week’s recess as Congress works to pass coronavirus response pla
Oil prices dropped as much as 8% as crude continues to take a hit on both the supply & demand side. West Texas Intermediate (WTI) crude is now down more than 25% this week, putting it on track for its worst week since 2008 & its 3rd largest weekly decline on record. Today WTI fell $1.48 (4.5%) to settle at $31.50 per barrel. Earlier in the session it traded as low as $30.02. Intel benchmark Brent crude fell $2.51 (7%) to trade at $33.31 per barrel. The coronavirus outbreak has led to softer demand for crude as people cut back on travel, among other things. Yesterday, Pres Trump imposed a 30-day ban on foreigners arriving from most of Europe, a move likely to reduce demand further. Since the beginning of the year, WTI has lost ½ of its value, as the coronavirus outbreak escalated into a global pandemic. As prices fell, OPEC met in Vienna last week where traders largely expected an announcement of additional production cuts in an effort to prop up prices. The 14-member cartel proposed an additional cut of 1.5M barrels per day, but ally Russia rejected the proposal. OPEC then decided that the production cuts currently in place, but that expire at the end of the month, would not be extended. This means that starting Apr 1, nations can pump as much as they want. WTI dropped 10% on Fri after the meeting ended with no agreement. Following Russia's rejection of the proposal, OPEC de facto leader Saudi Arabia retaliated by slashing its official oil prices while announcing plans to ramp up production. As tensions between the 2 powerhouse producers escalated, WTI & Brent each plummeted 24% on Mon, posting their worst day in nearly 3 decades while sending prices to a more than 4-year low. Then on Wed, Saudi Aramco said that it received a directive to increase its production capacity from 12M barrels per day to a record 13M barrels per day. Earlier in the week there had been reports that talks between OPEC & its allies might continue, but a report today that the OPEC+ technical meeting scheduled for Mar 18 was unlikely to go ahead.
Oil drops as much as 8%, on pace for worst week in more than a decade
Italy closes bars, restaurants and most shops as coronavirus death toll jumps 30%
Gold futures fell sharply, settling at a nearly 2-week low under $1600 an ounce, as a selloff in the stock market sent traders scrambling to sell positions in the precious metal in a bid for cash. Gold for Apr fell by $52 (3.2%) to settle at $1590 an ounce, extending its decline to a 3rd straight session. That was the lowest most-active contract settlement since Feb 28.
It's frustrating for investors to keep seeing so much selling in stocks. The Fed intervened at midday to help stop the bleeding. However, selling resumed & the averages finished close to today's lows. The Volatility Index (VIS) soared 23 to the 76s. In the "good old days" it was in the mid teens. Hard to remember that. With all the negative news, it's difficult to sort one story from the rest. Oil, a key commodity for the economy, is close to record lows. Those low prices are supposed to bring increased demand. But that is not the cards. In the meantime, divs are being paid although some are shaky. Exxon Mobil (XOM), a Dividend Aristocrat which has a 37 year streak of raising divs, fell 4.80 to 37.18 to yield a whopping 9.3%. The sellers want cash today, the buyers can take their chance with the high yield. These are extraordinarily difficult times & fixes continue to be far away.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The NY Federal Reserve moved to calm financial markets, saying by the end of business tomorrow it will offer $1.5T in repurchase operations for Treasury securities, where market liquidity had become strained. The operations include $500M of 3-month operations conducted today which settle tomorrow & $500B of both 1-month & 3-month operations conducted tomorrow & settling the same day. The Fed conducts repo operations by buying Treasuries or similar securities from counterparties with an agreement that it will sell them back at some point in the future. The operations are designed to increase the amount of reserves available in the banking system. “These changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak,” the New York Fed said in a statement. US equity markets more than halved their losses following the announcement with the Dow briefly trimming its drop from 2K to 800 in a matter of minutes. But the Dow fell back near session lows as traders digested the announcement.
Central Bank pumps liquidity into markets, calming virus-fueled slide
The Senate will cancel its recess planned for next week as Congress scrambles to respond to the economic effects of the coronavirus outbreak, Majority Leader Mitch McConnell said. “Notwithstanding the scheduled state work period, the Senate will be in session next week,” McConnell said in a tweet. “I am glad talks are ongoing between the Administration and Speaker Pelosi. I hope Congress can pass bipartisan legislation to continue combating the coronavirus and keep our economy strong.” Currently, the House had not announced plans to scrap its recess set for next week. House Speaker Nancy Pelosi spoke to Treasury Secretary Steve Mnuchin 4 times today as they discussed “language” in the legislation designed to help workers displaced by the global pandemic, according to a Dem spokesman. House Dems released a proposal last evening that they initially planned to vote on today. However, Pres Trump, McConnell & House Minority Leader Kevin McCarthy all opposed it. Earlier today, McCarthy urged Pelosi to push the recess back by 24 to 48 hours to allow more time for negotiations on a revised plan. Pelosi later responded in her weekly news conference. “We don’t need 48 hours,” she said. “We just need to decide to help families right now.”
Senate will cancel next week’s recess as Congress works to pass coronavirus response pla
Oil prices dropped as much as 8% as crude continues to take a hit on both the supply & demand side. West Texas Intermediate (WTI) crude is now down more than 25% this week, putting it on track for its worst week since 2008 & its 3rd largest weekly decline on record. Today WTI fell $1.48 (4.5%) to settle at $31.50 per barrel. Earlier in the session it traded as low as $30.02. Intel benchmark Brent crude fell $2.51 (7%) to trade at $33.31 per barrel. The coronavirus outbreak has led to softer demand for crude as people cut back on travel, among other things. Yesterday, Pres Trump imposed a 30-day ban on foreigners arriving from most of Europe, a move likely to reduce demand further. Since the beginning of the year, WTI has lost ½ of its value, as the coronavirus outbreak escalated into a global pandemic. As prices fell, OPEC met in Vienna last week where traders largely expected an announcement of additional production cuts in an effort to prop up prices. The 14-member cartel proposed an additional cut of 1.5M barrels per day, but ally Russia rejected the proposal. OPEC then decided that the production cuts currently in place, but that expire at the end of the month, would not be extended. This means that starting Apr 1, nations can pump as much as they want. WTI dropped 10% on Fri after the meeting ended with no agreement. Following Russia's rejection of the proposal, OPEC de facto leader Saudi Arabia retaliated by slashing its official oil prices while announcing plans to ramp up production. As tensions between the 2 powerhouse producers escalated, WTI & Brent each plummeted 24% on Mon, posting their worst day in nearly 3 decades while sending prices to a more than 4-year low. Then on Wed, Saudi Aramco said that it received a directive to increase its production capacity from 12M barrels per day to a record 13M barrels per day. Earlier in the week there had been reports that talks between OPEC & its allies might continue, but a report today that the OPEC+ technical meeting scheduled for Mar 18 was unlikely to go ahead.
Oil drops as much as 8%, on pace for worst week in more than a decade
Italy has tightened its nationwide lockdown
further in response to the rising death toll from coronavirus, ordering
all non-essential shops & services to close.
Announcing the
measures yesterday evening, Italian Prime Minister Giuseppe Conte said
supermarkets & pharmacies will be the only retailers to remain open in
Italy.
The latest restrictions come as the virus death toll surged over 30% yesterday to more than 800 — the biggest daily jump since the start of the outbreak. Italy is already under a national lockdown restricting citizens’ movement & activities until Apr 3.
Conte
said it was time to “go one step further” as he announced the closure
of most commercial & retail activities with bars, restaurants &
beauty salons among those ordered to shut. Public services remain in
place & industrial production is allowed to continue, on condition
that companies adopt safety measures to protect workers & prevent
contagion.
The prime minister said the world was watching to see how Italy, now
the country worst hit by the virus outside China, responds: “At this
moment the whole world is certainly looking at us for the numbers of the
contagion, they see a country that is in difficulty, but they also
appreciate us because we are showing great strictness and great
resistance,” Conte said online.
“I
have a deep conviction. I would like to share it with you. Tomorrow not
only will they look at us again and admire us, but they will take us as
a positive example of a country that, thanks to its sense of community,
has managed to win its battle against this pandemic.” As of yesterday, Italy recorded 12,462 confirmed cases of the virus, & 827 deaths, according to the latest figures from Johns Hopkins University & Italy's Civil Protection agency. The death toll from the virus a day earlier had been 631.
Italy closes bars, restaurants and most shops as coronavirus death toll jumps 30%
Gold futures fell sharply, settling at a nearly 2-week low under $1600 an ounce, as a selloff in the stock market sent traders scrambling to sell positions in the precious metal in a bid for cash. Gold for Apr fell by $52 (3.2%) to settle at $1590 an ounce, extending its decline to a 3rd straight session. That was the lowest most-active contract settlement since Feb 28.
Gold drops over 3%, as traders ‘sell what they can’ amid intensifying coronavirus fears
It's frustrating for investors to keep seeing so much selling in stocks. The Fed intervened at midday to help stop the bleeding. However, selling resumed & the averages finished close to today's lows. The Volatility Index (VIS) soared 23 to the 76s. In the "good old days" it was in the mid teens. Hard to remember that. With all the negative news, it's difficult to sort one story from the rest. Oil, a key commodity for the economy, is close to record lows. Those low prices are supposed to bring increased demand. But that is not the cards. In the meantime, divs are being paid although some are shaky. Exxon Mobil (XOM), a Dividend Aristocrat which has a 37 year streak of raising divs, fell 4.80 to 37.18 to yield a whopping 9.3%. The sellers want cash today, the buyers can take their chance with the high yield. These are extraordinarily difficult times & fixes continue to be far away.
Dow Jones Industrials
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