Dow plunged 785 (about 1000 below session highs), decliners over advancers 2-1 & NAZ sank 268. The MLP index dropped 3+ to the 173s & the REIT index fell 1 to the 397s (10 off session highs). Junk bond funds fluctuated today & Treasuries were in heavy demand (more below). Oil went up to the 47s & gold soared 41 (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)
10-year Treasury yield falls below 1% for the first time after Fed slashes rates due to coronavirus
CDC says US coronavirus cases jump by 17 in a day, topping at least 108
Gold futures rallied, with the haven metal posting its biggest daily percentage rise since Jun, as the Federal Reserve announced a surprise cut to interest rates, citing the risks to the economy from the COVID-19 epidemic. In a statement, the Fed said it had decided to cut its benchmark federal-funds rate by a ½-point to 1%-1.25%. While the economic fundamentals are strong, a rate cut was necessary in light of the risk to economic activity from the COVID-19, the Fed said. Apr gold picked up $49 (3.1%) to settle at $1644 an ounce—the largest one-day percentage rise since Jun 20, 2019. Prices gained 1.8% yesterday after falling by nearly 5% on Fri—the biggest one-day percentage loss since 2013. Bullion bulls say that gold has enjoyed a bounce so far this week because it was oversold last week, as the market reaction to news of the spread of the infectious disease that originated in China in Dec produced frenetic swings in asset prices & an unusual spate of selling in precious metals as investors sought to raise cash. Still, finance ministers & central bankers from the group of the 7 world's largest advanced economies said they stood ready to act to address the coronavirus, suggesting a willingness to use fiscal & monetary policy measures.
US benchmark oil futures finished modestly higher & off the day's best levels, while global benchmark crude prices settled lower as a surprise, inter-meeting interest-rate cut by the Federal Reserve caused traders to worry more about the global economic fallout of the COVID-19 epidemic. Prices had traded sharply higher earlier in the session, buoyed by expectations for a further cut to oil production by OPEC & its allies. Apr West Texas Intermediate crude rose 43¢ (0.9%) to settle at $47.18 a barrel. The global benchmark, May Brent crude, however, moved lower to settle down 4¢ at $51.86 a barrel after trading as high as $53.90. Both grades of crude oil posted gains of 4.5% yesterday—the biggest daily percentage rise of the year so far. A statement today from Group of Seven financial ministers indicated a willingness to use fiscal & monetary policy to fight the coronavirus impact on the economy but the statement didn’t outline specific steps. Meanwhile, OPEC ministers were gathering in Vienna ahead of a key Mar 5-6 meeting with allied oil producers to help determine the magnitude of cuts to output that might be needed to combat the impact on demand of the coronavirus epidemic which will not be allowed to enter the secretariat to cover the 2-day meeting due to fears of the spread of coronavirus. The Joint Ministerial Monitoring Committee, which monitors compliance with the production-cut agreement, is set to meet tommorow.
U.S. oil climbs, but ends off the day’s high as Fed rate cut raises worries about COVID-19’s economic fallout
These are scary times for investors & nervous ones were in a panic to buy safe have gold & Treasuries today. The rate cut by the Fed sent a message to worried investors that the Fed was uneasy about the future of the US & global economies. Gold is back near its multi year highs & Treasuries were also being purchased heavily. A year ago the 10 year Treasury was yielding above 2½%, today the yield dipped below 1% in the AM. Nervous investors are committing their money to earn a meager 1% over the next 10 years, versus buying risky stocks. The Volatility Index (VIX) jumped up 4+ to the 37s, far above the sub 15 region when stocks were in favor last year. Tense times for investors are not going away soon.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The 10-year Treasury yield broke below 1% for the
first time in the wake of an emergency rate cut by the Federal
Reserve to combat the economic effects of the spreading coronavirus. The
yield on the benchmark 10-year Treasury note fell more than 11 basis
points to an all-time low of 0.927%. The yield on the 30-year Treasury
bond was also at a record low of 1.601%. To offset the potential economic fallout from the coronavirus,
the Fed slashed interest rates by ½ a percentage point today in
between its policy meetings, the first such emergency cut in over 10 years. While the move by the central bank was widely expected at some point, this decrease still caught traders by surprise, sending
them into bonds. The Fed was scheduled to next decide on rates on Mar
18. “The coronavirus poses evolving risks to economic activity,”
the Fed said in a statement. “In light of these risks and in support of
achieving its maximum employment and price stability goals, the Federal
Open Market Committee decided today to lower the target range for the
federal funds rate.” Fed chair Jerome Powell said later that the committee saw “a risk to the economy and chose to act.” Stocks sold off again following the rate cut, after rebounding sharply yesterday with the Dow closing 5.1% higher to post its biggest daily
percentage gain since 2009. Investors have fled stocks & rushed into bonds
for safety as the spreading virus stoked fears of a prolonged economic
slowdown or even a recession. Global confirmed cases of the disease have surged to over 91K, while cases in the US climbed to 91. The
benchmark 10-year rate have plunged 90 basis points this year alone,
while the 30-year Treasury yield tumbled 75 basis points to
historic levels.
10-year Treasury yield falls below 1% for the first time after Fed slashes rates due to coronavirus
The number of COVID-19 cases in the US jumped by
17 over 24 hours, sickening 108 & killing 6, the
Centers for Disease Control & Prevention said. At least
48 of those cases are people who were evacuated from Wuhan, China, the
epicenter of the outbreak, & the Diamond Princess cruise ship,
according to an update on the agency's website. At least 22 cases are
travel-related infections, while 11 are from human-to-human interaction,
according to the CDC. US health officials are also investigating 27
other cases with currently no clear reason for infection, the CDC says. Separately,
the CDC said it’s stopped reporting “persons under investigation” or
PUIs. It's also not going to report case counts over the weekends. “Now
that states are testing and reporting their own results, CDC’s numbers
are not representative all of testing being done nationwide,” the CDC added. Earlier in the day, a top CDC official said the
World Health Organization will likely deem the coronavirus a global
pandemic once sustained person-to-person spread takes hold outside
China. The outbreak already meets 2 of the 3 main criteria
under the technical designation of a pandemic, Dr Anne Schuchat,
principal deputy director of the CDC, said in prepared remarks to the
Senate Committee on Health, Education, Labor & Pensions. The
US also has just 10% of the required respirator masks that would be
needed for medical professionals if the COVID-19 outbreak erupts into a
“full-blown” pandemic in America, Health & Human Services official Dr.
Robert Kadlec said at the hearing.
CDC says US coronavirus cases jump by 17 in a day, topping at least 108
Gold futures rallied, with the haven metal posting its biggest daily percentage rise since Jun, as the Federal Reserve announced a surprise cut to interest rates, citing the risks to the economy from the COVID-19 epidemic. In a statement, the Fed said it had decided to cut its benchmark federal-funds rate by a ½-point to 1%-1.25%. While the economic fundamentals are strong, a rate cut was necessary in light of the risk to economic activity from the COVID-19, the Fed said. Apr gold picked up $49 (3.1%) to settle at $1644 an ounce—the largest one-day percentage rise since Jun 20, 2019. Prices gained 1.8% yesterday after falling by nearly 5% on Fri—the biggest one-day percentage loss since 2013. Bullion bulls say that gold has enjoyed a bounce so far this week because it was oversold last week, as the market reaction to news of the spread of the infectious disease that originated in China in Dec produced frenetic swings in asset prices & an unusual spate of selling in precious metals as investors sought to raise cash. Still, finance ministers & central bankers from the group of the 7 world's largest advanced economies said they stood ready to act to address the coronavirus, suggesting a willingness to use fiscal & monetary policy measures.
Gold prices end 3% higher as Fed announces a surprise interest-rate cut
US benchmark oil futures finished modestly higher & off the day's best levels, while global benchmark crude prices settled lower as a surprise, inter-meeting interest-rate cut by the Federal Reserve caused traders to worry more about the global economic fallout of the COVID-19 epidemic. Prices had traded sharply higher earlier in the session, buoyed by expectations for a further cut to oil production by OPEC & its allies. Apr West Texas Intermediate crude rose 43¢ (0.9%) to settle at $47.18 a barrel. The global benchmark, May Brent crude, however, moved lower to settle down 4¢ at $51.86 a barrel after trading as high as $53.90. Both grades of crude oil posted gains of 4.5% yesterday—the biggest daily percentage rise of the year so far. A statement today from Group of Seven financial ministers indicated a willingness to use fiscal & monetary policy to fight the coronavirus impact on the economy but the statement didn’t outline specific steps. Meanwhile, OPEC ministers were gathering in Vienna ahead of a key Mar 5-6 meeting with allied oil producers to help determine the magnitude of cuts to output that might be needed to combat the impact on demand of the coronavirus epidemic which will not be allowed to enter the secretariat to cover the 2-day meeting due to fears of the spread of coronavirus. The Joint Ministerial Monitoring Committee, which monitors compliance with the production-cut agreement, is set to meet tommorow.
U.S. oil climbs, but ends off the day’s high as Fed rate cut raises worries about COVID-19’s economic fallout
These are scary times for investors & nervous ones were in a panic to buy safe have gold & Treasuries today. The rate cut by the Fed sent a message to worried investors that the Fed was uneasy about the future of the US & global economies. Gold is back near its multi year highs & Treasuries were also being purchased heavily. A year ago the 10 year Treasury was yielding above 2½%, today the yield dipped below 1% in the AM. Nervous investors are committing their money to earn a meager 1% over the next 10 years, versus buying risky stocks. The Volatility Index (VIX) jumped up 4+ to the 37s, far above the sub 15 region when stocks were in favor last year. Tense times for investors are not going away soon.
Dow Jones Industrials
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