Dow soared 456 (not far from the highs), advancers over decliners 5-2 & NAZ shot up 232. The MLP index gained 3 to the 115s & the REIT index recovered 6 to 323. Junk bond funds were in demand & Treasuries continued weak. Oil recovered 2+ to 14 & gold surged 47 to 1735 (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)
Delta Airlines (DAL) lost $607M before taxes in Q1 as Americans eliminated non-essential travel to help slow the spread of COVID-19. After adding a tax benefit, the carrier's net loss was $534M (84¢ a share) as revenue fell 18% from a year ago to $8.6B. The forecast was for a loss of 70¢ on revenue of $8.92B. Battered shares rallied after the results were released. "These are truly unprecedented times for all of us,” CEO Ed Bastian said. “Government travel restrictions and stay-at-home orders have been effective in slowing the spread of the virus, but have also severely impacted near-term demand for air travel, reducing our expected June quarter revenues by 90 percent, compared to a year ago." DAL had $6B of liquidity at the end of Mar & was burning $100M cash a day. The airline expects that number to moderate to about $50M by the end of Jun. To compensate for the lower demand, DAL will cut flight capacity by 85% during Q2, down 80% domestically & 90% internationally. Total expenses for Q2 will be 50% ($5B) below a year ago due to reduced capacity, lower fuel expenses & cost initiatives. The companys expects to receive $5.4B of payroll support -- $3.8B thru payroll relief & a $1.6B low-interest loan. If needed, the airline is eligible for $4.6B of secured loans. The stock fell 64¢.
If you would like to learn more about DAL, click on this link:
club.ino.com/trend/analysis/stock/DAL?a_aid=CD3289&a_bid=6ae5b6f7
The US oil industry reacted to cratering oil prices by cutting production by 900K barrels a day in just a month in what appears to be the biggest one-month decline since the last recession. Gov data shows that US production fell to 12.2M barrels a day last week, off 100K barrels in a week & down from a record high of 13.1M barrels a day just a month ago. Imports fell to 4.9M barrels from 5.7M barrels a week earlier & exports trickled off to 2.9M barrels a day from 3.4M. Oil in US stockpiles rose 15M barrels to 518.6M barrels. At closely watched Cushing, Oklahoma, oil in storage rose by about 10% in a week to 59.7M barrels, about 25M barrels shy of its capacity. The growth in US oil production was at the heart of the dispute earlier this year between Russia & Saudi Arabia, when the world's 2nd & 3rd-largest producers walked away from a more than 3-year-old production pact. OPEC & Russia have since agreed to cut 9.M barrels a day as of May 1 in a deal that Pres Trump helped broker. The US did not officially join the pact, but US production had been expected to drop off, & it now has. There have been reports that Saudi Arabia was considering cutting sooner than May 1 because of the drop in prices, but the US has moved faster to trim than OPEC & its allies just by the force of sheer economics. Producers from Texas to North Dakota are shutting in wells & curtailing plans to drill new ones. Oil prices have plummeted this week, with a futures contract actually turning negative for the first time ever. West Texas Intermediate futures for Jun were at $14.69 today, up 26%. The May futures contract was hit by wild trading Mon, plunging to minus $37.63 per barrel, as the market reacted to the lack of storage space for crude. Several brokerage clients held long positions in the contracts but were unable to cover their losses. The oil industry is facing the twin crises of oversupply & a shocking lack of demand due to the economic shutdown in response to the coronavirus pandemic.
US oil production plunges as the industry retrenches, more cuts are expected
Oil jumped 40% at the high, recovering from early losses in a volatile overnight trading session that saw intl benchmark Brent crude fall to its lowest level in more than 20 years. West Texas Intermediate (WTI), the US benchmark, rose $2.21 (19%) to settle at $13.78 per barrel. Earlier in the session WTI had traded as low as $10.26, before jumping more than 40% to hit a session high of $16.20. Brent crude settled up $1.04 (5%) higher at $20.37, after previously breaking below $16. Given oil's more than 70% decline this year a smaller gain, of course, now accounts for a much larger percentage move. At the beginning of the year WTI fetched more than $60 per barrel, but the fall-off in demand caused by the coronavirus pandemic has sent prices tumbling. Some early gains were lost after data from the Energy Information Administration showed that for last week inventory rose by 15M barrels. While less than last week's build of more than 19 million barrels, it is very large when compared with historical averages. Today's move higher stood in sharp contrast to the wild downward price action in oil so far this week. On Mon, the WTI contract for May delivery plunged below zero to trade in negative territory for the first time in history. Trading volume was thin since it was the day before the contract's expiration date, but the move was nonetheless historic. Yesterday the contract rallied ahead of the settle, to finish trading at $10.01 per barrel. Meantime the more actively traded Jun contract fell 43% yesterday to settle at $11.57 as energy market participants continue to fear that growing oversupply will soon exhaust all the available storage worldwide. Brent dropped 24% yesterday in its worst daily performance in nearly 3 decades. At a time when the coronavirus crisis continues to crush global demand, the world is awash with oil & quickly running out of places to put it.
Oil jumps 19%, clawing back some of the recent losses
Oil prices ended sharply higher as a rise in US-Iran tensions & declines in US crude output prompt a rebound from a 21-year low, & as a smaller-than-expected weekly climb in US gasoline stockpiles rallied futures prices for the fuel. Oil prices got a boost after a tweet from Pres Trump raised tensions with Iran. Trump tweeted that he has “instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea.” US benchmark crude futures settled yesterday at their lowest since 1999, while global benchmark Brent crude marked an intraday dip under $16 a barrel, also the lowest in 21 years. Jun West Texas Intermediate crude rose $2.21 (19%) to settle at $13.78 a barrel. Jun Brent crude, the intl benchmark, tacked on $1.04 (5%) at $20.37 a barrel. At one point, the contract, however, had skidded to an intraday low of $15.98 a barrel in electronic trade, which would have put the contract around its lowest levels since 1999. The trading action comes after Brent prices yesterday saw their lowest finish since 2002 & & notched the sharpest daily slide since 1991. A glut of oil & dwindling places to store the commodity has combined to obliterate crude values, highlighted by a stunning decline Mon in the now expired May contract that placed the front-month contract at negative $37.63 a barrel.
Oil prices rebound from 21-year low; gasoline futures rally on smaller U.S. stock climb
The confidence Americans felt in the economy sank at record speed in the past month as the devastation from the coronavirus spread, but they are apparently more hopeful now that the worst of the damage has been done. Those are the findings in a survey of consumer confidence conducted by Morning Consult, a poll that many economists closely follow because it comes out weekly. Other consumer surveys come out monthly. The Morning Consult index had been in a freefall, diving to a record low of 81.23 in the first week of Apr from a record high of 115.7 in Feb. It's since edged up a few points. To be sure, Americans are still extremely worried about the economy right now. What's nudged confidence higher is the belief that the economy will be slightly better off 12 months from now. Morning Consult economist John Leer suggested the stabilization in confidence reflects the view that the virus will eventually be contained, but he warned that even success in that regard is unlikely to prevent a prolonged recession & elevated unemployment. So the crisis in confidence might not have reached bottom quite yet. “Workers and businesses are struggling to cover their basic costs during the ongoing economic shutdown, and many of them cannot wait 12 months for improved economic or financial conditions,” he said. Although the Morning Consult poll has only existed since Jan 2018, the unprecedented decline is being mirrored by more established monthly surveys compiled by the Conference Board & the University of Michigan. The university's final consumer sentiment reading for Apr will be released Fri. The preliminary report showed the biggest one-month decline in the poll’s history.
Consumer confidence recovers from record drop, but Americans aren’t getting hopes up
Gold futures settled at their highest in a week, as nagging concerns about the global economy helped support a rise in the precious metal, a day after prices settled at their lowest in nearly 2 weeks. Gold for Jun rose an astounding $50 (3%) to settle at $1738 an ounce, the highest most-active contract finish since Apr 15. Prices lost 1.4% yesterday to mark the lowest close since Apr 8. Based on records going back to 1984, the record intraday level for most-active gold futures stands at $1923 an ounce in Sept 2011, with the settlement record at $1891 in Aug.
After a strong rebound by the Dow in early Apr, it has largely been trading sideways even though 500 point daily swings have been common (shown below). The war against coronavirus seems to be making headway, but uncertainty about what's next is extremely high. Trading tomorrow will begin with the weekly report on unemployment claims & that is widely expected to be dreary. The number of unemployed Americans will probably go above 25M. While earnings season is here, it's getting less attention that usual. The DAL report above is a reminder how depressing many have been. The bulls continue to have a tough case to make when there are so many doubts about how the US will reopen & recover.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Delta Airlines (DAL) lost $607M before taxes in Q1 as Americans eliminated non-essential travel to help slow the spread of COVID-19. After adding a tax benefit, the carrier's net loss was $534M (84¢ a share) as revenue fell 18% from a year ago to $8.6B. The forecast was for a loss of 70¢ on revenue of $8.92B. Battered shares rallied after the results were released. "These are truly unprecedented times for all of us,” CEO Ed Bastian said. “Government travel restrictions and stay-at-home orders have been effective in slowing the spread of the virus, but have also severely impacted near-term demand for air travel, reducing our expected June quarter revenues by 90 percent, compared to a year ago." DAL had $6B of liquidity at the end of Mar & was burning $100M cash a day. The airline expects that number to moderate to about $50M by the end of Jun. To compensate for the lower demand, DAL will cut flight capacity by 85% during Q2, down 80% domestically & 90% internationally. Total expenses for Q2 will be 50% ($5B) below a year ago due to reduced capacity, lower fuel expenses & cost initiatives. The companys expects to receive $5.4B of payroll support -- $3.8B thru payroll relief & a $1.6B low-interest loan. If needed, the airline is eligible for $4.6B of secured loans. The stock fell 64¢.
If you would like to learn more about DAL, click on this link:
club.ino.com/trend/analysis/stock/DAL?a_aid=CD3289&a_bid=6ae5b6f7
Delta Air Lines loses $607M as coronavirus zaps travel
The US oil industry reacted to cratering oil prices by cutting production by 900K barrels a day in just a month in what appears to be the biggest one-month decline since the last recession. Gov data shows that US production fell to 12.2M barrels a day last week, off 100K barrels in a week & down from a record high of 13.1M barrels a day just a month ago. Imports fell to 4.9M barrels from 5.7M barrels a week earlier & exports trickled off to 2.9M barrels a day from 3.4M. Oil in US stockpiles rose 15M barrels to 518.6M barrels. At closely watched Cushing, Oklahoma, oil in storage rose by about 10% in a week to 59.7M barrels, about 25M barrels shy of its capacity. The growth in US oil production was at the heart of the dispute earlier this year between Russia & Saudi Arabia, when the world's 2nd & 3rd-largest producers walked away from a more than 3-year-old production pact. OPEC & Russia have since agreed to cut 9.M barrels a day as of May 1 in a deal that Pres Trump helped broker. The US did not officially join the pact, but US production had been expected to drop off, & it now has. There have been reports that Saudi Arabia was considering cutting sooner than May 1 because of the drop in prices, but the US has moved faster to trim than OPEC & its allies just by the force of sheer economics. Producers from Texas to North Dakota are shutting in wells & curtailing plans to drill new ones. Oil prices have plummeted this week, with a futures contract actually turning negative for the first time ever. West Texas Intermediate futures for Jun were at $14.69 today, up 26%. The May futures contract was hit by wild trading Mon, plunging to minus $37.63 per barrel, as the market reacted to the lack of storage space for crude. Several brokerage clients held long positions in the contracts but were unable to cover their losses. The oil industry is facing the twin crises of oversupply & a shocking lack of demand due to the economic shutdown in response to the coronavirus pandemic.
US oil production plunges as the industry retrenches, more cuts are expected
Oil jumped 40% at the high, recovering from early losses in a volatile overnight trading session that saw intl benchmark Brent crude fall to its lowest level in more than 20 years. West Texas Intermediate (WTI), the US benchmark, rose $2.21 (19%) to settle at $13.78 per barrel. Earlier in the session WTI had traded as low as $10.26, before jumping more than 40% to hit a session high of $16.20. Brent crude settled up $1.04 (5%) higher at $20.37, after previously breaking below $16. Given oil's more than 70% decline this year a smaller gain, of course, now accounts for a much larger percentage move. At the beginning of the year WTI fetched more than $60 per barrel, but the fall-off in demand caused by the coronavirus pandemic has sent prices tumbling. Some early gains were lost after data from the Energy Information Administration showed that for last week inventory rose by 15M barrels. While less than last week's build of more than 19 million barrels, it is very large when compared with historical averages. Today's move higher stood in sharp contrast to the wild downward price action in oil so far this week. On Mon, the WTI contract for May delivery plunged below zero to trade in negative territory for the first time in history. Trading volume was thin since it was the day before the contract's expiration date, but the move was nonetheless historic. Yesterday the contract rallied ahead of the settle, to finish trading at $10.01 per barrel. Meantime the more actively traded Jun contract fell 43% yesterday to settle at $11.57 as energy market participants continue to fear that growing oversupply will soon exhaust all the available storage worldwide. Brent dropped 24% yesterday in its worst daily performance in nearly 3 decades. At a time when the coronavirus crisis continues to crush global demand, the world is awash with oil & quickly running out of places to put it.
Oil jumps 19%, clawing back some of the recent losses
Oil prices ended sharply higher as a rise in US-Iran tensions & declines in US crude output prompt a rebound from a 21-year low, & as a smaller-than-expected weekly climb in US gasoline stockpiles rallied futures prices for the fuel. Oil prices got a boost after a tweet from Pres Trump raised tensions with Iran. Trump tweeted that he has “instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea.” US benchmark crude futures settled yesterday at their lowest since 1999, while global benchmark Brent crude marked an intraday dip under $16 a barrel, also the lowest in 21 years. Jun West Texas Intermediate crude rose $2.21 (19%) to settle at $13.78 a barrel. Jun Brent crude, the intl benchmark, tacked on $1.04 (5%) at $20.37 a barrel. At one point, the contract, however, had skidded to an intraday low of $15.98 a barrel in electronic trade, which would have put the contract around its lowest levels since 1999. The trading action comes after Brent prices yesterday saw their lowest finish since 2002 & & notched the sharpest daily slide since 1991. A glut of oil & dwindling places to store the commodity has combined to obliterate crude values, highlighted by a stunning decline Mon in the now expired May contract that placed the front-month contract at negative $37.63 a barrel.
Oil prices rebound from 21-year low; gasoline futures rally on smaller U.S. stock climb
The confidence Americans felt in the economy sank at record speed in the past month as the devastation from the coronavirus spread, but they are apparently more hopeful now that the worst of the damage has been done. Those are the findings in a survey of consumer confidence conducted by Morning Consult, a poll that many economists closely follow because it comes out weekly. Other consumer surveys come out monthly. The Morning Consult index had been in a freefall, diving to a record low of 81.23 in the first week of Apr from a record high of 115.7 in Feb. It's since edged up a few points. To be sure, Americans are still extremely worried about the economy right now. What's nudged confidence higher is the belief that the economy will be slightly better off 12 months from now. Morning Consult economist John Leer suggested the stabilization in confidence reflects the view that the virus will eventually be contained, but he warned that even success in that regard is unlikely to prevent a prolonged recession & elevated unemployment. So the crisis in confidence might not have reached bottom quite yet. “Workers and businesses are struggling to cover their basic costs during the ongoing economic shutdown, and many of them cannot wait 12 months for improved economic or financial conditions,” he said. Although the Morning Consult poll has only existed since Jan 2018, the unprecedented decline is being mirrored by more established monthly surveys compiled by the Conference Board & the University of Michigan. The university's final consumer sentiment reading for Apr will be released Fri. The preliminary report showed the biggest one-month decline in the poll’s history.
Consumer confidence recovers from record drop, but Americans aren’t getting hopes up
Gold futures settled at their highest in a week, as nagging concerns about the global economy helped support a rise in the precious metal, a day after prices settled at their lowest in nearly 2 weeks. Gold for Jun rose an astounding $50 (3%) to settle at $1738 an ounce, the highest most-active contract finish since Apr 15. Prices lost 1.4% yesterday to mark the lowest close since Apr 8. Based on records going back to 1984, the record intraday level for most-active gold futures stands at $1923 an ounce in Sept 2011, with the settlement record at $1891 in Aug.
Gold prices settle at 1-week high as BofA forecasts the metal will surge to $3,000
After a strong rebound by the Dow in early Apr, it has largely been trading sideways even though 500 point daily swings have been common (shown below). The war against coronavirus seems to be making headway, but uncertainty about what's next is extremely high. Trading tomorrow will begin with the weekly report on unemployment claims & that is widely expected to be dreary. The number of unemployed Americans will probably go above 25M. While earnings season is here, it's getting less attention that usual. The DAL report above is a reminder how depressing many have been. The bulls continue to have a tough case to make when there are so many doubts about how the US will reopen & recover.
Dow Jones Industrials
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