Dow finished up 33 in a volatile session, decliners over advancers about 2-1 & NAZ rose an impressive 139. The MLP index was fractionally lower to 105 & the REIT index
Junk bond funds remained weak & Treasuries rose in price. Oil dipped lower in the 19s & gold fell 6 to 1733 (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)
Big US banks should raise $200B in capital right now & stop paying divs to prepare for a deep economic downturn due to the coronavirus pandemic, Minneapolis Federal Reserve Bank Pres Neel Kashkari wrote in a newspaper. Kashkari said banks should learn from the 2008-2009 financial crisis when they realized that they had serious problems only after the financial markets had taken a hit & stock prices had collapsed. “Raising that amount from private investors today, as a strong, preventive measure, would ensure that large banks can support the economy over a broad range of virus scenarios,” he added. The most optimistic scenario, or “rapid rebound,” would see 2020 industry earnings fall by 100%, the report said. Big US lenders have reported major profit declines in Q1, primarily due to higher reserve builds to protect them from a wave of potential loan defaults in the months ahead. Banks are braced for customers & companies being unable to pay their bills in the aftermath of the COVID-19 pandemic that has shuttered businesses & put Ms n out of work.
China is denying allegations that the coronavirus pandemic may have originated in a laboratory near the city of Wuhan where contagious samples were being stored. Foreign ministry spokesman Zhao Lijian cited the head of the World Health Organization & other unidentified medical experts as saying there is no evidence that transmission began from the lab & there is "no scientific basis" for such claims. "We always believe that this is a scientific issue and requires the professional assessment of scientists and medical experts," Zhao said. China also has strongly denied that it delayed announcing the virus outbreak in Wuhan & under-reported case numbers, worsening the impact on the US & other countries. The virus is widely believed to have originated with bats & to have passed via another species to humans at a wildlife & seafood market in Wuhan, although a firm determination has yet to be made. Allegations of a leak of the virus from the lab have been made in US media without direct evidence & Pres Trump has vowed to suspend funding for the World Health Organization, partly because of what he says is its pro-China bias.
The Commerce Dept said that ground breakings occurred last month at a seasonally adjusted annual rate of 1.2M units, down from a 1.56M pace in Feb. Construction of single-family houses fell 17.5%, while apartment & condo starts were off 32.1% from a month ago. All of this paints a bleak outlook for housing as the lockdown to contain COVID-19 have led more than 20M Americans to lose their jobs in the past 4 weeks. There was a 6.1% decline in the completion of homes being constructed, which means many homes are being left ½ built. The drop was 15% of single-family houses, meaning that unless economic activity picks up soon there could be ghost towns ½-built housing developments, an phenomenon last seen in the aftermath of the 2008 financial crisis. Construction activity will likely continue to slow. There was also a 6.8% drop in permits to begin construction in Mar. Homebuilders have become fearful. A confidence index released yesterday by The National Association of Home Builders & Wells Fargo plunged 42 points in Apr to a reading of 30, the largest single monthly change in the history of the index. Any reading below 50 signals a decline.
The Federal Reserve's efforts to support the markets & economy thru the coronavirus crisis are beyond anything it has done before, New York Fed Pres John Williams said. Over the past month, the Fed has cut its benchmark interest rate to near zero & has instituted a barrage of programs aimed at keeping markets running smoothly & helping get money to businesses & individuals that have been hamstrung by an economic shutdown. Williams said the Fed now has to make sure those moves perform as they are intended. “Our work is not done,” he added. Efforts to contain the coronavirus have shut down large parts of the economy. More than 22M Americans have filed claims for unemployment benefits over the past 5 weeks. “The reality is that the full scale of the economic consequences is still unknown,” Williams added. “To put the current situation in context, we are running more open market operations, for greater sums, than at any time in our history.” He declined to give a specific forecast for how strong a recovery he sees, saying that the economy is “going to be underperforming for some time.” “There’s certainly parts of the economy that as people go back to work, I see the economy bouncing back,” he continued. “There’s a lot of uncertainty about how long it will take,” Williams added, noting that the Fed will “use all of our tools as appropriate” to support growth. Williams stressed that the Fed's monetary moves have to work in conjunction with fiscal pending help from Congress. The Fed & Treasury Dept have worked together on programs that could generate $6T in loans & other funding to help the economy. “The economy is under distress in ways we’ve not experienced in our lifetimes,” he said. “At the New York Fed we are working tirelessly ... to address the economic and financial challenges posed by the pandemic.” The Fed's credit facilities have targeted the banking system, businesses of all sizes & state & municipal gov debt. The most recent leg, announced a week ago, was targeted at injecting more than $2T of loans.
Fed’s Williams says ‘our work is not done’ to try to repair economic damage from coronavirus
Abbott Labs (ABT) reported a 16% drop in Q1 profit as the COVID-19 pandemic weighed on some business lines, curbing medical procedures & routine testing. The health care products & services provider posted EPS of 31¢ while revenue rose 2.5% to $7.73B even though EPS missed the 58¢ that was forecast, revenue was ahead of the $7.34B estimate. "First and foremost, I want to thank our employees, our customers, and our suppliers for their extraordinary efforts to maintain supply of our critically important products to the people who need them, around the world," CEO Robert Ford said. "It's an unprecedented time, and our colleagues are rising to it in unprecedented ways." ABT has launched 3 critical new tests for COVID-19, including one which delivers results in as soon as 5 minutes. The company suspended its previously announced full-year guidance which called for organic sales growth of 7-8% & full-year EPS of $2.35-2.45. Yesterday, the company said it would ship 4M coronavirus antibody tests this month & will ramp up to 20M by Jun. The stock advanced 5.16.
If you would like to learn more about ABT, click on this link:
club.ino.com/trend/analysis/stock/ABT?a_aid=CD3289&a_bid=6ae5b6f7
Gold futures gave up earlier gains to end lower, pressured as the $ strengthened in the wake of a surge in weekly US jobless claims, which underlined the rapid deterioration in the economy from the COVID-19 pandemic. The Labor Dept reported that 5.2M workers who lost jobs applied for unemployment benefits last week, driving the number of coronavirus-related layoffs above 21M in just one month. Also, US data showed that the Philadelphia Fed manufacturing index in Apr dropped to -56.6, the lowest reading since 1980 & builders started construction on new homes at a pace of 1.22M in Mar, a 22% decline from a revised 1.56M in Feb. Downbeat data reinforced the perception that the US economy is weakening at an unprecedented clip, likely setting the stage for a slow & long recovery, referred to as U-shaped. Gold for Jun fell $8.50 (0.5%) to settle at $1731 an ounce after touching an earlier high of $1768. Prices finished at the lowest level for a most-active contract since Apr 8. Yesterday's loss of 1.6% halted a 4-session string of gains.
Oil futures settled mixed, with global benchmark prices up modestly for the session, but US prices ending flat to hold ground at their lowest in over 18 years. West Texas Intermediate (WTI) crude failed to find support at the key $20 a barrel mark on the back of a global glut in crude. The shutdown of major economies in the effort to contain the COVID-19 pandemic has led to slowdown in demand for oil & expectations for further growth in surplus supplies. US benchmark WTI crude for May settled at $19.87 a barrel, unchanged from Wed, which marked the lowest front-month contract finish since 2002. Global benchmark Jun Brent crude rose 13¢ (0.5%) to $27.82 a barrel. It had seesawed between losses & gains during the session. Oil prices slumped yesterday after the International Energy Agency forecast a record drop of 9.3M barrels a day in oil demand this year. In a report today, OPEC slashed its expectations for crude demand & said it now sees 2020 demand falling by 6.8M barrels a day. The near-term demand picture remains front & center as well, with analysts looking for it to continue sliding at least thru May.
U.S. oil prices hold ground at the lowest finish since 2002
Stocks held up well on a day when gloomy news was everywhere. They were led by tech shares which make up much of NAZ. There will be more talk shortly about opening up the US economy. The overall consideration is expected to be at a slow pace. And this will vary state by state, as they all have different stories. The war against COVI-19 is making progress, but winning will take time. Thru all the uncertainty investors continue to be bullish, all things considered.
Dow Jones Industrials
Junk bond funds remained weak & Treasuries rose in price. Oil dipped lower in the 19s & gold fell 6 to 1733 (more on both below).
AMJ (Alerian MLP Index tracking fund)
Big US banks should raise $200B in capital right now & stop paying divs to prepare for a deep economic downturn due to the coronavirus pandemic, Minneapolis Federal Reserve Bank Pres Neel Kashkari wrote in a newspaper. Kashkari said banks should learn from the 2008-2009 financial crisis when they realized that they had serious problems only after the financial markets had taken a hit & stock prices had collapsed. “Raising that amount from private investors today, as a strong, preventive measure, would ensure that large banks can support the economy over a broad range of virus scenarios,” he added. The most optimistic scenario, or “rapid rebound,” would see 2020 industry earnings fall by 100%, the report said. Big US lenders have reported major profit declines in Q1, primarily due to higher reserve builds to protect them from a wave of potential loan defaults in the months ahead. Banks are braced for customers & companies being unable to pay their bills in the aftermath of the COVID-19 pandemic that has shuttered businesses & put Ms n out of work.
Fed prez: How banks should prep for slump
China is denying allegations that the coronavirus pandemic may have originated in a laboratory near the city of Wuhan where contagious samples were being stored. Foreign ministry spokesman Zhao Lijian cited the head of the World Health Organization & other unidentified medical experts as saying there is no evidence that transmission began from the lab & there is "no scientific basis" for such claims. "We always believe that this is a scientific issue and requires the professional assessment of scientists and medical experts," Zhao said. China also has strongly denied that it delayed announcing the virus outbreak in Wuhan & under-reported case numbers, worsening the impact on the US & other countries. The virus is widely believed to have originated with bats & to have passed via another species to humans at a wildlife & seafood market in Wuhan, although a firm determination has yet to be made. Allegations of a leak of the virus from the lab have been made in US media without direct evidence & Pres Trump has vowed to suspend funding for the World Health Organization, partly because of what he says is its pro-China bias.
Chinese officials deny virus came from Wuhan lab, point to WHO finding
The Commerce Dept said that ground breakings occurred last month at a seasonally adjusted annual rate of 1.2M units, down from a 1.56M pace in Feb. Construction of single-family houses fell 17.5%, while apartment & condo starts were off 32.1% from a month ago. All of this paints a bleak outlook for housing as the lockdown to contain COVID-19 have led more than 20M Americans to lose their jobs in the past 4 weeks. There was a 6.1% decline in the completion of homes being constructed, which means many homes are being left ½ built. The drop was 15% of single-family houses, meaning that unless economic activity picks up soon there could be ghost towns ½-built housing developments, an phenomenon last seen in the aftermath of the 2008 financial crisis. Construction activity will likely continue to slow. There was also a 6.8% drop in permits to begin construction in Mar. Homebuilders have become fearful. A confidence index released yesterday by The National Association of Home Builders & Wells Fargo plunged 42 points in Apr to a reading of 30, the largest single monthly change in the history of the index. Any reading below 50 signals a decline.
Virus hammers construction as home-building activity collapses in March
The Federal Reserve's efforts to support the markets & economy thru the coronavirus crisis are beyond anything it has done before, New York Fed Pres John Williams said. Over the past month, the Fed has cut its benchmark interest rate to near zero & has instituted a barrage of programs aimed at keeping markets running smoothly & helping get money to businesses & individuals that have been hamstrung by an economic shutdown. Williams said the Fed now has to make sure those moves perform as they are intended. “Our work is not done,” he added. Efforts to contain the coronavirus have shut down large parts of the economy. More than 22M Americans have filed claims for unemployment benefits over the past 5 weeks. “The reality is that the full scale of the economic consequences is still unknown,” Williams added. “To put the current situation in context, we are running more open market operations, for greater sums, than at any time in our history.” He declined to give a specific forecast for how strong a recovery he sees, saying that the economy is “going to be underperforming for some time.” “There’s certainly parts of the economy that as people go back to work, I see the economy bouncing back,” he continued. “There’s a lot of uncertainty about how long it will take,” Williams added, noting that the Fed will “use all of our tools as appropriate” to support growth. Williams stressed that the Fed's monetary moves have to work in conjunction with fiscal pending help from Congress. The Fed & Treasury Dept have worked together on programs that could generate $6T in loans & other funding to help the economy. “The economy is under distress in ways we’ve not experienced in our lifetimes,” he said. “At the New York Fed we are working tirelessly ... to address the economic and financial challenges posed by the pandemic.” The Fed's credit facilities have targeted the banking system, businesses of all sizes & state & municipal gov debt. The most recent leg, announced a week ago, was targeted at injecting more than $2T of loans.
Fed’s Williams says ‘our work is not done’ to try to repair economic damage from coronavirus
Abbott Labs (ABT) reported a 16% drop in Q1 profit as the COVID-19 pandemic weighed on some business lines, curbing medical procedures & routine testing. The health care products & services provider posted EPS of 31¢ while revenue rose 2.5% to $7.73B even though EPS missed the 58¢ that was forecast, revenue was ahead of the $7.34B estimate. "First and foremost, I want to thank our employees, our customers, and our suppliers for their extraordinary efforts to maintain supply of our critically important products to the people who need them, around the world," CEO Robert Ford said. "It's an unprecedented time, and our colleagues are rising to it in unprecedented ways." ABT has launched 3 critical new tests for COVID-19, including one which delivers results in as soon as 5 minutes. The company suspended its previously announced full-year guidance which called for organic sales growth of 7-8% & full-year EPS of $2.35-2.45. Yesterday, the company said it would ship 4M coronavirus antibody tests this month & will ramp up to 20M by Jun. The stock advanced 5.16.
If you would like to learn more about ABT, click on this link:
club.ino.com/trend/analysis/stock/ABT?a_aid=CD3289&a_bid=6ae5b6f7
Abbott Labs posts 16% profit drop amid coronavairus, suspends forecast
Pres Trump said the US has “passed
the peak” of the coronavirus outbreak, which has infected more than
632K in America. “While we must remain vigilant, it is
clear that our aggressive strategy is working,” Trump said at a White
House news briefing with coronavirus task force yesterday. “The
battle continues, but the data suggests that nationwide we have passed
the peak on new cases.” Trump
said new cases are “declining” in New York, which has more confirmed
cases than any country outside the US. He added that cases are “flat”
in Denver & Detroit, while other cities including Baltimore &
Philadelphia “are showing great signs of success.” “Some states
are looking at other states and they’re saying I can’t imagine what
they’re going through because they’re not in that position. They’re in
very good shape,” he said. “I would say that we have 20 states, at
least, but you really have 29 that are in extremely good shape. You have
others that are getting much better.” Trump said he will discuss
guidelines for reopening the country today. The governors of 7
states on the East Coast & 3 states on the West Coast have
announced regional working groups to coordinate the reopening of the
regions. “My administration is using every available authority to
accelerate the development, study and delivery of therapies,” he said,
adding that at least 35 clinical trials of treatments are underway. Over the past 6 days, the rate of new cases has declined across the
country, Coronavirus Response Coordinator Dr Deborah Birx said, adding
that 9 states have less than 1K cases each & report fewer than
30 new cases per day. However, she said the administration is concerned
about Providence, Rhode Island, which is in a “unique situation,” caught
between 2 hot spots, New York & Boston.
Trump says US has ‘passed the peak’ of coronavirus outbreakGold futures gave up earlier gains to end lower, pressured as the $ strengthened in the wake of a surge in weekly US jobless claims, which underlined the rapid deterioration in the economy from the COVID-19 pandemic. The Labor Dept reported that 5.2M workers who lost jobs applied for unemployment benefits last week, driving the number of coronavirus-related layoffs above 21M in just one month. Also, US data showed that the Philadelphia Fed manufacturing index in Apr dropped to -56.6, the lowest reading since 1980 & builders started construction on new homes at a pace of 1.22M in Mar, a 22% decline from a revised 1.56M in Feb. Downbeat data reinforced the perception that the US economy is weakening at an unprecedented clip, likely setting the stage for a slow & long recovery, referred to as U-shaped. Gold for Jun fell $8.50 (0.5%) to settle at $1731 an ounce after touching an earlier high of $1768. Prices finished at the lowest level for a most-active contract since Apr 8. Yesterday's loss of 1.6% halted a 4-session string of gains.
Gold down a second session as the dollar strengthens following a jump in U.S. jobless claims
Oil futures settled mixed, with global benchmark prices up modestly for the session, but US prices ending flat to hold ground at their lowest in over 18 years. West Texas Intermediate (WTI) crude failed to find support at the key $20 a barrel mark on the back of a global glut in crude. The shutdown of major economies in the effort to contain the COVID-19 pandemic has led to slowdown in demand for oil & expectations for further growth in surplus supplies. US benchmark WTI crude for May settled at $19.87 a barrel, unchanged from Wed, which marked the lowest front-month contract finish since 2002. Global benchmark Jun Brent crude rose 13¢ (0.5%) to $27.82 a barrel. It had seesawed between losses & gains during the session. Oil prices slumped yesterday after the International Energy Agency forecast a record drop of 9.3M barrels a day in oil demand this year. In a report today, OPEC slashed its expectations for crude demand & said it now sees 2020 demand falling by 6.8M barrels a day. The near-term demand picture remains front & center as well, with analysts looking for it to continue sliding at least thru May.
U.S. oil prices hold ground at the lowest finish since 2002
Stocks held up well on a day when gloomy news was everywhere. They were led by tech shares which make up much of NAZ. There will be more talk shortly about opening up the US economy. The overall consideration is expected to be at a slow pace. And this will vary state by state, as they all have different stories. The war against COVI-19 is making progress, but winning will take time. Thru all the uncertainty investors continue to be bullish, all things considered.
Dow Jones Industrials
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