Dow jumped up 328, advancers over decliners 5-1 & NAZ gained 32. The MLP index added 1+ to the 107s & the REIT index went up 6+ to 331. Junk bond funds rose in price & Treasuries were bid higher. Oil remained weak, sinking 1+ to a new multi year low in the 18s (more below), & gold dropped a very big 23 to 1706.
AMJ (Alerian MLP Index tracking fund)
Secretary of State Mike Pompeo said that the Trump administration is demanding answers from China after the nation raised the number of coronavirus deaths in Wuhan by nearly 50% earlier in the day. Officials changed the city's 1290-person COVID-19 death count to 3869 today, highlighting questions surrounding the validity of China's reporting on virus cases in the country. Chinese state media said “belated, missed and mistaken reporting occurred" because medical facilities in the country were overwhelmed at the peak of the outbreak, hence the sudden spike. "What this administration has consistently done, with respect to the Chinese Communist Party, is demand they behave in a way that's consistent with international norms," Pompeo said. The change in Wuhan's death count also came after it was reported that the virus outbreak likely originated in a Wuhan laboratory not as a bioweapon but as a way for China to prove its efforts to identify and combat viruses are equal to or greater than the capabilities of the US, according to multiple sources. The virus outbreak is an example of how the country is not being consistent with intl norms by withholding information & data related to COVID-19 from the rest of the world before it became a pandemic, Pompeo added. "This authoritarian regime had information, had data. It's very clear now that the Chinese Communist Party and the World Health Organization didn't put that information out into the international space as they're required to do in a timely fashion. And the result of that is that we now have this global pandemic. We're still suffering that today," he continued. Pompeo said that the administration is "still trying" to get China to allow experts into the lab where it is believed the virus originated. "This is about science and epidemiology," he said. "We need to understand what has taken place so that we can reduce risk to Americans in the days and weeks and months ahead and get the global economy back on track. It's very important." The secretary of state also related China's failure to be transparent to Chinese telecom giant Huawei & the security concerns the US has with the company. The administration put Huawei on a blacklist called the Entity List, which prohibits American companies from doing business with the Chinese firm.
US oil prices plunged after China reported its GDP shrank for the first time since record keeping began in 1992 as the economy was shut down to slow the spread of COVID-19. West Texas Intermediate crude oil for May tumbled 10% to $17.90 a barrel, its lowest since 2001. China's Q1 GDP fell 6.8% year-over-year in the Jan-Mar period, according to the National Bureau of Statistics, larger than the 6% estimate. The sharp economic contraction is a preview of things to come for the rest of the developed world, including the US, as the COVID-19 pandemic originated in China, impacting its economy first. Slower economic growth means there will be less demand for oil & its byproducts, including gasoline & jet fuel. In a report out yesterday, OPEC said global demand will fall by 6.9M barrels per day amid the COVID-19 pandemic. In a separate report out Wed, the US Energy Information Administration said 9.3M barrels per day of demand has been zapped. The weaker demand exacerbates a supply glut that was made worse when a price war broke out between Saudi Arabia & Russia on Mar 9. In virtual talks last weekend, the world's largest oil producers reached an agreement to trim global production by about 20M barrels per day in May & Jun. OPEC & its allies will lower output by 9.7M barrels a day while the rest of the cuts come from major players such as the US & Canada, mostly as a result of lower prices. The agreement also says OPEC producers & their allies will reduce production by 7.7M barrels a day from Jul thru next year.
New York Federal Reserve Pres John Williams said he sees some parts of the economy coming back online but doubts growth will return to normal this year. Construction should be among the first to return, he said. That echoed comments from Philadelphia Fed Pres Patrick Harker, yesterday. “I expect that to be able to bounce back a little bit more quickly than maybe some of the other sectors,” Williams said. While Williams expressed some optimism about the longer-term growth prospects, he sees “some tough days ahead” & “horrible” Q2 economic data. “We have not come to any firm conclusions about how long this will last, and we’re acting in every way we can to do the utmost to support the economy, however this evolves over the next couple months,” he said. “Our concerns are that even as the pandemic passes, even as the restrictions are relaxed gradually over time, people may take quite a while before they’re willing to get back on airplanes or trains or go to theaters and concerts, things like that,” he added.
New York Fed Pres says economy won’t be at ‘full strength’ by end of 2020
The rise in the stock market was helped by a report that there is a new treatment for the virus. However, the Dow has pulled back from early gains on the abundance of negative news (some discussed above). The oil market is nothing short of a disaster & that is crucial for economic growth. The comments from Williams on the outlook for the economy above are sobering. Additionally, it's difficult to believe anything China says (with the #2 economy in the world). Trump's plans about opening the economy make sense, but it is based on one step at a time & will be uneven around the 50 states. Stocks are doing well so far while commodities are being hit hard with a lot of selling.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 18.17 | -1.70 | -8.6% |
| GC=F | Gold | 1,705.90 | -25.80 | -1.5% |
Secretary of State Mike Pompeo said that the Trump administration is demanding answers from China after the nation raised the number of coronavirus deaths in Wuhan by nearly 50% earlier in the day. Officials changed the city's 1290-person COVID-19 death count to 3869 today, highlighting questions surrounding the validity of China's reporting on virus cases in the country. Chinese state media said “belated, missed and mistaken reporting occurred" because medical facilities in the country were overwhelmed at the peak of the outbreak, hence the sudden spike. "What this administration has consistently done, with respect to the Chinese Communist Party, is demand they behave in a way that's consistent with international norms," Pompeo said. The change in Wuhan's death count also came after it was reported that the virus outbreak likely originated in a Wuhan laboratory not as a bioweapon but as a way for China to prove its efforts to identify and combat viruses are equal to or greater than the capabilities of the US, according to multiple sources. The virus outbreak is an example of how the country is not being consistent with intl norms by withholding information & data related to COVID-19 from the rest of the world before it became a pandemic, Pompeo added. "This authoritarian regime had information, had data. It's very clear now that the Chinese Communist Party and the World Health Organization didn't put that information out into the international space as they're required to do in a timely fashion. And the result of that is that we now have this global pandemic. We're still suffering that today," he continued. Pompeo said that the administration is "still trying" to get China to allow experts into the lab where it is believed the virus originated. "This is about science and epidemiology," he said. "We need to understand what has taken place so that we can reduce risk to Americans in the days and weeks and months ahead and get the global economy back on track. It's very important." The secretary of state also related China's failure to be transparent to Chinese telecom giant Huawei & the security concerns the US has with the company. The administration put Huawei on a blacklist called the Entity List, which prohibits American companies from doing business with the Chinese firm.
Pompeo: US demanding answers from Beijing, vows Wuhan lab probe
US oil prices plunged after China reported its GDP shrank for the first time since record keeping began in 1992 as the economy was shut down to slow the spread of COVID-19. West Texas Intermediate crude oil for May tumbled 10% to $17.90 a barrel, its lowest since 2001. China's Q1 GDP fell 6.8% year-over-year in the Jan-Mar period, according to the National Bureau of Statistics, larger than the 6% estimate. The sharp economic contraction is a preview of things to come for the rest of the developed world, including the US, as the COVID-19 pandemic originated in China, impacting its economy first. Slower economic growth means there will be less demand for oil & its byproducts, including gasoline & jet fuel. In a report out yesterday, OPEC said global demand will fall by 6.9M barrels per day amid the COVID-19 pandemic. In a separate report out Wed, the US Energy Information Administration said 9.3M barrels per day of demand has been zapped. The weaker demand exacerbates a supply glut that was made worse when a price war broke out between Saudi Arabia & Russia on Mar 9. In virtual talks last weekend, the world's largest oil producers reached an agreement to trim global production by about 20M barrels per day in May & Jun. OPEC & its allies will lower output by 9.7M barrels a day while the rest of the cuts come from major players such as the US & Canada, mostly as a result of lower prices. The agreement also says OPEC producers & their allies will reduce production by 7.7M barrels a day from Jul thru next year.
Oil sinks to 18-year low as China tumbles
New York Federal Reserve Pres John Williams said he sees some parts of the economy coming back online but doubts growth will return to normal this year. Construction should be among the first to return, he said. That echoed comments from Philadelphia Fed Pres Patrick Harker, yesterday. “I expect that to be able to bounce back a little bit more quickly than maybe some of the other sectors,” Williams said. While Williams expressed some optimism about the longer-term growth prospects, he sees “some tough days ahead” & “horrible” Q2 economic data. “We have not come to any firm conclusions about how long this will last, and we’re acting in every way we can to do the utmost to support the economy, however this evolves over the next couple months,” he said. “Our concerns are that even as the pandemic passes, even as the restrictions are relaxed gradually over time, people may take quite a while before they’re willing to get back on airplanes or trains or go to theaters and concerts, things like that,” he added.
New York Fed Pres says economy won’t be at ‘full strength’ by end of 2020
The rise in the stock market was helped by a report that there is a new treatment for the virus. However, the Dow has pulled back from early gains on the abundance of negative news (some discussed above). The oil market is nothing short of a disaster & that is crucial for economic growth. The comments from Williams on the outlook for the economy above are sobering. Additionally, it's difficult to believe anything China says (with the #2 economy in the world). Trump's plans about opening the economy make sense, but it is based on one step at a time & will be uneven around the 50 states. Stocks are doing well so far while commodities are being hit hard with a lot of selling.
Dow Jones Industrials
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