Dow sank 592 (around session lows), decliners over advancers 4-1 & NAZ pulled back 92. The MLP index was fractionally lower ro the 111s & the REIT index dropped 11 to the 324s. Junk bond funds continued weak & Treasuries remained in demand. Oil plunged 53 to -35 & gold gained 9 to 1708 (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)
US equities sold off as oil crashed below zero & headed toward its lowest close since record keeping began in 1983. Ongoing concerns over swelling oil inventories pushed West Texas Intermediate crude for May delivery to a record low -$39.55 per barrel. At a price below zero, buyers would be paid to take delivery as there are costs associated with transportation & storage. The plunge in crude prices pressured oil majors Exxon Mobil (XOM) & Chevron (CVX), which were the biggest decliners among Dow components & also Dividend Aristocrat.
Senate has no deal on coronavirus relief bill, but sets up possible Tuesday vote
Oilfield services giant Halliburton (HAL) reported a $1B Q1 loss on charges & warned that bleak conditions in the US shale patch would depress its results for the rest of the year. Oil prices have collapsed 80% since Jan to levels well below many shale drillers' cost of production, resulting in sharp drops in business for service firms. The spread of coronavirus & associated lockdown measures have crushed oil demand. HAL, which generates most of its business in North America, booked $1.1B in pre-tax impairments & other charges, mostly relating to the value of a pressure pumping business that breaks shale rock to release trapped oil & gas. It posted a 25% drop in revenue from the region to $2.46B, while intl revenue rose 5% to $2.58B. "For the remainder of 2020, the Company expects a further decline in revenue and profitability, particularly in North America," CEO Jeff Miller said. HAL will cut capital expenditure for the year to $800M & reduce costs by about $1B. The company has laid off hundreds of staff & furloughed Ks, while its exec team has taken pay cuts. Analysts were encouraged by the cost cutting despite its warning of deteriorating market conditions. HAL said it also faced challenges from coronavirus lockdown measures, including logistical problems from border closures & travel restrictions that have prevented the company from accessing certain facilities and sites, as well as inefficiencies from stay-at-home work arrangements. It reported a net loss of $1.02B ($1.16 per share) compared with a profit of $152M (17¢ per share) a year earlier. Excluding charges, EPS was 31¢, beating the estimate of 24¢. The stock went up 3 pennies, but is down 75% in the last 12 months.
If you would like to learn more about HAL, click on this link:
club.ino.com/trend/analysis/stock/HAL?a_aid=CD3289&a_bid=6ae5b6f7
Gold futures ended modestly higher, reclaiming a perch above $1700, as early gains for the $ faded & as a tumble in crude-oil prices—a sign of waning risk appetite—provided a pathway for the precious metal to gain some ground higher. The metal gained some traction higher as the May contract for oil finished in negative territory for the first time in history. That dynamic helped to overcome signs of growing optimism around treatments for COVID-19 & an easing of global lockdowns intended to slow the spread of the deadly illness, which had been a drag on bullion buying. Moves for bullion appear somewhat muted as investors brace for expected weak data from quarterly results from corps. About 20% of the S&P 500 will report earnings this week & the results are expected to be the worst on a year-over-year basis since 2009. Gold for Jun rose $12 (0.7%) to settle at $1711 an ounce, but had traded at an intraday low at $1685. Last week, the metal put in a weekly decline of 3.1%. Gold retreated sharply to end last week's trade amid reports of therapeutics for the novel strain of coronavirus that was first identified in Wuhan, China. The uncertainty around opening up nearly frozen economies & the likelihood that the market is facing a global recession could also provide support for the yellow metal in the longer term.
Gold prices end higher, recapture level above $1,700 as oil prices plunge
US oil's May contract plunged into negative territory, meaning that you would have to pay to get someone to take barrels of oil off your hands. West Texas Intermediate oil plunged to settle at negative $37.63 a barrel. The May contract expires tomorrow. That one-day drop marks the first time the contract has traded negative in history & would be the largest tumble on record going back to 1983, while a finish near its current level would be far below the previous all-time low for a front-month contract. The Jun contract which is the most-active, ended down $4.60 (18.3%) at $20.03 a barrel.
Stock trading remains brutal with all that is going on. Those clowns in DC don't really care about helping the economy. Playing political games comes first. Oil is one of the biggest financial disasters ever, & that ripples to economies around the world. Tankers are parked in the ocean filled with oil waiting for delivery instructions. Opening up the US economy is coming, but that will be controversial. Protests are already spreading across the country. Easily forgotten, this is earnings season & it is shaping up as awful with grim forecasts about the future. The bulls have a tough time making their case for buying stocks.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
US equities sold off as oil crashed below zero & headed toward its lowest close since record keeping began in 1983. Ongoing concerns over swelling oil inventories pushed West Texas Intermediate crude for May delivery to a record low -$39.55 per barrel. At a price below zero, buyers would be paid to take delivery as there are costs associated with transportation & storage. The plunge in crude prices pressured oil majors Exxon Mobil (XOM) & Chevron (CVX), which were the biggest decliners among Dow components & also Dividend Aristocrat.
Oil crashes below 0 in historic drop
The Senate did not reach a deal on the next
coronavirus relief bill in time for a brief session, but set up a
vote as soon as late tomorrow to replenish a key small business aid
program. Congressional Dems have held discussions with the
Treasury Dept on the next package to rescue an economy & health
care system ravaged by the global pandemic. Yesterday, negotiators
signaled they had come closer to a deal that could include $370B in loan programs for small businesses,
designed to keep employees on payroll as businesses across the country
shutter. It may also include $75B for hospitals & $25B
for testing — but not money for state & local govs that
Dems sought. The
$350B allocated to a relief program for small firms in last
month's $2T stimulus package dried up last week, though it is
unclear how much of that money has actually gone to companies so far. “At
this hour, our Democratic colleagues are still prolonging their
discussions with the administration, so the Senate regretfully will not
be able to pass more funding for Americans’ paychecks today,” Senate
Majority Leader Mitch McConnell. He said the Senate would meet again tomorrow to try to pass legislation to replenish the program. The
House will convene (maybe) on Wed to consider an emergency bill. The chamber expects a recorded vote, which requires representatives
currently in their districts to return to DC Some members of the party's more liberal wing have started to oppose the emerging deal.
Senate has no deal on coronavirus relief bill, but sets up possible Tuesday vote
Oilfield services giant Halliburton (HAL) reported a $1B Q1 loss on charges & warned that bleak conditions in the US shale patch would depress its results for the rest of the year. Oil prices have collapsed 80% since Jan to levels well below many shale drillers' cost of production, resulting in sharp drops in business for service firms. The spread of coronavirus & associated lockdown measures have crushed oil demand. HAL, which generates most of its business in North America, booked $1.1B in pre-tax impairments & other charges, mostly relating to the value of a pressure pumping business that breaks shale rock to release trapped oil & gas. It posted a 25% drop in revenue from the region to $2.46B, while intl revenue rose 5% to $2.58B. "For the remainder of 2020, the Company expects a further decline in revenue and profitability, particularly in North America," CEO Jeff Miller said. HAL will cut capital expenditure for the year to $800M & reduce costs by about $1B. The company has laid off hundreds of staff & furloughed Ks, while its exec team has taken pay cuts. Analysts were encouraged by the cost cutting despite its warning of deteriorating market conditions. HAL said it also faced challenges from coronavirus lockdown measures, including logistical problems from border closures & travel restrictions that have prevented the company from accessing certain facilities and sites, as well as inefficiencies from stay-at-home work arrangements. It reported a net loss of $1.02B ($1.16 per share) compared with a profit of $152M (17¢ per share) a year earlier. Excluding charges, EPS was 31¢, beating the estimate of 24¢. The stock went up 3 pennies, but is down 75% in the last 12 months.
If you would like to learn more about HAL, click on this link:
club.ino.com/trend/analysis/stock/HAL?a_aid=CD3289&a_bid=6ae5b6f7
Halliburton books $1.1B charge as oil crash whacks spending
Gold futures ended modestly higher, reclaiming a perch above $1700, as early gains for the $ faded & as a tumble in crude-oil prices—a sign of waning risk appetite—provided a pathway for the precious metal to gain some ground higher. The metal gained some traction higher as the May contract for oil finished in negative territory for the first time in history. That dynamic helped to overcome signs of growing optimism around treatments for COVID-19 & an easing of global lockdowns intended to slow the spread of the deadly illness, which had been a drag on bullion buying. Moves for bullion appear somewhat muted as investors brace for expected weak data from quarterly results from corps. About 20% of the S&P 500 will report earnings this week & the results are expected to be the worst on a year-over-year basis since 2009. Gold for Jun rose $12 (0.7%) to settle at $1711 an ounce, but had traded at an intraday low at $1685. Last week, the metal put in a weekly decline of 3.1%. Gold retreated sharply to end last week's trade amid reports of therapeutics for the novel strain of coronavirus that was first identified in Wuhan, China. The uncertainty around opening up nearly frozen economies & the likelihood that the market is facing a global recession could also provide support for the yellow metal in the longer term.
Gold prices end higher, recapture level above $1,700 as oil prices plunge
US oil's May contract plunged into negative territory, meaning that you would have to pay to get someone to take barrels of oil off your hands. West Texas Intermediate oil plunged to settle at negative $37.63 a barrel. The May contract expires tomorrow. That one-day drop marks the first time the contract has traded negative in history & would be the largest tumble on record going back to 1983, while a finish near its current level would be far below the previous all-time low for a front-month contract. The Jun contract which is the most-active, ended down $4.60 (18.3%) at $20.03 a barrel.
U.S. oil's May contract just marked history, plunging about 300% to settle negative $37.63 a barrel
Stock trading remains brutal with all that is going on. Those clowns in DC don't really care about helping the economy. Playing political games comes first. Oil is one of the biggest financial disasters ever, & that ripples to economies around the world. Tankers are parked in the ocean filled with oil waiting for delivery instructions. Opening up the US economy is coming, but that will be controversial. Protests are already spreading across the country. Easily forgotten, this is earnings season & it is shaping up as awful with grim forecasts about the future. The bulls have a tough time making their case for buying stocks.
Dow Jones Industrials
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