Dow sank 631 (around session lows), decliners over advancers 4-1 & NAZ tumbled 297. The MLP index went up 1+ to 113 & the REIT index fell 5 to the 317s. Junk bonds funds drifted lower & Treasuries continued in strong demand. Oil rose to 9+, above yesterday's negative number, & gold fell 8 to 1702 (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 sales of existing homes cratered 8.5% in Mar with real estate activity stalled by the coronavirus outbreak. The National Association of Realtors said that 5.27M homes sold last month, down from 5.76M in Feb. The decrease was the steepest since Nov 2015. The situation will likely get worse, said Danielle Hale, chief economist at realtor.com. “Going forward, we’ve seen both home buyers and sellers report being less confident and many are making adjustments to the process,” Hale said. "Already, sellers are getting less aggressive with asking price growth, and we’re seeing roughly half as many new listings come up for sale this year versus last year." Home-buying had been steady for the first ½ of Mar because of low mortgage rates & the finalization of contracts signed in prior months, only to collapse in response to COVID-19 burying the economy in a likely recession. Businesses & schools have closed & Ms of Americans have lost their jobs. Sales in Mar were still 0.8% higher from a year ago, when mortgage rates were higher than now. The real estate market was already facing pressure from a shortage of sales listings & prices climbing faster than incomes, a linked set of problems that intensified last month. The number of homes for sale in Mar plunged 10.2% from a year ago, to 1.5M. This shortage appears to be most pronounced among entry level homes. The total number of sales of homes worth less than $250K has fallen over the past year because there are so few available. The national median sales price jumped 8% over 12 months to $281K, even as overall consumer prices fell 0.4% in Mar. Prices have been consistently rising faster than incomes for several years, such that many homeowners are struggling as 22M have lost their jobs in the past 4 weeks. The Mortgage Bankers Association said yesterday that 6% of mortgages are under forbearance because of the downturn.
The US will take advantage of historically low oil prices to fill up its Strategic Petroluem Reserve, Energy Secretary Dan Brouillette said. “We've contracted now for approximately 43 million barrels, up to about 75 million, perhaps 77 million barrels,” Brouillette said. ”We're also authorized to go up to 1 billion barrels of storage under the strategic reserve.” Brouillette plans to work with Congress to expand the reserve, which will buoy an oil market overwhelmed with supply as “stay-at-home” orders issued in response to the COVID-19 pandemic crushed demand even as Saudi Arabia & Russia, 2 of the world's largest producers, engaged in a price war. West Texas Intermediate crude futures contracts for Jun delivery plunged by 35% to $13.29 a barrel today, one day after the May contract plummeted by 305 percent to -$36.73 as traders dumped contracts to avoid having to take physical delivery following today's expiration. “The key is to reopen the economy -- it's to create a demand signal to put people back to work,” Brouillette said. Pres Trump reiterated his support for the oil industry in a tweet , saying he has “instructed the Secretary of Energy and Secretary of the Treasury to formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future!"
If International Business Machine’s (IBM), a Dow stock, early warnings are any indication, this isn't likely to be a pretty earnings season for software companies. IBM pointed to a sharp slowdown in software sales during late Mar as the COVID-19 outbreak worsened in the US, suggesting some pain ahead for the enterprise software industry until businesses feel more certain about the economy. Of the 20 analysts who cover IBM, 5 have buy ratings, 13 have hold ratings & 2 have sell ratings. 9 cut their price targets on the stock, while one raised the target, resulting in an average target price of $130. Though the last 2 weeks of the qtr are typically big for IBM in terms of closing deals, CFO James Kavanaugh said that the company saw big changes in customer behavior toward the end of the period. Customers that “did engage” with IBM indicated that their focus was “the stability of their operations and preservation of cash,” he added. The stock dropped 3.51.
If you would like to learn more about IBM, click on this link:
club.ino.com/trend/analysis/stock/IBM?a_aid=CD3289&a_bid=6ae5b6f7
IBM says customers are in cash-conservation mode, a foreboding sign for software earnings
Gold futures end below $1700 an ounce, at their lowest in nearly 2 weeks, as the $ strengthened, pressuring the commodity priced in the currency after modest gains in the previous session. Commodity traders speculated that the yellow metal could also be facing some resistance after prices punched above $1700 as a plunge in crude-oil prices sparked some investors to flee to the perceived safety of bullion. Gold for Jun lost $23 (1.4%) to settle at $1687 an ounce, following a 0.7% gain yesterday. Prices marked the lowest close for a most-active contract since Apr 8.
Gold prices end near 2-week low as the U.S. dollar strengthens
Oil futures saw another day of volatile trading, with the most-active Jun contract for the US benchmark marking its lowest finish in 21 years, a day after the May contract made history by settling in negative territory for the first time ever. A glut of oil & dwindling places to store the commodity has combined to obliterate crude values. West Texas Intermediate crude for Jun lost $8.86 (43.4%) to settle at at $11.57 a barrel, after touching a low at $6.50. Based on the most-active contracts, prices settled around their lowest since 1999. Meanwhile, WTI crude for May, which expired at the end of trading today, settled at $10.01 a barrel, climbing $47.64 today—the largest one day net gain on record. That followed a stunning decline yesterday that placed the front-month contract at negative $37.63 a barrel. Jun Brent crude fell by $6.24 (24.4%) to end at $19.33 a barrel, the lowest finish since 2002. Prices saw the largest one-day percentage decline since 1991. Yesterday's traverse into negative territory for the May WTI contract effectively means that producers of crude must pay for buyers to take oil off their hands due to a dearth of places to store the commodity. The epic decline for crude prices comes even after a group of major producers, including OPEC & Russia, a group collectively referred to as OPEC+, last week struck a historic agreement to curb daily output among oil producers by around 10M barrels in May & Jun. The pact was intended to end a price war between Saudi Arabia, the de factor leader of OPEC & Russia, which had erupted just as demand for oil was expected to tumble amid the outbreak of COVID-19. The pandemic has caused world-wide closures of business & travel, badly damaging demand for oil.
Lockheed Martin (LMT) kept its 2020 guidance largely unchanged as it mitigated the impact of the coronavirus pandemic on production & its supply chain. The defense sector has continued to operate through coronavirus-driven shelter-in-place restrictions, deemed an essential sector, with the Pentagon disclosing that only around 1% of the broader supply base is shuttered. Big contractors like LMT have provided additional payments to support smaller companies, & with the Pentagon accelerating some of its own funding & contract awards, companies have also pivoted some production capacity to produce medical supplies. The lack of business interruption helped LMT, the world's largest defense company by sales, maintain existing profit guidance for 2020, with only a small trim to its revenue outlook. Its footprint across air, space, sea & land systems makes it a proxy for Pentagon spending, with gov outlays rising 6% in Q1 from a year earlier, including a 31% jump in Mar. EPS rose to $6.08 from $5.99 & above the $5.80 estimate. Sales climbed to $15.7B from $14.3B a year earlier. LMT expects sales to rise to as high as $64B this year, trimming just $250M from the top end of its guidance because of pandemic-related disruption. EPS is still forecast at $23.65-23.95 & free cash-flow guidance was left unchanged.. The stock sank 9.93.
If you would like to learn more about LMT, click on this link:
club.ino.com/trend/analysis/stock/LMT?a_aid=CD3289&a_bid=6ae5b6f7
The stock market "can't get no respect," even after its recent substantial rebound. The 4th relief package for business was just approved by the Senate. But chaos exists elsewhere for coronavirus victims, unemployed workers & business in general. States are running out of money needed for unemployment benefits. Reopening the economy, state by state, is stumbling along. And there has been a lot of psychological damage to many Americans (among others). The Dow lost 1200 in 2 days, falling to 23K, as the economic outlook is dreary.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
US sales of existing homes cratered 8.5% in Mar with real estate activity stalled by the coronavirus outbreak. The National Association of Realtors said that 5.27M homes sold last month, down from 5.76M in Feb. The decrease was the steepest since Nov 2015. The situation will likely get worse, said Danielle Hale, chief economist at realtor.com. “Going forward, we’ve seen both home buyers and sellers report being less confident and many are making adjustments to the process,” Hale said. "Already, sellers are getting less aggressive with asking price growth, and we’re seeing roughly half as many new listings come up for sale this year versus last year." Home-buying had been steady for the first ½ of Mar because of low mortgage rates & the finalization of contracts signed in prior months, only to collapse in response to COVID-19 burying the economy in a likely recession. Businesses & schools have closed & Ms of Americans have lost their jobs. Sales in Mar were still 0.8% higher from a year ago, when mortgage rates were higher than now. The real estate market was already facing pressure from a shortage of sales listings & prices climbing faster than incomes, a linked set of problems that intensified last month. The number of homes for sale in Mar plunged 10.2% from a year ago, to 1.5M. This shortage appears to be most pronounced among entry level homes. The total number of sales of homes worth less than $250K has fallen over the past year because there are so few available. The national median sales price jumped 8% over 12 months to $281K, even as overall consumer prices fell 0.4% in Mar. Prices have been consistently rising faster than incomes for several years, such that many homeowners are struggling as 22M have lost their jobs in the past 4 weeks. The Mortgage Bankers Association said yesterday that 6% of mortgages are under forbearance because of the downturn.
Home sales plunge in March
The US will take advantage of historically low oil prices to fill up its Strategic Petroluem Reserve, Energy Secretary Dan Brouillette said. “We've contracted now for approximately 43 million barrels, up to about 75 million, perhaps 77 million barrels,” Brouillette said. ”We're also authorized to go up to 1 billion barrels of storage under the strategic reserve.” Brouillette plans to work with Congress to expand the reserve, which will buoy an oil market overwhelmed with supply as “stay-at-home” orders issued in response to the COVID-19 pandemic crushed demand even as Saudi Arabia & Russia, 2 of the world's largest producers, engaged in a price war. West Texas Intermediate crude futures contracts for Jun delivery plunged by 35% to $13.29 a barrel today, one day after the May contract plummeted by 305 percent to -$36.73 as traders dumped contracts to avoid having to take physical delivery following today's expiration. “The key is to reopen the economy -- it's to create a demand signal to put people back to work,” Brouillette said. Pres Trump reiterated his support for the oil industry in a tweet , saying he has “instructed the Secretary of Energy and Secretary of the Treasury to formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future!"
US pumps up oil stockpiles with historically cheap fuel: Energy Secretary
If International Business Machine’s (IBM), a Dow stock, early warnings are any indication, this isn't likely to be a pretty earnings season for software companies. IBM pointed to a sharp slowdown in software sales during late Mar as the COVID-19 outbreak worsened in the US, suggesting some pain ahead for the enterprise software industry until businesses feel more certain about the economy. Of the 20 analysts who cover IBM, 5 have buy ratings, 13 have hold ratings & 2 have sell ratings. 9 cut their price targets on the stock, while one raised the target, resulting in an average target price of $130. Though the last 2 weeks of the qtr are typically big for IBM in terms of closing deals, CFO James Kavanaugh said that the company saw big changes in customer behavior toward the end of the period. Customers that “did engage” with IBM indicated that their focus was “the stability of their operations and preservation of cash,” he added. The stock dropped 3.51.
If you would like to learn more about IBM, click on this link:
club.ino.com/trend/analysis/stock/IBM?a_aid=CD3289&a_bid=6ae5b6f7
IBM says customers are in cash-conservation mode, a foreboding sign for software earnings
Gold futures end below $1700 an ounce, at their lowest in nearly 2 weeks, as the $ strengthened, pressuring the commodity priced in the currency after modest gains in the previous session. Commodity traders speculated that the yellow metal could also be facing some resistance after prices punched above $1700 as a plunge in crude-oil prices sparked some investors to flee to the perceived safety of bullion. Gold for Jun lost $23 (1.4%) to settle at $1687 an ounce, following a 0.7% gain yesterday. Prices marked the lowest close for a most-active contract since Apr 8.
Gold prices end near 2-week low as the U.S. dollar strengthens
Oil futures saw another day of volatile trading, with the most-active Jun contract for the US benchmark marking its lowest finish in 21 years, a day after the May contract made history by settling in negative territory for the first time ever. A glut of oil & dwindling places to store the commodity has combined to obliterate crude values. West Texas Intermediate crude for Jun lost $8.86 (43.4%) to settle at at $11.57 a barrel, after touching a low at $6.50. Based on the most-active contracts, prices settled around their lowest since 1999. Meanwhile, WTI crude for May, which expired at the end of trading today, settled at $10.01 a barrel, climbing $47.64 today—the largest one day net gain on record. That followed a stunning decline yesterday that placed the front-month contract at negative $37.63 a barrel. Jun Brent crude fell by $6.24 (24.4%) to end at $19.33 a barrel, the lowest finish since 2002. Prices saw the largest one-day percentage decline since 1991. Yesterday's traverse into negative territory for the May WTI contract effectively means that producers of crude must pay for buyers to take oil off their hands due to a dearth of places to store the commodity. The epic decline for crude prices comes even after a group of major producers, including OPEC & Russia, a group collectively referred to as OPEC+, last week struck a historic agreement to curb daily output among oil producers by around 10M barrels in May & Jun. The pact was intended to end a price war between Saudi Arabia, the de factor leader of OPEC & Russia, which had erupted just as demand for oil was expected to tumble amid the outbreak of COVID-19. The pandemic has caused world-wide closures of business & travel, badly damaging demand for oil.
U.S. oil’s June contract drops over 43% to 21-year low as May contract expires at $10 a barrel
Lockheed Martin (LMT) kept its 2020 guidance largely unchanged as it mitigated the impact of the coronavirus pandemic on production & its supply chain. The defense sector has continued to operate through coronavirus-driven shelter-in-place restrictions, deemed an essential sector, with the Pentagon disclosing that only around 1% of the broader supply base is shuttered. Big contractors like LMT have provided additional payments to support smaller companies, & with the Pentagon accelerating some of its own funding & contract awards, companies have also pivoted some production capacity to produce medical supplies. The lack of business interruption helped LMT, the world's largest defense company by sales, maintain existing profit guidance for 2020, with only a small trim to its revenue outlook. Its footprint across air, space, sea & land systems makes it a proxy for Pentagon spending, with gov outlays rising 6% in Q1 from a year earlier, including a 31% jump in Mar. EPS rose to $6.08 from $5.99 & above the $5.80 estimate. Sales climbed to $15.7B from $14.3B a year earlier. LMT expects sales to rise to as high as $64B this year, trimming just $250M from the top end of its guidance because of pandemic-related disruption. EPS is still forecast at $23.65-23.95 & free cash-flow guidance was left unchanged.. The stock sank 9.93.
If you would like to learn more about LMT, click on this link:
club.ino.com/trend/analysis/stock/LMT?a_aid=CD3289&a_bid=6ae5b6f7
Lockheed Martin mitigates coronavirus impact, keeps 2020 guidance
The stock market "can't get no respect," even after its recent substantial rebound. The 4th relief package for business was just approved by the Senate. But chaos exists elsewhere for coronavirus victims, unemployed workers & business in general. States are running out of money needed for unemployment benefits. Reopening the economy, state by state, is stumbling along. And there has been a lot of psychological damage to many Americans (among others). The Dow lost 1200 in 2 days, falling to 23K, as the economic outlook is dreary.
Dow Jones Industrials
No comments:
Post a Comment