Dow tumbled 224 (but 200 above early lows), decliners over advancers 2-1 & NAZ went up 10. The MLP index was about even in the 112s & the REIT index dropped 7+ to the 327s. Junk bond funds drifted lower & Treasuries were bid higher. Oil plunged 7+ to go below 11 (lowest since 1998 & more below) & gold added 8 to 1707.
AMJ (Alerian MLP Index tracking fund)
US oil prices tumbled to levels last seen in 1998 as swelling inventories have storage facilities nearing their capacity. West Texas Intermediate crude oil futures for May delivery cratered 41% to $10.85 a barrel. The contract, which expires tomorrow, was trading at a more than $10 discount to Jun. Demand for crude oil is projected to fall by 29M barrels per day this month, according to the International Energy Administration (EIA), as COVID-19 has forced countries around the world to issue “stay-at-home” orders to slow the spread of the disease. Lower economic activity means weaker demand for crude oil & its byproducts, including gasoline & jet fuel. The sharp drop in demand has storage tanks in Cushing, Oklahoma, a key US oil hub, filling up at an astounding rate. Inventories have ballooned by 48% to about 55M barrels, according to a recent report from the EIA. Capacity at the hub is about 76M barrels, according to the EIA. Oil supplies were swelling even before Saudi Arabia launched a price war against Russia on Mar 8 after the latter refused to join OPEC in slashing production, causing oil prices to post their largest single-day drop on record. After more than a month of pumping out oil at elevated production levels, the world's largest producers agreed on Apr 12 to historic cuts that will reduce output by 20M barrels per day beginning May 1. However, the production deal still won't be able to offset the big drop in demand.
Dems & the Trump administration are close to a deal for Congress to replenish a tapped-out program to help small businesses stay afloat as the coronavirus forces a broad shutdown of the nation's economy. Treasury Secretary Steve Mnuchin & House Speaker Nancy Pelosi said yesterday the 2 sides were nearing an agreement that would include funding for the Paycheck Protection Program, a $349B fund that was part of the federal gov's stimulus package passed at the end of Mar, as well as provide money for coronavirus testing & overwhelmed hospitals. The evaporation of the program's funds came at a critical time: Over the past 4 weeks, 22M Americans filed for first-time unemployment benefits, a stunning sign of the massive economic damage inflicted by the virus outbreak. Before the pandemic, the largest number of Americans to seek jobless aid in a 4-week period was 2.7M in 1982. “I’m hopeful we can reach an agreement the Senate can pass tomorrow and the House can pass Tuesday,” Mnuchin said. “We’re making a lot of progress.” He added that the agreement could include 2 aspects that Dems have pressed for: $75B for hospitals & $25B to expand testing for COVID-19, the respiratory illness caused by the novel coronavirus. The Paycheck Protection Program was part of the $2.2T economic-relief bill & provides loans at ultra-low interest rates to businesses with fewer than 500 employees to incentivize them to keep staff on payroll or rehire laid-off workers as the virus paralyzes the economy. If at least 75% of the money is used to maintain the size of their payroll, the federal govt will forgive the loans. But money for the program ran dry last Thurs & the Small Business Administration said on its website that the agency is "currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding. Similarly, we are unable to enroll new PPP lenders at this time." Under current negotiations, lawmakers are considering allocating an additional $310B to the PPP & an extra $60B to a separate Economic Injury Disaster Loan Program (EIDL) that provides grants of as much as $10K for businesses. The $350B approved by Congress in late Mar evaporated in less than 2 weeks. There were 1.6M loans approved that depleted the $349B fund. Nearly 5K lenders participated, according to SBA data.
United Airlines (UAL) posted a $2.1B loss for Q1, as the coronavirus pandemic drove travel demand down to the lowest level in decades. The airline said it has applied for up to $4.5B in gov loans on top of about $5B federal payroll grants & loans it also expects to receive to weather the crisis. UAL is the first major US airline to detail the results, while they are preliminary, of the virus on its results in the first 3 months of the year. The disease & harsh measures to stop it from spreading such as stay-at-home orders has ravaged air travel demand & prompted carriers to slash most of their flights. Revenue fell 17% in Q1 from a year ago to $8B. On an adjusted basis, UAL said it had a roughly $1B loss in the qtr, stripping out special charges. The stock fell 90¢ (3%).
If you would like to learn more about UAL, click on this link:
club.ino.com/trend/analysis/stock/UAL?a_aid=CD3289&a_bid=6ae5b6f7
United Airlines posts $2.1 billion loss on coronavirus hit, seeks more federal aid
Given the abundance of negative news, the stock market found buyers after the initial decline & is doing fairly well (all considered). However there is no shortage of dreadful stories. Congress is not in session & can not figure out how to handle another bailout situation. Q1 GDP data will be reported next week it is likely that GDP will shrink which would put the into economy into a recession with Q2 guaranteed to be a disaster. Although the fight against the virus seems to be going better, reopening the economy will go slowly. And the stock market continues to hang in there!
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 11.32 | -6.95 | -38.0% |
| GC=F | Gold | 1,699.60 | +0.80 | +0.1% |
US oil prices tumbled to levels last seen in 1998 as swelling inventories have storage facilities nearing their capacity. West Texas Intermediate crude oil futures for May delivery cratered 41% to $10.85 a barrel. The contract, which expires tomorrow, was trading at a more than $10 discount to Jun. Demand for crude oil is projected to fall by 29M barrels per day this month, according to the International Energy Administration (EIA), as COVID-19 has forced countries around the world to issue “stay-at-home” orders to slow the spread of the disease. Lower economic activity means weaker demand for crude oil & its byproducts, including gasoline & jet fuel. The sharp drop in demand has storage tanks in Cushing, Oklahoma, a key US oil hub, filling up at an astounding rate. Inventories have ballooned by 48% to about 55M barrels, according to a recent report from the EIA. Capacity at the hub is about 76M barrels, according to the EIA. Oil supplies were swelling even before Saudi Arabia launched a price war against Russia on Mar 8 after the latter refused to join OPEC in slashing production, causing oil prices to post their largest single-day drop on record. After more than a month of pumping out oil at elevated production levels, the world's largest producers agreed on Apr 12 to historic cuts that will reduce output by 20M barrels per day beginning May 1. However, the production deal still won't be able to offset the big drop in demand.
Oil crashes to lowest level since 1998
Dems & the Trump administration are close to a deal for Congress to replenish a tapped-out program to help small businesses stay afloat as the coronavirus forces a broad shutdown of the nation's economy. Treasury Secretary Steve Mnuchin & House Speaker Nancy Pelosi said yesterday the 2 sides were nearing an agreement that would include funding for the Paycheck Protection Program, a $349B fund that was part of the federal gov's stimulus package passed at the end of Mar, as well as provide money for coronavirus testing & overwhelmed hospitals. The evaporation of the program's funds came at a critical time: Over the past 4 weeks, 22M Americans filed for first-time unemployment benefits, a stunning sign of the massive economic damage inflicted by the virus outbreak. Before the pandemic, the largest number of Americans to seek jobless aid in a 4-week period was 2.7M in 1982. “I’m hopeful we can reach an agreement the Senate can pass tomorrow and the House can pass Tuesday,” Mnuchin said. “We’re making a lot of progress.” He added that the agreement could include 2 aspects that Dems have pressed for: $75B for hospitals & $25B to expand testing for COVID-19, the respiratory illness caused by the novel coronavirus. The Paycheck Protection Program was part of the $2.2T economic-relief bill & provides loans at ultra-low interest rates to businesses with fewer than 500 employees to incentivize them to keep staff on payroll or rehire laid-off workers as the virus paralyzes the economy. If at least 75% of the money is used to maintain the size of their payroll, the federal govt will forgive the loans. But money for the program ran dry last Thurs & the Small Business Administration said on its website that the agency is "currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding. Similarly, we are unable to enroll new PPP lenders at this time." Under current negotiations, lawmakers are considering allocating an additional $310B to the PPP & an extra $60B to a separate Economic Injury Disaster Loan Program (EIDL) that provides grants of as much as $10K for businesses. The $350B approved by Congress in late Mar evaporated in less than 2 weeks. There were 1.6M loans approved that depleted the $349B fund. Nearly 5K lenders participated, according to SBA data.
Mnuchin, Democrats near coronavirus small business loan deal worth $370B
United Airlines (UAL) posted a $2.1B loss for Q1, as the coronavirus pandemic drove travel demand down to the lowest level in decades. The airline said it has applied for up to $4.5B in gov loans on top of about $5B federal payroll grants & loans it also expects to receive to weather the crisis. UAL is the first major US airline to detail the results, while they are preliminary, of the virus on its results in the first 3 months of the year. The disease & harsh measures to stop it from spreading such as stay-at-home orders has ravaged air travel demand & prompted carriers to slash most of their flights. Revenue fell 17% in Q1 from a year ago to $8B. On an adjusted basis, UAL said it had a roughly $1B loss in the qtr, stripping out special charges. The stock fell 90¢ (3%).
If you would like to learn more about UAL, click on this link:
club.ino.com/trend/analysis/stock/UAL?a_aid=CD3289&a_bid=6ae5b6f7
United Airlines posts $2.1 billion loss on coronavirus hit, seeks more federal aid
Given the abundance of negative news, the stock market found buyers after the initial decline & is doing fairly well (all considered). However there is no shortage of dreadful stories. Congress is not in session & can not figure out how to handle another bailout situation. Q1 GDP data will be reported next week it is likely that GDP will shrink which would put the into economy into a recession with Q2 guaranteed to be a disaster. Although the fight against the virus seems to be going better, reopening the economy will go slowly. And the stock market continues to hang in there!
Dow Jones Industrials
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