Dow tumbled 582, decliners over advancers a whopper 8-1 & NAZ sank 316. The MLP index fell 2+ to the 108s & the REIT index dropped 7+ to the 314s. Junk bond funds were hit with selling & Treasuries continued in demand. Oil was up whatever that means in its chaotic market (more below) & gold dropped 12 to 1698.
AMJ (Alerian MLP Index tracking fund)
West Texas Intermediate crude futures for May pared losses to trade in positive territory, one day after plunging below zero for the first time in history. The contract expires today, which means that thin trading volume has contributed to the wild price action. The massive selling gripping the oil market is now spreading to more futures contracts, worrying investors about the deep economic damage being done by the coronavirus shutdowns. The contract for Jun, which is the more actively traded & therefore a better indication of how investors view the price of oil, slipped 24% to $15.56 per barrel. Earlier it had dipped below $15. The contract for Jul fell roughly 11% to $23.42. The May contract last traded at $1.30 per barrel after previously trading in negative territory, which means sellers would effectively pay buyers to take the oil off their hands. Yesterday it fell below zero for the first time in history. However, as contracts approach expiration, trading volume is typically thin. The front part of the oil futures ‘curve,’ which is the May contract that expires today, was hit the hardest since it applies to fuel that's set to be delivered while most of the country remains on lockdown due to the coronavirus. The only buyers of oil futures for that contract are entities that want to physically take the delivery like a refinery or an airline. But demand has dropped & storage tanks are filled, so they don't need it. Futures contracts trade by month with expiration dates. Toward the end of their expiration, speculators usually trade out of the contract & then buyers who will accept physical delivery of the commodity remain. Meanwhile, in another bearish sign, intl benchmark Brent crude traded 15.5% lower at $21.60 per barrel. Earlier, Brent fell to $18.10, its lowest level since 2001, before paring some of those losses.
Congress moved toward a 4th coronavirus relief bill expected to top $450B, as Senate Dem Leader Chuck Schumer said all major provisions were agreed, & that the Trump administration has signed off on a national testing strategy. "I believe we have a deal, and I believe that we will pass it this afternoon," Schumer said. He said the package would include more money for small businesses & hospitals as well as the testing strategy that will help states lift extensive stay-at-home orders & advisories intended to slow the spread of the potentially lethal respiratory disease. "We need a national strategy, as the governors have said, to get the kinds of testing that's done, to get the contact tracing, to make the tests free," Schumer said. He added that Pres Trump - who has talked about testing as largely a state responsibility - had agreed to this "and it will be in the proposal."
Coca-Cola (KO), a Dow stock & Dividend Aristocrat, reported lower revenue for the latest qtr, reflecting growing sales for the first 2 months of the year before the Covid-19 pandemic escalated & resulted in reduced travel, restaurant closures & sports cancellations outside of China. The beverage giant posted first-quarter sales of $8.6B, down 1% from a year earlier. Analysts were targeting sales of $8.3B. The company said organic revenue, which excludes the effect of currency swings, acquisitions & divestitures, was flat. For the qtr, EPS was 64¢ compared with 39¢ last year. Adjusted EPS was 51¢, ahead of the 44¢ expected. Sales volume has fallen about 25% globally since the beginning of Apr, led by a decline in the company's away-from-home channels, which represent about ½ of its revenue, as efforts to contain the pandemic intensified in Mar. The company witnessed pantry loading in certain markets, followed by normalized demand & an increase in e-commerce sales. Unit-case volume outside of China was growing 3% thru the end of Feb. Unit-case volume fell 1% for the qtr, with declines in the Asia Pacific region due to coronavirus offset growth in North America. Unit-case volume for its sparkling soft drinks, which include its namesake soda drink, Diet Coke, Fanta & Sprite, fell 2%, led by a decline in the Asia Pacific, particularly China. The stock fell 50¢.
If you would like to learn more about KO, click on this link:
club.ino.com/trend/analysis/stock/KO?a_aid=CD3289&a_bid=6ae5b6f7
Dreary days for stocks have now become routine. Congress is finally getting its act together to throw more money at the economy. Oil is experiencing one of its worst selloffs since Rockefeller started Standard Oil in the 19th century. And earnings season plods along with gloomy reports. The stock market continues overbought (shown below). The rebound for the Dow has been spectacular, while there has only been limited good news backing it up.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 3.91 | +41.54 | +110% |
| GC=F | Gold | 1,701.60 | -9.60 | -0.6% |
West Texas Intermediate crude futures for May pared losses to trade in positive territory, one day after plunging below zero for the first time in history. The contract expires today, which means that thin trading volume has contributed to the wild price action. The massive selling gripping the oil market is now spreading to more futures contracts, worrying investors about the deep economic damage being done by the coronavirus shutdowns. The contract for Jun, which is the more actively traded & therefore a better indication of how investors view the price of oil, slipped 24% to $15.56 per barrel. Earlier it had dipped below $15. The contract for Jul fell roughly 11% to $23.42. The May contract last traded at $1.30 per barrel after previously trading in negative territory, which means sellers would effectively pay buyers to take the oil off their hands. Yesterday it fell below zero for the first time in history. However, as contracts approach expiration, trading volume is typically thin. The front part of the oil futures ‘curve,’ which is the May contract that expires today, was hit the hardest since it applies to fuel that's set to be delivered while most of the country remains on lockdown due to the coronavirus. The only buyers of oil futures for that contract are entities that want to physically take the delivery like a refinery or an airline. But demand has dropped & storage tanks are filled, so they don't need it. Futures contracts trade by month with expiration dates. Toward the end of their expiration, speculators usually trade out of the contract & then buyers who will accept physical delivery of the commodity remain. Meanwhile, in another bearish sign, intl benchmark Brent crude traded 15.5% lower at $21.60 per barrel. Earlier, Brent fell to $18.10, its lowest level since 2001, before paring some of those losses.
Oil continues unprecedented sell-off
Congress moved toward a 4th coronavirus relief bill expected to top $450B, as Senate Dem Leader Chuck Schumer said all major provisions were agreed, & that the Trump administration has signed off on a national testing strategy. "I believe we have a deal, and I believe that we will pass it this afternoon," Schumer said. He said the package would include more money for small businesses & hospitals as well as the testing strategy that will help states lift extensive stay-at-home orders & advisories intended to slow the spread of the potentially lethal respiratory disease. "We need a national strategy, as the governors have said, to get the kinds of testing that's done, to get the contact tracing, to make the tests free," Schumer said. He added that Pres Trump - who has talked about testing as largely a state responsibility - had agreed to this "and it will be in the proposal."
Schumer believes coronavirus small business loan deal reached
Coca-Cola (KO), a Dow stock & Dividend Aristocrat, reported lower revenue for the latest qtr, reflecting growing sales for the first 2 months of the year before the Covid-19 pandemic escalated & resulted in reduced travel, restaurant closures & sports cancellations outside of China. The beverage giant posted first-quarter sales of $8.6B, down 1% from a year earlier. Analysts were targeting sales of $8.3B. The company said organic revenue, which excludes the effect of currency swings, acquisitions & divestitures, was flat. For the qtr, EPS was 64¢ compared with 39¢ last year. Adjusted EPS was 51¢, ahead of the 44¢ expected. Sales volume has fallen about 25% globally since the beginning of Apr, led by a decline in the company's away-from-home channels, which represent about ½ of its revenue, as efforts to contain the pandemic intensified in Mar. The company witnessed pantry loading in certain markets, followed by normalized demand & an increase in e-commerce sales. Unit-case volume outside of China was growing 3% thru the end of Feb. Unit-case volume fell 1% for the qtr, with declines in the Asia Pacific region due to coronavirus offset growth in North America. Unit-case volume for its sparkling soft drinks, which include its namesake soda drink, Diet Coke, Fanta & Sprite, fell 2%, led by a decline in the Asia Pacific, particularly China. The stock fell 50¢.
If you would like to learn more about KO, click on this link:
club.ino.com/trend/analysis/stock/KO?a_aid=CD3289&a_bid=6ae5b6f7
Coca-Cola sales slide as coronavirus bites restaurant revenue
Dreary days for stocks have now become routine. Congress is finally getting its act together to throw more money at the economy. Oil is experiencing one of its worst selloffs since Rockefeller started Standard Oil in the 19th century. And earnings season plods along with gloomy reports. The stock market continues overbought (shown below). The rebound for the Dow has been spectacular, while there has only been limited good news backing it up.
Dow Jones Industrials
No comments:
Post a Comment