Dow sank 328 (finishing above previous lows), decliners over advancers 3-1 & NAZ went up 38. The MLP index added 2+ to the 104s & the REIT index tumbled 13+ to the 332s. Junk bond funds drifted lower & Treasuries were weak. Oil was flattish in a very choppy session & gold rose 13 to 1766 for another 9 year high (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)
Parts of the US could reopen and get back to business as early as next month. Dr Anthony Fauci said that the economy in parts of the country could have a “rolling reentry” as early as next month, provided health authorities can quickly identify & isolate people who will inevitably be infected. New cases of the coronavirus are certain to arise when restrictions imposed to limit the spread of the virus are eased, said Fauci. He also said he “can't guarantee" that it will be safe for Americans to vote in person on Election Day, Nov 3. Rather than flipping a switch to reopen the entire country, Fauci said a gradual process will be required based on the status of the pandemic in various parts of the US & the availability of rapid, widespread testing. Once the number of people who are seriously ill sharply declines, officials can begin to “think about a gradual reentry of some sort of normality, some rolling reentry," Fauci added. In some places, he added, that might occur as soon as May. “We are hoping that, at the end of the month, we could look around and say, OK, is there any element here that we can safely and cautiously start pulling back on? If so, do it. If not, then just continue to hunker down," Fauci said. Whenever restrictions ease, Fauci said, “we know that there will be people who will be getting infected. I mean, that is just reality.“ Social distancing guidelines from Trump are set to expire Apr 30. Trump is eager to restart the economy, which has stalled because most Americans are under orders to “stay at home” to help slow the virus’ spread. But governors will have a lot to say about when to ease restrictions in their states, & the leaders of Maryland & New Jersey indicated that they are not likely to do so until widespread testing is available.
The energy industry could bounce back "very, very quickly" amid the coronavirus pandemic after the historic oil deal that will cut production by close to 20M barrels a day, Energy Secretary Dan Brouillette said. "The historic agreement that we saw over the weekend from OPEC and OPEC+ is roughly 10 million barrels, but that is in fact only half of the story," Brouillette said. "When you add up all of the production cuts around the world, we're going to be much closer to 20 million barrels per day coming off the market." "This was an extraordinarily complex deal that was struck by OPEC and OPEC+ members. We hope that we will see the return of the energy industry very, very quickly," he added. Pres Trump said today that "OPEC+ is looking to cut 20 Million Barrels a day, not the 10 Million that is generally being reported." Brouillette also touted increased American energy independence amid the falling oil prices. "The fact that we are able to produce the amounts that we are able to produce today place the United States of America, place this president in a position of strength in order to bring this deal together," he said.
The number of small business owners applying for aid thru the Paycheck Protection Program surged over the weekend, as they scramble to survive the economic calamity brought on by the coronavirus pandemic. As of today, banks have processed 880K loans worth more than $215B, according to a senior Small Business Administration official. More than 4500 lenders participated in the program. The $2.2T CARES Act established the $349B Paycheck Protection Program, which is designed to get cash in the hands of small businesses devastated by the coronavirus pandemic & incentivize them to keep staff on payroll, or rehire workers who have already been laid off. For the first week, the program was exclusively available to small business owners, but beginning Apr 10, it opened to self-employed individuals & independent contractors. If the current trend in demand continues -- one week ago, about $50B in loans had been processed; that jumped to $160B by Fri -- the program could be close to running out of money by Fri. Treasury Secretary Steve Mnuchin asked Congress Wed to approve an additional $250Bn to replenish the loan program. The next day, however, Senate Dems blocked an attempt by Majority Leader Mitch McConnell to unanimously pass the legislation, pushing for changes to the small business aid program & more emergency funding for hospitals and states. The Senate adjourned until Mon. Companies with no more than 500 employees may borrow up to 2.5 times their payroll (up to $10M), which can be used for payroll & other expenses, like insurance premiums, mortgages, rent or utilities thru Jun 30. The loans, which are guaranteed by the federal gov, will be fully forgiven if 75% of the money goes toward keeping workers employed, according to the SBA. National banks that are participating in the program have largely rebuffed potential applicants who do not have prior ties with the bank. Many owners have run into problems obtaining the loans: According to a study released by an industry trade group on Thurs, 70% of small business owners have applied for the loan -- but just 70% were successful. Time is imperative for owners. Nearly one in 4 small businesses has shut down temporarily in response to the crisis, while another 40% expect to do so within 2 weeks, according to a survey published by the MetLife & US Chamber of Commerce Small Business Index. If owners don't receive further support, about 43% have warned they have less than 6 months to a permanent shutdown. One in 10 say they have less than a month until a permanent shutdown is inevitable, the survey found.
Th coronavirus shock to the economy won't push the country into a damaging bout of deflation given the Federal Reserve's response and its power to do more, Fed vice chair Richard Clarida said. “Demand is impacted very adversely. On net it is disinflationary. I don’t think it is deflationary. I think we have the tools to keep the economy out of deflation,” Clarida said. The distinction is important. The Fed targets an inflation rate of 2%, & a period of disinflation — where prices are still rising but at a slower pace — means it is falling farther from that goal. But deflation refers to a more chronic problem where goods & services on average are actually getting cheaper, & has been associated with more dire economic episodes like the Great Depression. With prices falling, wages tend to follow, & households pull back on spending. Clarida noted that as concerns about the coronavirus intensified in Feb & Mar, analysts at first regarded it as a potential shock to the global supply chain because of its impact on Chinese manufacturing. That would likely cause prices to rise. Clarida said it has instead been a blow to demand which, while deep, is something he feels the Fed has the power to counter. “I always thought that if we got hit it would be a shock to aggregate demand, and that is what I think it is,” Clarida added. “We are trying to offset that” with programs that include lending to smaller businesses & state govs. The Fed has also cut interest rates to near zero, & any talk of an increase is “a long way down the road,” Clarida said.
The Federal Reserve is casting a broad net in its hunt for further problems it may need to address & is “going to be present and ready to act if that becomes necessary,” Atlanta Federal Reserve bank pres Raphael Bostic said. “We are trying as much as possible to monitor every market in the country,” Bostic added in an interview. Even after approving a broad set of lending & credit programs, “we are not just sitting on our hands.”
The Treasury Dept is sending a message to large companies weighing gov aid to weather the coronavirus pandemic: No free rides. Negotiations between airlines & the department over payroll grants have dragged on longer than expected after the Treasury Dept requested more information & proposed additional conditions for the aid, a hint of what companies could face as they seek gov assistance to blunt the impact of the virus & harsh measures like shelter-in-place orders aimed at slowing its spread. US passenger airline execs cheered when Congress passed a $2T coronavirus relief package that included $25B in airline payroll grants on the condition that they they don't furlough or cut the pay rates of their employees through Sep 30, as carriers face the deepest crisis in their history. But Steve Mnuchin's Treasury Dept has asked the country's largest airlines to pay back 30% of the grants for which they applied, essentially turning them into low-interest loans, according to people familiar with the matter. The grants would also come with equity warrants for 10% of the value of the loan. Talks continued over the weekend & deals could be reached early this week. Labor unions, some lawmakers & industry members have balked at additional conditions on the payroll grants, arguing they go against what was outlined in the aid package, that they could be too onerous for airlines to either accept or that they could leave carriers on shakier footing later on. “Direct Payroll Assistance funding in the form of grants only is considerably more effective for our employees rather than a hybrid combination of instruments,” said Airlines for America, a trade group that represents the country’s biggest airlines. “This federal relief is critical to getting our employees paid and preventing furloughs right now, especially as our country is experiencing historically high unemployment claims.”
Mnuchin flexes muscles on airline coronavirus aid — a taste of what other companies may face
Crude prices rose in choppy trading, a day after major oil producers reached a historic agreement to cut oil production, as analysts said the moves were “too little, too late” after weeks of a damaging price war between Saudi Arabia & Russia. After several days of intense negotiations, members of OPEC & allies (OPEC+) agreed uesterday to cut overall crude-oil production by 9.7M barrels a day starting on May 1 thru Jun 30 of this year. That total would drop to around 8M barrels a day from Jul 1 thru Dec. 31, followed by 6M barrels in cuts from Jan 1, 2021 to Apr 30, 2022. Analysts feared lack of a deal could have ended in a collapse of prices, but some see oil prices still under pressured, given demand has been crushed by coronavirus-driven economic shutdowns. The deal came after Pres Trump intervened to compensate what Mexico could not contribute to the proposed cuts. However, Trump tweeted “the number that OPEC+ is looking to cut is 20 Million Barrels per day, not the 10 Million that is generally reported.” Prince Abdulaziz bin Salman, Saudi Arabia's energy minister, said that the global oil supply cuts would amount to roughly 19.5M barrels per day, considering the OPEC+ output-cut deal, pledges by other Group of 20 nations & oil purchases into petroleum reserves. After an initial 4% surge that was followed by a tumble into negative territory, West Texas Intermediate (WTI) crude for May delivery was up 44¢ (1.9%) at $23.20 a barrel & Jun Brent crude, the global benchmark, was up 52¢ (1.7%) at $32 a barrel. Last week, WTI fell nearly 20%, while Brent ended the period down nearly 8%.
Oil higher in choppy trade after historic deal to cut output and end price war
Gold futures climbed to mark another finish at their highest price in more than 7 years, finding support as investors eyed losses in the stock market & weighed expectations for further moves by central banks & fiscal policy makers to boost the global economy. Gold for Jun climbed $8 (0.5%) to settle at $1761 an ounce. That was the highest finish for a most-active contract since Oct 2012. The metal had also marked a more than 7-year high on Thurs, even as stocks that day scored their biggest weekly advance since 1974. US financial markets were closed Fri for the Good Friday holiday. Gold is often seen as a haven asset, moving inversely to risky securities like stocks. But analysts said efforts by central banks & fiscal policy makers to backstop the global economy as the COVID-19 pandemic takes its toll should also continue to buoy the yellow metal.
Agreement on production cuts for oil was no help for markets as much of that story was already baked iinto the stock market. The Dow had one of its best recovery rallies in history during the last couple of weeks, but that was not meant to least. There is a lot of uncertainty about the success over the war with coronavirus & then how to move the economy forward. Enthusiasm that has been bringing buyers to stocks recently is fading.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Parts of the US could reopen and get back to business as early as next month. Dr Anthony Fauci said that the economy in parts of the country could have a “rolling reentry” as early as next month, provided health authorities can quickly identify & isolate people who will inevitably be infected. New cases of the coronavirus are certain to arise when restrictions imposed to limit the spread of the virus are eased, said Fauci. He also said he “can't guarantee" that it will be safe for Americans to vote in person on Election Day, Nov 3. Rather than flipping a switch to reopen the entire country, Fauci said a gradual process will be required based on the status of the pandemic in various parts of the US & the availability of rapid, widespread testing. Once the number of people who are seriously ill sharply declines, officials can begin to “think about a gradual reentry of some sort of normality, some rolling reentry," Fauci added. In some places, he added, that might occur as soon as May. “We are hoping that, at the end of the month, we could look around and say, OK, is there any element here that we can safely and cautiously start pulling back on? If so, do it. If not, then just continue to hunker down," Fauci said. Whenever restrictions ease, Fauci said, “we know that there will be people who will be getting infected. I mean, that is just reality.“ Social distancing guidelines from Trump are set to expire Apr 30. Trump is eager to restart the economy, which has stalled because most Americans are under orders to “stay at home” to help slow the virus’ spread. But governors will have a lot to say about when to ease restrictions in their states, & the leaders of Maryland & New Jersey indicated that they are not likely to do so until widespread testing is available.
Fauci: 'Rolling re-entry' possible in May
The energy industry could bounce back "very, very quickly" amid the coronavirus pandemic after the historic oil deal that will cut production by close to 20M barrels a day, Energy Secretary Dan Brouillette said. "The historic agreement that we saw over the weekend from OPEC and OPEC+ is roughly 10 million barrels, but that is in fact only half of the story," Brouillette said. "When you add up all of the production cuts around the world, we're going to be much closer to 20 million barrels per day coming off the market." "This was an extraordinarily complex deal that was struck by OPEC and OPEC+ members. We hope that we will see the return of the energy industry very, very quickly," he added. Pres Trump said today that "OPEC+ is looking to cut 20 Million Barrels a day, not the 10 Million that is generally being reported." Brouillette also touted increased American energy independence amid the falling oil prices. "The fact that we are able to produce the amounts that we are able to produce today place the United States of America, place this president in a position of strength in order to bring this deal together," he said.
Energy secretary: Oil industry could bounce back 'very quickly' after deal
The number of small business owners applying for aid thru the Paycheck Protection Program surged over the weekend, as they scramble to survive the economic calamity brought on by the coronavirus pandemic. As of today, banks have processed 880K loans worth more than $215B, according to a senior Small Business Administration official. More than 4500 lenders participated in the program. The $2.2T CARES Act established the $349B Paycheck Protection Program, which is designed to get cash in the hands of small businesses devastated by the coronavirus pandemic & incentivize them to keep staff on payroll, or rehire workers who have already been laid off. For the first week, the program was exclusively available to small business owners, but beginning Apr 10, it opened to self-employed individuals & independent contractors. If the current trend in demand continues -- one week ago, about $50B in loans had been processed; that jumped to $160B by Fri -- the program could be close to running out of money by Fri. Treasury Secretary Steve Mnuchin asked Congress Wed to approve an additional $250Bn to replenish the loan program. The next day, however, Senate Dems blocked an attempt by Majority Leader Mitch McConnell to unanimously pass the legislation, pushing for changes to the small business aid program & more emergency funding for hospitals and states. The Senate adjourned until Mon. Companies with no more than 500 employees may borrow up to 2.5 times their payroll (up to $10M), which can be used for payroll & other expenses, like insurance premiums, mortgages, rent or utilities thru Jun 30. The loans, which are guaranteed by the federal gov, will be fully forgiven if 75% of the money goes toward keeping workers employed, according to the SBA. National banks that are participating in the program have largely rebuffed potential applicants who do not have prior ties with the bank. Many owners have run into problems obtaining the loans: According to a study released by an industry trade group on Thurs, 70% of small business owners have applied for the loan -- but just 70% were successful. Time is imperative for owners. Nearly one in 4 small businesses has shut down temporarily in response to the crisis, while another 40% expect to do so within 2 weeks, according to a survey published by the MetLife & US Chamber of Commerce Small Business Index. If owners don't receive further support, about 43% have warned they have less than 6 months to a permanent shutdown. One in 10 say they have less than a month until a permanent shutdown is inevitable, the survey found.
Small business loan applications jump with more than $215B approved
Th coronavirus shock to the economy won't push the country into a damaging bout of deflation given the Federal Reserve's response and its power to do more, Fed vice chair Richard Clarida said. “Demand is impacted very adversely. On net it is disinflationary. I don’t think it is deflationary. I think we have the tools to keep the economy out of deflation,” Clarida said. The distinction is important. The Fed targets an inflation rate of 2%, & a period of disinflation — where prices are still rising but at a slower pace — means it is falling farther from that goal. But deflation refers to a more chronic problem where goods & services on average are actually getting cheaper, & has been associated with more dire economic episodes like the Great Depression. With prices falling, wages tend to follow, & households pull back on spending. Clarida noted that as concerns about the coronavirus intensified in Feb & Mar, analysts at first regarded it as a potential shock to the global supply chain because of its impact on Chinese manufacturing. That would likely cause prices to rise. Clarida said it has instead been a blow to demand which, while deep, is something he feels the Fed has the power to counter. “I always thought that if we got hit it would be a shock to aggregate demand, and that is what I think it is,” Clarida added. “We are trying to offset that” with programs that include lending to smaller businesses & state govs. The Fed has also cut interest rates to near zero, & any talk of an increase is “a long way down the road,” Clarida said.
Fed's vice chair says central bank has tools to avoid deflation
The Federal Reserve is casting a broad net in its hunt for further problems it may need to address & is “going to be present and ready to act if that becomes necessary,” Atlanta Federal Reserve bank pres Raphael Bostic said. “We are trying as much as possible to monitor every market in the country,” Bostic added in an interview. Even after approving a broad set of lending & credit programs, “we are not just sitting on our hands.”
Fed's Bostic: Central bank 'ready to act' on coronavirus help if more is needed
The Treasury Dept is sending a message to large companies weighing gov aid to weather the coronavirus pandemic: No free rides. Negotiations between airlines & the department over payroll grants have dragged on longer than expected after the Treasury Dept requested more information & proposed additional conditions for the aid, a hint of what companies could face as they seek gov assistance to blunt the impact of the virus & harsh measures like shelter-in-place orders aimed at slowing its spread. US passenger airline execs cheered when Congress passed a $2T coronavirus relief package that included $25B in airline payroll grants on the condition that they they don't furlough or cut the pay rates of their employees through Sep 30, as carriers face the deepest crisis in their history. But Steve Mnuchin's Treasury Dept has asked the country's largest airlines to pay back 30% of the grants for which they applied, essentially turning them into low-interest loans, according to people familiar with the matter. The grants would also come with equity warrants for 10% of the value of the loan. Talks continued over the weekend & deals could be reached early this week. Labor unions, some lawmakers & industry members have balked at additional conditions on the payroll grants, arguing they go against what was outlined in the aid package, that they could be too onerous for airlines to either accept or that they could leave carriers on shakier footing later on. “Direct Payroll Assistance funding in the form of grants only is considerably more effective for our employees rather than a hybrid combination of instruments,” said Airlines for America, a trade group that represents the country’s biggest airlines. “This federal relief is critical to getting our employees paid and preventing furloughs right now, especially as our country is experiencing historically high unemployment claims.”
Mnuchin flexes muscles on airline coronavirus aid — a taste of what other companies may face
Crude prices rose in choppy trading, a day after major oil producers reached a historic agreement to cut oil production, as analysts said the moves were “too little, too late” after weeks of a damaging price war between Saudi Arabia & Russia. After several days of intense negotiations, members of OPEC & allies (OPEC+) agreed uesterday to cut overall crude-oil production by 9.7M barrels a day starting on May 1 thru Jun 30 of this year. That total would drop to around 8M barrels a day from Jul 1 thru Dec. 31, followed by 6M barrels in cuts from Jan 1, 2021 to Apr 30, 2022. Analysts feared lack of a deal could have ended in a collapse of prices, but some see oil prices still under pressured, given demand has been crushed by coronavirus-driven economic shutdowns. The deal came after Pres Trump intervened to compensate what Mexico could not contribute to the proposed cuts. However, Trump tweeted “the number that OPEC+ is looking to cut is 20 Million Barrels per day, not the 10 Million that is generally reported.” Prince Abdulaziz bin Salman, Saudi Arabia's energy minister, said that the global oil supply cuts would amount to roughly 19.5M barrels per day, considering the OPEC+ output-cut deal, pledges by other Group of 20 nations & oil purchases into petroleum reserves. After an initial 4% surge that was followed by a tumble into negative territory, West Texas Intermediate (WTI) crude for May delivery was up 44¢ (1.9%) at $23.20 a barrel & Jun Brent crude, the global benchmark, was up 52¢ (1.7%) at $32 a barrel. Last week, WTI fell nearly 20%, while Brent ended the period down nearly 8%.
Oil higher in choppy trade after historic deal to cut output and end price war
Gold futures climbed to mark another finish at their highest price in more than 7 years, finding support as investors eyed losses in the stock market & weighed expectations for further moves by central banks & fiscal policy makers to boost the global economy. Gold for Jun climbed $8 (0.5%) to settle at $1761 an ounce. That was the highest finish for a most-active contract since Oct 2012. The metal had also marked a more than 7-year high on Thurs, even as stocks that day scored their biggest weekly advance since 1974. US financial markets were closed Fri for the Good Friday holiday. Gold is often seen as a haven asset, moving inversely to risky securities like stocks. But analysts said efforts by central banks & fiscal policy makers to backstop the global economy as the COVID-19 pandemic takes its toll should also continue to buoy the yellow metal.
Gold holds ground at highest price in more than 7 years
Agreement on production cuts for oil was no help for markets as much of that story was already baked iinto the stock market. The Dow had one of its best recovery rallies in history during the last couple of weeks, but that was not meant to least. There is a lot of uncertainty about the success over the war with coronavirus & then how to move the economy forward. Enthusiasm that has been bringing buyers to stocks recently is fading.
Dow Jones Industrials
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