Dow rose 259, advancers over decliners 3-1 & the NAZ went up 103. The MLP index was fractionally lower in the 122s & the REIT index gained 6+ to 327. Junk bond funds crawled higher after a tough week & Treasuries were sold. Oil crude dropped a huge 4+ to the 12s (more below) & gold fell 8 to 1727.
AMJ (Alerian MLP Index tracking fund)
Oil prices plunged as mounting global supplies have storage capacity nearing the limit due to the Covid-19 pandemic. West Texas Intermediate crude oil futures for Jun were down 29% at $12.10 a barrel while Brent crude oil futures fell 7.6% to $19.81. Stay-at-home orders issued by gov officials worldwide have removed about 30M barrels of oil demand from the market each day as nonessential travel has ground to a halt. The demand shortfall comes as a global supply glut has been aggravated by a price war between Russia & Saudi Arabia. A large amount of oil is available now with few buyers, & storage facilities are filling up fast. WTI, the US benchmark, posted its largest weekly decline last week, falling 32%, as prices for the May contract dipped into negative territory for the first time on record. Brent, the intl standard, lost 24%, posting its sharpest weekly drop in 5 weeks. The world' largest oil producers at a meeting earlier this month agreed to reduce global production by 20M barrels per day beginning May 1. OPEC & its allies will reduce daily production by 9.7M barrels while other large producers including the US & Canada will deliver cuts mostly as a result of lower prices. Storage capacities at Cushing, Oklahoma, a key US oil hub, swelled to 59.7M barrels last week, up 8.7% from the week prior, according to the Energy Information Administration. The storage facility tops out at about 76M barrels.
Boeing (BA), a Dow stock, CEO Dave Calhoun told said that air travel demand won't recover for 2 or 3 years, another challenge for the manufacturer that was reeling from the 737 Max grounding before the coronavirus pandemic. Investors approved the company's board. BA is scrambling to cut costs to meet the weak demand for new jetliners. Air travel in the US is about 5% of what it was a year ago & airlines have parked more than a 1/3 of the country's fleet & some are planning to defer orders of new planes. “When it does [recover], the commercial market will be smaller,” Calhoun said. BA is scheduled to report Q1 results before the market opens on Wed. The stock dropped 1.01.
If you would like to learn more about BA, click on this link:
club.ino.com/trend/analysis/stock/BA?a_aid=CD3289&a_bid=6ae5b6f7
Boeing CEO says air travel could take two to three years to recover; board wins approval
General Motors (GM) said it has suspended its quarterly cash div & share-buyback program as it seeks to conserve cash amid the coronavirus pandemic. The auto maker also said it extended $3.6M under its 3-year revolving credit agreement to Apr 2022. The company previously extended its $2B 364-day agreement to Apr 2021. GM also said it would still reinvest pretax returns equal to or more than 20% into its business & focus on maintaining an investment-grade balance sheet. Its capital allocation framework calls for returning capital to shareholders after those 2 goals are met.
Major car companies have reported a drop in sales for the first 3 months of the year as the pandemic spread across continents. GM earlier this month reported a 7% decline in US sales for Q1, saying strong results in Jan & Feb were more than offset by the effect of the health crisis in Mar, when Covid-19 cases in the US shot up & shelter-in-place measures escalated. The auto industry has stepped up to convert plants into medical-supply factories as US hospitals face shortages. GM earlier this month said it was making 30K ventilators for the national stockpile in a $489M contract with the Dept of Health & Human Services, while Ford (F) said it was working to make 50K ventilators by early Jul. The stock dropped 25¢.
If you would like to learn more about BA, click on this link:
club.ino.com/trend/analysis/stock/BA?a_aid=CD3289&a_bid=6ae5b6f7
After a down week, buyers returned & the buying has been aggressive taking the averages straight up so far. However opening the economy is hardly news &, as expected, it will go slowly. That means one step at a time. And currently it only affects a few states. Meanwhile the huge oil market is a disaster & that affects all businesses. Let's see how long this rally holds.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 12.50 | -4.44 | -26.2% |
| GC=F | Gold | 1,723.20 | -12.40 | -0.7% |
Oil prices plunged as mounting global supplies have storage capacity nearing the limit due to the Covid-19 pandemic. West Texas Intermediate crude oil futures for Jun were down 29% at $12.10 a barrel while Brent crude oil futures fell 7.6% to $19.81. Stay-at-home orders issued by gov officials worldwide have removed about 30M barrels of oil demand from the market each day as nonessential travel has ground to a halt. The demand shortfall comes as a global supply glut has been aggravated by a price war between Russia & Saudi Arabia. A large amount of oil is available now with few buyers, & storage facilities are filling up fast. WTI, the US benchmark, posted its largest weekly decline last week, falling 32%, as prices for the May contract dipped into negative territory for the first time on record. Brent, the intl standard, lost 24%, posting its sharpest weekly drop in 5 weeks. The world' largest oil producers at a meeting earlier this month agreed to reduce global production by 20M barrels per day beginning May 1. OPEC & its allies will reduce daily production by 9.7M barrels while other large producers including the US & Canada will deliver cuts mostly as a result of lower prices. Storage capacities at Cushing, Oklahoma, a key US oil hub, swelled to 59.7M barrels last week, up 8.7% from the week prior, according to the Energy Information Administration. The storage facility tops out at about 76M barrels.
Oil prices tank as mounting supply has storage capacity nearing limit
Boeing (BA), a Dow stock, CEO Dave Calhoun told said that air travel demand won't recover for 2 or 3 years, another challenge for the manufacturer that was reeling from the 737 Max grounding before the coronavirus pandemic. Investors approved the company's board. BA is scrambling to cut costs to meet the weak demand for new jetliners. Air travel in the US is about 5% of what it was a year ago & airlines have parked more than a 1/3 of the country's fleet & some are planning to defer orders of new planes. “When it does [recover], the commercial market will be smaller,” Calhoun said. BA is scheduled to report Q1 results before the market opens on Wed. The stock dropped 1.01.
If you would like to learn more about BA, click on this link:
club.ino.com/trend/analysis/stock/BA?a_aid=CD3289&a_bid=6ae5b6f7
Boeing CEO says air travel could take two to three years to recover; board wins approval
General Motors (GM) said it has suspended its quarterly cash div & share-buyback program as it seeks to conserve cash amid the coronavirus pandemic. The auto maker also said it extended $3.6M under its 3-year revolving credit agreement to Apr 2022. The company previously extended its $2B 364-day agreement to Apr 2021. GM also said it would still reinvest pretax returns equal to or more than 20% into its business & focus on maintaining an investment-grade balance sheet. Its capital allocation framework calls for returning capital to shareholders after those 2 goals are met.
Major car companies have reported a drop in sales for the first 3 months of the year as the pandemic spread across continents. GM earlier this month reported a 7% decline in US sales for Q1, saying strong results in Jan & Feb were more than offset by the effect of the health crisis in Mar, when Covid-19 cases in the US shot up & shelter-in-place measures escalated. The auto industry has stepped up to convert plants into medical-supply factories as US hospitals face shortages. GM earlier this month said it was making 30K ventilators for the national stockpile in a $489M contract with the Dept of Health & Human Services, while Ford (F) said it was working to make 50K ventilators by early Jul. The stock dropped 25¢.
If you would like to learn more about BA, click on this link:
club.ino.com/trend/analysis/stock/BA?a_aid=CD3289&a_bid=6ae5b6f7
GM suspends dividends, share repurchases in coronavirus pandemic
After a down week, buyers returned & the buying has been aggressive taking the averages straight up so far. However opening the economy is hardly news &, as expected, it will go slowly. That means one step at a time. And currently it only affects a few states. Meanwhile the huge oil market is a disaster & that affects all businesses. Let's see how long this rally holds.
Dow Jones Industrials
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