Dow plunged 629 (around session lows), decliners over advancers a huge 13-1 & NAZ sank 137 The MLP index fell 5+ to the 103s & the REIT index tumbled 15+ to 327. Junk bond funds were sold along with stocks & Treasuries sank in price. Oil dropped below 20 (more below) & gold retreated 20 to 1748.
AMJ (Alerian MLP Index tracking fund)
American industry collapsed in Mar as the pandemic wreaked havoc on the US economy. Manufacturing & overall industrial production posted the biggest declines since the US demobilized after World War II. The Federal Reserve reported that manufacturing output dropped 6.3% last month, led by plunging production at auto factories that have entirely shut down. Overall, industrial production, which includes factories, utilities & mines, plummeted 5.4%. The declines were the biggest since 1946 & far worse than what had been expected. Production of autos & auto parts went into freefall, dropping 28%.
The historic oil output cuts agreed to by the world's largest producers are bigger than what is being reported, according to Saudi Arabia's energy minister. Prince Abdulaziz Bin Salman said the agreement will reduce the world's output by 20M barrels per day, more than double the 9.7M that has been reported. The prince’s comments confirm what Pres Trump said on Mon. The production cuts amount to “20 million” barrels per day, Prince Abdulaziz said, adding that he is “very grateful for the work that the president did, the secretary for energy did, and to the people around the president. They were extremely helpful.” The output cut is aimed at reducing a global supply glut that had been building even before a price war broke out between Saudi Arabia & Russia & global demand was crushed due to “stay-at-home” orders in response to the COVID-19 pandemic. The disease & the worldwide economic shutdowns will cause world demand to drop by the most on record, according to a report by the Intl Energy Agency. The 9.3M barrels a day of demand that has been removed from the market equates to about a decade's worth of growth. That demand destruction has been a factor in Brent crude prices falling by 13% in the 2 trading days following the announcement of the deal. The intl benchmark fell another 3.6% to $28.55 a barrel today & has lost about 60% of its value this year. While Saudi Arabia would still turn a profit at that level under its reported breakeven of $10 a barrel, the kingdom's budget was set with a price of $70. Prince Abdulaziz said the nation has the “ability to reconfigure" & noted that all “producers are suffering,” which is why a deal was made. While a risk remains that Russia or other countries may not hold up their end of the bargain, Prince Abdulaziz brushed those possibilities aside, saying that he “has no reason not to believe them.” “We are all in dire need of maintaining our commitment,” he said. “None of us will gain if we don’t fulfill our commitment.”
Citigroup (C) reported a 46% plunge in quarterly profits as the bank set aside nearly $5B to prepare for an expected flood of defaults on loans due to a virtual halt in economic activity caused by the coronavirus pandemic. The lender, the most global of the US banks, said net income fell to $2.5B ($1.05 per share) in Q1 from $4.7B ($1.87 per share) a year earlier. EPS was also boosted by a 10% reduction in shares outstanding. Analysts had expected EPS of $1.04. It was not immediately clear whether those estimates were comparable to the reported results. The stock dropped 1.83.
If you would like to learn more about Citi, click on this link:
club.ino.com/trend/analysis/stock/C?a_aid=CD3289&a_bid=6ae5b6f7
This is turning out to be another dreary day for investors. The economic news from the Fed was dreadful, although it should have come as no surprise. The US economy, as is the case for most other economies, is in a state of depression. Period!! And it's not going to get significantly better any time soon. Early earnings reports from banks discuss how they are expecting loan losses to be enormous. The oil industry has to deal with its own depression, caused largely by a drastic cut in demand for oil & energy products. Tomorrow the weekly claims for unemployment benefits will be reported & that will not be pretty. The short term outlook for stocks is for more selling.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 19.94 | -0.17 | -0.9% |
| GC=F | Gold | 1,747.30 | -21.60 | -1.2% |
American industry collapsed in Mar as the pandemic wreaked havoc on the US economy. Manufacturing & overall industrial production posted the biggest declines since the US demobilized after World War II. The Federal Reserve reported that manufacturing output dropped 6.3% last month, led by plunging production at auto factories that have entirely shut down. Overall, industrial production, which includes factories, utilities & mines, plummeted 5.4%. The declines were the biggest since 1946 & far worse than what had been expected. Production of autos & auto parts went into freefall, dropping 28%.
Industrial production nears WWII levels
The historic oil output cuts agreed to by the world's largest producers are bigger than what is being reported, according to Saudi Arabia's energy minister. Prince Abdulaziz Bin Salman said the agreement will reduce the world's output by 20M barrels per day, more than double the 9.7M that has been reported. The prince’s comments confirm what Pres Trump said on Mon. The production cuts amount to “20 million” barrels per day, Prince Abdulaziz said, adding that he is “very grateful for the work that the president did, the secretary for energy did, and to the people around the president. They were extremely helpful.” The output cut is aimed at reducing a global supply glut that had been building even before a price war broke out between Saudi Arabia & Russia & global demand was crushed due to “stay-at-home” orders in response to the COVID-19 pandemic. The disease & the worldwide economic shutdowns will cause world demand to drop by the most on record, according to a report by the Intl Energy Agency. The 9.3M barrels a day of demand that has been removed from the market equates to about a decade's worth of growth. That demand destruction has been a factor in Brent crude prices falling by 13% in the 2 trading days following the announcement of the deal. The intl benchmark fell another 3.6% to $28.55 a barrel today & has lost about 60% of its value this year. While Saudi Arabia would still turn a profit at that level under its reported breakeven of $10 a barrel, the kingdom's budget was set with a price of $70. Prince Abdulaziz said the nation has the “ability to reconfigure" & noted that all “producers are suffering,” which is why a deal was made. While a risk remains that Russia or other countries may not hold up their end of the bargain, Prince Abdulaziz brushed those possibilities aside, saying that he “has no reason not to believe them.” “We are all in dire need of maintaining our commitment,” he said. “None of us will gain if we don’t fulfill our commitment.”
Saudi minister: Oil cuts bigger than reports
Citigroup (C) reported a 46% plunge in quarterly profits as the bank set aside nearly $5B to prepare for an expected flood of defaults on loans due to a virtual halt in economic activity caused by the coronavirus pandemic. The lender, the most global of the US banks, said net income fell to $2.5B ($1.05 per share) in Q1 from $4.7B ($1.87 per share) a year earlier. EPS was also boosted by a 10% reduction in shares outstanding. Analysts had expected EPS of $1.04. It was not immediately clear whether those estimates were comparable to the reported results. The stock dropped 1.83.
If you would like to learn more about Citi, click on this link:
club.ino.com/trend/analysis/stock/C?a_aid=CD3289&a_bid=6ae5b6f7
Citi profit slides; $5B spike in loan reserves
This is turning out to be another dreary day for investors. The economic news from the Fed was dreadful, although it should have come as no surprise. The US economy, as is the case for most other economies, is in a state of depression. Period!! And it's not going to get significantly better any time soon. Early earnings reports from banks discuss how they are expecting loan losses to be enormous. The oil industry has to deal with its own depression, caused largely by a drastic cut in demand for oil & energy products. Tomorrow the weekly claims for unemployment benefits will be reported & that will not be pretty. The short term outlook for stocks is for more selling.
Dow Jones Industrials
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