Dow sank 445, decliners over advancers 5-1 & NAZ dropped 122. The MLP index fell 3 to the 105s & the REIT index gave back 14+ to 328. Junk bond funds declined in price & Treasuries were heavily sold. Oil closed a little above 20 after dipping into the 19s & gold dropped 23 to 1745 (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)
Bank of America (BAC) joined rivals in strengthening its buffer against coronavirus-related costs, setting aside an additional $3.6B to cover delinquent loans. The buildout in reserves helped drag net income down 45% to $4B (40¢ a share) the bank. The lender's profitability despite the reserve increase shows CEO Brian Moynihan's success in positioning the bank to be a "source of strength" as gov measures intended to limit the COVID-19 pandemic shutter swaths of the US economy & send unemployment soaring, execs said. That security is a sharp turnaround from the 2008 financial crisis, when the acquisitions of subprime lender Countrywide Financial & investment Bank Merrill Lynch under Moynihan's predecessor, Ken Lewis, forced the company to take a $45B bailout. "Ten years ago, we set out to transform our business and operate under the principles of responsible growth so we would be a source of strength in the next crisis," CFO Paul Donofrio said. "Our results this quarter reflect our progress." The bank ended Q1 with more liquidity than when it began, Moynihan noted. BAC has received nearly 1M requests for help so far as the economic shutdown left small businesses & consumers alike struggling to cover rent & mortgages & has committed $100M to aid local communities, he added. "We are taking extraordinary steps to support our employees, clients and communities during this humanitarian crisis," Moynihan continued. The stock dropped 1.52.
If you would like to learn more about BAC, click on this link:
club.ino.com/trend/analysis/stock/BAC?a_aid=CD3289&a_bid=6ae5b6f7
Economic activity has showed a deep decline due to measures taken during the coronavirus scare, with leisure & hospitality as well as retail the hardest-hit so far, according to the Federal Reserve's latest Beige Book report. The report released also said most areas saw manufacturing declines that varied among industries. Food & medical product producers saw strong demand but faced obstacles in production & supply chains. “Economic activity contracted sharply and abruptly across all regions in the United States as a result of the COVID-19 pandemic,” the report said. “All Districts reported highly uncertain outlooks among business contacts, with most expecting conditions to worsen in the next several months.” Released periodically thru the year, the Beige Book surveys the Fed's 12 districts for activity across sectors. On employment, business contacts said cuts “were widespread, including the manufacturing and energy sectors.” While many said they hoped to reverse the reductions once activity resumed, they largely said more furloughs were likely in the near term. Though no district reported upward pressure on wages, some noted that grocery workers were getting temporary raises as appreciation for doing hazardous work. The downward push on wages came amid a similar decrease for prices overall, particularly in the energy sector. The report comes the same day as historic declines were reported on both retail sales & New York-area manufacturing. The national economy has been brought to a standstill due to social distancing measures aimed at stemming the coronavirus spread.
Fed Beige Book says economy contracted ‘sharply and abruptly’ due to coronavirus
Much-needed small business aid is beginning to trickle out & more is expected in the weeks to come as banks start to disburse the rescue funds to Main Street. But the first-come, first-serve Payroll Protection Program of $349B in aid may be nearing a ceiling for loan commitments, with more than 1.3M loans given approval at a value of more than $296B, according to the Small Business Administration. The program could reach its funding limit by the end of today, according to a source familiar with the matter. The SBA & Treasury Dept have yet to release any formal statistics on total loan disbursements from banks to small business owners, with one senior administration official saying the information is not yet available, despite multiple requests. The SBA did release data showing the average loan size is just under $240K. Business owners that have received loan approval numbers should start to get funds soon, as Treasury guidance states that “the lender must make the first disbursement of the loan no later than ten calendar days from the date of loan approval.” Several big banks reporting earnings this week offered a look into the amount of loans going out the door, with Wells Fargo (WFC) saying it had received 370K indications of interest from customers thru Apr 10. JPMorgan (JPM), a Dow stock, as of yesterday had 300K applications in varying stages for $37B in loans, with $9.3B already into the hands of small business owners.
Small businesses begin getting their rescue funds as program nears funding limit
The global economic downturn has been so severe that already ½ of the world has asked the IMF for a bailout, the organization’s chief said. “This is an emergency like no other. It is not because of bad governors or mistakes,” Kristalina Georgieva said. “For that reason, we are providing funding very quickly.” “We are asking for one thing only: Please pay your doctors and nurses, make sure that your health [care] systems are functioning, and that vulnerable people and first responders are protected,” Georgieva said. Georgieva comments came after the IMF said yesterday it expects the global economy to contract by 3% this year, adding the world could see a 1930′s style recession. The fund had forecast a 3.3% economic expansion for 2020 in Jan. Georgieva noted the global economy could expand by 5.8% in 2021 if the virus is contained & new cases start to recede. However, she added the total global economic output would be less than in 2019 even with such a jump. Economic output could also be worse if the virus takes a “double trip” around the world. “It’s the first time in the history of the IMF that epidemiologists are as important as macro economists for our projections,” said Georgieva. “We are really hoping our scientists will not disappoint us.” More than 2M coronavirus cases have been confirmed globally, according to Johns Hopkins University. In the US alone, over 600K cases have been confirmed.
Half of the world has asked the IMF for a bailout, chief says
A crucial indicator of homebuilder sentiment just suffered its biggest monthly drop in the index’s 35-year history as the coronavirus pandemic hammered the American economy. Builder confidence in the market for single-family homes plunged 42 points to a reading of 30 in Apr, the lowest point since 2012, according to the latest National Association of Homebuilders/Wells Fargo Housing Market Index (NAHB). The survey dates to 1985. The reading was expected to drop to 55. Anything above 50 is considered positive. The last negative reading was in 2014. This month's survey was conducted from Apr 1-13, after Ms of Americans had been issued orders to stay home to stem the spread of the virus, prompting historic waves of business closures, layoffs & furloughs. “This unprecedented drop in builder confidence is due exclusively to the coronavirus outbreak across the nation, as unemployment has skyrocketed and gaps in the supply chain have hampered construction activities,” said NAHB Chair Dean Mon. Of the index's 3 components, current sales conditions dropped 43 points to 36, sales expectations in the next 6 months fell 39 points to 36, & buyer traffic decreased 43 points to 13. Homebuilding had been strengthening significantly coming into 2020. According to the US Census, new home sales in Mar hit the highest level since 2007, when the subprime mortgage crisis started to take hold. Construction was deemed an essential business by the federal gov during the coronavirus pandemic, although certain states — such as New York, Pennsylvania, New Jersey, Washington, Michigan & Vermont — have shut down most operations. “To show how hard and fast this outbreak has hit the housing sector, a recent poll of our members reveals that 96% reported that virus mitigation efforts were hurting buyer traffic,” said Robert Dietz, NAHB’s chief economist. “While the virus is severely disrupting residential construction and the overall economy, the need and demand for housing remains acute.” “As social distancing and other mitigation efforts show signs of easing this health crisis, we expect that housing will play its traditional role of helping to lead the economy out of a recession later in 2020,” Dietz added.
Homebuilder confidence index takes biggest monthly dive ever as coronavirus slams economy
Gold futures ended at their lowest in a week, snapping a multiday climb that had lifted prices for the metal to a more than 7-year high a day earlier. The sharp pullback in bullion prices came as the $ was firmly higher, providing some resistance to the asset's recent climb toward an all-time high. Gold for Jun fell a huge $28 (1.6%) to settle at $1740 an ounce, marking the lowest finish for most-active contract in a week. Prices marked a 4th straight session climb on yesterday to settle at the highest since 2012. Investors digested a slate of US economic reports, including the NY Fed's Empire State business conditions index, which plummeted to -78.2 in Apr, marking the lowest reading on record. And a reading on retail sales saw a record 8.7% slump in sales at US retailers. Gold largely maintained losses after that downbeat data. Meanwhile, the IMF said we may see the worst year in modern history for oil markets.
Gold pulls back from highest level since 2012 to end at lowest in a week
US benchmark oil futures settled at their lowest since 2002 on the back of a grim forecast for a record decline in global oil demand this year and a 12th consecutive weekly rise in US crude stockpiles. West Texas Intermediate crude for May declined 24¢ (1.2%) to settle at $19.87 a barrel, after trading as high as $20.89. Front-month contract prices finished at their lowest since 2002. Jun Brent crude settled down $1.91 (6.6%) to $27.69 a barrel. Prices logged the lowest settlement in 2 weeks. The IMF warned of a record drop in crude demand this year due to the COVID-19 pandemic, which has forced countries around the world to close their economies. The agency estimated a drop in demand of 9.3M barrels a day this year, equivalent to a decade's worth of growth. In the near term, demand in what the agency is referring to as “Black April” for the energy market, is forecast to drop to its lowest since 1995. The market also digested US gov data that showed domestic crude inventories posted their largest weekly climb on record. Oil inventories are now above 500M barrels for the first time since 2017. The Energy Information Administration reported a rise of 19.2M barrels in domestic crude supplies for the week ended Apr 10. The forecast called for a rise of 10.1M barrels. The American Petroleum Institute on yesterday reported a climb of 13.1M barrels, according to sources.
U.S. oil prices shake off losses after drop to lowest levels since 2002
The sellers were in charge all day, but the Dow finished about 200 above session lows. It's difficult to call that a victory for the bulls. Macro economic news keeps coming & none of it is cheery. The big banks are preparing for huge loan losses, about what is being expected. There are numerous requests to the World Bank for bailouts by countries. Enormous changes are coming & many of them can not be imagined. The Dow is about 5K above its recent lows while gold is at levels not seen in almost a decade & not that far from its record levels when it was closing in on 2K. Trading tomorrow will be greeted by the weekly report on jobless claims. Ugghh!!
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Bank of America (BAC) joined rivals in strengthening its buffer against coronavirus-related costs, setting aside an additional $3.6B to cover delinquent loans. The buildout in reserves helped drag net income down 45% to $4B (40¢ a share) the bank. The lender's profitability despite the reserve increase shows CEO Brian Moynihan's success in positioning the bank to be a "source of strength" as gov measures intended to limit the COVID-19 pandemic shutter swaths of the US economy & send unemployment soaring, execs said. That security is a sharp turnaround from the 2008 financial crisis, when the acquisitions of subprime lender Countrywide Financial & investment Bank Merrill Lynch under Moynihan's predecessor, Ken Lewis, forced the company to take a $45B bailout. "Ten years ago, we set out to transform our business and operate under the principles of responsible growth so we would be a source of strength in the next crisis," CFO Paul Donofrio said. "Our results this quarter reflect our progress." The bank ended Q1 with more liquidity than when it began, Moynihan noted. BAC has received nearly 1M requests for help so far as the economic shutdown left small businesses & consumers alike struggling to cover rent & mortgages & has committed $100M to aid local communities, he added. "We are taking extraordinary steps to support our employees, clients and communities during this humanitarian crisis," Moynihan continued. The stock dropped 1.52.
If you would like to learn more about BAC, click on this link:
club.ino.com/trend/analysis/stock/BAC?a_aid=CD3289&a_bid=6ae5b6f7
Bank of America joins rivals with $3.6B buffer from coronavirus loan defaults
Economic activity has showed a deep decline due to measures taken during the coronavirus scare, with leisure & hospitality as well as retail the hardest-hit so far, according to the Federal Reserve's latest Beige Book report. The report released also said most areas saw manufacturing declines that varied among industries. Food & medical product producers saw strong demand but faced obstacles in production & supply chains. “Economic activity contracted sharply and abruptly across all regions in the United States as a result of the COVID-19 pandemic,” the report said. “All Districts reported highly uncertain outlooks among business contacts, with most expecting conditions to worsen in the next several months.” Released periodically thru the year, the Beige Book surveys the Fed's 12 districts for activity across sectors. On employment, business contacts said cuts “were widespread, including the manufacturing and energy sectors.” While many said they hoped to reverse the reductions once activity resumed, they largely said more furloughs were likely in the near term. Though no district reported upward pressure on wages, some noted that grocery workers were getting temporary raises as appreciation for doing hazardous work. The downward push on wages came amid a similar decrease for prices overall, particularly in the energy sector. The report comes the same day as historic declines were reported on both retail sales & New York-area manufacturing. The national economy has been brought to a standstill due to social distancing measures aimed at stemming the coronavirus spread.
Fed Beige Book says economy contracted ‘sharply and abruptly’ due to coronavirus
Much-needed small business aid is beginning to trickle out & more is expected in the weeks to come as banks start to disburse the rescue funds to Main Street. But the first-come, first-serve Payroll Protection Program of $349B in aid may be nearing a ceiling for loan commitments, with more than 1.3M loans given approval at a value of more than $296B, according to the Small Business Administration. The program could reach its funding limit by the end of today, according to a source familiar with the matter. The SBA & Treasury Dept have yet to release any formal statistics on total loan disbursements from banks to small business owners, with one senior administration official saying the information is not yet available, despite multiple requests. The SBA did release data showing the average loan size is just under $240K. Business owners that have received loan approval numbers should start to get funds soon, as Treasury guidance states that “the lender must make the first disbursement of the loan no later than ten calendar days from the date of loan approval.” Several big banks reporting earnings this week offered a look into the amount of loans going out the door, with Wells Fargo (WFC) saying it had received 370K indications of interest from customers thru Apr 10. JPMorgan (JPM), a Dow stock, as of yesterday had 300K applications in varying stages for $37B in loans, with $9.3B already into the hands of small business owners.
Small businesses begin getting their rescue funds as program nears funding limit
The global economic downturn has been so severe that already ½ of the world has asked the IMF for a bailout, the organization’s chief said. “This is an emergency like no other. It is not because of bad governors or mistakes,” Kristalina Georgieva said. “For that reason, we are providing funding very quickly.” “We are asking for one thing only: Please pay your doctors and nurses, make sure that your health [care] systems are functioning, and that vulnerable people and first responders are protected,” Georgieva said. Georgieva comments came after the IMF said yesterday it expects the global economy to contract by 3% this year, adding the world could see a 1930′s style recession. The fund had forecast a 3.3% economic expansion for 2020 in Jan. Georgieva noted the global economy could expand by 5.8% in 2021 if the virus is contained & new cases start to recede. However, she added the total global economic output would be less than in 2019 even with such a jump. Economic output could also be worse if the virus takes a “double trip” around the world. “It’s the first time in the history of the IMF that epidemiologists are as important as macro economists for our projections,” said Georgieva. “We are really hoping our scientists will not disappoint us.” More than 2M coronavirus cases have been confirmed globally, according to Johns Hopkins University. In the US alone, over 600K cases have been confirmed.
Half of the world has asked the IMF for a bailout, chief says
A crucial indicator of homebuilder sentiment just suffered its biggest monthly drop in the index’s 35-year history as the coronavirus pandemic hammered the American economy. Builder confidence in the market for single-family homes plunged 42 points to a reading of 30 in Apr, the lowest point since 2012, according to the latest National Association of Homebuilders/Wells Fargo Housing Market Index (NAHB). The survey dates to 1985. The reading was expected to drop to 55. Anything above 50 is considered positive. The last negative reading was in 2014. This month's survey was conducted from Apr 1-13, after Ms of Americans had been issued orders to stay home to stem the spread of the virus, prompting historic waves of business closures, layoffs & furloughs. “This unprecedented drop in builder confidence is due exclusively to the coronavirus outbreak across the nation, as unemployment has skyrocketed and gaps in the supply chain have hampered construction activities,” said NAHB Chair Dean Mon. Of the index's 3 components, current sales conditions dropped 43 points to 36, sales expectations in the next 6 months fell 39 points to 36, & buyer traffic decreased 43 points to 13. Homebuilding had been strengthening significantly coming into 2020. According to the US Census, new home sales in Mar hit the highest level since 2007, when the subprime mortgage crisis started to take hold. Construction was deemed an essential business by the federal gov during the coronavirus pandemic, although certain states — such as New York, Pennsylvania, New Jersey, Washington, Michigan & Vermont — have shut down most operations. “To show how hard and fast this outbreak has hit the housing sector, a recent poll of our members reveals that 96% reported that virus mitigation efforts were hurting buyer traffic,” said Robert Dietz, NAHB’s chief economist. “While the virus is severely disrupting residential construction and the overall economy, the need and demand for housing remains acute.” “As social distancing and other mitigation efforts show signs of easing this health crisis, we expect that housing will play its traditional role of helping to lead the economy out of a recession later in 2020,” Dietz added.
Homebuilder confidence index takes biggest monthly dive ever as coronavirus slams economy
Gold futures ended at their lowest in a week, snapping a multiday climb that had lifted prices for the metal to a more than 7-year high a day earlier. The sharp pullback in bullion prices came as the $ was firmly higher, providing some resistance to the asset's recent climb toward an all-time high. Gold for Jun fell a huge $28 (1.6%) to settle at $1740 an ounce, marking the lowest finish for most-active contract in a week. Prices marked a 4th straight session climb on yesterday to settle at the highest since 2012. Investors digested a slate of US economic reports, including the NY Fed's Empire State business conditions index, which plummeted to -78.2 in Apr, marking the lowest reading on record. And a reading on retail sales saw a record 8.7% slump in sales at US retailers. Gold largely maintained losses after that downbeat data. Meanwhile, the IMF said we may see the worst year in modern history for oil markets.
Gold pulls back from highest level since 2012 to end at lowest in a week
US benchmark oil futures settled at their lowest since 2002 on the back of a grim forecast for a record decline in global oil demand this year and a 12th consecutive weekly rise in US crude stockpiles. West Texas Intermediate crude for May declined 24¢ (1.2%) to settle at $19.87 a barrel, after trading as high as $20.89. Front-month contract prices finished at their lowest since 2002. Jun Brent crude settled down $1.91 (6.6%) to $27.69 a barrel. Prices logged the lowest settlement in 2 weeks. The IMF warned of a record drop in crude demand this year due to the COVID-19 pandemic, which has forced countries around the world to close their economies. The agency estimated a drop in demand of 9.3M barrels a day this year, equivalent to a decade's worth of growth. In the near term, demand in what the agency is referring to as “Black April” for the energy market, is forecast to drop to its lowest since 1995. The market also digested US gov data that showed domestic crude inventories posted their largest weekly climb on record. Oil inventories are now above 500M barrels for the first time since 2017. The Energy Information Administration reported a rise of 19.2M barrels in domestic crude supplies for the week ended Apr 10. The forecast called for a rise of 10.1M barrels. The American Petroleum Institute on yesterday reported a climb of 13.1M barrels, according to sources.
U.S. oil prices shake off losses after drop to lowest levels since 2002
The sellers were in charge all day, but the Dow finished about 200 above session lows. It's difficult to call that a victory for the bulls. Macro economic news keeps coming & none of it is cheery. The big banks are preparing for huge loan losses, about what is being expected. There are numerous requests to the World Bank for bailouts by countries. Enormous changes are coming & many of them can not be imagined. The Dow is about 5K above its recent lows while gold is at levels not seen in almost a decade & not that far from its record levels when it was closing in on 2K. Trading tomorrow will be greeted by the weekly report on jobless claims. Ugghh!!
Dow Jones Industrials
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