Dow is off 16 from a decline of 450 at the opening, decliners over advancers better than 3-2 & NAZ fell 34. The MLP index added 3+ to the 127s & the REIT index declined 4+ to 299 (an almost 2 month low). Junk bond funds slid lower along with stocks & Treasuries continued in demand. Oil went up to the 26s & gold climbed 21 to 1737 after dreary economic news.
AMJ (Alerian MLP Index tracking fund)
Pres Trump made one of his strongest comments yet in dealing with China in the wake of the communist country's handling of the coronavirus pandemic. "There are many things we could do," Trump said. "We could cut off the whole relationship." The Trump administration has been mulling avenues to possibly punish or seek financial compensation from China for what it sees as withholding information about the virus. The pres raised the impact of ending relations. "Now, if you did, what would happen?," asked Trump. "You’d save $500 billion if you cut off the whole relationship." However, Trump & his team used other tactics to demonstrate displeasure with China's actions. Mon, the administration cut investment ties between federal retirement funds & Chinese equities. In a letter, national security adviser Robert O'Brien & Trump's top economic adviser Larry Kudlow wrote on Mon to Labor Secretary Eugene Scalia that the White House does not want the Thrift Savings Plan -- which is a federal employee retirement fund -- to have money invested in Chinese equities that numbers about $4B in assets. Scalia then wrote to Michael Kennedy, the chairman of the Federal Retirement Thrift Investment Board, to shared the Kudlow & O'Brien correspondence & telling Kennedy that investments in China pose "investment risk and national security” risks. As for China's response to inquiries about the spread of the coronavirus from the US, Trump said: "We asked to go over and they said no. They didn't want our help. And I figured that was OK because they must know what they are doing. So it was either stupidity, incompetence or deliberate."
Treasury Secretary Steve Mnuchin said that the jobs of more than 33M Americans who have filed for unemployment since Mar as a result of the coronavirus pandemic will be recreated once the economy is reopened. "I think we're doing everything to rebuild our economy and I think that we will rebuild our economy," Mnuchin said. "When you literally turn off the economy, you create big unemployment. When you open up the economy, you're going to create those jobs back." Mnuchin added that he is "very sympathetic to the American business[es] & the American workers" that are dealing with the impact of the coronavirus. "This was nobody's fault, this was a virus," Mnuchin said. "This was not the American public's fault."
More grim news is keeping investors away from stocks. Buyers are returning after the sharp selloff at the opening but that enthusiasm appears to be fading. While the data for unemployment claims is showing improvement from the early weeks when it topped 6M, it remains disturbing. Additionally, the trade relations between the US & China are becoming very worrisome. The Dow may not be able to hold above the important 23K resistance level while gold is being bid higher.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 26.19 | +0.90 | +3.6% |
| GC=F | Gold | 1,740.80 | +24.40 | +1.4% |
New filings for unemployment claims totaled just
shy of 3M for the most recent reporting period, a number that
while still high declined for the 6th straight week, according to
Labor Dept figures. The total 2.98M new
claims for unemployment insurance filed last week brought the
coronavirus crisis total to nearly 36.5M, by far the biggest loss
in US history. The count announced last week count was revised up by
7K to 3.18M, putting the weekly decline at 195K between
the 2 most recent reports. The forecast called for the count of new claims to be 2.7M. While the numbers have been declining since the Mar 28 peak,
joblessness remains pervasive thru the US even as states continue
to come back online slowly following the economic shutdown. The
Labor Dept reported a loss of 20.5M jobs in Apr that
brought the unemployment rate to 14.7%, both post-World War II highs. Those displaced are still not being brought back
to work under a freeze that was supposed to last weeks but now has
extended for nearly 2 months. Continuing claims rose by 456K to a
record 22.8M, after the previous week's total was revised down
to 22.4M. The 4-week moving average, which is used to smooth out weekly volatility, also spiked by 2.7M to 19.8M. Those
displaced by social distancing measures during the coronavirus pandemic
have had to navigate their way thu an often difficult maze of state
offices not equipped to handle the onslaught of filings.
Weekly jobless claims total 2.981 million, bringing coronavirus tally to 36.5 million
Pres Trump made one of his strongest comments yet in dealing with China in the wake of the communist country's handling of the coronavirus pandemic. "There are many things we could do," Trump said. "We could cut off the whole relationship." The Trump administration has been mulling avenues to possibly punish or seek financial compensation from China for what it sees as withholding information about the virus. The pres raised the impact of ending relations. "Now, if you did, what would happen?," asked Trump. "You’d save $500 billion if you cut off the whole relationship." However, Trump & his team used other tactics to demonstrate displeasure with China's actions. Mon, the administration cut investment ties between federal retirement funds & Chinese equities. In a letter, national security adviser Robert O'Brien & Trump's top economic adviser Larry Kudlow wrote on Mon to Labor Secretary Eugene Scalia that the White House does not want the Thrift Savings Plan -- which is a federal employee retirement fund -- to have money invested in Chinese equities that numbers about $4B in assets. Scalia then wrote to Michael Kennedy, the chairman of the Federal Retirement Thrift Investment Board, to shared the Kudlow & O'Brien correspondence & telling Kennedy that investments in China pose "investment risk and national security” risks. As for China's response to inquiries about the spread of the coronavirus from the US, Trump said: "We asked to go over and they said no. They didn't want our help. And I figured that was OK because they must know what they are doing. So it was either stupidity, incompetence or deliberate."
President tells Bartiromo US could 'cut off' China relationship and 'save $500B'
Treasury Secretary Steve Mnuchin said that the jobs of more than 33M Americans who have filed for unemployment since Mar as a result of the coronavirus pandemic will be recreated once the economy is reopened. "I think we're doing everything to rebuild our economy and I think that we will rebuild our economy," Mnuchin said. "When you literally turn off the economy, you create big unemployment. When you open up the economy, you're going to create those jobs back." Mnuchin added that he is "very sympathetic to the American business[es] & the American workers" that are dealing with the impact of the coronavirus. "This was nobody's fault, this was a virus," Mnuchin said. "This was not the American public's fault."
Mnuchin makes prediction about jobs returning as US economy reopens
More grim news is keeping investors away from stocks. Buyers are returning after the sharp selloff at the opening but that enthusiasm appears to be fading. While the data for unemployment claims is showing improvement from the early weeks when it topped 6M, it remains disturbing. Additionally, the trade relations between the US & China are becoming very worrisome. The Dow may not be able to hold above the important 23K resistance level while gold is being bid higher.
Dow Jones Industrials
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