Dow rose 318, advancer over decliners about 4-1 & NAZ went up 144. The MLP index added 1 to the 131s & the REIT index recovered 4 to 326. Junk bond funds found buyers & Treasuries drifted lower in price. Oil jumped 3+ to the 23s (more below) on expectations for moderate inventory gains & gold fell 8 to 1704.
AMJ (Alerian MLP Index tracking fund)
The US services sector contracted for the first time in more than a decade in Apr as the coronavirus pandemic paralyzed the nation's economy, according to the Institute for Supply Management (ISM). The ISM non-manufacturing index plunged to 41.8 in Apr from 52.5 in Mar, marking the first contraction since services since 2009. The forecast called for activity in the services sector to plummet to 36.8. Readings above 50 represent an expansion in the non-manufacturing sector, while readings below 50 represent contraction. The steep decline was driven by the biggest drop in business activity since 1997, according to the report. Business activity plummeted by 22 percentage points, compared to Mar. "Respondents are concerned about the continuing coronavirus impacts on the supply chain, operational capacity, human resources and finances, as well as the uncertain timelines for the resumption of business and a return to normality," Anthony Nieves, ISM chair, said. The virus outbreak triggered a majority of states to close non-essential businesses & direct residents to stay at home to mitigate the spread of COVID-19, leading to a massive surge in layoffs. Over the past 6 weeks, more than 30M Americans have filed for unemployment benefits, according to the Labor Dept. The US economy also contracted by 4.8% in Q1, the steepest decline since the 2008 financial crisis.
Oil prices were on track for a 5th straight day of gains as traders look toward a rebalancing of the market. West Texas Intermediate crude oil, which rose 11% to $25.24 per barrel, has now more than doubled in price since the streak began. Brent crude, the intl benchmark, climbed 10% to $29.88. 30M barrels of oil removed from the market each day as non-essential travel has come to a standstill due to stay-at-home orders intended to slow the spread of COVID-19 & the output-cut agreement reached by the world's largest producers that takes 20M barrels of supply off the market each day. Pres Trump took note of the recent spike in oil prices today in a tweet. Traders will get an updated look into supply and demand in the US when the American Petroleum Institute releases its weekly inventory data. Last week's data, which showed a smaller-than-expected inventory build, was followed up a day later by the Energy Information Administration's report that also showed stockpiles building more slowly than anticipated.
DuPont de Nemours (DD), a Dow stock, posted lower sales & swung to a loss for Q1 as the COVID-19 pandemic led to higher demand for personal protective equipment but also disrupted supply chains. The maker of nylon & other materials for the auto industry posted a loss 83¢ a share, compared with EPS of 69¢ in the same qtr last year. But adjusted EPS was 84¢, ahead of the 73¢ expected. Sales fell to $5.22B from $5.41B in the year-ago period. The forecast called for $5.07B. The company said sales grew in its electronics-&-imaging & nutrition-&-biosciences segments, though declines in other segments offset gains. "Through April, we continue to see strength in personal protection, water filtration, food and beverage, electronics and probiotics," CEO Ed Breen said. "Automotive, oil and gas, and select industrial end markets continue to suffer." The company had expected per-share losses of 70¢-$1 (82¢-84¢ on an adjusted basis), on sales of about $5.2B. DD has withdrawn its full-year sales & adjusted-earnings guidance. The company said it has stepped up production of personal protective equipment. DD also said it increased the production of Tyvek garments by more than 9M a month, double the number produced for any prior crisis. The company in Apr said it idled several manufacturing sites that serve the auto industry after major US car makers halted production. The company makes materials for a host of products, including solar cells, bullet-proof vests, biofuels & probiotics. The stock rose 91¢.
If you would like to learn more about DD, click on this link:
club.ino.com/trend/analysis/stock/DD?a_aid=CD3289&a_bid=6ae5b6f7
The bulls have returned & are in command. Dreary economic news is ignored. Investors are encouraged to see the start of opening up the US economy. But more negative news stories are coming.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 23.95 | +3.56 | +17.5% |
| GC=F | Gold | 1,703.70 | -9.60 | -0.6% |
The US services sector contracted for the first time in more than a decade in Apr as the coronavirus pandemic paralyzed the nation's economy, according to the Institute for Supply Management (ISM). The ISM non-manufacturing index plunged to 41.8 in Apr from 52.5 in Mar, marking the first contraction since services since 2009. The forecast called for activity in the services sector to plummet to 36.8. Readings above 50 represent an expansion in the non-manufacturing sector, while readings below 50 represent contraction. The steep decline was driven by the biggest drop in business activity since 1997, according to the report. Business activity plummeted by 22 percentage points, compared to Mar. "Respondents are concerned about the continuing coronavirus impacts on the supply chain, operational capacity, human resources and finances, as well as the uncertain timelines for the resumption of business and a return to normality," Anthony Nieves, ISM chair, said. The virus outbreak triggered a majority of states to close non-essential businesses & direct residents to stay at home to mitigate the spread of COVID-19, leading to a massive surge in layoffs. Over the past 6 weeks, more than 30M Americans have filed for unemployment benefits, according to the Labor Dept. The US economy also contracted by 4.8% in Q1, the steepest decline since the 2008 financial crisis.
Services sector contracts for first in decade
Oil prices were on track for a 5th straight day of gains as traders look toward a rebalancing of the market. West Texas Intermediate crude oil, which rose 11% to $25.24 per barrel, has now more than doubled in price since the streak began. Brent crude, the intl benchmark, climbed 10% to $29.88. 30M barrels of oil removed from the market each day as non-essential travel has come to a standstill due to stay-at-home orders intended to slow the spread of COVID-19 & the output-cut agreement reached by the world's largest producers that takes 20M barrels of supply off the market each day. Pres Trump took note of the recent spike in oil prices today in a tweet. Traders will get an updated look into supply and demand in the US when the American Petroleum Institute releases its weekly inventory data. Last week's data, which showed a smaller-than-expected inventory build, was followed up a day later by the Energy Information Administration's report that also showed stockpiles building more slowly than anticipated.
Oil prices double during 5-day winning streak
DuPont de Nemours (DD), a Dow stock, posted lower sales & swung to a loss for Q1 as the COVID-19 pandemic led to higher demand for personal protective equipment but also disrupted supply chains. The maker of nylon & other materials for the auto industry posted a loss 83¢ a share, compared with EPS of 69¢ in the same qtr last year. But adjusted EPS was 84¢, ahead of the 73¢ expected. Sales fell to $5.22B from $5.41B in the year-ago period. The forecast called for $5.07B. The company said sales grew in its electronics-&-imaging & nutrition-&-biosciences segments, though declines in other segments offset gains. "Through April, we continue to see strength in personal protection, water filtration, food and beverage, electronics and probiotics," CEO Ed Breen said. "Automotive, oil and gas, and select industrial end markets continue to suffer." The company had expected per-share losses of 70¢-$1 (82¢-84¢ on an adjusted basis), on sales of about $5.2B. DD has withdrawn its full-year sales & adjusted-earnings guidance. The company said it has stepped up production of personal protective equipment. DD also said it increased the production of Tyvek garments by more than 9M a month, double the number produced for any prior crisis. The company in Apr said it idled several manufacturing sites that serve the auto industry after major US car makers halted production. The company makes materials for a host of products, including solar cells, bullet-proof vests, biofuels & probiotics. The stock rose 91¢.
If you would like to learn more about DD, click on this link:
club.ino.com/trend/analysis/stock/DD?a_aid=CD3289&a_bid=6ae5b6f7
DuPont sales fall, despite PPE demand
The bulls have returned & are in command. Dreary economic news is ignored. Investors are encouraged to see the start of opening up the US economy. But more negative news stories are coming.
Dow Jones Industrials
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