Dow was off only 17 after being down 300 earlier in the session, declines ahead of advancers about 5-4 & NAZ jumped 120. The MLP index was flattish in the 144s & the REIT index lost 2+ to 341. Junk bond funds continued mixed & Treasuries were in demand. Oil gained 1+ to the high 34s (more below) & gold went ujp 17 to 1745 (near recent multi year highs).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Federal Chair Chairman Jerome Powell said the central bank's crisis-lending program for small-& medium-sized businesses will begin issuing emergency loans within a few days. Businesses with up to 15K & $5B in revenue can apply for financing thru the $600B Main Street Lending Program. "We're days away from making our first loans in Main Street," Powell said during a virtual conference. Under the program, businesses can secure loans of up to 4 years from banks at low rates. Payments can be deferred in their first year, although the loans must eventually be repaid. The program is designed to help businesses that are too big to tap the gov-backed Paycheck Protection Program, but too small to access other avenues of relief offered by the central bank. Companies that were on sound financial footing pre-crisis & only damaged by the virus outbreak can tap the program. The $2.2. CARES Act signed into law at the end of Mar provided $454B for the Treasury to backstop the various lending programs offered by the Fed. "It is very challenging," Powell said, "because it's an extraordinarily diverse space. The credit needs of different kinds of companies in different kinds of industries are extraordinarily diverse." There is a $500K minimum, though Powell said he could see the Fed "expanding it on either end."
The Chicago Business Barometer fell this month & hit its lowest point in nearly 40 years, MNI Indicators said. The monthly reading was 32.3, the forecast called for it to be 40. MNI Indicators said the reading was the barometer's lowest since 1982 & that the supplier deliveries & order backlogs indicators -- 2 of the main 5 that go into the barometer reading -- fell the most. The latter fell to its lowest level since 2009. The employment indicator rose, but new orders fell to its lowest point since 1980. The 5 sub indicators that go into producing the barometer are employment, order backlogs, new orders, production & supplier deliveries. About 27% of businesses asked said they expected Covid-19 to affect business plans for between ½ a year to 9 months. About 23% expected it to affect plans for 9 months to one year & 19% said they expected it to affect plans for more than that. Meanwhile, around 10% expected the effects to last for under three months & 21% expected the effects to last between 3-6 months.
Pres Trump announced he would begin taking steps to revoke Hong Kong's favored trade status with the US, in response to a controversial new security law that would effectively bar political protest in Hong Kong. “I am directing my administration to begin the process of eliminating policy exemptions that give Hong Kong different and special treatment,” Trump said. “My announcement today will affect the full range of agreements that we have with Hong Kong, from our extradition treaty, to our export controls and technologies,” Trump added. “We will take action to revoke Hong Kong’s preferential treatment as a separate customs and travel territory from the rest of China.” The shift in Hong Kong's status immediately jeopardizes several aspects of the former British colony's relationship with the US, which has so far meant that Hong Kong has been spared punishing tariffs that are a hallmark of Trump's trade war with Beijing. Trump also announced that the US would be terminating its relationship with the World Health Organization, a move likely to draw criticism from public health experts & US allies. Trump said the organization had failed to make “the requested and greatly needed reforms,” & he blamed the global health group for a lack of “transparency.” For weeks, the Trump administration has been ratcheting up pressure on Beijing over its alleged cover-up of early coronavirus cases. Trump has publicly blamed China for the virus itself & for its outsized severity in the US. Beijing, in turn, has suggested the virus originated in US service members, a claim widely rejected by intl health experts. In the past week, however, the pressure from the US has taken a more serious turn in response to a proposed Chinese security law that threatens the long-standing independence of Hong Kong. The law, formally approved yesterday by China's People's Congress, is expected to criminalize most forms of political protest under blanket bans on “sedition” & “subversion.”
Oil futures reversed early losses to trade with strong gains, waving off data that showed an unexpected rise in US crude inventories as traders focused on a fall in gasoline stocks & a further decline in crude stored at the delivery hub in Cushing, Oklahoma. West Texas Intermediate crude for Jul rose 90¢ (2.7%) to finish at $33.71 a barrel, while Aug Brent crude gained 55¢ per barrel (1.6%) to finish at $35.29. The Energy Information Administration (EIA) said inventories rose 7.9M barrels last week. Oil had been under pressure after the American Petroleum Institute late Wed reported that crude inventories rose 8.7M barrels last week. The forecast called for the more closely followed EIA report to show crude inventories fell by 1.2M barrels. The rise in inventories reflected a surge in imports of oil from Saudi Arabia as a much publicized flotilla of tankers carrying crude from the kingdom begin to arrive, a legacy of the short-lived price war between the Saudis & Russia that amplified a collapse in crude prices in Mar & Apr.
Oil turns higher, waving off unexpected rise in crude inventories
Economic data remains grim but they are lagging indicators. The economy is rebounding, although off depression lows. Trump's comments about China were not has harsh as expected, bringing back buyers in the last 2 hours of trading. The Dow finished the month up 1K & 7K above the Mar lows, making for a very impressive rally.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Federal Chair Chairman Jerome Powell said the central bank's crisis-lending program for small-& medium-sized businesses will begin issuing emergency loans within a few days. Businesses with up to 15K & $5B in revenue can apply for financing thru the $600B Main Street Lending Program. "We're days away from making our first loans in Main Street," Powell said during a virtual conference. Under the program, businesses can secure loans of up to 4 years from banks at low rates. Payments can be deferred in their first year, although the loans must eventually be repaid. The program is designed to help businesses that are too big to tap the gov-backed Paycheck Protection Program, but too small to access other avenues of relief offered by the central bank. Companies that were on sound financial footing pre-crisis & only damaged by the virus outbreak can tap the program. The $2.2. CARES Act signed into law at the end of Mar provided $454B for the Treasury to backstop the various lending programs offered by the Fed. "It is very challenging," Powell said, "because it's an extraordinarily diverse space. The credit needs of different kinds of companies in different kinds of industries are extraordinarily diverse." There is a $500K minimum, though Powell said he could see the Fed "expanding it on either end."
Powell: Fed is 'days away' from making first loans through Main Street lending facility
The Chicago Business Barometer fell this month & hit its lowest point in nearly 40 years, MNI Indicators said. The monthly reading was 32.3, the forecast called for it to be 40. MNI Indicators said the reading was the barometer's lowest since 1982 & that the supplier deliveries & order backlogs indicators -- 2 of the main 5 that go into the barometer reading -- fell the most. The latter fell to its lowest level since 2009. The employment indicator rose, but new orders fell to its lowest point since 1980. The 5 sub indicators that go into producing the barometer are employment, order backlogs, new orders, production & supplier deliveries. About 27% of businesses asked said they expected Covid-19 to affect business plans for between ½ a year to 9 months. About 23% expected it to affect plans for 9 months to one year & 19% said they expected it to affect plans for more than that. Meanwhile, around 10% expected the effects to last for under three months & 21% expected the effects to last between 3-6 months.
Chicago business barometer falls to lowest level since 1982
Pres Trump announced he would begin taking steps to revoke Hong Kong's favored trade status with the US, in response to a controversial new security law that would effectively bar political protest in Hong Kong. “I am directing my administration to begin the process of eliminating policy exemptions that give Hong Kong different and special treatment,” Trump said. “My announcement today will affect the full range of agreements that we have with Hong Kong, from our extradition treaty, to our export controls and technologies,” Trump added. “We will take action to revoke Hong Kong’s preferential treatment as a separate customs and travel territory from the rest of China.” The shift in Hong Kong's status immediately jeopardizes several aspects of the former British colony's relationship with the US, which has so far meant that Hong Kong has been spared punishing tariffs that are a hallmark of Trump's trade war with Beijing. Trump also announced that the US would be terminating its relationship with the World Health Organization, a move likely to draw criticism from public health experts & US allies. Trump said the organization had failed to make “the requested and greatly needed reforms,” & he blamed the global health group for a lack of “transparency.” For weeks, the Trump administration has been ratcheting up pressure on Beijing over its alleged cover-up of early coronavirus cases. Trump has publicly blamed China for the virus itself & for its outsized severity in the US. Beijing, in turn, has suggested the virus originated in US service members, a claim widely rejected by intl health experts. In the past week, however, the pressure from the US has taken a more serious turn in response to a proposed Chinese security law that threatens the long-standing independence of Hong Kong. The law, formally approved yesterday by China's People's Congress, is expected to criminalize most forms of political protest under blanket bans on “sedition” & “subversion.”
Trump taking action to eliminate special treatment for Hong Kong
Oil futures reversed early losses to trade with strong gains, waving off data that showed an unexpected rise in US crude inventories as traders focused on a fall in gasoline stocks & a further decline in crude stored at the delivery hub in Cushing, Oklahoma. West Texas Intermediate crude for Jul rose 90¢ (2.7%) to finish at $33.71 a barrel, while Aug Brent crude gained 55¢ per barrel (1.6%) to finish at $35.29. The Energy Information Administration (EIA) said inventories rose 7.9M barrels last week. Oil had been under pressure after the American Petroleum Institute late Wed reported that crude inventories rose 8.7M barrels last week. The forecast called for the more closely followed EIA report to show crude inventories fell by 1.2M barrels. The rise in inventories reflected a surge in imports of oil from Saudi Arabia as a much publicized flotilla of tankers carrying crude from the kingdom begin to arrive, a legacy of the short-lived price war between the Saudis & Russia that amplified a collapse in crude prices in Mar & Apr.
Oil turns higher, waving off unexpected rise in crude inventories
Economic data remains grim but they are lagging indicators. The economy is rebounding, although off depression lows. Trump's comments about China were not has harsh as expected, bringing back buyers in the last 2 hours of trading. The Dow finished the month up 1K & 7K above the Mar lows, making for a very impressive rally.
Dow Jones Industrials
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