Dow dropped 390 (session lows & all selling was in the last hour), decliners over advancers 5-4 & NAZ dropped 49. The MLP index gained 2+ to the 138s (a 2 month high) & the REIT index gave back 3 to the 317s. Junk bond funds crawled higher & Treasuries continued in demand. Oil remained strong, rising to the 32s & gold bounced back 15 to 1750.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Treasury Secretary Steve Mnuchin warned the US economy could suffer long-term damage if states extend lockdowns imposed to contain the coronavirus outbreak. “There is the risk of permanent damage,” Mnuchin told members of the Senate Banking Committee. These comments come as some states begin to ease stay-at-home mandates & allow certain businesses to reopen. He suggested economic conditions could begin to improve in the 3rd & 4th qtrs of this year. "We're conscious of the health issues and we want to do this in a safe way," Mnuchin said. Still, some public health officials have warned that doing so could lead to a 2nd coronavirus wave in the nation. Earlier this week, Federal Reserve Chair Jerome Powell appeared to push back against the possibility of a "V-shaped" rebound, noting it was "unlikely" the US will bounce back to pre-crisis levels by the end of the year. "This economy will recover ... We'll get through this. It may take a while. It may take a period of time. It could stretch through the end of next year," Powell said. "We really don't know. We hope that it will be shorter than that, but no one really knows." Lawmakers were questioning Mnuchin & Powell over their use of the $500 B in CARES Act funding made available to the Treasury & central bank to keep credit flowing. The fund was designated to support Federal Reserve lending programs to businesses, states & municipalities. So far, the gov has committed up to $195B in credit support, leaving $259B to expand or create additional programs. The remaining $46B was set aside for airlines. Mnuchin said the Treasury & the Fed are "fully prepared to take losses in certain scenarios" on the remaining capital. “There are scenarios within Main Street [lending facilities] where we could lose all of our capital, and we’re prepared to do that," he added. In the 2 months since the outbreak of the virus brought the economy to a grinding halt, more than 36M Americans have lost their jobs, a rate unseen since the depression. Economists are increasingly warning of an "unprecedented" contraction in Q2, with Powell acknowledged the nation's GDP could shrink by 30%. House Dems passed another $3T economic-relief package last week, but Rep senators contend they need to wait & see how the existing legislation, worth nearly $3T, affects the economy before passing additional aid measures.
Kohl's (KSS) net sales tanked 43.5% during Q1 as its stores were forced temporarily shut due to the Covid-19 crisis. “While we have a fast-growing digital business, it has only replaced a small portion of the sales loss from our entire store base,” CEO Michelle Gass said. The company has suspended its share repurchase program & its div as it looks to cut costs & bolster liquidity. Net sales fell to $2.16B from $3.82B a year ago. The retailer reported a net loss of $3.50 per share, compared EPS of 38¢ a year prior. Excluding one-time charges, EPS was a loss of $3.20. The company will not be reporting its same-store sales results for the qtr due to its shops being forced shut. Analysts had been calling for a decline of nearly 31%. Analysts had been calling for the retailer to report a loss of $1.80 per share, adjusted, on revenue of $2.18B. However, it is difficult to compare reported earnings with analyst estimates, as the coronavirus pandemic continues to hit global economies & makes earnings impact difficult to assess. Digital sales were up 24% overall, with growth of more than 60% in Apr. Some of its strongest categories online included home, active wear, toys & beauty. “We responded [to store closures] with speed and agility, leaning into our digital business as the only channel to engage with our customers,” Gass said. However, with heightened e-commerce activity comes heightened pressure on profits. Gross margins during the period fell to 17.3% from 36.8% a year ago, hurt by increased shipping costs & amplified promotions to try to clear inventory. About ½ of its more than 1160 stores across the US have been reopened for business. The stock sank 1.44 (8%).
If you would like to learn more about KSS, click on this link:
club.ino.com/trend/analysis/stock/KSS?a_aid=CD3289&a_bid=6ae5b6f7
Kohl’s sales tank almost 44% as coronavirus slams the retailer
UK jobless claims jumped 70% in April as the coronavirus hit employment
‘We may not be able to pass another bill. I think it’s less than 50% chance of passing another bill.’ That line above came from GOP Sen John Kennedy of Louisiana as Reps & Dems consider what could go into another coronavirus aid package. The senator said there will be “serious pushback” for “a variety of reasons” from lawmakers in both parties to “whatever deal” is reached by congressional leaders & the Trump administration. He added that he could “be wrong, but I doubt it.” While Kennedy is sounding downbeat on the prospects for the next bipartisan measure, analysts have been expecting that a new package will be signed into law in Jun or later. Kennedy's comments came as he spoke in support of his legislation that would give state & local govs more flexibility in using aid already provided by the $2.2T CARES Act. “Why would we not allow states — without appropriating any new money — to use that money to address revenue shortfalls that you and the chairman of the Fed both agree are going to exist and be substantial?” the senator asked Treasury Secretary Steve Mnuchin during a virtual Senate hearing on relief programs.
Washington probably won’t deliver another coronavirus aid package, says Republican senator
The outlook for the US economy is sobering & the central bank and lawmakers should be ready to act boldly, said Eric Rosengren, the pres of the Boston Federal Reserve. In a speech, Rosengren said he expects the unemployment rate will peak at close to 20%. And unfortunately by the end of the year, the jobless rate will “remain at double-digit levels,” he said. He said that reopening the economy was not the panacea that will end the economic downturn. Rather, it was public health policy that is the root of the solution. “If consumer are afraid to eat out, shop, or travel, a relaxation in laws requiring business closures may do little to bring back customers, and thus jobs,” he added. Rosengren said what the “optimal mix” of public health & economic policies should be was a complex question. He sounded a cautious note about reopening the economy, saying it should not undo the sacrifices & progress made so far. He noted the largest percentage declines in payroll jobs as have come in industries where social distancing is most challenging — such as recreation, entertainment, the arts & food services. If there is continued concern about community spread of the coronavirus, these activities may continue to be hurt by cautious consumers. In addition, Americans 50-79 years of age account for about 50% of purchases in spending categories affected by social distancing, Rosengren noted. “Public health solutions are paramount — without them, it is virtually impossible to return to full employment,” he said.
Fed’s Rosengren sees unemployment rate still at double-digit levels at end of this year
Gold prices finished higher to recoup more than ½ of what they lost a day earlier, as Federal Reserve Chair Jerome Powell said the central bank stands ready to provide more support for the domestic economy. During testimony to the Senate Banking Committee Tuesday, Powell said “we need to be prepared to act further and I would say we are, if the need is there.” Gold for Jun tacked on $11 (0.7%) to settle at $1745.60 an ounce, following a 1.3% decline yesterday, which marked the first decline in 5 sessions. Prices fell yesterday as renewed optimism about a vaccine for the coronavirus undermined the need for a safe haven, causing gold to retreat from the highest intraday levels since 2012. Gold prices have been mostly elevated recently, posting a climb last week, amid worries about the economic impact of the COVID-19 pandemic that has likely pushed the world into recession, underpinning the traditional haven appeal for the yellow metal that tends to rise during economic uncertainty.
Gold climbs to recoup some recent losses as Powell says Fed ‘prepared to act further’ if economy falters
US benchmark oil futures settled higher, getting a lift from global supply cuts & signs of improving demand, following a volatile trading session that ended with the expiration of the Jun contract. West Texas Intermediate (WTI) crude-oil prices settled in backwardation yesterday, a condition in which the spot price & nearby futures are bid higher than contracts for later delivery. The Jun WTI contract price also ended today above the Jul contract, which is now the front month. That has marked a shift from the contango trade, in which later dated futures are bid higher than nearby contracts, signaling a near-term supply glut & offering incentive to store a commodity for future use. Today, Jun WTI crude, which expired at the end of the session, held ground above the price for the Jul contract, ending at $32.50 a barrel, up 68¢ (2.1%) after surging 8.1% yesterday. The Jul WTI contract, which is the most-actively traded, added 31¢ (1%) to settle at $31.96 a barrel, following a 7.2% rally for the contract in the previous session. Meanwhile, global benchmark Brent crude for Jul delivery lost 16¢ (0.5%) to $34.65 a barrel after a 7.1% climb yesterday. It marked its first loss in 4 sessions. An agreement between OPEC & their allies to cut 9.7M barrels a day in oil thrU the end of Jun have helped to stem a flood of crude against a backdrop of demand that had been declining, hurt by lockdowns to stop the spread of COVID-19. US oil production has also fallen & there are signs of further declines ahead. Crude-oil production from 7 major US shale plays is forecast to decline by 197K barrels a day in Jun to 7.8M barrels a day, according to a report from the Energy Information Administration released yesterday.
U.S. oil futures settle higher, buoyed by supply cuts, improving demand, as June contract expires
Stocks weere struggling all day, trying to extend yesterday's rally. However in the last hour the negative thoughts about another relief package not coming brought in the sellers. Of course, in DC, conditions can change suddenly. The Dow continues to stay close the the 24K trend line where it has been for 2 months.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury Secretary Steve Mnuchin warned the US economy could suffer long-term damage if states extend lockdowns imposed to contain the coronavirus outbreak. “There is the risk of permanent damage,” Mnuchin told members of the Senate Banking Committee. These comments come as some states begin to ease stay-at-home mandates & allow certain businesses to reopen. He suggested economic conditions could begin to improve in the 3rd & 4th qtrs of this year. "We're conscious of the health issues and we want to do this in a safe way," Mnuchin said. Still, some public health officials have warned that doing so could lead to a 2nd coronavirus wave in the nation. Earlier this week, Federal Reserve Chair Jerome Powell appeared to push back against the possibility of a "V-shaped" rebound, noting it was "unlikely" the US will bounce back to pre-crisis levels by the end of the year. "This economy will recover ... We'll get through this. It may take a while. It may take a period of time. It could stretch through the end of next year," Powell said. "We really don't know. We hope that it will be shorter than that, but no one really knows." Lawmakers were questioning Mnuchin & Powell over their use of the $500 B in CARES Act funding made available to the Treasury & central bank to keep credit flowing. The fund was designated to support Federal Reserve lending programs to businesses, states & municipalities. So far, the gov has committed up to $195B in credit support, leaving $259B to expand or create additional programs. The remaining $46B was set aside for airlines. Mnuchin said the Treasury & the Fed are "fully prepared to take losses in certain scenarios" on the remaining capital. “There are scenarios within Main Street [lending facilities] where we could lose all of our capital, and we’re prepared to do that," he added. In the 2 months since the outbreak of the virus brought the economy to a grinding halt, more than 36M Americans have lost their jobs, a rate unseen since the depression. Economists are increasingly warning of an "unprecedented" contraction in Q2, with Powell acknowledged the nation's GDP could shrink by 30%. House Dems passed another $3T economic-relief package last week, but Rep senators contend they need to wait & see how the existing legislation, worth nearly $3T, affects the economy before passing additional aid measures.
Mnuchin explains risk of 'permanent damage' to America from coronavirus
Kohl's (KSS) net sales tanked 43.5% during Q1 as its stores were forced temporarily shut due to the Covid-19 crisis. “While we have a fast-growing digital business, it has only replaced a small portion of the sales loss from our entire store base,” CEO Michelle Gass said. The company has suspended its share repurchase program & its div as it looks to cut costs & bolster liquidity. Net sales fell to $2.16B from $3.82B a year ago. The retailer reported a net loss of $3.50 per share, compared EPS of 38¢ a year prior. Excluding one-time charges, EPS was a loss of $3.20. The company will not be reporting its same-store sales results for the qtr due to its shops being forced shut. Analysts had been calling for a decline of nearly 31%. Analysts had been calling for the retailer to report a loss of $1.80 per share, adjusted, on revenue of $2.18B. However, it is difficult to compare reported earnings with analyst estimates, as the coronavirus pandemic continues to hit global economies & makes earnings impact difficult to assess. Digital sales were up 24% overall, with growth of more than 60% in Apr. Some of its strongest categories online included home, active wear, toys & beauty. “We responded [to store closures] with speed and agility, leaning into our digital business as the only channel to engage with our customers,” Gass said. However, with heightened e-commerce activity comes heightened pressure on profits. Gross margins during the period fell to 17.3% from 36.8% a year ago, hurt by increased shipping costs & amplified promotions to try to clear inventory. About ½ of its more than 1160 stores across the US have been reopened for business. The stock sank 1.44 (8%).
If you would like to learn more about KSS, click on this link:
club.ino.com/trend/analysis/stock/KSS?a_aid=CD3289&a_bid=6ae5b6f7
Kohl’s sales tank almost 44% as coronavirus slams the retailer
The number of people claiming unemployment
benefits in the UK soared in Apr, as the coronavirus outbreak
created mass job losses in the country. UK
jobless claims rose by 857K to 2.1M, the Office for
National Statistics (ONS) said, representing a monthly
increase of 69%. The
forecast called for an increase of 676K in the claimant count. The
ONS noted, however, that enhancements to “Universal Credit” (a social
security payment designed to simplify the benefits system by rolling 6
benefits into one payment) as part of the UK gov's response to
Covid-19 meant that an increasing number of people became eligible for
unemployment-related benefit support, although they were still employed. “Consequently
changes in the claimant count will not be due wholly to changes in the
number of people who are unemployed. We are not able to identify to what
extent people who are employed or unemployed have affected the
numbers,” the ONS said. The UK's unemployment rate came in
slightly higher at 3.9% in the Jan-Mar period, although that time
period covered only one week of the lockdown (imposed in the UK from
Mar 23). The rate was up 0.1 percentage points from a year earlier &
was 0.1 percentage point higher than in the last qtr of 2019. The
UK has sought to encourage businesses to retain staff amid the
coronavirus pandemic with its furlough scheme, or “Coronavirus Jobs
Retention Scheme’ (CJRS). In this, the gov provides a grant to
employers to cover 80% of an employee's salary, up to a maximum of
£2500 ($3K) per month. The scheme has been popular & has been
extended to the end of Oct.
UK jobless claims jumped 70% in April as the coronavirus hit employment
‘We may not be able to pass another bill. I think it’s less than 50% chance of passing another bill.’ That line above came from GOP Sen John Kennedy of Louisiana as Reps & Dems consider what could go into another coronavirus aid package. The senator said there will be “serious pushback” for “a variety of reasons” from lawmakers in both parties to “whatever deal” is reached by congressional leaders & the Trump administration. He added that he could “be wrong, but I doubt it.” While Kennedy is sounding downbeat on the prospects for the next bipartisan measure, analysts have been expecting that a new package will be signed into law in Jun or later. Kennedy's comments came as he spoke in support of his legislation that would give state & local govs more flexibility in using aid already provided by the $2.2T CARES Act. “Why would we not allow states — without appropriating any new money — to use that money to address revenue shortfalls that you and the chairman of the Fed both agree are going to exist and be substantial?” the senator asked Treasury Secretary Steve Mnuchin during a virtual Senate hearing on relief programs.
Washington probably won’t deliver another coronavirus aid package, says Republican senator
The outlook for the US economy is sobering & the central bank and lawmakers should be ready to act boldly, said Eric Rosengren, the pres of the Boston Federal Reserve. In a speech, Rosengren said he expects the unemployment rate will peak at close to 20%. And unfortunately by the end of the year, the jobless rate will “remain at double-digit levels,” he said. He said that reopening the economy was not the panacea that will end the economic downturn. Rather, it was public health policy that is the root of the solution. “If consumer are afraid to eat out, shop, or travel, a relaxation in laws requiring business closures may do little to bring back customers, and thus jobs,” he added. Rosengren said what the “optimal mix” of public health & economic policies should be was a complex question. He sounded a cautious note about reopening the economy, saying it should not undo the sacrifices & progress made so far. He noted the largest percentage declines in payroll jobs as have come in industries where social distancing is most challenging — such as recreation, entertainment, the arts & food services. If there is continued concern about community spread of the coronavirus, these activities may continue to be hurt by cautious consumers. In addition, Americans 50-79 years of age account for about 50% of purchases in spending categories affected by social distancing, Rosengren noted. “Public health solutions are paramount — without them, it is virtually impossible to return to full employment,” he said.
Fed’s Rosengren sees unemployment rate still at double-digit levels at end of this year
Gold prices finished higher to recoup more than ½ of what they lost a day earlier, as Federal Reserve Chair Jerome Powell said the central bank stands ready to provide more support for the domestic economy. During testimony to the Senate Banking Committee Tuesday, Powell said “we need to be prepared to act further and I would say we are, if the need is there.” Gold for Jun tacked on $11 (0.7%) to settle at $1745.60 an ounce, following a 1.3% decline yesterday, which marked the first decline in 5 sessions. Prices fell yesterday as renewed optimism about a vaccine for the coronavirus undermined the need for a safe haven, causing gold to retreat from the highest intraday levels since 2012. Gold prices have been mostly elevated recently, posting a climb last week, amid worries about the economic impact of the COVID-19 pandemic that has likely pushed the world into recession, underpinning the traditional haven appeal for the yellow metal that tends to rise during economic uncertainty.
Gold climbs to recoup some recent losses as Powell says Fed ‘prepared to act further’ if economy falters
US benchmark oil futures settled higher, getting a lift from global supply cuts & signs of improving demand, following a volatile trading session that ended with the expiration of the Jun contract. West Texas Intermediate (WTI) crude-oil prices settled in backwardation yesterday, a condition in which the spot price & nearby futures are bid higher than contracts for later delivery. The Jun WTI contract price also ended today above the Jul contract, which is now the front month. That has marked a shift from the contango trade, in which later dated futures are bid higher than nearby contracts, signaling a near-term supply glut & offering incentive to store a commodity for future use. Today, Jun WTI crude, which expired at the end of the session, held ground above the price for the Jul contract, ending at $32.50 a barrel, up 68¢ (2.1%) after surging 8.1% yesterday. The Jul WTI contract, which is the most-actively traded, added 31¢ (1%) to settle at $31.96 a barrel, following a 7.2% rally for the contract in the previous session. Meanwhile, global benchmark Brent crude for Jul delivery lost 16¢ (0.5%) to $34.65 a barrel after a 7.1% climb yesterday. It marked its first loss in 4 sessions. An agreement between OPEC & their allies to cut 9.7M barrels a day in oil thrU the end of Jun have helped to stem a flood of crude against a backdrop of demand that had been declining, hurt by lockdowns to stop the spread of COVID-19. US oil production has also fallen & there are signs of further declines ahead. Crude-oil production from 7 major US shale plays is forecast to decline by 197K barrels a day in Jun to 7.8M barrels a day, according to a report from the Energy Information Administration released yesterday.
U.S. oil futures settle higher, buoyed by supply cuts, improving demand, as June contract expires
Stocks weere struggling all day, trying to extend yesterday's rally. However in the last hour the negative thoughts about another relief package not coming brought in the sellers. Of course, in DC, conditions can change suddenly. The Dow continues to stay close the the 24K trend line where it has been for 2 months.
Dow Jones Industrials
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