Dow gained 133 (but near sessiojn lows), advancers over decliners 3-2 & NAZ added 98. The MLP index was off a fraction to 130 & the REIT index crawled up to 1+ to the 323s. Junk bond funds were bid higher & Treasuries continued weak. Oil jumped almost 4 to the 24s & gold sllid back 1 to 1711 (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)
Household debt surged by more than $150B to a new record high in the first 3 months of the year, just before the worst of the coronavirus pandemic began to batter Americans' finances, according to the New York Federal Reserve. The results don't capture the full extent of the pandemic's impact because the data was collected thru Mar 31, just 2 weeks into the virus-induced lockdown. The total debt balance is now $14.3T, roughly $1.6T higher than the previous peak of $12.7T in 2008, in the midst of the last recession. Mortgage balances, the largest component of household debt in the US, jumped $156B in Q1 to $9.7T. Non-housing balances were mostly flat, with increases of $27B in student loans & $15B in auto loans offset by a $34B seasonal decline in credit card balances. “The credit card balance decline was notably larger than the same period last year, which may reflect the early signs of decreased consumer spending due to COVID-19,” the New York Fed said. The drop of card balances came as total credit limits increased by $34B , leaving more than $3T in available credit.
New home listings dropped 44% in Apr, one of the busiest months in the real estate industry, according to data from Realtor.com. The decrease in home listings highlights seller decisions to halt sales & see how market conditions play out as coronavirus stay-at-home orders have led 30M Americans to lose their jobs, crippling the US economy. "The good momentum we saw at the start of the year has helped to somewhat insulate the housing market from the coronavirus' negative impact on buyer and seller confidence ac ross the U.S.," Reator.com Chief Economist Danielle Hale said. "Although we saw sharp drops in new listings, an increase in the time it takes to sell a home and a flattening of prices in April, May is likely to see some of these metrics worsen." She added that the impact on the housing market "will depend on how effective the country is at containing the virus and how the economy responds." If the economy experiences a positive reboot, sellers "could see buyers returning to the market aggressively this summer to make up for the spring they lost," Hale continuned. The US median listing price increased 0.6% year-over-year to $320K, about 3.2% less than Mar's median listing price increase of 3.8%. Economists from real estate search website Zillow said yesterday that home sales could plummet by 60% in the spring & prices will drop by about 3% by the end of 2020. Home sales should increase by roughly 10% per month through 2021, they added. The total number of home sales dropped 15.3% year-over-year & none of the country's 50 largest metro areas saw an increase in inventory year-over-year. Inventory declined by 16% overall. Metro areas saw the largest declines in inventory.
International Business Machines (IBM), a Dow stock, CEO Arvind Krishna said that he is not looking to split up the technology company & won't cut its 5% div. The company withdrew its 2020 annual forecast due to coronavirus concerns on Apr 20. IBM execs said that the tech giant's customers were well-positioned for the pandemic, & IBM would continue to pay divs. "I believe that we actually have enough financial stability, including a secure dividend," Krishna said. "The dividend is occupying a little bit more than half our free cash flow. It's not like it's occupying all of it, and that leaves enough flexibility for us to do it." Krishna, who took over as CEO last month, added that IBM is "always open for acquisitions when they make strategic sense and when the price is right." "In terms of divestitures, we've always pruned our portfolio appropriately. When there are pieces that don't align with a strategy or they become too commoditized for us to deal with them, we have done divestitures. And you've seen us doing that over the past two years," he added. He also said the company was not considering breaking up the company. "Our model is so integrated, it really makes sense for our clients," Krisha said. "And I think that need is going to accelerate in this crisis. Our clients are looking for us to bring solutions to them —to really solve the puzzle for them, and if you look at our services, they're really often linked to our products." The stock went up 92¢.
If you would like to learn more about IBM, click on this link:
club.ino.com/trend/analysis/stock/IBM?a_aid=CD3289&a_bid=6ae5b6f7
Fiat Chrysler (FCAU) lost about $1.8B in Q1 as the coronavirus pandemic caused rolling shutdowns of its plants in China, Europe & North America. Despite the “unexpected and unprecedented times” due to COVID-19, the company said that it & French automaker PSA Group “remain committed” to a previouslu announced merger of equals. The deal, according to FCAU, is expected to close by the end of this year or early 2021. FCAU also expects to restart the majority of its North American plants the week of May 18. The company has been in discussions with the United Auto Workers (UAW) union for weeks to reopen US plants, which shuttered in Mar. CEO Mike Manley said that the new restart date is a result of the company working with the UAW as well as local gov officials where its plants are located. UAW Pres Rory Gamble said the union continues to talk with all of the companies, however he did not outright oppose the plans as he previously had regarding an early May restart. “As for the start date, the companies contractually make that decision and we all knew this day would come,” he said. “Our UAW focus and role is and will continue to be, on health and safety protocols to protect our members.” Revenue during Q1 fell 16% to about $22.3B while global vehicle shipments plummeted 21%. Before taxes & one-time adjustments & charges, profit was about $56.4M for the qtr versus a net profit of $552M in Q1-2019. Adjusted pretax earnings was $1.2B a year ago. Manley said the automaker has sufficient liquidity “beyond” 2020, however the automaker said it could tap into additional credit facilities. “We continue to assess all funding options and expect to access funding as and when available on reasonable terms to further strengthen our balance sheet and enhance our liquidity to optimize our financial flexibility,” the company said. The stock slid back 7¢.
If you would like to learn more about FCAU, click on this link:
club.ino.com/trend/analysis/stock/FCAU?a_aid=CD3289&a_bid=6ae5b6f7
Fiat Chrysler to restart US production in two weeks after coronavirus causes $1.8 billion loss
Gold futures fell to register the first loss in 3 sessions, with prices dragged down by optimism about the easing of business lockdowns in the US & Europe & hopes for the speedy development of a vaccine. California Gov Gavin Newsom said that certain retailers could open on Fri for curbside pickup, reflecting an easing in shutdown protocols in one of the first US states to implement such measures to slow the pathogen's spread. Meanwhile, a report said that researchers at New York University & the University of Maryland School of Medicine said that they began injecting people with the first of 4 vaccine candidates from Pfizer (PFE), a Dow company, & Germany's BioNTech (BNTX). The developments mark the most recent push to experiment with a cure for the COVID-19 pandemic, which has infected more than 3.6M globally & claimed more than ½ a M lives since emerging in Wuhan, China, in Dec, according to data compiled by Johns Hopkins University. Against that backdrop, Jun gold lost (0.2%) to settle at $1710 an ounce, following gains in each of the last 2 sessions. The precious metal failed to find haven support even after data released today showed the Institute for Supply Management’s survey of nonmanufacturing companies plummeted to 41.8% in Apr from 52.5% in Mar, breaking a string of 112 straight months of positive readings.
Oil futures ended sharply higher, with US benchmark prices posting a 5th straight gain, as investors wagered on a slowdown in production & a gradual increase in appetite for the commodity as business lockdowns intended to curtail the spread of the COVID-19 pandemic are rolled back. An agreement between OPEC its allies (OPEC+) to reduce output by 9.7M barrels a day in May & Jun officially began on Fri. Separately, some US oil have also announced plans for voluntary output reductions. West Texas Intermediate crude for Jun rose $4.17 (21%) to settle at $24.56 a barrel after gaining 3.1% yesterday. The settlement was the highest for a most-active contract since Apr 17 & marked a 5th consecutive session gain. Global benchmark Jul Brent crude added $3.77 (14%) to $30.97 a barrel following a 2.9% gain in the previous session. Commodities data provider Genscape reported an increase in crude inventories of 1.8M barrels at Cushing, Oklahoma, the delivery point for West Texas Intermediate crude, which would be the smallest weekly gain in weeks. The rate of crude inventory build is slowing & that perception has allowed optimism to seep back into the crude market as efforts to rebalance the oil market are under way. That optimism helped the market to overcome worries about growing tensions between the US & China that could lead to a dispute between the world's largest economies that would likely deliver another hit to crude demand.
U.S. oil prices climb 20% as traders bet on demand pickup as lockdowns ease
The Dow began the day higher & remained elevated until the last hours when sellers took over. But it still finsiihsed with what would be considered a modest gain currennlty. There was some degreee of calm in the oill market as inventory building has finally slowed. However oil prices remain at very depressed levels. More macro economic dreary reports are coming including jobless claims on Thurs. For what it's worth, the Dow is in the black this week but down so far in early May.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Household debt surged by more than $150B to a new record high in the first 3 months of the year, just before the worst of the coronavirus pandemic began to batter Americans' finances, according to the New York Federal Reserve. The results don't capture the full extent of the pandemic's impact because the data was collected thru Mar 31, just 2 weeks into the virus-induced lockdown. The total debt balance is now $14.3T, roughly $1.6T higher than the previous peak of $12.7T in 2008, in the midst of the last recession. Mortgage balances, the largest component of household debt in the US, jumped $156B in Q1 to $9.7T. Non-housing balances were mostly flat, with increases of $27B in student loans & $15B in auto loans offset by a $34B seasonal decline in credit card balances. “The credit card balance decline was notably larger than the same period last year, which may reflect the early signs of decreased consumer spending due to COVID-19,” the New York Fed said. The drop of card balances came as total credit limits increased by $34B , leaving more than $3T in available credit.
Household debt surged to record high ahead of virus crisis, Fed says
New home listings dropped 44% in Apr, one of the busiest months in the real estate industry, according to data from Realtor.com. The decrease in home listings highlights seller decisions to halt sales & see how market conditions play out as coronavirus stay-at-home orders have led 30M Americans to lose their jobs, crippling the US economy. "The good momentum we saw at the start of the year has helped to somewhat insulate the housing market from the coronavirus' negative impact on buyer and seller confidence ac ross the U.S.," Reator.com Chief Economist Danielle Hale said. "Although we saw sharp drops in new listings, an increase in the time it takes to sell a home and a flattening of prices in April, May is likely to see some of these metrics worsen." She added that the impact on the housing market "will depend on how effective the country is at containing the virus and how the economy responds." If the economy experiences a positive reboot, sellers "could see buyers returning to the market aggressively this summer to make up for the spring they lost," Hale continuned. The US median listing price increased 0.6% year-over-year to $320K, about 3.2% less than Mar's median listing price increase of 3.8%. Economists from real estate search website Zillow said yesterday that home sales could plummet by 60% in the spring & prices will drop by about 3% by the end of 2020. Home sales should increase by roughly 10% per month through 2021, they added. The total number of home sales dropped 15.3% year-over-year & none of the country's 50 largest metro areas saw an increase in inventory year-over-year. Inventory declined by 16% overall. Metro areas saw the largest declines in inventory.
New home listings plunged in one of real estate's busiest months
International Business Machines (IBM), a Dow stock, CEO Arvind Krishna said that he is not looking to split up the technology company & won't cut its 5% div. The company withdrew its 2020 annual forecast due to coronavirus concerns on Apr 20. IBM execs said that the tech giant's customers were well-positioned for the pandemic, & IBM would continue to pay divs. "I believe that we actually have enough financial stability, including a secure dividend," Krishna said. "The dividend is occupying a little bit more than half our free cash flow. It's not like it's occupying all of it, and that leaves enough flexibility for us to do it." Krishna, who took over as CEO last month, added that IBM is "always open for acquisitions when they make strategic sense and when the price is right." "In terms of divestitures, we've always pruned our portfolio appropriately. When there are pieces that don't align with a strategy or they become too commoditized for us to deal with them, we have done divestitures. And you've seen us doing that over the past two years," he added. He also said the company was not considering breaking up the company. "Our model is so integrated, it really makes sense for our clients," Krisha said. "And I think that need is going to accelerate in this crisis. Our clients are looking for us to bring solutions to them —to really solve the puzzle for them, and if you look at our services, they're really often linked to our products." The stock went up 92¢.
If you would like to learn more about IBM, click on this link:
club.ino.com/trend/analysis/stock/IBM?a_aid=CD3289&a_bid=6ae5b6f7
IBM CEO on whether he'll cut 5% dividend, split company
Fiat Chrysler (FCAU) lost about $1.8B in Q1 as the coronavirus pandemic caused rolling shutdowns of its plants in China, Europe & North America. Despite the “unexpected and unprecedented times” due to COVID-19, the company said that it & French automaker PSA Group “remain committed” to a previouslu announced merger of equals. The deal, according to FCAU, is expected to close by the end of this year or early 2021. FCAU also expects to restart the majority of its North American plants the week of May 18. The company has been in discussions with the United Auto Workers (UAW) union for weeks to reopen US plants, which shuttered in Mar. CEO Mike Manley said that the new restart date is a result of the company working with the UAW as well as local gov officials where its plants are located. UAW Pres Rory Gamble said the union continues to talk with all of the companies, however he did not outright oppose the plans as he previously had regarding an early May restart. “As for the start date, the companies contractually make that decision and we all knew this day would come,” he said. “Our UAW focus and role is and will continue to be, on health and safety protocols to protect our members.” Revenue during Q1 fell 16% to about $22.3B while global vehicle shipments plummeted 21%. Before taxes & one-time adjustments & charges, profit was about $56.4M for the qtr versus a net profit of $552M in Q1-2019. Adjusted pretax earnings was $1.2B a year ago. Manley said the automaker has sufficient liquidity “beyond” 2020, however the automaker said it could tap into additional credit facilities. “We continue to assess all funding options and expect to access funding as and when available on reasonable terms to further strengthen our balance sheet and enhance our liquidity to optimize our financial flexibility,” the company said. The stock slid back 7¢.
If you would like to learn more about FCAU, click on this link:
club.ino.com/trend/analysis/stock/FCAU?a_aid=CD3289&a_bid=6ae5b6f7
Fiat Chrysler to restart US production in two weeks after coronavirus causes $1.8 billion loss
Gold futures fell to register the first loss in 3 sessions, with prices dragged down by optimism about the easing of business lockdowns in the US & Europe & hopes for the speedy development of a vaccine. California Gov Gavin Newsom said that certain retailers could open on Fri for curbside pickup, reflecting an easing in shutdown protocols in one of the first US states to implement such measures to slow the pathogen's spread. Meanwhile, a report said that researchers at New York University & the University of Maryland School of Medicine said that they began injecting people with the first of 4 vaccine candidates from Pfizer (PFE), a Dow company, & Germany's BioNTech (BNTX). The developments mark the most recent push to experiment with a cure for the COVID-19 pandemic, which has infected more than 3.6M globally & claimed more than ½ a M lives since emerging in Wuhan, China, in Dec, according to data compiled by Johns Hopkins University. Against that backdrop, Jun gold lost (0.2%) to settle at $1710 an ounce, following gains in each of the last 2 sessions. The precious metal failed to find haven support even after data released today showed the Institute for Supply Management’s survey of nonmanufacturing companies plummeted to 41.8% in Apr from 52.5% in Mar, breaking a string of 112 straight months of positive readings.
Gold prices post first loss in 3 sessions
Oil futures ended sharply higher, with US benchmark prices posting a 5th straight gain, as investors wagered on a slowdown in production & a gradual increase in appetite for the commodity as business lockdowns intended to curtail the spread of the COVID-19 pandemic are rolled back. An agreement between OPEC its allies (OPEC+) to reduce output by 9.7M barrels a day in May & Jun officially began on Fri. Separately, some US oil have also announced plans for voluntary output reductions. West Texas Intermediate crude for Jun rose $4.17 (21%) to settle at $24.56 a barrel after gaining 3.1% yesterday. The settlement was the highest for a most-active contract since Apr 17 & marked a 5th consecutive session gain. Global benchmark Jul Brent crude added $3.77 (14%) to $30.97 a barrel following a 2.9% gain in the previous session. Commodities data provider Genscape reported an increase in crude inventories of 1.8M barrels at Cushing, Oklahoma, the delivery point for West Texas Intermediate crude, which would be the smallest weekly gain in weeks. The rate of crude inventory build is slowing & that perception has allowed optimism to seep back into the crude market as efforts to rebalance the oil market are under way. That optimism helped the market to overcome worries about growing tensions between the US & China that could lead to a dispute between the world's largest economies that would likely deliver another hit to crude demand.
U.S. oil prices climb 20% as traders bet on demand pickup as lockdowns ease
The Dow began the day higher & remained elevated until the last hours when sellers took over. But it still finsiihsed with what would be considered a modest gain currennlty. There was some degreee of calm in the oill market as inventory building has finally slowed. However oil prices remain at very depressed levels. More macro economic dreary reports are coming including jobless claims on Thurs. For what it's worth, the Dow is in the black this week but down so far in early May.
Dow Jones Industrials
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