Dow shot up 661 (going above 25K), advancers over decliners almost 10-1 & NAZ gained 111. The MLP index rose 4+ to the 146s & the REIT index advanced 9+ to 333. Junk bond funds were purchased & Treasuries declined as stocks rallied. Oil rose to 34 & gold dropped 23 to 1712.
AMJ (Alerian MLP Index tracking fund)
US debt is on track to surpass the size of the nation's economy for the first time since World War II, according to a projection by the Committee for a Responsible Budget. The nonpartisan group, which advocates for reducing the federal debt, estimated the deficit for 2020 will top $3.8T, more than double the record set during the 2008 financial crisis. The deficit is the gap between what the federal gov pays & what it collects in taxes; in fiscal 2019, the deficit was about $984B. By the beginning of Oct, the group estimated the US debt held by the public will surpass the country's $21T economy. "The chances are that this year, we will hit the point where our national debt is the equivalent of the size of the economy," Maya MacGuineas said. "And that comes many years in advance of when we thought this would happen." The group's calculations are based on the estimate that GDP will drop by 3.9% from fiscal 2019 to 2020 & rise 3.2% from fiscal 2020 to 2021. It also assumes that Congress will not enact additional legislation to blunt the economic pain caused by the coronavirus pandemic; so far, lawmakers have passed 3 emergency aid packages totaling nearly $3T -- an unprecedented amount. It estimates the nation's debt will be $20.6T on Oct 1, compared with nominal GDP of more than $20T. The proportion of debt to GDP will continue to swell, the committee said, eventually passing the World War II record of 106% by 2023 as the US continues to borrow. It cautioned its estimates were likely low, as they did not take into account additional stimulus measures that legislators are hoping to pass. Still, the group acknowledged the majority of the deficit was "inevitable and necessary in light of the current pandemic crisis." Policymakers are trying to stave off an economic catastrophe with the passage of the stimulus packages; economists have warned the economy will see a historic contraction in Q2, with estimates ranging as high as 38%.
Consumer confidence unexpectedly improved in May as the US economy slowly restarted, according to data released by the Conference Board. The Conference Board's consumer confidence index rose to 86.6 this month from 85.7 in Apr. The forecast expected consumer confidence of 82.3 in May. “Following two months of rapid decline, the free-fall in Confidence stopped in May,” said Lynn Franco, senior director of economic indicators at The Conference Board. “Short-term expectations moderately increased as the gradual re-opening of the economy helped improve consumers’ spirits.” All 50 states had reopened their economies to some extent, including allowing some restaurants, beaches & retail locations to open in various parts of the country. “However, consumers remain concerned about their financial prospects,” Franco added. “While the decline in confidence appears to have stopped for the moment, the uneven path to recovery and potential second wave are likely to keep a cloud of uncertainty hanging over consumers’ heads.”
Consumer confidence rises unexpectedly in May as economy reopens
Merck (MRK), a Dow stock, plans to work alongside nonprofit scientific research organization IAVI to develop a potential vaccine against the coronavirus. The announcement comes as drugmakers pause other clinical trials & scramble to find an antidote for Covid-19, which has infected more than 5.5M worldwide & killed over 346K. Most experts agree it could take 12-18 months to roll out a safe vaccine to the market. And, even if an effective vaccine becomes available, many have warned of significant logistical challenges around distributing enough doses for the global population. MRK & IAVI said their vaccine candidate would use the recombinant vesicular stomatitis virus technology that is the basis for its Ebola Zaire virus vaccine — which was the first rVSV vaccine approved for use in humans. Ebola Zaire is one of 6 known species within the genus Ebola virus, an acute deadly illness. The virus causing the current outbreak in the Democratic Republic of Congo, & the 2014 to 2016 West African outbreak, belongs to the Ebola Zaire virus species, according to the World Health Organization. Designed & engineered by IAVI scientists in NY, the vaccine candidate for Covid-19 is in preclinical development. Clinical studies are expected to start this year. If approved, both organizations would work together to develop the vaccine & “make it accessible and affordable” worldwide. Pres Trump has voiced ambitions for a vaccine to be developed & distributed by the end of 2020, in a project called “Operation Warp Speed.” However, medical experts, including Dr Anthony Fauci, the gov's top infectious disease expert, have cast doubt on Trump's goal, expressing skepticism over the time frame. Dr Mark Feinberg, IAVI pres & CEO, said the rVSV-based vaccine strategy represented a “promising approach to combating the novel coronavirus pandemic.” MRK stock went up 1.43.
If you would like to learn more about MRK, click on this link:
club.ino.com/trend/analysis/stock/MRK?a_aid=CD3289&a_bid=6ae5b6f7
Merck in collaboration to develop coronavirus vaccine, with clinical trials to start this year
News about a new vaccine from MRK brought out buyers for stocks, taking stocks to their best levels since early Mar (shown below). The challenge will be to keep this rally going in the face of dreary macro economic news coming. Thurs will bring the 2nd estimate for Q1 GDP & the next jobless claims report.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 33.97 | +0.72 | +2.2% |
| GC=F | Gold | 1,731.50 | -4.00 | -0.2% |
US debt is on track to surpass the size of the nation's economy for the first time since World War II, according to a projection by the Committee for a Responsible Budget. The nonpartisan group, which advocates for reducing the federal debt, estimated the deficit for 2020 will top $3.8T, more than double the record set during the 2008 financial crisis. The deficit is the gap between what the federal gov pays & what it collects in taxes; in fiscal 2019, the deficit was about $984B. By the beginning of Oct, the group estimated the US debt held by the public will surpass the country's $21T economy. "The chances are that this year, we will hit the point where our national debt is the equivalent of the size of the economy," Maya MacGuineas said. "And that comes many years in advance of when we thought this would happen." The group's calculations are based on the estimate that GDP will drop by 3.9% from fiscal 2019 to 2020 & rise 3.2% from fiscal 2020 to 2021. It also assumes that Congress will not enact additional legislation to blunt the economic pain caused by the coronavirus pandemic; so far, lawmakers have passed 3 emergency aid packages totaling nearly $3T -- an unprecedented amount. It estimates the nation's debt will be $20.6T on Oct 1, compared with nominal GDP of more than $20T. The proportion of debt to GDP will continue to swell, the committee said, eventually passing the World War II record of 106% by 2023 as the US continues to borrow. It cautioned its estimates were likely low, as they did not take into account additional stimulus measures that legislators are hoping to pass. Still, the group acknowledged the majority of the deficit was "inevitable and necessary in light of the current pandemic crisis." Policymakers are trying to stave off an economic catastrophe with the passage of the stimulus packages; economists have warned the economy will see a historic contraction in Q2, with estimates ranging as high as 38%.
US debt set to exceed nation's GDP for first time since this war, watchdog warns
Consumer confidence unexpectedly improved in May as the US economy slowly restarted, according to data released by the Conference Board. The Conference Board's consumer confidence index rose to 86.6 this month from 85.7 in Apr. The forecast expected consumer confidence of 82.3 in May. “Following two months of rapid decline, the free-fall in Confidence stopped in May,” said Lynn Franco, senior director of economic indicators at The Conference Board. “Short-term expectations moderately increased as the gradual re-opening of the economy helped improve consumers’ spirits.” All 50 states had reopened their economies to some extent, including allowing some restaurants, beaches & retail locations to open in various parts of the country. “However, consumers remain concerned about their financial prospects,” Franco added. “While the decline in confidence appears to have stopped for the moment, the uneven path to recovery and potential second wave are likely to keep a cloud of uncertainty hanging over consumers’ heads.”
Consumer confidence rises unexpectedly in May as economy reopens
Merck (MRK), a Dow stock, plans to work alongside nonprofit scientific research organization IAVI to develop a potential vaccine against the coronavirus. The announcement comes as drugmakers pause other clinical trials & scramble to find an antidote for Covid-19, which has infected more than 5.5M worldwide & killed over 346K. Most experts agree it could take 12-18 months to roll out a safe vaccine to the market. And, even if an effective vaccine becomes available, many have warned of significant logistical challenges around distributing enough doses for the global population. MRK & IAVI said their vaccine candidate would use the recombinant vesicular stomatitis virus technology that is the basis for its Ebola Zaire virus vaccine — which was the first rVSV vaccine approved for use in humans. Ebola Zaire is one of 6 known species within the genus Ebola virus, an acute deadly illness. The virus causing the current outbreak in the Democratic Republic of Congo, & the 2014 to 2016 West African outbreak, belongs to the Ebola Zaire virus species, according to the World Health Organization. Designed & engineered by IAVI scientists in NY, the vaccine candidate for Covid-19 is in preclinical development. Clinical studies are expected to start this year. If approved, both organizations would work together to develop the vaccine & “make it accessible and affordable” worldwide. Pres Trump has voiced ambitions for a vaccine to be developed & distributed by the end of 2020, in a project called “Operation Warp Speed.” However, medical experts, including Dr Anthony Fauci, the gov's top infectious disease expert, have cast doubt on Trump's goal, expressing skepticism over the time frame. Dr Mark Feinberg, IAVI pres & CEO, said the rVSV-based vaccine strategy represented a “promising approach to combating the novel coronavirus pandemic.” MRK stock went up 1.43.
If you would like to learn more about MRK, click on this link:
club.ino.com/trend/analysis/stock/MRK?a_aid=CD3289&a_bid=6ae5b6f7
Merck in collaboration to develop coronavirus vaccine, with clinical trials to start this year
News about a new vaccine from MRK brought out buyers for stocks, taking stocks to their best levels since early Mar (shown below). The challenge will be to keep this rally going in the face of dreary macro economic news coming. Thurs will bring the 2nd estimate for Q1 GDP & the next jobless claims report.
Dow Jones Industrials
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