Dow rose 60 (well off early lows), advancers over decliners 5-4 & NAZ gained 70. The MLP index added 3+ to the 128s & the REIT index was off 3+ to 301. Junk bond funds slid lower & Treasuries were sold. Oil shot up 2+ to the 29s & gold advanced 12 to 1753 (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)
US consumer sentiment edged higher in the first weeks of May after Congress signed a massive economic-relief package designed to protect American workers & businesses from the coronavirus pandemic, according to preliminary by the University of Michigan. The May print on consumer sentiment inched slightly higher to 73.7 in May from 71.8 in Apr. The forecast called for consumer sentiment to drop to 68 in May. The expectations index dropped to 67.7, the lowest level since 2013, while the measure of current conditions rose 8.7 points to 83. Despite the modest gains, personal financial prospects for the year ahead continued to decline, falling to the lowest level in nearly 6 years. “Confidence inched upward in early May as the CARES relief checks improved consumers’ finances and widespread price discounting boosted their buying attitudes,” Richard Curtin, director of the survey, said. “Despite these gains, personal financial prospects for the year ahead continued to weaken.” Asked about their top concerns from the virus outbreak, a majority of survey respondents (61%) cited the health threat. Those who cited financial damages as their top concern dropped to 17%, down from 22% in Apr. Americans, however, were more worried about social isolation -- it was the top concern among 21% of respondents in May, up from 14% last month. A separate report on today showed that retail sales plunged by a record-shattering 16.4% in Apr. It was the 2nd straight month of declines for the industry as the virus outbreak forces American life to come to a grinding halt & marks the steepest decline since Mar, when they plunged 8.7%. The gov began tracking retail sales in 1992.
The German economy shrank 2.2% in Q1 compared with the previous 3-month period as shutdowns in the country & beyond started to bite, official data showed. That means Europe's biggest economy went into recession following a small dip at the end of last year. The figures from the Federal Statistical Office offered a first glimpse of the damage caused by the coronavirus crisis to Europe's biggest economy, which the gov is trying to limit with a raft of rescue programs. The decline in the Jan-Mar period was the biggest since 2009 & followed a 0.3% gain in last year's Q3 & a 0.1% contraction in Q4 (revised down from the initial report in February of zero growth). That revision put Germany into a technical recession, defined as 2 consecutive qtrs of negative growth, in Q1. Mar was the month in which the coronavirus pandemic hit Europe, with first Italy & then other countries imposing sweeping restrictions on public life & businesses. Germany itself started shutting down in mid-Mar. It never ordered factories closed, but companies did largely stop production in some areas, such as the automaking sector, & supply chains were disrupted. Recent data showed a 15.6 % month-on-month decrease in factory orders in Mar & a 9.2% drop in industrial production. The country started loosening restrictions on Apr 20 & the process has gathered pace recently. Shops have now reopened, restaurants are gradually opening up & auto production has restarted.
The already dismal outlook for economic growth during the current period just got considerably worse. GDP, which tallies the sum of goods & services across the economy, is on track to crater 42.8% in the Apr-Jun period, according to a running measure kept by the Atlanta Federal Reserve. The tracker, called GDPNow, had been indicating a drop of 34.9% a week ago, but a raft of poor economic data since then caused the central bank district to take down the figure even more. The drop would easily be the worst in the post-World War II era. On top of all the bad jobs reports recently, the Census Bureau reported that retail sales collapsed 16.4% in Apr, which was even worse than the 12.3% that was expected. That came following news yesterday that another nearly 3M Americans filed jobless claims last week, bringing the running 8-week total during the coronavirus lockdown to 36.5M. The Atlanta Fed now sees personal consumption expenditures, which make 68% of GDP, falling by 43.6% in Q2, down from the May 8 estimate of -33.9%. Gross private domestic investment, which currently is 17% of GDP, is expected to plunge by 69.4%, down from a -62.8% estimate a week ago. GDPNow can be volatile & is not a forecast per se but rather a running estimate based on real-time data. However, it is only somewhat worse than other prominent estimates.
GDP could decline by 42% in the second quarter, according to the Atlanta Fed
Gold prices ended higher as US economic data underscored the damage from the COVID-19 pandemic on business activity & as concerns over US-China trade tensions lifted haven demand for the metal, which scored its highest settlement in a month. Gold for Jun climbed $15 (0.9%) to settle at $1756 an ounce. Prices for the most-active contract marked their highest settlement since Apr 14. For the week, gold gained 2.5% based on the most-active contract. Economic data was mostly downbeat. US retail sales tumbled by a record 16.4% in Apr & fell 16.2% excluding automobile sales & gas price, due to lockdown measures implemented to slow the worst viral outbreak in more than a century. Meanwhile, a reading on business activity in the New York area, the New York Fed's Empire State business conditions index, rose 29.7 points to minus 48.5 in May, the regional Fed bank said, marking the 2nd-lowest reading on record. US industrial output fell by a record 11.2% in Apr, but the preliminary reading of the consumer-sentiment survey in May edged up to 73.7 from 71.8 in Apr, the University of Michigan said. Gold also digested reports of rising Sino-American tensions after Pres Trump moved to block shipments of semiconductors to Huawei Technologies, as the US has blamed China for mishandling the outbreak of the coronavirus.
Gold scores highest finish in a month as U.S. economic data highlights impact of coronavirus
Oil futures rose, with the US benchmark posting a weekly gain of 19%, finding support from production cuts by major oil producers & early signs of a recovery in demand for crude with some business lockdowns globally being lifted. West Texas Intermediate (WTI) crude for Jun rose $1.87 (6.8%) to settle at $29.43 barrel. Prices based on the front-month contract, which expires at the end of Tues trading, logged a weekly gain of 19%. They also marked the highest finish since Mar 13. Jul WTI crude, the most active contract, rose $1.64 (5.9%) to settle at $29.52. At their highest levels today, Jun WTI traded at $29.92 & Jul WTI touched $29.78. Global benchmark Jul Brent crude rose $1.37 (4.4%) at $32.50 a barrel for a 4.9% weekly rise.
U.S. oil benchmark posts a 19% weekly climb on output cuts, improving demand outlook
When all is said & done, the Dow went up 300 this week. Not a bad performance given the abundance of negative news (including div cuts). That's where it was on Apr 7, recovering from dreary lows around 18K. The US economy is trying to reopen in several states with various degrees of success. The bulls have done well to keep enough buyers around so that the averages have been trading sideways. The most worrisome problem is US-China trade relations which continue to be touchy.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
US consumer sentiment edged higher in the first weeks of May after Congress signed a massive economic-relief package designed to protect American workers & businesses from the coronavirus pandemic, according to preliminary by the University of Michigan. The May print on consumer sentiment inched slightly higher to 73.7 in May from 71.8 in Apr. The forecast called for consumer sentiment to drop to 68 in May. The expectations index dropped to 67.7, the lowest level since 2013, while the measure of current conditions rose 8.7 points to 83. Despite the modest gains, personal financial prospects for the year ahead continued to decline, falling to the lowest level in nearly 6 years. “Confidence inched upward in early May as the CARES relief checks improved consumers’ finances and widespread price discounting boosted their buying attitudes,” Richard Curtin, director of the survey, said. “Despite these gains, personal financial prospects for the year ahead continued to weaken.” Asked about their top concerns from the virus outbreak, a majority of survey respondents (61%) cited the health threat. Those who cited financial damages as their top concern dropped to 17%, down from 22% in Apr. Americans, however, were more worried about social isolation -- it was the top concern among 21% of respondents in May, up from 14% last month. A separate report on today showed that retail sales plunged by a record-shattering 16.4% in Apr. It was the 2nd straight month of declines for the industry as the virus outbreak forces American life to come to a grinding halt & marks the steepest decline since Mar, when they plunged 8.7%. The gov began tracking retail sales in 1992.
US consumer sentiment inches higher following coronavirus stimulus checks
The German economy shrank 2.2% in Q1 compared with the previous 3-month period as shutdowns in the country & beyond started to bite, official data showed. That means Europe's biggest economy went into recession following a small dip at the end of last year. The figures from the Federal Statistical Office offered a first glimpse of the damage caused by the coronavirus crisis to Europe's biggest economy, which the gov is trying to limit with a raft of rescue programs. The decline in the Jan-Mar period was the biggest since 2009 & followed a 0.3% gain in last year's Q3 & a 0.1% contraction in Q4 (revised down from the initial report in February of zero growth). That revision put Germany into a technical recession, defined as 2 consecutive qtrs of negative growth, in Q1. Mar was the month in which the coronavirus pandemic hit Europe, with first Italy & then other countries imposing sweeping restrictions on public life & businesses. Germany itself started shutting down in mid-Mar. It never ordered factories closed, but companies did largely stop production in some areas, such as the automaking sector, & supply chains were disrupted. Recent data showed a 15.6 % month-on-month decrease in factory orders in Mar & a 9.2% drop in industrial production. The country started loosening restrictions on Apr 20 & the process has gathered pace recently. Shops have now reopened, restaurants are gradually opening up & auto production has restarted.
Germany in recession as economy shrinks 2.2% in 1st quarter
The already dismal outlook for economic growth during the current period just got considerably worse. GDP, which tallies the sum of goods & services across the economy, is on track to crater 42.8% in the Apr-Jun period, according to a running measure kept by the Atlanta Federal Reserve. The tracker, called GDPNow, had been indicating a drop of 34.9% a week ago, but a raft of poor economic data since then caused the central bank district to take down the figure even more. The drop would easily be the worst in the post-World War II era. On top of all the bad jobs reports recently, the Census Bureau reported that retail sales collapsed 16.4% in Apr, which was even worse than the 12.3% that was expected. That came following news yesterday that another nearly 3M Americans filed jobless claims last week, bringing the running 8-week total during the coronavirus lockdown to 36.5M. The Atlanta Fed now sees personal consumption expenditures, which make 68% of GDP, falling by 43.6% in Q2, down from the May 8 estimate of -33.9%. Gross private domestic investment, which currently is 17% of GDP, is expected to plunge by 69.4%, down from a -62.8% estimate a week ago. GDPNow can be volatile & is not a forecast per se but rather a running estimate based on real-time data. However, it is only somewhat worse than other prominent estimates.
GDP could decline by 42% in the second quarter, according to the Atlanta Fed
Gold prices ended higher as US economic data underscored the damage from the COVID-19 pandemic on business activity & as concerns over US-China trade tensions lifted haven demand for the metal, which scored its highest settlement in a month. Gold for Jun climbed $15 (0.9%) to settle at $1756 an ounce. Prices for the most-active contract marked their highest settlement since Apr 14. For the week, gold gained 2.5% based on the most-active contract. Economic data was mostly downbeat. US retail sales tumbled by a record 16.4% in Apr & fell 16.2% excluding automobile sales & gas price, due to lockdown measures implemented to slow the worst viral outbreak in more than a century. Meanwhile, a reading on business activity in the New York area, the New York Fed's Empire State business conditions index, rose 29.7 points to minus 48.5 in May, the regional Fed bank said, marking the 2nd-lowest reading on record. US industrial output fell by a record 11.2% in Apr, but the preliminary reading of the consumer-sentiment survey in May edged up to 73.7 from 71.8 in Apr, the University of Michigan said. Gold also digested reports of rising Sino-American tensions after Pres Trump moved to block shipments of semiconductors to Huawei Technologies, as the US has blamed China for mishandling the outbreak of the coronavirus.
Gold scores highest finish in a month as U.S. economic data highlights impact of coronavirus
Oil futures rose, with the US benchmark posting a weekly gain of 19%, finding support from production cuts by major oil producers & early signs of a recovery in demand for crude with some business lockdowns globally being lifted. West Texas Intermediate (WTI) crude for Jun rose $1.87 (6.8%) to settle at $29.43 barrel. Prices based on the front-month contract, which expires at the end of Tues trading, logged a weekly gain of 19%. They also marked the highest finish since Mar 13. Jul WTI crude, the most active contract, rose $1.64 (5.9%) to settle at $29.52. At their highest levels today, Jun WTI traded at $29.92 & Jul WTI touched $29.78. Global benchmark Jul Brent crude rose $1.37 (4.4%) at $32.50 a barrel for a 4.9% weekly rise.
U.S. oil benchmark posts a 19% weekly climb on output cuts, improving demand outlook
When all is said & done, the Dow went up 300 this week. Not a bad performance given the abundance of negative news (including div cuts). That's where it was on Apr 7, recovering from dreary lows around 18K. The US economy is trying to reopen in several states with various degrees of success. The bulls have done well to keep enough buyers around so that the averages have been trading sideways. The most worrisome problem is US-China trade relations which continue to be touchy.
Dow Jones Industrials
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