Dow sank 457 (closing at session lows), decliners over advancers 3-1 & NAZ dropped 189. The MLP index was fractionally lower to the 127s & the REIT index sank 14+ to 311. Junk bond funds went up in price & Treasuries remained strong. Oil went up 1+ to the 25s & gold rose 5 to 1703 (more below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
China announced a new list of 79 US products eligible for waivers from retaliatory tariffs imposed at the height of the bilateral trade war, amid continued pressure on Beijing to boost imports from the US. China's finance ministry said the new waivers will take effect on May 19 & expire on May 18, 2021. The latest list waives tariffs on products including ores of rare earth metals, gold ores, silver ores & concentrates. The ministry did not disclose the imports value of the products. Beijing in Feb said it will grant exemptions for 696 US goods including key products such as soybeans & pork based on applications from companies. Beijing & the US's top trade negotiators held a call last week & discussed implementation of the Phase 1 deal signed in Jan. Under the deal, China agreed to increase its purchases of US goods from a 2017 baseline by $200B over 2 years, with about $77B in increased purchases in the first year & $123B in the 2nd year. Renewed tensions between the 2 countries, sparked by the COVID-19 pandemic that began in China late last year, are also raising questions about the trade truce. Pres Trump has threatened to terminate the deal if China fails to meet its purchase commitments. China's Global Times, published by the official newspaper of the ruling Communist Party, also reported that some gov advisers were urging Beijing to invalidate the trade deal & negotiate a one more favorable to China.
Gold futures ended higher, with slight support attributed in part to a weaker tone for the $ as traders bet on a slow economic recovery, even as efforts were under way to reopen economies that were closed to contain the COVID-19 pandemic. Gold for Jun rose $8 (0.5%) to settle at $1706 an ounce following losses in each of the last 2 sessions.
Gold prices end higher as traders track weaker dollar, bet on slow economic recovery
Oil futures finished higher, with US prices at a 5-week high on expectations that falling production levels & a gradual revival in demand from a COVID-19 pandemic-related drop, will ease a global glut of crude that has slammed prices in 2020. Saudi Arabia has promised to cut an additional 1M barrels per day in Jun, in addition to its share of reductions under the output-cut agreement between OPEC & its allies, including Russia. It was reported that OPEC+ wants to continue their existing oil production cuts beyond Jun. The agreement between the group of producers (OPEC+) called for output reductions of 9.7M barrels per day from May 1 thru Jun, with the group gradually reducing the size of the cuts after that, thru Apr 2022. West Texas Intermediate crude for Jun rose $1.64 (6.8%) to settle at $25.78 a barrel, the highest finish for a front-month contract since Apr 6. Jul Brent crude, the global benchmark, added 35¢ (1.2%) to $29.98 a barrel. Saudi oil production for Jun, with the OPEC+ output-cut agreement & the voluntary cuts, will total 7.5M barrels per day. Kuwait & the UAE said that they would offer support for the Saudi move by reducing production by 80K barrels & 100K barrels per day, respectively, in Jun.
Oil settles higher on hopes supply cuts, reopening economies will drain crude glut
Dreary economic news keeps coming in & that drives selling. Before the virus pandemic, the Treasury was supposed to run a $1T+ deficit for this fiscal year. Now spending on relief programs plus reduced tax income can easily increase the deficit to around 4$. And the Dems want another super spending program which would increase that deficit. Over the short term, Q2 will be an awful time for the economy & that will felt by all govs. Meanwhile the oil market is bouncing back with significant production cuts, although oil prices remain at depressed levels. Today there was heavy selling in the Dow during the last hour.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
China announced a new list of 79 US products eligible for waivers from retaliatory tariffs imposed at the height of the bilateral trade war, amid continued pressure on Beijing to boost imports from the US. China's finance ministry said the new waivers will take effect on May 19 & expire on May 18, 2021. The latest list waives tariffs on products including ores of rare earth metals, gold ores, silver ores & concentrates. The ministry did not disclose the imports value of the products. Beijing in Feb said it will grant exemptions for 696 US goods including key products such as soybeans & pork based on applications from companies. Beijing & the US's top trade negotiators held a call last week & discussed implementation of the Phase 1 deal signed in Jan. Under the deal, China agreed to increase its purchases of US goods from a 2017 baseline by $200B over 2 years, with about $77B in increased purchases in the first year & $123B in the 2nd year. Renewed tensions between the 2 countries, sparked by the COVID-19 pandemic that began in China late last year, are also raising questions about the trade truce. Pres Trump has threatened to terminate the deal if China fails to meet its purchase commitments. China's Global Times, published by the official newspaper of the ruling Communist Party, also reported that some gov advisers were urging Beijing to invalidate the trade deal & negotiate a one more favorable to China.
China announces new tariff waivers for some US imports
The US reported a record
$738B budget deficit in Apr, as an explosion in gov
spending & a shrinking of revenues amid the novel coronavirus pandemic
put it deeply into the red. The Treasury Dept said the
budget deficit last month was the first to reflect the enormity of
gov spending that has been authorized to try to mitigate the
economic impact of the crisis, which until recently saw most of the
country under strict lockdown orders & many businesses shuttered to
contain the spread of the virus. Congress approved a $2.3T rescue package on Mar 27 &
has since added to it, taking total emergency relief spending to around
$3T. Apr marked the first month some of those stimulus
programs were begun to be paid. Apr is usually a month in which
Treasury posts a surplus because tax payments are due on Apr 15, but
they have been delayed this year until Jul 15 due to the pandemic. The
gov has only reported an Apr deficit 15 times over the past 66
years, Treasury said. More than 33M Americans have filed
for unemployment benefits since Mar 21, which equates to roughly one
in 5 jobs, cratering the gov's revenue base. “They
really are striking numbers that I didn’t think I would ever see,” a
senior Treasury official said when asked about the
monthly figure, which was also an all-time record budget deficit for any
month. About $283B in non-withheld individual income taxes
were paid in Apr 2019, according to Treasury data, & receipts for
taxes withheld from worker paychecks, which totaled $114B in
Apr 2019, were reduced this year by the jump in unemployment. In
Apr, receipts totaled $242B, down 55% from a year earlier,
while outlays surged 161% to $980B. The fiscal year-to-date
deficit surged to $1.48T compared to a $531B deficit in
the comparable period in 2019.
US reported a record $738 billion budget deficit in AprilGold futures ended higher, with slight support attributed in part to a weaker tone for the $ as traders bet on a slow economic recovery, even as efforts were under way to reopen economies that were closed to contain the COVID-19 pandemic. Gold for Jun rose $8 (0.5%) to settle at $1706 an ounce following losses in each of the last 2 sessions.
Gold prices end higher as traders track weaker dollar, bet on slow economic recovery
Oil futures finished higher, with US prices at a 5-week high on expectations that falling production levels & a gradual revival in demand from a COVID-19 pandemic-related drop, will ease a global glut of crude that has slammed prices in 2020. Saudi Arabia has promised to cut an additional 1M barrels per day in Jun, in addition to its share of reductions under the output-cut agreement between OPEC & its allies, including Russia. It was reported that OPEC+ wants to continue their existing oil production cuts beyond Jun. The agreement between the group of producers (OPEC+) called for output reductions of 9.7M barrels per day from May 1 thru Jun, with the group gradually reducing the size of the cuts after that, thru Apr 2022. West Texas Intermediate crude for Jun rose $1.64 (6.8%) to settle at $25.78 a barrel, the highest finish for a front-month contract since Apr 6. Jul Brent crude, the global benchmark, added 35¢ (1.2%) to $29.98 a barrel. Saudi oil production for Jun, with the OPEC+ output-cut agreement & the voluntary cuts, will total 7.5M barrels per day. Kuwait & the UAE said that they would offer support for the Saudi move by reducing production by 80K barrels & 100K barrels per day, respectively, in Jun.
Oil settles higher on hopes supply cuts, reopening economies will drain crude glut
Dreary economic news keeps coming in & that drives selling. Before the virus pandemic, the Treasury was supposed to run a $1T+ deficit for this fiscal year. Now spending on relief programs plus reduced tax income can easily increase the deficit to around 4$. And the Dems want another super spending program which would increase that deficit. Over the short term, Q2 will be an awful time for the economy & that will felt by all govs. Meanwhile the oil market is bouncing back with significant production cuts, although oil prices remain at depressed levels. Today there was heavy selling in the Dow during the last hour.
Dow Jones Industrials
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