Dow fell 28, decliners over advancers 3-2 & NAZ went up 31. The MLP index was off fractionally to the 145s & the REIT index lost 1+ to the 348s. Junk bond funds slid lower while Treasuries wee bid higher. Oil was flat just under 40 & gold rose 10 to 1763.
AMJ (Alerian MLP Index tracking fund)
Small businesses still reeling from the coronavirus pandemic & the related economic lockdown could receive a 2nd loan thru the Paycheck Protection Program (PPP) under new legislation introduced by a group of Dem lawmakers. The Prioritized Paycheck Protection Program Act, introduced Thurs would allow businesses with fewer than 100 employees to tap the taxpayer-backed fund for a 2nd time if they can prove that they lost half of their revenue as a result of the virus outbreak. Eligible businesses must have exhausted their initial PPP loan, or be on pace to spend the aid in order to qualify for another loan. The bill would also extend the loan application deadline for businesses from Jun 30 to Dec 30 or later. A companion bill has been introduced in the House. “Many small businesses will continue to struggle in the weeks and months to come,” Sen Cardin, the ranking member of the Senate Small Business Committee, said. “Congress must once again act urgently to support our most vulnerable small businesses through this crisis, so our economy can recover as quickly as possible after the pandemic.” Large, publicly traded companies are ineligible to dip into the program again, & hospitality & lodging businesses with more than one location are limited to an aggregate loan amount of $2M. At least $25B of the fund would be reserved for employers with 10 or fewer workers, as well as small businesses in underserved & rural communities. Under the aid program, businesses can receive up to $10M taxpayer-funded loans that will be forgiven by the federal gov if at least 60% goes toward maintaining payroll. As of Fri, more than 4.5M loans worth close to $514B had been distributed through the program. Congress allocated $600B to the PPP, leaving roughly $100B left over in the fund. But lawmakers & small business advocate that more aid, or more time, is needed to ensure there's not a surge of bankruptcies. There are roughly 30M small businesses in the US that employ about 59M workers (about ½ of the total US workforce). The bill introduction comes as Congress & the White House grapple with a 4th coronavirus aid package to help the US economy, still hurting from the lockdown, recover. Even as states gradually start to reopen their economies, & life slowly starts to return to normal, unemployment remains at a decades-high, with Ms of Americans still out of work. The Trump administration has previously said it does not intend to pass more relief measures until at least the beginning of Jul, although the Senate is not scheduled to return from its 2-week recess until Jul 20.
Existing home sales plummeted in May as the coronavirus continued to hammer the economy, but realtors expect that it will represent the bottom. Sales of existing homes in May fell 9.7% compared with Apr, to a seasonally adjusted annualized rate of 3.91M units, according to the National Association of Realtors sales were down 26.6% annually. That is the largest annual decline since 1982, when interest rates were 18%. It is also the slowest sales pace since 2010. These numbers are based on closed sales, representing contracts signed in Mar & Apr. Given that those months saw the worst of the economic shutdown from the coronavirus, it is not surprising that the volume came in so low. “Well into the month of June, I think people are much more relaxed, knowing that there is a massive stimulus package in the economy,” said Lawrence Yun, chief economist for the Realtors. “I am very confident that this will be the cyclical low point. Buyers are coming back and listings are coming back.” The meager supply of homes for sale didn't help either, as not only did potential sellers decide to wait, but some already on the market pulled their listings. Inventories nationally fell 18.8% compared with May 2019. At the current sales pace, it would take 4.8 months to exhaust the inventory & supply was lower across all price points. Tight supply kept pressure on home prices. The median price of an existing home sold in May was $284K, an increase of 2.3% compared with May 2019 & the smallest annual rise since 2012, when the market had just begun to recover from the last recession. It may be due, in part, to a shift in the mix of sales. Lower-priced homes sold at a much stronger pace, while sales were sharply lower at the high end of the market. The nation’s homebuilders appear to be benefiting from the lack of existing homes for sale. An index measuring homebuilder sentiment took a major leap in Jun, back into positive territory, after plunging in Apr, according to the National Association of Home Builders. Builders have reported increases in both sales & buyer traffic, even though some of that traffic is online & virtual. There continues to be a large divergence between single-family homes & condominiums. Single-family home sales fell 9.4% month to month, while condominium sales were down 12.8%.
Existing home sales plunge in May, but Realtors think that was the bottom
White House economic advisor Larry Kudlow said that a “second wave” of coronavirus cases isn't coming & that lawmakers will likely develop another stimulus package by the end of next month. When asked how he's thinking about resurgences of Covid-19 cases in several states, Kudlow said he isn’t too concerned. “There is no second wave coming. It’s just hot spots. They send in CDC teams, we’ve got the testing procedures, we’ve got the diagnostics, we’ve got the PPE. And so I really think it’s a pretty good situation,” said Kudlow, director of the National Economic Council & chief economic advisor to Pres Trump. “Actually, I think nationwide the positivity rate is still quite low, well under 10%.” His comments came after the US reported more than 30K new infections on Fri & Sat, the highest daily totals since May 1, according to Johns Hopkins University data. New cases are rising in states in the South, West & Midwest, including Florida & South Carolina, which last week broke their single-day totals 3 days in a row. Health officials have warned that upswings in new cases appear clustered among younger people who are flocking to bars & social gatherings. The World Health Organization on Fri warned that the pandemic has entered a “new and dangerous phase” as the disease accelerates in new locations globally & rises in areas that have begun to ease protective rules. But Kudlow reiterated that the resurgence in the national numbers is concentrated in a handful of “hot spots” including Florida, Arizona & Nevada, & said he isn't worried about a broader return of the virus. “There are some hot spots. We’re on it. We know how to deal with this stuff now, we’ve come a long way from last winter,” he added. Kudlow also discussed the odds of another fiscal stimulus package from Congress & the White House. While no final decisions have been made as to the content of any bill, it’s “highly likely” that the House, Senate & White House will coordinate on some form of economic relief after the Jul recess, he added. Kudlow listed several things Trump has mentioned as possible items in a future economic support bill. “Things the president has talked about publicly. He has talked about a payroll tax holiday for the workforce, he’s occasionally talked about capital gains tax relief,” Kudlow said. “He wants to help out with some form of tax relief. Restaurants, entertainment, athletic contests, things of that sort,” he added. “We want to help out the tourism business, which has been hurt very badly. We also want to reward people who are reemploying, who are going back to work.”
Larry Kudlow says a second wave of coronavirus cases ‘isn’t coming’
Stocks are treading water, awaiting developments as more states reopen their economies. The Dow remains near 26K, about 7½K above its recent lows & 3K under its record highs earlier this year, Gold continues close to its 9 year highs.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 39.97 | +0.22 | +0.6% |
| GC=F | Gold | 1,777.10 | +24.10 | +1.4% |
Small businesses still reeling from the coronavirus pandemic & the related economic lockdown could receive a 2nd loan thru the Paycheck Protection Program (PPP) under new legislation introduced by a group of Dem lawmakers. The Prioritized Paycheck Protection Program Act, introduced Thurs would allow businesses with fewer than 100 employees to tap the taxpayer-backed fund for a 2nd time if they can prove that they lost half of their revenue as a result of the virus outbreak. Eligible businesses must have exhausted their initial PPP loan, or be on pace to spend the aid in order to qualify for another loan. The bill would also extend the loan application deadline for businesses from Jun 30 to Dec 30 or later. A companion bill has been introduced in the House. “Many small businesses will continue to struggle in the weeks and months to come,” Sen Cardin, the ranking member of the Senate Small Business Committee, said. “Congress must once again act urgently to support our most vulnerable small businesses through this crisis, so our economy can recover as quickly as possible after the pandemic.” Large, publicly traded companies are ineligible to dip into the program again, & hospitality & lodging businesses with more than one location are limited to an aggregate loan amount of $2M. At least $25B of the fund would be reserved for employers with 10 or fewer workers, as well as small businesses in underserved & rural communities. Under the aid program, businesses can receive up to $10M taxpayer-funded loans that will be forgiven by the federal gov if at least 60% goes toward maintaining payroll. As of Fri, more than 4.5M loans worth close to $514B had been distributed through the program. Congress allocated $600B to the PPP, leaving roughly $100B left over in the fund. But lawmakers & small business advocate that more aid, or more time, is needed to ensure there's not a surge of bankruptcies. There are roughly 30M small businesses in the US that employ about 59M workers (about ½ of the total US workforce). The bill introduction comes as Congress & the White House grapple with a 4th coronavirus aid package to help the US economy, still hurting from the lockdown, recover. Even as states gradually start to reopen their economies, & life slowly starts to return to normal, unemployment remains at a decades-high, with Ms of Americans still out of work. The Trump administration has previously said it does not intend to pass more relief measures until at least the beginning of Jul, although the Senate is not scheduled to return from its 2-week recess until Jul 20.
Certain small businesses could receive another PPP loan under new proposal
Existing home sales plummeted in May as the coronavirus continued to hammer the economy, but realtors expect that it will represent the bottom. Sales of existing homes in May fell 9.7% compared with Apr, to a seasonally adjusted annualized rate of 3.91M units, according to the National Association of Realtors sales were down 26.6% annually. That is the largest annual decline since 1982, when interest rates were 18%. It is also the slowest sales pace since 2010. These numbers are based on closed sales, representing contracts signed in Mar & Apr. Given that those months saw the worst of the economic shutdown from the coronavirus, it is not surprising that the volume came in so low. “Well into the month of June, I think people are much more relaxed, knowing that there is a massive stimulus package in the economy,” said Lawrence Yun, chief economist for the Realtors. “I am very confident that this will be the cyclical low point. Buyers are coming back and listings are coming back.” The meager supply of homes for sale didn't help either, as not only did potential sellers decide to wait, but some already on the market pulled their listings. Inventories nationally fell 18.8% compared with May 2019. At the current sales pace, it would take 4.8 months to exhaust the inventory & supply was lower across all price points. Tight supply kept pressure on home prices. The median price of an existing home sold in May was $284K, an increase of 2.3% compared with May 2019 & the smallest annual rise since 2012, when the market had just begun to recover from the last recession. It may be due, in part, to a shift in the mix of sales. Lower-priced homes sold at a much stronger pace, while sales were sharply lower at the high end of the market. The nation’s homebuilders appear to be benefiting from the lack of existing homes for sale. An index measuring homebuilder sentiment took a major leap in Jun, back into positive territory, after plunging in Apr, according to the National Association of Home Builders. Builders have reported increases in both sales & buyer traffic, even though some of that traffic is online & virtual. There continues to be a large divergence between single-family homes & condominiums. Single-family home sales fell 9.4% month to month, while condominium sales were down 12.8%.
Existing home sales plunge in May, but Realtors think that was the bottom
White House economic advisor Larry Kudlow said that a “second wave” of coronavirus cases isn't coming & that lawmakers will likely develop another stimulus package by the end of next month. When asked how he's thinking about resurgences of Covid-19 cases in several states, Kudlow said he isn’t too concerned. “There is no second wave coming. It’s just hot spots. They send in CDC teams, we’ve got the testing procedures, we’ve got the diagnostics, we’ve got the PPE. And so I really think it’s a pretty good situation,” said Kudlow, director of the National Economic Council & chief economic advisor to Pres Trump. “Actually, I think nationwide the positivity rate is still quite low, well under 10%.” His comments came after the US reported more than 30K new infections on Fri & Sat, the highest daily totals since May 1, according to Johns Hopkins University data. New cases are rising in states in the South, West & Midwest, including Florida & South Carolina, which last week broke their single-day totals 3 days in a row. Health officials have warned that upswings in new cases appear clustered among younger people who are flocking to bars & social gatherings. The World Health Organization on Fri warned that the pandemic has entered a “new and dangerous phase” as the disease accelerates in new locations globally & rises in areas that have begun to ease protective rules. But Kudlow reiterated that the resurgence in the national numbers is concentrated in a handful of “hot spots” including Florida, Arizona & Nevada, & said he isn't worried about a broader return of the virus. “There are some hot spots. We’re on it. We know how to deal with this stuff now, we’ve come a long way from last winter,” he added. Kudlow also discussed the odds of another fiscal stimulus package from Congress & the White House. While no final decisions have been made as to the content of any bill, it’s “highly likely” that the House, Senate & White House will coordinate on some form of economic relief after the Jul recess, he added. Kudlow listed several things Trump has mentioned as possible items in a future economic support bill. “Things the president has talked about publicly. He has talked about a payroll tax holiday for the workforce, he’s occasionally talked about capital gains tax relief,” Kudlow said. “He wants to help out with some form of tax relief. Restaurants, entertainment, athletic contests, things of that sort,” he added. “We want to help out the tourism business, which has been hurt very badly. We also want to reward people who are reemploying, who are going back to work.”
Larry Kudlow says a second wave of coronavirus cases ‘isn’t coming’
Stocks are treading water, awaiting developments as more states reopen their economies. The Dow remains near 26K, about 7½K above its recent lows & 3K under its record highs earlier this year, Gold continues close to its 9 year highs.
Dow Jones Industrials
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