Dow lost 80, decliners slightly ahead of advancers & NAZ dropped 28. The MLP index inched higher in the 137s & the REIT index was fractionally lower to the 337s. Junk bond funds fluctuated & Treasuries were bid higher. Oil rose in the 38s & gold fell 3 to 1771.
AMJ (Alerian MLP Index tracking fund)
Jobless claims totaled 1.48M last week as unemployment related to the coronavirus pandemic remained stubbornly high, though those receiving benefits fell below 20M for the first time in 2 months, the gov reported. The forecast had been for 1.35M claims. While the weekly numbers remained high & were worse than estimates for a 2nd straight week, the total of those receiving benefits continued to fall: Continuing claims fell 767K to 19.5M. There also were 728K initial claims under the Pandemic Unemployment Assistance program. The unexpectedly high number comes as all 50 states have reopened following a shutdown that began in mid-Mar. Rising cases across various states has prompted some governors to reconsider the relaxed policies. The most recent number marked the 14th straight week that filings remained above 1M, a total first eclipsed for the week ended Mar 21. That was shortly after the World Health Organization declared the pandemic & much of the US economy went into lockdown. Claims had never been above 1M prior to that. The coronavirus-era record is just shy of 6.9M, hit in late Mar. At the state level, California posted an increase of 46K (19%) far larger than any other state, according to data not adjusted for seasonal factors. Pennsylvania rose 7K (a 14% jump from the previous week) & Oklahoma/s total fell by 36K.
Total of those receiving unemployment benefits falls below 20 million
The US economy shrank at a 5.0% rate in Q1 with a much worse decline expected in the current 3-month economic period, which will show what happened when the pandemic began to spread across the US. The Commerce Dept reported that the decline in GDP, the total output of goods & services, in the Jan-Mar qtr was unchanged from the estimate made a month ago. The 5% drop was the sharpest quarterly decline since an 8.4% fall in Q4--2008 during the depths of the worst financial crisis since the depression. The Q1 period captured just 2 weeks of the shutdowns that began in many parts of the country in mid-Mar. Economists believe that GDP plunged around 30% in Q2. That would be the biggest quarterly decline on record, 3 times bigger than the current record-holder, a 10% drop in 1958. Forecasters believe the economy will rebound in H2. The Congressional Budget Office is predicting a 21.5% growth rate in the upcoming Jul-Sep qtr followed by a 10.4% gain in Q4. However, a handful of states, particularly in the South, have begun to report surging infections. And even with a rebound in growth if it does materialize in Jul, it would come after seismic losses that would mean a decline in economic output for the entire year. While the overall GDP figure was unchanged for Q1, the composition shifted slightly with downward revisions to consumer spending, exports & business inventories offset by an upward revision to business investment.
White House economic adviser Larry Kudlow said that a resurgence of coronavirus cases in some states could lead to targeted shutdowns in certain areas to slow the spread of the outbreak. "There are spikes in hot spots. There's no doubt about that," Kudlow said. "And there will be shutdowns in individual places or certain stores. We are keeping a very close eye on this." Yesterday, the nation set a record high of new cases. Several states, including Arizona, California, Mississippi, Nevada, Texas & Oklahoma notched their own records for daily infections this week. "We're going to have to live with this from time to time," he added. "But that's a different matter than the whole country. We have seen case growth rates rise nationally just a little bit. Fatality rates, however, continue to go down." Kudlow's comments came on the heels of the latest jobless claims figures from the Labor Dept, which showed that another 1.5M Americans filed for unemployment benefits last week. That pushes the number of job losses since the shutdown began to around 47M. A surprisingly good May jobs report, which showed the nation's unemployment rate unexpectedly fell to 13.3% from 14.7% last month, buoyed hopes for a so-called V-shaped recovery. But the sudden resurgence in cases has rattled markets, threatening to derail the nation's slow, but steady, recovery from the pandemic. Still, Kudlow maintained his projection of a faster economic rebound, estimating that unemployment will fall below 10% by the end of the year & that economic growth could surge to 20% in the 3rd & 4th qtrs. "I think the strong V recovery is still right there," he said. "I'm pretty hopeful once we get the next set of jobs report, based on these weekly numbers."
Dreary news from the jobless claims report & a reminder about GDP's shrinkage in Q1 is bringing sellers to the market. The Dow is down 200 from its high ½ an hour ago. More cases of coronavirus is making it difficult for the bulls to make their case & gold is still popular with many investors.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 38.46 | +0.45 | +1.2% |
| GC=F | Gold | 1,767.10 | -8.00 | -0.5% |
Jobless claims totaled 1.48M last week as unemployment related to the coronavirus pandemic remained stubbornly high, though those receiving benefits fell below 20M for the first time in 2 months, the gov reported. The forecast had been for 1.35M claims. While the weekly numbers remained high & were worse than estimates for a 2nd straight week, the total of those receiving benefits continued to fall: Continuing claims fell 767K to 19.5M. There also were 728K initial claims under the Pandemic Unemployment Assistance program. The unexpectedly high number comes as all 50 states have reopened following a shutdown that began in mid-Mar. Rising cases across various states has prompted some governors to reconsider the relaxed policies. The most recent number marked the 14th straight week that filings remained above 1M, a total first eclipsed for the week ended Mar 21. That was shortly after the World Health Organization declared the pandemic & much of the US economy went into lockdown. Claims had never been above 1M prior to that. The coronavirus-era record is just shy of 6.9M, hit in late Mar. At the state level, California posted an increase of 46K (19%) far larger than any other state, according to data not adjusted for seasonal factors. Pennsylvania rose 7K (a 14% jump from the previous week) & Oklahoma/s total fell by 36K.
Total of those receiving unemployment benefits falls below 20 million
The US economy shrank at a 5.0% rate in Q1 with a much worse decline expected in the current 3-month economic period, which will show what happened when the pandemic began to spread across the US. The Commerce Dept reported that the decline in GDP, the total output of goods & services, in the Jan-Mar qtr was unchanged from the estimate made a month ago. The 5% drop was the sharpest quarterly decline since an 8.4% fall in Q4--2008 during the depths of the worst financial crisis since the depression. The Q1 period captured just 2 weeks of the shutdowns that began in many parts of the country in mid-Mar. Economists believe that GDP plunged around 30% in Q2. That would be the biggest quarterly decline on record, 3 times bigger than the current record-holder, a 10% drop in 1958. Forecasters believe the economy will rebound in H2. The Congressional Budget Office is predicting a 21.5% growth rate in the upcoming Jul-Sep qtr followed by a 10.4% gain in Q4. However, a handful of states, particularly in the South, have begun to report surging infections. And even with a rebound in growth if it does materialize in Jul, it would come after seismic losses that would mean a decline in economic output for the entire year. While the overall GDP figure was unchanged for Q1, the composition shifted slightly with downward revisions to consumer spending, exports & business inventories offset by an upward revision to business investment.
US GDP suffers sharpest decline since 2008 — and worst likely still ahead
White House economic adviser Larry Kudlow said that a resurgence of coronavirus cases in some states could lead to targeted shutdowns in certain areas to slow the spread of the outbreak. "There are spikes in hot spots. There's no doubt about that," Kudlow said. "And there will be shutdowns in individual places or certain stores. We are keeping a very close eye on this." Yesterday, the nation set a record high of new cases. Several states, including Arizona, California, Mississippi, Nevada, Texas & Oklahoma notched their own records for daily infections this week. "We're going to have to live with this from time to time," he added. "But that's a different matter than the whole country. We have seen case growth rates rise nationally just a little bit. Fatality rates, however, continue to go down." Kudlow's comments came on the heels of the latest jobless claims figures from the Labor Dept, which showed that another 1.5M Americans filed for unemployment benefits last week. That pushes the number of job losses since the shutdown began to around 47M. A surprisingly good May jobs report, which showed the nation's unemployment rate unexpectedly fell to 13.3% from 14.7% last month, buoyed hopes for a so-called V-shaped recovery. But the sudden resurgence in cases has rattled markets, threatening to derail the nation's slow, but steady, recovery from the pandemic. Still, Kudlow maintained his projection of a faster economic rebound, estimating that unemployment will fall below 10% by the end of the year & that economic growth could surge to 20% in the 3rd & 4th qtrs. "I think the strong V recovery is still right there," he said. "I'm pretty hopeful once we get the next set of jobs report, based on these weekly numbers."
Kudlow says coronavirus resurgence in some areas could lead to new closures
Dreary news from the jobless claims report & a reminder about GDP's shrinkage in Q1 is bringing sellers to the market. The Dow is down 200 from its high ½ an hour ago. More cases of coronavirus is making it difficult for the bulls to make their case & gold is still popular with many investors.
Dow Jones Industrials
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