Dow went up 50 (below early highs), advancers over decliners 4-3 & NAZ gained 80. The MLP index was up fractionally to the 128s & the REIT index fell 2+ to the 343s. Junk bond funds edged higher & Treasuries slid lower in price. Oil was even above 40 & gold advanced 14 to 1824, nearing its record high.
AMJ (Alerian MLP Index tracking fund)
The US coronavirus outbreak crossed a grim milestone of over 3M confirmed cases yesterday as more states reported record numbers of new infections & Florida faced an impending shortage of intensive care unit hospital beds. Authorities have reported alarming upswings of daily caseloads in roughly 2 dozen states over the past 2 weeks, a sign that efforts to control transmission of the novel coronavirus have failed in large swaths of the country. California, Hawaii, Idaho, Missouri, Montana, Oklahoma & Texas shattered their previous daily record highs for new cases. The biggest jumps occurred in Texas & California, the 2 largest states, with more than 10K each. About 24 states have reported disturbingly high infection rates as a percentage of diagnostic tests conducted over the past week. In Texas alone, the number of hospitalized patients more than doubled in just 2 weeks. The trend has driven many more Americans to seek out COVID-19 screenings. The Dept of Health & Human Services said it was adding short-term "surge" testing sites in 3 metropolitan areas in Florida, Louisiana & Texas. In Houston, a line of more than 200 cars snaked around the United Memorial Medical Center as people waited hours in sweltering heat to get tested. Some had arrived the night before to secure a place in line at the drive-through site. In Florida, more than 4 dozen hospitals across 25 of 67 counties reported their intensive care units had reached full capacity. Only 17% of the total 6K adult ICU beds statewide were available, down from 20% just 3 days earlier. Additional hospitalizations could strain healthcare systems in many areas, leading to an uptick in lives lost from the respiratory illness that has killed more than 131K Americans to date. At least 923 of those deaths were reported yesterday, the biggest single-day toll since Jun 10 but still far fewer than the record 2806 tallied back in Apr. A widely cited mortality model from the University of Washington's Institute for Health Metrics & Evaluation (IHME) projected yesterday that US deaths would reach 208K by Nov, with the outbreak expected to gain new momentum heading into the fall. A hoped-for summertime decline in transmission of the virus never materialized, the IHME said. “The U.S. didn’t experience a true end of the first wave of the pandemic,” the IHME's director, Dr Christopher Murray, said. “This will not spare us from a second surge in the fall, which will hit particularly hard in states currently seeing high levels of infections.” Pres Trump, who has pushed for restarting the economy & urged Americans to return to their normal routines, said yesterday he would lean on governors to open schools in the fall.
After a brief pullback at the end of Jun, homebuyers rushed back into the mortgage market last week, taking advantage of record-low mortgage rates. Mortgage applications to purchase a home rose 5% for the week & were a remarkable 33% higher than a year ago, according to the Mortgage Bankers Association's (MBA) index, which was seasonally adjusted, including for the Fourth of Jul holiday. Buyer demand has been incredibly strong since mid-May, after the coronavirus shut down most housing activity in Apr. The only thing standing in the way of more sales is the record low supply of homes for sale. Home prices gains continue to accelerate, so low mortgage rates are giving buyers much-needed help. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of up to $510K dropped to 3.26% from 3.29%. Points, including the origination fee, for loans with a 20% down payment decreased to 0.35 from 0.36. “Mortgage rates declined to another record low as renewed fears of a coronavirus resurgence offset the impacts from a week of mostly positive economic data, such as June factory orders and payroll employment,” said Joel Kan, an MBA economist. “The average purchase loan size increased to $365,700 — also another high — as borrowers contend with limited supply and higher home prices.” Applications to refinance a home loan, which are generally more sensitive to weekly interest rate moves, rose just 0.4% from the previous week but were 111% higher than one year ago. Because interest rates have been low & refinance demand has been strong for so long, only a limited number of borrowers can still benefit significantly from even the new record low rate. The refinance share of mortgage activity decreased to 60.1% of total applications from 61.2% the previous week. Mortgage rates continued to drop at the start of this week, especially after the stock market sell-off yesterday. Mortgage rates loosely follow the yield on the 10-year Treasury.
Homebuyer mortgage demand spikes 33% as rates set another record low
The Energy Information Administration (EIA) reported that US crude inventories rose 5.7M barrels last week. That followed a fall of 7.2M barrels the week before & compared with a forecast for a decline of 3.7M barrels. The American Petroleum Institute on yesterday reported an increase of 2M barrels, according to sources. The EIA data also showed crude stocks at the Cushing, Okla., storage hub edged up by about 2.2M barrels for the week. Gasoline supply fell by 4.8M barrels, while distillate stockpiles climbed by 3.1M barrels. Expectations for supply declines of 1.2M barrels for gasoline & 500K barrels for distillates. Aug West Texas Intermediate crude fell 3¢ to $40.59.
EIA reports a surprise weekly climb in U.S. crude supplies
The Dow jumped over 200 at the opening, but sellers reduced that gain. NAZ also pulled back after an initial surge. The coronavirus is not giving up & that is weighing on the minds of investors who keep buying safe haven gold. Gold bugs are looking to take it to record levels above 1900.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 40.72 | +0.10 | +0.3% |
| GC=F | Gold | 1,824.90 | +15.00 | +0.8% |
The US coronavirus outbreak crossed a grim milestone of over 3M confirmed cases yesterday as more states reported record numbers of new infections & Florida faced an impending shortage of intensive care unit hospital beds. Authorities have reported alarming upswings of daily caseloads in roughly 2 dozen states over the past 2 weeks, a sign that efforts to control transmission of the novel coronavirus have failed in large swaths of the country. California, Hawaii, Idaho, Missouri, Montana, Oklahoma & Texas shattered their previous daily record highs for new cases. The biggest jumps occurred in Texas & California, the 2 largest states, with more than 10K each. About 24 states have reported disturbingly high infection rates as a percentage of diagnostic tests conducted over the past week. In Texas alone, the number of hospitalized patients more than doubled in just 2 weeks. The trend has driven many more Americans to seek out COVID-19 screenings. The Dept of Health & Human Services said it was adding short-term "surge" testing sites in 3 metropolitan areas in Florida, Louisiana & Texas. In Houston, a line of more than 200 cars snaked around the United Memorial Medical Center as people waited hours in sweltering heat to get tested. Some had arrived the night before to secure a place in line at the drive-through site. In Florida, more than 4 dozen hospitals across 25 of 67 counties reported their intensive care units had reached full capacity. Only 17% of the total 6K adult ICU beds statewide were available, down from 20% just 3 days earlier. Additional hospitalizations could strain healthcare systems in many areas, leading to an uptick in lives lost from the respiratory illness that has killed more than 131K Americans to date. At least 923 of those deaths were reported yesterday, the biggest single-day toll since Jun 10 but still far fewer than the record 2806 tallied back in Apr. A widely cited mortality model from the University of Washington's Institute for Health Metrics & Evaluation (IHME) projected yesterday that US deaths would reach 208K by Nov, with the outbreak expected to gain new momentum heading into the fall. A hoped-for summertime decline in transmission of the virus never materialized, the IHME said. “The U.S. didn’t experience a true end of the first wave of the pandemic,” the IHME's director, Dr Christopher Murray, said. “This will not spare us from a second surge in the fall, which will hit particularly hard in states currently seeing high levels of infections.” Pres Trump, who has pushed for restarting the economy & urged Americans to return to their normal routines, said yesterday he would lean on governors to open schools in the fall.
US coronavirus cases soar to new high as states report surging infection rates
After a brief pullback at the end of Jun, homebuyers rushed back into the mortgage market last week, taking advantage of record-low mortgage rates. Mortgage applications to purchase a home rose 5% for the week & were a remarkable 33% higher than a year ago, according to the Mortgage Bankers Association's (MBA) index, which was seasonally adjusted, including for the Fourth of Jul holiday. Buyer demand has been incredibly strong since mid-May, after the coronavirus shut down most housing activity in Apr. The only thing standing in the way of more sales is the record low supply of homes for sale. Home prices gains continue to accelerate, so low mortgage rates are giving buyers much-needed help. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of up to $510K dropped to 3.26% from 3.29%. Points, including the origination fee, for loans with a 20% down payment decreased to 0.35 from 0.36. “Mortgage rates declined to another record low as renewed fears of a coronavirus resurgence offset the impacts from a week of mostly positive economic data, such as June factory orders and payroll employment,” said Joel Kan, an MBA economist. “The average purchase loan size increased to $365,700 — also another high — as borrowers contend with limited supply and higher home prices.” Applications to refinance a home loan, which are generally more sensitive to weekly interest rate moves, rose just 0.4% from the previous week but were 111% higher than one year ago. Because interest rates have been low & refinance demand has been strong for so long, only a limited number of borrowers can still benefit significantly from even the new record low rate. The refinance share of mortgage activity decreased to 60.1% of total applications from 61.2% the previous week. Mortgage rates continued to drop at the start of this week, especially after the stock market sell-off yesterday. Mortgage rates loosely follow the yield on the 10-year Treasury.
Homebuyer mortgage demand spikes 33% as rates set another record low
The Energy Information Administration (EIA) reported that US crude inventories rose 5.7M barrels last week. That followed a fall of 7.2M barrels the week before & compared with a forecast for a decline of 3.7M barrels. The American Petroleum Institute on yesterday reported an increase of 2M barrels, according to sources. The EIA data also showed crude stocks at the Cushing, Okla., storage hub edged up by about 2.2M barrels for the week. Gasoline supply fell by 4.8M barrels, while distillate stockpiles climbed by 3.1M barrels. Expectations for supply declines of 1.2M barrels for gasoline & 500K barrels for distillates. Aug West Texas Intermediate crude fell 3¢ to $40.59.
EIA reports a surprise weekly climb in U.S. crude supplies
The Dow jumped over 200 at the opening, but sellers reduced that gain. NAZ also pulled back after an initial surge. The coronavirus is not giving up & that is weighing on the minds of investors who keep buying safe haven gold. Gold bugs are looking to take it to record levels above 1900.
Dow Jones Industrials
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