Dow dropped 361 (above session lows), decliners over advancers about 3-1 but NAZ went up 55 to a new record. The MLP index lost 4 to the 123s & the REIT index gave back 3+ to 342. Junk bond funds continued weak & Treasuries rose in price, taking the yield on the 10 year Treasury down to 0.6%. Oil fell 1+ to the 39s (more below) & gold retreated 18 to 1808 (it's 9 year high).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
US wholesale inventories tumbled in May as the Covid-19 `pandemic drove imports to near a 10-year low, supporting expectations that Q2 will see the sharpest contraction in economic growth since the depression. The Commerce Dept said that wholesale inventories dropped 1.2% in May as estimated last month. Stocks at wholesalers gained 0.2% in Apr. The component of wholesale inventories that goes into the calculation of GDP fell 0.7% in May. Goods imports dropped in May to their lowest level since 2010 as the coronavirus crisis suppressed demand & upended global trade. Imports have also been curbed by the trade war with China. Though the shrinking import bill is a positive in the calculation of GDP, it has been overshadowed by an even bigger decline in exports. That has led a widening of the trade deficit, which together with the continued inventory drawdown are expected to contribute to the steepest decline in GDP on record. The economy contracted at a 5.0% annualized rate in Q1, the sharpest pace of decline in GDP since the 2007-2009 recession. The economy fell into recession is Feb. Economists expect GDP shrank at as much as a 35% pace in the Apr-Jun qtr. The gov will publish its advance Q2 GDP estimate later this month. The decline in inventories in May was broad, with a 5.1% decline in stocks of motor vehicles & parts. Sales at wholesalers rebounded 5.4% in May after plunging 16.4% in Apr. At May's sales pace it would take wholesalers 1.53 months to clear shelves, down from 1.63 months in Apr.
The number of Americans unable to make their full on-time housing payment hit a new high in Jul, as a resurgence in coronavirus cases threatened to derail the economy's nascent recovery. Roughly 1/3 of households, 32%, have not made their complete housing payment in Jul, according to a survey published yesterday by Apartment List, an online rental platform. That's up from 30% in Jun & 31% in May. About 19% of Americans made no housing payment at all during the first week of Jul, while 13% paid only a portion of their rent or mortgage. It marked the 4th consecutive month that a "historically high" percentage of renters & homeowners were unable to pay their entire housing bill. Renters, young & low-income households and residents in dense urban areas were the most likely to miss their payments. Still, a majority of households that miss the payment in the first week of the month tend to make up with late payments. 89% of respondents had paid their Jun bill in full as of the first week of Jul, which is consistent with the end-of-month payment rate for prior months. The report comes amid a rapid rise of COVID-19 cases; a spike in infections in California, Texas & Florida drove the US to a new single-day record of infections, with 60K new cases reported. There are 3M confirmed cases in the US, the most in the world. "The number of new coronavirus cases has surged, and reopening plans have been paused or rolled back throughout the country, making clear that effects of the pandemic are far from behind us," the report said. "This continued economic hardship is having serious implications for housing security." The federal eviction moratorium, which covers individuals in properties backed by Fannie Mae or Freddie Mac, has been extended until Aug 31. In 2019, roughly 43% of new mortgages were federally backed.
Number of Americans unable to pay full housing payment hit all-time high in July
China's factory gate prices fell for the 5th consecutive month in Jun but at a slower-than-expected pace, with persistent deflation in the industrial sector highlighting the lasting economic impact of the coronavirus pandemic. The producer price index (PPI) in Jun fell 3.0% from a year earlier, China's National Bureau of Statistics (NBS) said, compared with a 3.2% estimate & a 3.7% decline in May. But in a sign of modest improvement in the manufacturing sector, PPI rose 0.4% from the previous month, turning around from a 0.4% decline in May. Chinese officials have said the economy is recovering from the sharp contraction in Q1 when the coronavirus outbreak in the mainland reached its peak & crippled large parts of the economy. The pandemic, which has infected more than 12M & killed about 546K globally, has sunk world demand & sent many economies into deflation as factories & retailers shut their doors. An official survey on the manufacturing sector last week showed that activity expanded at a quicker clip, as Beijing's success in drastically reducing the number of new coronavirus infections has allowed it to reopen the economy in a welcome boost to business & domestic consumption. But export orders have continued to contract, reflecting the widespread global impact of the COVID-19 pandemic. Many Chinese manufacturers are grappling with falling profits & have been forced to let workers go to cut costs. NBS data also showed that the consumer prices rose 2.5% from a year earlier, in line with forecasts & slightly faster from 2.4% growth in May.
Treasury’s Mnuchin backs narrower coronavirus aid package as talks with Congress resume
Oil futures fell, with US benchmark prices settling back below $40 a barrel, as commodity traders contended with rising cases of coronavirus in the US & some other countries that may threaten to unsettle demand for crude. Aug West Texas Intermediate crude fell $1.28 (3.1%) to settle at $39.62 a barrel, after climbing 0.7% yesterday. Prices today were at the lowest for a front-month contract since Jun 30. Global benchmark Brent oil for Sep lost 94¢ (2.2%) at $42.35 a barrel, the lowest since Jul 1. Feeding expectations for a slowdown in economic recovery & weakness in energy demand, the US reported more than 58K new coronavirus cases, according to data compiled by Johns Hopkins University. Infections have topped 3M in the country, with world-wide cases exceeding 12M. Yesterday, the Energy Information Administration reported that U.S. crude inventories rose by 5.7M barrels for last week.
Oil falls, with U.S. benchmark settling back under $40 as coronavirus concerns swirl
Another dreary day in the stock market, although there was buying in tech shares. The coronavirus is getting the headlines because it refuses to go away, even though the data from NY-NJ show declines in the prominent virus indices falling over 95% from their peaks. Until there is major improvement in southern & western states, recovery for the US economy will be limited. Gold is still in demand from nervous investors, although today it fell 18 to 1808.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
US wholesale inventories tumbled in May as the Covid-19 `pandemic drove imports to near a 10-year low, supporting expectations that Q2 will see the sharpest contraction in economic growth since the depression. The Commerce Dept said that wholesale inventories dropped 1.2% in May as estimated last month. Stocks at wholesalers gained 0.2% in Apr. The component of wholesale inventories that goes into the calculation of GDP fell 0.7% in May. Goods imports dropped in May to their lowest level since 2010 as the coronavirus crisis suppressed demand & upended global trade. Imports have also been curbed by the trade war with China. Though the shrinking import bill is a positive in the calculation of GDP, it has been overshadowed by an even bigger decline in exports. That has led a widening of the trade deficit, which together with the continued inventory drawdown are expected to contribute to the steepest decline in GDP on record. The economy contracted at a 5.0% annualized rate in Q1, the sharpest pace of decline in GDP since the 2007-2009 recession. The economy fell into recession is Feb. Economists expect GDP shrank at as much as a 35% pace in the Apr-Jun qtr. The gov will publish its advance Q2 GDP estimate later this month. The decline in inventories in May was broad, with a 5.1% decline in stocks of motor vehicles & parts. Sales at wholesalers rebounded 5.4% in May after plunging 16.4% in Apr. At May's sales pace it would take wholesalers 1.53 months to clear shelves, down from 1.63 months in Apr.
Wholesale inventories tumble in May
The number of Americans unable to make their full on-time housing payment hit a new high in Jul, as a resurgence in coronavirus cases threatened to derail the economy's nascent recovery. Roughly 1/3 of households, 32%, have not made their complete housing payment in Jul, according to a survey published yesterday by Apartment List, an online rental platform. That's up from 30% in Jun & 31% in May. About 19% of Americans made no housing payment at all during the first week of Jul, while 13% paid only a portion of their rent or mortgage. It marked the 4th consecutive month that a "historically high" percentage of renters & homeowners were unable to pay their entire housing bill. Renters, young & low-income households and residents in dense urban areas were the most likely to miss their payments. Still, a majority of households that miss the payment in the first week of the month tend to make up with late payments. 89% of respondents had paid their Jun bill in full as of the first week of Jul, which is consistent with the end-of-month payment rate for prior months. The report comes amid a rapid rise of COVID-19 cases; a spike in infections in California, Texas & Florida drove the US to a new single-day record of infections, with 60K new cases reported. There are 3M confirmed cases in the US, the most in the world. "The number of new coronavirus cases has surged, and reopening plans have been paused or rolled back throughout the country, making clear that effects of the pandemic are far from behind us," the report said. "This continued economic hardship is having serious implications for housing security." The federal eviction moratorium, which covers individuals in properties backed by Fannie Mae or Freddie Mac, has been extended until Aug 31. In 2019, roughly 43% of new mortgages were federally backed.
Number of Americans unable to pay full housing payment hit all-time high in July
China's factory gate prices fell for the 5th consecutive month in Jun but at a slower-than-expected pace, with persistent deflation in the industrial sector highlighting the lasting economic impact of the coronavirus pandemic. The producer price index (PPI) in Jun fell 3.0% from a year earlier, China's National Bureau of Statistics (NBS) said, compared with a 3.2% estimate & a 3.7% decline in May. But in a sign of modest improvement in the manufacturing sector, PPI rose 0.4% from the previous month, turning around from a 0.4% decline in May. Chinese officials have said the economy is recovering from the sharp contraction in Q1 when the coronavirus outbreak in the mainland reached its peak & crippled large parts of the economy. The pandemic, which has infected more than 12M & killed about 546K globally, has sunk world demand & sent many economies into deflation as factories & retailers shut their doors. An official survey on the manufacturing sector last week showed that activity expanded at a quicker clip, as Beijing's success in drastically reducing the number of new coronavirus infections has allowed it to reopen the economy in a welcome boost to business & domestic consumption. But export orders have continued to contract, reflecting the widespread global impact of the COVID-19 pandemic. Many Chinese manufacturers are grappling with falling profits & have been forced to let workers go to cut costs. NBS data also showed that the consumer prices rose 2.5% from a year earlier, in line with forecasts & slightly faster from 2.4% growth in May.
China's producer prices extend declines amid sluggish demand
Treasury Secretary Steve Mnuchin indicated that the White House will not back the kind of
sweeping coronavirus relief it supported in earlier bills, instead
opting for narrower aid even as the pandemic ravages the US. Congress
plans to return from a Fourth of Jul break later this month for 2
weeks of work before its Aug recess. Lawmakers aim to craft another
relief package before the end of the month, but Reps &
Dems appear at odds over how much aid to send a country still in
the thick of fighting an outbreak that has killed more than 132K Americans. While
the Trump administration backs direct payments to individuals in the
next bill, it has not embraced broad aid proposed by Dems including
hazard pay for essential workers, a longer extension of strengthened
unemployment benefits, mortgage & rent relief and support for state & local govs. Mnuchin said “we do support another round” of stimulus checks to
individuals, after most Americans received a $1200 sum as part of the
$2T rescue legislation passed in Mar. But he did not say
whether he backed a potential $40K income cap floated by GOP
lawmakers, lower than the $75K where the previous payment started to
phase out. Mnuchin noted that he spoke to Senate Majority Leader Mitch
McConnell & would discuss the “level and
criteria” for checks with senators when they return to DC. The
Treasury secretary also addressed one of the most urgent issues
Congress faces in the talks: an income cliff Ms will
face at the end of Jul when the $600 per week enhanced federal
unemployment benefit expires. Even though the economy gained nearly 5M jobs in June, the unemployment rate dropped to a still
staggering 11.1%. Mnuchin
said the White House wants to change rather than extend the enhanced
unemployment provision. He did not give details on how it would want to
structure aid to unemployed workers. “You can assume that it will
be no more than 100%” of a worker’s usual pay, Mnuchin said. He echoed
Reps who argue the generous insurance deters some people from
resuming work because they make more at home than they otherwise would
at their jobs. On other fronts, Mnuchin said the White House
supports an extension of the Paycheck Protection Program loans for small
businesses but wants new relief to be “much, much more targeted” than
past rounds of funding. Congress has put $670B into the loan
program & it had about $130B. He
also downplayed the need for more relief money for states and
municipalities, as lost revenue and higher costs due to the outbreak
force some governments to consider trimming essential services. He said
the administration does not want to “bail out” states that were
“mismanaged” before the virus hit. Dems put nearly $1T in aid for state & local govs in a $3T relief
bill the House passed in May. House Speaker Nancy Pelosi
considers the funds a priority. McConnell has repeatedly said he wants to see liability protections for doctors & businesses in any new relief legislation. Officials in DC could find
themselves at an impasse over how to handle an ongoing economic &
health crisis that Pres Trump has largely downplayed following two strong months of jobs growth.
Treasury’s Mnuchin backs narrower coronavirus aid package as talks with Congress resume
Oil futures fell, with US benchmark prices settling back below $40 a barrel, as commodity traders contended with rising cases of coronavirus in the US & some other countries that may threaten to unsettle demand for crude. Aug West Texas Intermediate crude fell $1.28 (3.1%) to settle at $39.62 a barrel, after climbing 0.7% yesterday. Prices today were at the lowest for a front-month contract since Jun 30. Global benchmark Brent oil for Sep lost 94¢ (2.2%) at $42.35 a barrel, the lowest since Jul 1. Feeding expectations for a slowdown in economic recovery & weakness in energy demand, the US reported more than 58K new coronavirus cases, according to data compiled by Johns Hopkins University. Infections have topped 3M in the country, with world-wide cases exceeding 12M. Yesterday, the Energy Information Administration reported that U.S. crude inventories rose by 5.7M barrels for last week.
Oil falls, with U.S. benchmark settling back under $40 as coronavirus concerns swirl
Another dreary day in the stock market, although there was buying in tech shares. The coronavirus is getting the headlines because it refuses to go away, even though the data from NY-NJ show declines in the prominent virus indices falling over 95% from their peaks. Until there is major improvement in southern & western states, recovery for the US economy will be limited. Gold is still in demand from nervous investors, although today it fell 18 to 1808.
Dow Jones Industrials
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