Dow sank 360 (not far from session lows), decliners over advancers 5-1 & NAZ fell 114. The MLP index was even at 93 & the REIT index dropped 8+ to the 282s. Junk bond funds continued weak & Treasuries rose in price, bringing lower yields. Oil surged 3+ to the 28s on prospects of production cuts & gold went up 12 to 1650 (more on both below).
AMJ (Alerian MLP Index tracking fund)
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Bank of America (BAC) said that about ½ way through its first day administering a small business relief program, more than 5K customers applied for $6B in loans. The bank was the first major lender to get its web portal for the Paycheck Protection Program up and running & it was soon inundated with requests. “That is an astounding number of applications to take in such a short period of time and considering we just launched the site this morning at 8:45 a.m.,” a Bank of America manager said in a staff email. As of mid-morning, none of the websites of the 3 other big US banks were accepting applications for the program, which was supposed to go live shortly after midnight. In fact, Wells Fargo (WFC) announced that it will be unable to accept applications today. BAC's portal went live at about 9 AM. Within an hour, the bank had 10K applications for loans. The chaotic launch heightened fears among business owners that they could miss out on the historic program if lenders manage to disburse all $350B of the money. Treasury Secretary Steve Mnuchin has said he would request more money if that happened, but that would require Congressional approval. The US gov has asked banks to help it dole out at least $350B in loans to small businesses, part of the $2T coronavirus stimulus bill signed last week. But banks & industry groups have complained that they lacked the guidance to get online systems up & running until just hours before the deadline. That guidance was finally issued by Treasury last evening, leaving banks scrambling to get their systems to accept loan applications. “Having just received guidance outlining how to implement a $349 billion program literally hours before it starts, we would ask for everyone to be patient,” Richard Hunt, head of the Consumer Bankers Association, said late yesterday. He added that the organization's members would “move heaven and earth to get a system in place and running to help America's small businesses and the millions of men and women who work at them.” Even at BAC, there was confusion among customers about the program. The bank is prioritizing existing customers with online accounts who are active borrowers as of last month, meaning that even longtime customers are being initially shut out of the application process. Moynihan said that bank would initially focus on “borrowing clients” before turning to other small business customers & then ultimately new clients. “We have to focus on the borrowing clients to make sure we can take care of them,” he added.
Bank of America says 58,000 small businesses have asked for $6 billion in loans since 9 a.m
Gold futures ended higher after a report on US employment in Mar indicated that the damage from coronavirus related business shutdowns is already having a big impact on the labor market. Jun gold rose $8 (0.5%) to settle at $1645 an ounce. It tacked on 2.9% yesterday, marking its first gain in 5 sessions. The most-active contract registered a loss of 0.5% for the week. The nonfarm-payrolls report from the Bureau of Labor Statistics showed that the US. lost 701K jobs last month, representing the biggest monthly decline in 11 years & one of the largest ever, but it’s likely only a harbinger of what is ahead in coming months. The unemployment figures far exceeded estimates for job losses of 83K. The unemployment rate, meanwhile, rose to 4.4% from a 50-year low of 3.5% in Feb. The huge increase in weekly new jobless claims reported yesterday, however, suggests the rate has actually surged to around 10%. The grim jobs figures hardly reflect the full extent of the state of the labor market, which likely seen around 10M put out of work in the past few weeks alone, as personal & business activity has come to a halt in an effort to prevent the spread of the COVID-19 pandemic that has infected more than 1M people world-wide.
Gold ends higher after U.S. jobs report, but posts a loss for the week
US services & other non-manufacturing companies reported continued growth in Mar, but at the slowest pace since 2016, the Institute for Supply Management (ISM) said. The ISM services index was 52.5% in Mar after a 57.3% reading in the prior month. Readings above 50% indicate expansion. The forecast expected a 43 reading. ISM reported that its gauge of new orders for non-manufacturers fell 10.2 points to 52.9% in Mar & the gauge of business activity fell 9.8 points to 48%. This is the first contraction since 2009. Meanwhile the employment barometer fell 8.6 points to 47%. Only 5 of 17 industries tracked by ISM reported growth in business activity: Health care, food service, construction, public administration & finance/insurance. A similar survey by IHS Markit reported a steep decline in service-sector activity in Mar. The Markit index dropped to 39.8 from 49.4 in the prior month. This was the deepest decline in the history of the index.
U.S. service sector continued to expand in March but at slower rate, ISM says
Community banks have processed hundreds of small-business loans intended to address the economic calamity caused by the coronavirus pandemic, even as some of the biggest banks in the country say they're not ready to process applications. A senior Treasury official said that more than 6K loans worth more than $2B had been processed by 2:30 PM, dominated by community banks. The $349B Payroll Protection Program, part of the $2T stimulus package that Pres Trump signed into law last week, is designed to get cash in the hands of struggling small businesses & incentivize them to keep staff on payroll, or re-hire workers who have already been laid off. To receive the aid, businesses must have been operational by at least Feb 15. Companies may borrow up to 2.5 times their payroll (up to $10M) which can be used for payroll & other expenses, like insurance premiums, mortgages, rent or utilities through Jun 30. The loans, which are guaranteed by the federal gov, will be fully forgiven if 75% of the money goes toward keeping workers employed, according to the SBA. "As long as you hire those people, your loan will be forgiven," Mnuchin said. "This keeps 50 percent of American workers at work." Some large lenders said they’re ready to go. Although JPMorgan Chase initially said it will not accept applications, citing lack of guidance from the Treasury Dept, the nation's largest bank reversed course ijn the PM & said it will begin processing applications. Bank of America said it's received 28K applications so far -- but its decision to process applications from current loan holders first frustrated some. “Unfortunately even as a small business client who has banked with @bankofamerica since day 1, I cannot apply because we do not have a lending relationship,” tweeted Liinsey Johnson, the CEO of Weezie Towels. "We have never required debt until now! This loan is make or break for our business and employees and we are unable to apply.” The program is expected to run out of cash quickly, but Mnuchin said last week that officials could ask Congress to approve more money if that happens.
Oil jumps 12%, posts best week in history as traders expect big production cuts
About 6 weeks ago, the Dow was humming along & the bulls were looking at 30K. Then the market crashed (shown below). While the last couple of weeks were wild, the Dow has settle around 21K, a good 8K below where it had been. Apr looks to be a grim month with more depressing news. Hopefully news on fighting coronavirus will improve later in the month which will allow for more time to be spent on repairing the economy (which is broken). Try to get some rest over the weekend!!
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Bank of America (BAC) said that about ½ way through its first day administering a small business relief program, more than 5K customers applied for $6B in loans. The bank was the first major lender to get its web portal for the Paycheck Protection Program up and running & it was soon inundated with requests. “That is an astounding number of applications to take in such a short period of time and considering we just launched the site this morning at 8:45 a.m.,” a Bank of America manager said in a staff email. As of mid-morning, none of the websites of the 3 other big US banks were accepting applications for the program, which was supposed to go live shortly after midnight. In fact, Wells Fargo (WFC) announced that it will be unable to accept applications today. BAC's portal went live at about 9 AM. Within an hour, the bank had 10K applications for loans. The chaotic launch heightened fears among business owners that they could miss out on the historic program if lenders manage to disburse all $350B of the money. Treasury Secretary Steve Mnuchin has said he would request more money if that happened, but that would require Congressional approval. The US gov has asked banks to help it dole out at least $350B in loans to small businesses, part of the $2T coronavirus stimulus bill signed last week. But banks & industry groups have complained that they lacked the guidance to get online systems up & running until just hours before the deadline. That guidance was finally issued by Treasury last evening, leaving banks scrambling to get their systems to accept loan applications. “Having just received guidance outlining how to implement a $349 billion program literally hours before it starts, we would ask for everyone to be patient,” Richard Hunt, head of the Consumer Bankers Association, said late yesterday. He added that the organization's members would “move heaven and earth to get a system in place and running to help America's small businesses and the millions of men and women who work at them.” Even at BAC, there was confusion among customers about the program. The bank is prioritizing existing customers with online accounts who are active borrowers as of last month, meaning that even longtime customers are being initially shut out of the application process. Moynihan said that bank would initially focus on “borrowing clients” before turning to other small business customers & then ultimately new clients. “We have to focus on the borrowing clients to make sure we can take care of them,” he added.
Bank of America says 58,000 small businesses have asked for $6 billion in loans since 9 a.m
The gov's survey of establishments painted a
grim picture of the US employment situation thru early Mar, but
its poll of households was far worse. The household survey, which
asks individual residents how many people are working there, showed a
stunning drop of almost 3M workers for the month. That compares with the nonfarm payrolls decline of 701K reported
in the establishment survey & gives another perspective to just how
bad the situation has gotten since the economy has all but shut down to
protect against the coronavirus spread. When releasing its
headline nonfarm payroll numbers, the gov focuses on the
establishment survey as it captures a larger sample size & is
considered less volatile than the household count. The establishment
survey captures about 145K businesses & work sites, while its
counterpart focuses on 60K eligible households & includes
agricultural workers. Both use the week up to the 12th of the month for sampling, which in this case was before the worst of the job losses began. The Labor Dept uses the household survey to calculate the headline unemployment rate, which jumped from 3.5% to 4.4%. In the Mar survey, the household survey's numbers are stunning. They
show a decline of employment from 158.8M in Feb to
155.8 in Mar. That came amid a drop of 1.6M in the
civilian labor force & a 1.1 percentage point tumble in the
employment-population ratio to 60%. The labor force participation rate
contracted 0.7 percentage point to 62.7%. Those counted as not in the
labor force rose nearly 1.8M to 96.8M. Other numbers
showed a 1.2M increase in job losers or those who completed
temporary jobs. Those unemployed for less than 5 weeks surged by 1.5M while those at work part time for economic reasons jumped by
more than 1.4M.
Another figure in the jobs report paints an even gloomier picture of the coronavirus damage
Gold futures ended higher after a report on US employment in Mar indicated that the damage from coronavirus related business shutdowns is already having a big impact on the labor market. Jun gold rose $8 (0.5%) to settle at $1645 an ounce. It tacked on 2.9% yesterday, marking its first gain in 5 sessions. The most-active contract registered a loss of 0.5% for the week. The nonfarm-payrolls report from the Bureau of Labor Statistics showed that the US. lost 701K jobs last month, representing the biggest monthly decline in 11 years & one of the largest ever, but it’s likely only a harbinger of what is ahead in coming months. The unemployment figures far exceeded estimates for job losses of 83K. The unemployment rate, meanwhile, rose to 4.4% from a 50-year low of 3.5% in Feb. The huge increase in weekly new jobless claims reported yesterday, however, suggests the rate has actually surged to around 10%. The grim jobs figures hardly reflect the full extent of the state of the labor market, which likely seen around 10M put out of work in the past few weeks alone, as personal & business activity has come to a halt in an effort to prevent the spread of the COVID-19 pandemic that has infected more than 1M people world-wide.
Gold ends higher after U.S. jobs report, but posts a loss for the week
US services & other non-manufacturing companies reported continued growth in Mar, but at the slowest pace since 2016, the Institute for Supply Management (ISM) said. The ISM services index was 52.5% in Mar after a 57.3% reading in the prior month. Readings above 50% indicate expansion. The forecast expected a 43 reading. ISM reported that its gauge of new orders for non-manufacturers fell 10.2 points to 52.9% in Mar & the gauge of business activity fell 9.8 points to 48%. This is the first contraction since 2009. Meanwhile the employment barometer fell 8.6 points to 47%. Only 5 of 17 industries tracked by ISM reported growth in business activity: Health care, food service, construction, public administration & finance/insurance. A similar survey by IHS Markit reported a steep decline in service-sector activity in Mar. The Markit index dropped to 39.8 from 49.4 in the prior month. This was the deepest decline in the history of the index.
U.S. service sector continued to expand in March but at slower rate, ISM says
Community banks have processed hundreds of small-business loans intended to address the economic calamity caused by the coronavirus pandemic, even as some of the biggest banks in the country say they're not ready to process applications. A senior Treasury official said that more than 6K loans worth more than $2B had been processed by 2:30 PM, dominated by community banks. The $349B Payroll Protection Program, part of the $2T stimulus package that Pres Trump signed into law last week, is designed to get cash in the hands of struggling small businesses & incentivize them to keep staff on payroll, or re-hire workers who have already been laid off. To receive the aid, businesses must have been operational by at least Feb 15. Companies may borrow up to 2.5 times their payroll (up to $10M) which can be used for payroll & other expenses, like insurance premiums, mortgages, rent or utilities through Jun 30. The loans, which are guaranteed by the federal gov, will be fully forgiven if 75% of the money goes toward keeping workers employed, according to the SBA. "As long as you hire those people, your loan will be forgiven," Mnuchin said. "This keeps 50 percent of American workers at work." Some large lenders said they’re ready to go. Although JPMorgan Chase initially said it will not accept applications, citing lack of guidance from the Treasury Dept, the nation's largest bank reversed course ijn the PM & said it will begin processing applications. Bank of America said it's received 28K applications so far -- but its decision to process applications from current loan holders first frustrated some. “Unfortunately even as a small business client who has banked with @bankofamerica since day 1, I cannot apply because we do not have a lending relationship,” tweeted Liinsey Johnson, the CEO of Weezie Towels. "We have never required debt until now! This loan is make or break for our business and employees and we are unable to apply.” The program is expected to run out of cash quickly, but Mnuchin said last week that officials could ask Congress to approve more money if that happens.
Mnuchin reveals how much money small banks have already processed for small biz relief
Oil prices surged again on the hope that
a production cut deal will soon be reached after OPEC & its allies
announced they will hold a virtual meeting Mon & after Russian
Pres Vladimir Putin reportedly said that the county wanted to see
global action on cuts of around 10M barrels per day. US West Texas Intermediate crude
jumped 11.9% ($3.02) to settle at $28.34 per barrel. At the session
high, WTI gained more than 12% to trade at $28.56. For the week WTI
rose 31.7% in its best week on record back to the contract's inception
in 1983. Intel benchmark Brent crude rose 13.9% to settle at $34.11 per barrel. Russia
initially rejected additional cuts proposed by OPEC in early Mar, but a report today that Putin said production needs to be cut
by around 10M barrels per day, but that the US must also take
action. Yesterday WTI & Brent posted their best day on record after Pres Trump said
that he expected Russian Pres Vladimir Putin & Saudi Crown
Prince Mohammed bin Salman to announce a deal to cut oil production 10-15M barrels, although the exact details of the cut
remained unclear. WTI gained 24.7% to settle at $25.32, while Brent rose 21% to settle at $29.94.
Oil jumps 12%, posts best week in history as traders expect big production cuts
About 6 weeks ago, the Dow was humming along & the bulls were looking at 30K. Then the market crashed (shown below). While the last couple of weeks were wild, the Dow has settle around 21K, a good 8K below where it had been. Apr looks to be a grim month with more depressing news. Hopefully news on fighting coronavirus will improve later in the month which will allow for more time to be spent on repairing the economy (which is broken). Try to get some rest over the weekend!!
Dow Jones Industrials
