Dow went up 67, advancers over decliners about 5-4 & NAZ rose 42 The MLP index lost 1 to the 145s & the REIT index was flat in the 341s. Junk bond funds inched higher & Treasuries edged lower. Oil was fractionally lower in the 32s & gold added 10 to 1720.
AMJ (Alerian MLP Index tracking fund)
First-time claims for unemployment benefits totaled 2.1M last week, the lowest total since the coronavirus crisis began though indicative that a historically high number of Americans remain separated from their jobs. The forecast was looking for 2.05M. The total represented a decrease of 323K from the previous week's upwardly revised 2.4M. Continuing claims, or those who have been collecting for at least 2 weeks, numbered 21.1M, a clearer picture of how many workers are still sidelined. That number dropped sharply, falling 3.86M from the previous week. The insured unemployment rate, which is a basic calculation of those collecting benefits vs. the total labor force, came down sharply to 14.5% from 17.1% the previous week. Since the pandemic was declared in mid-Mar, 40.8M have filed claims as social distancing measures aimed at containing the coronavirus outbreak resulted in much of the $21.5T US economy being in lockdown for 2½ months. A separate report showed that Q1 GDP contracted by 5%, while the Atlanta Fed's GDPNow tracker is indicating a 41.9% plunge in Q2, the worst in history. That would put the US firmly in recession territory, though most economists are expecting a rebound in H2 after restrictions are lifted. A total 1.2M filed claims thru the Pandemic Unemployment Assistance program last week. The high jobless numbers persist even as all states have reopened their economies to various extents. Las Vegas casinos will be resuming activities late next week, Disney (DIS), a Dow stock, resorts also have targeted Jul reopening dates & Los Angeles is allowing retail stores to resume business. Restrictions are likely to be loosened soon in New York as well. Still, businesses are wrestling with multiple dynamics stemming from the biggest surge in in layoffs since the depression. The Federal Reserve reported that business owners are seeing workers reluctant to return to their jobs because of safety concerns, child-care issues & “generous” unemployment benefits from the gov.
The American economy shrank more than expected in Q1 as the coronavirus-pandemic triggered an unprecedented lockdown of the nation, according to new figures published by the Commerce Dept. GDP, the broadest measure of goods & services produced across the economy, fell at a seasonally adjusted annual rate of 5% in the 3-month period Jan-Mar, the Commerce Dept said in its 2nd reading of the data. GDP was expected to remain unrevised at 4.8%. It was the worst drop since 2009, when the economy contracted by 4.4% in the midst of the financial crisis. The revision, which relies on more complete data, reflected a drop in weaker investment by businesses in their inventory, which was partially offset by stronger consumer spending. Still, the severity of the coronavirus-induced downturn will be reflected more accurately in Q2, when the nation's economy came to a near standstill to mitigate the spread of the virus. Estimates vary widely, but economists agree it'll be grim, possibly surpassing the worst of the depression. The economy is expected to see a rebound in the 3rd & 4th-qtrs of the year. The Congressional Budget Office, a nonpartisan agency, has forecast that GDP could increase 23.5% in Q2 & 10.5% in Q4.
Sales of long-lasting goods tumbled in Apr, as businesses cut investment in response to the global coronavirus-pandemic. Orders for durable goods -- products designed to last longer than 3 years such as washing machines, bulldozers & cars -- fell 17.2% from a month earlier, the Commerce Dept reported. The forecast called for a 17% drop in orders. Sales fell across major product categories. Excluding transportation products, which can be volatile, orders fell 7.4%. Excluding defense, orders dropped 16.2%. The drop followed a decline of 16.6% in Mar. So far this year orders have fallen 11.4% compared with a year earlier. Perhaps most ominous is a sharp decline in business investment, which could spell slower economic growth beyond the pandemic. A key measure of business spending -- orders for nondefense capital goods, excluding aircraft -- fell 5.8%. This year they're down 1.3% to the same period last year. The drop followed a decline of 16.6% in Mar. So far this year orders have fallen 11.4% compared with a year earlier. Several factors are restraining investment spending. The pandemic has disrupted supply chains, impairing factories' ability to get key parts. Depressed oil prices have prompted energy companies to pull back on purchases of drilling equipment. The collapse of air travel has sapped airlines' demand for new aircraft. More broadly, businesses are reluctant to invest in equipment, software & facilities given the uncertainty about how long lockdowns will last, whether the country will suffer a 2nd virus outbreak, & how robust a recovery might be.
Investors were buying stocks, but not aggressively after the grim economic news. The forecasts were negative but investors were somewhat relieved that the news shows improvement over previous reports. Continued talk about some degree of recovery in H2 is welcomed & the Dow extended its 2+ month rally.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 32.61 | -0.20 | -0.6% |
| GC=F | Gold | 1,737.80 | +11.00 | +0.6% |
First-time claims for unemployment benefits totaled 2.1M last week, the lowest total since the coronavirus crisis began though indicative that a historically high number of Americans remain separated from their jobs. The forecast was looking for 2.05M. The total represented a decrease of 323K from the previous week's upwardly revised 2.4M. Continuing claims, or those who have been collecting for at least 2 weeks, numbered 21.1M, a clearer picture of how many workers are still sidelined. That number dropped sharply, falling 3.86M from the previous week. The insured unemployment rate, which is a basic calculation of those collecting benefits vs. the total labor force, came down sharply to 14.5% from 17.1% the previous week. Since the pandemic was declared in mid-Mar, 40.8M have filed claims as social distancing measures aimed at containing the coronavirus outbreak resulted in much of the $21.5T US economy being in lockdown for 2½ months. A separate report showed that Q1 GDP contracted by 5%, while the Atlanta Fed's GDPNow tracker is indicating a 41.9% plunge in Q2, the worst in history. That would put the US firmly in recession territory, though most economists are expecting a rebound in H2 after restrictions are lifted. A total 1.2M filed claims thru the Pandemic Unemployment Assistance program last week. The high jobless numbers persist even as all states have reopened their economies to various extents. Las Vegas casinos will be resuming activities late next week, Disney (DIS), a Dow stock, resorts also have targeted Jul reopening dates & Los Angeles is allowing retail stores to resume business. Restrictions are likely to be loosened soon in New York as well. Still, businesses are wrestling with multiple dynamics stemming from the biggest surge in in layoffs since the depression. The Federal Reserve reported that business owners are seeing workers reluctant to return to their jobs because of safety concerns, child-care issues & “generous” unemployment benefits from the gov.
Another 2.1 million file jobless claims, but total unemployed shrinks
The American economy shrank more than expected in Q1 as the coronavirus-pandemic triggered an unprecedented lockdown of the nation, according to new figures published by the Commerce Dept. GDP, the broadest measure of goods & services produced across the economy, fell at a seasonally adjusted annual rate of 5% in the 3-month period Jan-Mar, the Commerce Dept said in its 2nd reading of the data. GDP was expected to remain unrevised at 4.8%. It was the worst drop since 2009, when the economy contracted by 4.4% in the midst of the financial crisis. The revision, which relies on more complete data, reflected a drop in weaker investment by businesses in their inventory, which was partially offset by stronger consumer spending. Still, the severity of the coronavirus-induced downturn will be reflected more accurately in Q2, when the nation's economy came to a near standstill to mitigate the spread of the virus. Estimates vary widely, but economists agree it'll be grim, possibly surpassing the worst of the depression. The economy is expected to see a rebound in the 3rd & 4th-qtrs of the year. The Congressional Budget Office, a nonpartisan agency, has forecast that GDP could increase 23.5% in Q2 & 10.5% in Q4.
US economy shrinks more than expected as virus triggers unprecedented lockdown
Sales of long-lasting goods tumbled in Apr, as businesses cut investment in response to the global coronavirus-pandemic. Orders for durable goods -- products designed to last longer than 3 years such as washing machines, bulldozers & cars -- fell 17.2% from a month earlier, the Commerce Dept reported. The forecast called for a 17% drop in orders. Sales fell across major product categories. Excluding transportation products, which can be volatile, orders fell 7.4%. Excluding defense, orders dropped 16.2%. The drop followed a decline of 16.6% in Mar. So far this year orders have fallen 11.4% compared with a year earlier. Perhaps most ominous is a sharp decline in business investment, which could spell slower economic growth beyond the pandemic. A key measure of business spending -- orders for nondefense capital goods, excluding aircraft -- fell 5.8%. This year they're down 1.3% to the same period last year. The drop followed a decline of 16.6% in Mar. So far this year orders have fallen 11.4% compared with a year earlier. Several factors are restraining investment spending. The pandemic has disrupted supply chains, impairing factories' ability to get key parts. Depressed oil prices have prompted energy companies to pull back on purchases of drilling equipment. The collapse of air travel has sapped airlines' demand for new aircraft. More broadly, businesses are reluctant to invest in equipment, software & facilities given the uncertainty about how long lockdowns will last, whether the country will suffer a 2nd virus outbreak, & how robust a recovery might be.
Durable goods orders in US tumbled 17.2% in April
Investors were buying stocks, but not aggressively after the grim economic news. The forecasts were negative but investors were somewhat relieved that the news shows improvement over previous reports. Continued talk about some degree of recovery in H2 is welcomed & the Dow extended its 2+ month rally.
Dow Jones Industrials
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