Archives of “April 9, 2020” day

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Re-opening the US economy: Trump does not indicate a time frame, Kudlow says 4 to 8 weeks

  
  Analysis

There was little of significance from the daily US coronavirus briefing at the White House.

US President Trump did say he’d like to reopen U.S. economy with a ‘big bang’
  • the death toll from the coronavirus needs to be trending down before that can happen:  “We have to be on the down side of the slope”
  • did not indicate a timeframe on reopening
Kudlow (WH chief economic adviser) spoke on Tuesday though
  • said reopening was possible in four to eight weeks.

Saudi Arabia’s sovereign-wealth fund pours $1bn into stakes in 4 European oil firms

  
  Analysis
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WSJ citing “according to people familiar with the matter“
  • Saudi Arabia’s sovereign-wealth fund has amassed stakes worth roughly $1 billion in four major European oil companies
  • buying assets it perceives as undervalued in a market depressed by the coronavirus pandemic and low oil prices
  • stakes in Equinor AS A, Royal Dutch Shell PLC, Total SA and Eni SpA
  • bought in recent weeks
  • the fund may continue to make stock purchases
That “buying assets it perceives as undervalued in a market depressed by the coronavirus pandemic and low oil prices“. You might recall from a few weeks ago OPEC+ failed to agree on maintaining output cuts and Saudi Arabia ramping production higher and thus sending the price of oil plummeting. The cynical amongst us might even suggest this was all part of a plan?

Kuwait indicates OPEC+ is ‘moving towards’ production cut of between 10-15m bpd

  
  Analysis

Kuwait’s oil minister comments reported in Kuwaiti press (via Reuters)

  • after talking with countries that will attend the OPEC+ meeting, intention is moving towards reaching an agreement to reduce production by an amount ranging between 10 mln-15 mln bpd

The trickle of reports ahead of the meeting (today, Thursday) are hinting the output cut is on:

  • Algeria’s oil minister said production cuts at OPEC+ could reach 10 mbpd.

Major indices close higher led by the Dow and S&P

  
Analysis, US Market
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Dow and S&P rise by 3.4%

the major indices are closing higher with the Dow and S&P leading the way. Each rose by around 3.4%. The NASDAQ index lagged behind with a 2.6% gain.
A look at the close is showing:
  • S&P index, rose by 89.86 points or 3.38% to 2749.27.
  • NASDAQ index, rose by 203.64 points or 2.58% to 8090.90
  • Dow industrial average, rose by 772.57 points or 3.41% to 23426.43

Some of the leading stocks include:

  • Wynnresort, +13.39%
  • Square, +13.29%
  • Marriott, +11.87%
  • United Airlines, +12.3%
  • General Motors, +8.6%
  • Unitedhealth +8.10%
  • Raytheon, +8.96%
  • Twitter, +8.82%
  • FedEx, +8.13%
  • Citigroup, +7.27%
  • Ford Motor’s, +6.69%
  • Morgan Stanley, +6.58%
  • Exxon Mobil +6.35%
  • Goldman Sachs +6.47%
  • Chevron +6.34%
  • American Express, +5.14%
Some laggards today included;
  • Deutsche Bank, -1.58%
  • General Mills, -1.24%
  • Alibaba, -1.10%
  • ATT, -0.70%
  • Netflix, -0.33%
  • Disney, -0.23%
  • Walmart, -0.12%

 

Crude oil futures settle at $25.09

  
Analysis, Crude

Up $1.46 vs 6.18%

The price of crude oil futures are settling at $25.09.  That’s up $1.46 or 6.18% on the day.
The high price today reached $26.45, while the low extended to $23.74.
Looking at the daily chart, the settle price was below the swing low going back to 2016 at $26.05. That keeps the sellers more in control from that chart’s perspective.
Up $1.46 vs 6.18%

Zooming in the same daily chart, the rally last Friday moved through the 50% of the range since the gap lower in March at $27.81 but could not reach the 61.8% at $29.83 (the high reached $29.13 on Friday).  The closes this week have all been below the 50% retracement level.

FOMC minutes: Trading conditions across a range of markets were severely strained

  
  Analysis

Comments in the minutes of the March 15 meeting

  • In Treasury market: Market participants reported an acute decline in market liquidity
  • A number of primary dealers found it especially difficult to make markets in off-the-run Treasury securities and reported that this segment of the market had ceased to function effectively
  • All participants viewed the near-term U.S. economic outlook as having deteriorated sharply in recent weeks and as having become profoundly uncertain
  • Full text
“The staff provided two plausible economic scenarios that spanned a range of possibilities. Importantly, the future performance of the economy would depend on the evolution of the virus outbreak and the measures undertaken to contain it. In one scenario, economic activity started to rebound in the second half of this year. In a more adverse scenario, the economy entered recession this year, with a recovery much slower to take hold and not materially under way until next year.”
This is nothing new but worth repeating:
With regard to monetary policy beyond this meeting, these participants judged that it would be appropriate to maintain the target range for the federal funds rate at 0 to 1/4 percent until policymakers were confident that the economy had weathered recent events and was on track to achieve the Committee’s maximum employment and price stability goals.
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