Daily Comments

China’s January-February industrial profits fell -38.3% y/y. Asian markets were widely mixed. The Nikkei 225 bounced back +3.88% and the Shanghai Composite edged up +0.26%. The FTSE sank-5.25% to 5,510. The DAX fell -3.68% to 9,632. The Stoxx 600 lost -3.26% to 310. 10-yr. Bunds yield -0.473%.      February Personal Income was up +0.6%, Consumer Spending rose +0.2%, and the PCE Price Index edged higher by +0.1%. March Consumer Sentiment was 89.1, its weakest since 2016. Baker-Hughes reported that the U.S. oil rig count for 03/20 fell 44, to 728, down 278 y-o-y. Yields on 10-year Notes are 0.697%. The June US$ Index sank to 98.420. June gold fell to $1,652. May crude sank -4.47% to $21.59. There were headlines that the number of coronavirus cases in the U.S. has now surpassed the numbers from China (such as they are). On the open, stocks took the news negatively, and were perhaps further pressured on the possibility of a Congressman delaying the $2T+ congressional stimulus package. However, prices rallied from the open to near even, but slid hard into the close. Even after today’s deeply red close, the DJIA had its strongest weekly gain since 1938!

The Senate rescue bill was passed 96-0 and now goes to the House. Asian markets were mostly lower. The Nikkei 225 slumped -4.51% and the Shanghai Composite lost -0.60%. The FTSE gained +2.24% to 5,815. The DAX gained +1.28% to 10,000. The Stoxx 600 jumped +2.55% to 321. 10-yr. Bunds yield -0.371%.      Initial Claims for 03/20 were a stunning 3,283K. Final Q4 Real GDP was unchanged at +2.1%, Real Consumer Spending edged up to +1.8%, and the GDP Price Index stayed at +1.3%. The February International Trade in Goods deficit was -$59.9B, and Advance Retail Inventories fell -0.3% and Wholesale Inventories slid -0.5%. Yields on 10-year Notes are 0.832%. The June US$ Index sank -1.55% to 99.445. June gold jumped to $1,655. May crude sank to $23.17 In further anticipation of a multi-trillion dollar stimulus package passing, financial markets showed their approval and equities rallied hard. Jobless claims went off the charts, yet such had been anticipated, and Mnuchin says the numbers aren’t relevant. It seems the market agrees for now. The ES opened higher, rallied and strongly surged on the close. Stocks have had their biggest 3-day surge since 1931!

There is an apparent agreement in the Senate for a massive rescue package. Asian markets were broadly higher. The Nikkei 225 roared higher by another +8.04% and the Shanghai Composite jumped another +2.17%. The FTSE soared +4.45% to 5,688. The DAX gained +1.79% to 9,874. The Stoxx 600 jumped +3.09% to 313. 10-yr. Bunds yield -0.266%.      The MBA Mortgage Applications Index for 03/20 tumbled -29.4%. February Durable Goods Orders rose +1.2% (ex-transportation -0.6%). The January FHFA House Price Index was up +0.3%. The EIA reported that crude inventories for 03/20 were up 1.623M vs. 2.774M consensus. 10-year Note are at 0.861%. The June US$ Index sank to 100.900. June gold lost $25 to $1,638. May crude jumped +1.33% to $24.33. Anticipation of a federal government stimulus package getting passed today led the markets to charge higher. It was the 2nd consecutive rally, something not seen since February 2! However, due to Senate delays, the House will not engage further with the package until Thursday, at the earliest. The ES had been way up to 2560, but sold off nearly 100 points on the disappointment, closing only modestly stronger.