U.S. and World News
- Coronavirus cases across the world has eclipsed half a million and the United States has surpassed every other country in the world in number of cases, currently at about 95,000. At the epicenter of the virus, New York City Mayor Bill de Blasio projects “over half the people in this city will ultimately be infected.” In the United Kingdom, Prime Minister Boris Johnson has tested positive for coronavirus, after instating a “stay-at-home” order earlier this week. The U.S. House of Representatives was prepared for a voice vote on the $2 trillion coronavirus relief bill passed by congress earlier this week, until one lawmaker announced his opposition to the bill late last night. This announcement led to House members scrambling back to Washington to hold a recorded vote. The bill passed in the House early this afternoon and is now being sent to the President’s desk. The relief bill includes one-time direct payments to individuals, added unemployment insurance, and loans to businesses.
- The oil price war led by Saudi Arabia has resulted in the worst crude oil crash in a generation and even lower prices are anticipated. Secretary of State Mike Pompeo urged Saudi Arabia to curb production on Wednesday as weakening global demand is compounding on the issue, but Saudi Arabia shows no signs of slowing down. The U.S. shale industry is at risk and is running out of options now as most of the U.S. economy is shut down along with Europe and India. U.S. shale producers are now asking for radical solutions such as a tariff on international oil. Yesterday, leaders of the Group of 20 met to discuss the global pandemic, but the statement made no mention of the oil crisis.
- Markets rebounded in what was the best week since 2009. The S&P 500 jumped 10.28% and closed at 2,541. The Dow Jones rose 12.48% and closed at 21,637. Year-to-date, the S&P 500 is down 20.96% and the Dow Jones is down 23.72%.
- Yields fell further this week. The 5 year and 10 year U.S. Treasury Notes are yielding 0.39% and 0.68%, respectively.
- The spot price of WTI Crude tumbled further this week. Prices fell 4.77% and closed at $21.55 per barrel. Year to date, Oil prices are down 64.71%.
- The spot price of Gold rose by 8.22% and closed at $1,621.92 per ounce. Year to date, Gold prices are up 6.89%.
- Initial jobless claims rose by a record 3 million to 3.28 million and the four-week moving average of claims rose 766,000 to 998,000. Claims rose by 398,000 in Pennsylvania, 213,000 in Ohio, and by 179,000 in New Jersey.
- Personal consumption rose by 1.8% versus expectations for an increase of 1.7%
- New home sales came in at 765,000 versus expectations for a reading of 750,000
- Durable goods orders rose by 1.2% versus expectations for a decline of 0.9%
- Durable goods orders ex-transports fell by -0.6% versus expectations for a decline of -0.4%
- Personal income rose by 0.6% versus expectations for a 0.4% increase
- Personal spending rose by 0.2%, in-line with expectations
- The PCE price index rose by 0.1%, in-line with expectations and the year-over-year rate rose by 1.8% versus expectations for a 1.7% increase
- The core PCE price index rose by 0.2%, in-line with expectations and the year-over-year rate rose by 1.8% versus expectations for 1.7%
- The University of Michigan’s index of consumer sentiment fell 6.8 points 89.1 versus expectations for a reading of 90.0
Fact of the Week
- The United States currently has about 95,000 confirmed cases of coronavirus and a population of 327.2 million (0.029% infection rate) while Italy has about 86,500 confirmed cases and a population of 60.5 million (0.14% infection rate). The United States has a population that is 5X the size of Italy, but Italy has an infection rate that is about 6X higher than the U.S. (Source: John Hopkins).
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