April 9, 2020 - Market Update

Yesterday, benchmark 10-year notes were down 12/32 pushing yields up to .77%, while 30-year bonds fell 1-10/32 with yields at 1.38%. 

In Wednesday’s economic news, the Trump administration asked Congress for an additional $250B in emergency economic aid for small U.S. businesses impacted by the coronavirus pandemic. In addition, the government’s $350B program to aid struggling businesses received some forward movement on Wednesday, with the launch of a new system that will allow hundreds of new lenders to participate.  In other news, consumer confidence in the U.S. witnessed its biggest weekly decline on record as the coronavirus caused massive deteriorations in the views Americans have on the state of the economy.  The Bloomberg Consumer Comfort Index plummeted 6.4 points to 49.9, hitting the lowest since October 2017.  In the past three weeks, the measure has plummeted more than 13 points, also the steepest decline in records back to 1985.

On Wednesday, stocks were up for the fourth time in five days as another possible stimulus had investors in risk-on mode. Equities have now moved in bullish territory as the S&P is up over 20% from its March 23^rd low.  The Dow rose 779 points to 23,433, the S&P was up 94 points to 2,752, and the Nasdaq gained 233 points to 8,090. 

The profoundly ill-timed oil market price-war between Saudi Arabia and Russia has not only pushed oil prices to twenty-year lows but is also pushing up storage costs. The current elevated production rate combined with depressed demand means storage facilities will run out of space by early August. Unless supply soon dramatically falls, and it will, prices will turn negative once storage space is exhausted.