Market Brief: June 17, 2020

A daily summary of news, analysis and data shaping the market.
Market Brief
Wednesday, June 17, 2020
Pressing Pause. U.S. stocks turned lower in the final hour of trading Wednesday, ending a three-day winning streak for the Dow. The S&P 500 fell 0.4% to 3113. The Dow Jones Industrial Average shed 170 points, or 0.7%, to about 26,120. The Nasdaq Composite rose 0.2% to about 9911. The cause of the late selling was unclear. Stocks had held their ground earlier Wednesday as hopes for global fiscal and monetary stimulus offset a flurry of less-than-rosy news: coronavirus outbreaks in Beijing and the U.S., data showing Japanese exports down almost 30% in May from a year earlier, weaker-than-expected May housing starts in the U.S., and possible new regulatory scrutiny of social-media platforms.
CHANGE
DJIA 26,119.61 -170.37
S&P 500 3,113.49 -11.25
NASDAQ 9,910.53 14.66
US 10-Year Note 0.73 -0.02
Dollar Index 97.11 0.15
Crude Oil 37.73 -0.65
Gold 1,737.10 0.60
Global Dow 2,857.05 64.60
Powered by Dow Jones Research, FactSet, Eurostat, SIX Financial Information.
Justice Department Proposes Limiting Internet Companies’ Protections
The Justice Department proposed a rollback of legal protections that online platforms have enjoyed for more than two decades, in an effort to make tech companies more responsible in how they police their content.

The department’s changes, unveiled Wednesday, are designed to spur online platforms to be more aggressive in addressing illicit and harmful conduct on their sites, and to be fairer and more consistent in their decisions to take down content they find objectionable, a Trump administration official said.

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U.S. Brands Aunt Jemima and Uncle Ben’s to Change Amid Protests
Amid nationwide protests against racism, major U.S. food companies on Wednesday said they would change the Aunt Jemima and Uncle Ben’s brands, both of which feature African American mascots.

PepsiCo said it would end entirely the Aunt Jemima line of pancake syrup and batter adorned with the face of a black woman, while Mars plans to “evolve” the Uncle Ben’s brand of rice dishes that uses a black man as its logo.

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In Boon for Builder Stocks, Housing Market Shows Early Signs of a V-Shaped Recovery
If there’s a V-shaped recovery under way anywhere, it’s in the housing market. That’s despite slightly disappointing housing starts and building permits Wednesday.

The Commerce Department said housing starts rose 4.3% in May to an annual rate of 974,000, below the 1.10 million economists expected, while permits jumped 14.4% to a rate of 1.22 million, slightly lower than the estimate of 1.25 million. Housing-starts data are volatile from month to month and can be subject to large revisions. “We aren’t much bothered about the undershoot,” says Ian Shepherdson, chief economist at Pantheon Macroeconomics. “The outlook is very positive, given the astonishing surge in mortgage demand.”

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OPEC’s Outlook for Oil Demand Hasn’t Improved. That’s a Bad Sign for Oil.
Oil prices dropped on Wednesday after OPEC said it expects global oil demand to fall by 9.1 million barrels per day this year, the same demand outlook it gave last month. The fact that the outlook hasn’t improved—and is worse than the outlook by the International Energy Agency, or IEA—is a negative sign for oil’s rebound.

The Energy Information Administration also reported that the U.S. added 1.2 million barrels of crude oil to storage in the week ended June 12, even as analysts had expected a decline in inventories.

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Tesla Cracks $1,000 Again Despite Lousy State Sales Data
Tesla stock is rallying despite some lousy sales data from its home state of California. The upside-down stock reaction shows how investors aren’t focused on U.S. sales much anymore. Instead, they are looking to overseas markets to fuel Tesla’s rise.

New Tesla vehicle registrations in California fell about 37% year over year in April and May combined. But the stock isn’t reacting to the news. In fact, Tesla shares rose about 2.1% to more than $1,000 in midday trading Wednesday.

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Lyft’s Move Shows EVs Are Taking Over
Ride-hailing company Lyft is getting rid of gasoline-powered cars in its fleets by 2030. That’s the goal announced Wednesday. Batteries, and not gas, will power Lyft rides of the future.

The move isn’t doing much to lift Lyft, Uber Technologies, or EV-maker stocks today. But the news is another sign to investors that battery-powered cars are here to stay.

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Hertz Pulls Share Offering, Says SEC Planned to Review It
Hertz Global is suspending its controversial share offering, according to a filing Wednesday.

Hertz filed to offer up to $500 million in shares Monday, aiming to cash in on a surge in the stock’s popularity even though the company had filed for bankruptcy protection on May 22. In a filing Wednesday, Hertz said it had been “advised orally” by employees with the Securities and Exchange Commission’s division of corporation finance on Monday afternoon that they planned to review the offering’s prospectus supplement.

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How the Supreme Court’s Landmark LGBTQ Ruling Will Boost the U.S. Economy
The Supreme Court’s landmark ruling to extend federal workplace protections to gay and transgender employees nationwide is certain to boost the economy, analysts say.

The Supreme Court ruled Monday that employers cannot fire workers for being gay or transgender, a massive victory for LGBTQ workers and the gay rights movement. While the decision isn’t overtly an economic issue, it “gives the U.S. an international [economic] comparative advantage,” Paul Donovan, chief economist of UBS Global Wealth Management, wrote in a blog post. The economic impact “is potentially quite big,” extending secure employment to 5% of U.S. workers, he added.

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U.S. Steel Provides Disappointing Second-Quarter Outlook
United States Steel stock dropped after the company provided a disappointing look into second-quarter results.

U.S. Steel said it would lose about $315 million in Ebitda, short for earnings before interest, taxes, depreciation, and amortization. That amount excludes restructuring spending of about $100 million. Wall Street was looking for a loss of just $135 million.

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DraftKings Is Selling Shares After a Surge in Its Stock
DraftKings is taking advantage of its surging stock price to offer 33 million shares of stock in a deal that could raise $1.3 billion based on Tuesday’s closing price of $40.57.

In conjunction with the offering, the online sports gambling company gave stronger-than-expected revenue guidance for the second quarter of $70 million to $75 million, compared with a Morgan Stanley estimate of $52 million and a consensus projection of $42 million.

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Copyright ©
2020 Dow Jones & Company, Inc. All Rights Reserved. Not for redistribution.
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market or economic conditions.

Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance.

Market Brief: April 28, 2020

A daily summary of news, analysis and data shaping the market.
Market Brief
Tuesday, April 28, 2020
Weighing Reopenings. U.S. stocks gave up early gains to close mostly lower on Tuesday as investors gird for a slew of corporate earnings and the possibility that resuming normal economic activity could reignite coronavirus infection rates. The Dow Jones Industrial Average lost about 32 points, or 0.1%, to close near 24,101, while the S&P 500 gave up about 15 points, or 0.5%, to end the session near 2863. The technology-heavy Nasdaq Composite Index closed about 122 points, or 1.4%, lower, near 8608, with a full slate of tech names set to report earnings over the next few days. Investors were weighing the recent run-up for tech stocks since the mid-March market bottom against the possibility that the coming downturn could be worse than is commonly believed, and that a rush to resume normal activity could be dangerous. 3M shares jumped nearly 3% after it announced
earnings and sales that beat expectations.
CHANGE
DJIA 24,101.55 -32.23
S&P 500 2,863.39 -15.09
NASDAQ 8,607.73 -122.43
US 10-Year Note 0.61 -0.05
Dollar Index 99.88 -0.16
Crude Oil 12.67 -0.11
Gold 1,721.20 -2.60
Global Dow 2,625.02 17.84
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Alphabet Earnings Hit by ‘Significant Slowdown’ in Ad Sales
Google’s profits were damaged even more than expected as the Covid-19 pandemic caused “a significant slowdown in ad revenues,” parent company Alphabet revealed in a quarterly earnings report Tuesday.

Alphabet reported first-quarter earnings of $6.84 billion, or $9.87 a share, compared with $6.66 billion, or $9.50 a share, in the year-ago period, though the 2019 results took a hit from a large fine levied by the European Commission. Revenue after removing traffic-acquisition costs grew to $33.7 billion from $29.48 billion in the year-ago period.

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IBM Bucks the Trend and Raises Its Dividend for the 25th Straight Year
IBM did something on Tuesday that few companies are daring amid the Covid-19 pandemic: It raised its quarterly dividend.

This marks the 25th straight year that the computer giant has raised its payout—up a penny to $1.63 a share. IBM has been paying quarterly dividends continuously since 1916. Its shares now yield 5.17%.

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Pfizer, Merck Earnings Beat Expectations
Two of America’s biggest pharmaceutical companies, Pfizer and Merck, released earnings Tuesday morning that beat analyst expectations.

Pfizer reported first-quarter earnings of 80 cents per share, beating the S&P Capital IQ Consensus estimate of 71 cents. The company reported revenue of $12 billion for the quarter. Merck reported earnings of $1.50 per share, 16 cents more than the S&P Capital IQ Consensus estimate, and quarterly revenue of $12.1 billion. But while Merck lowered its guidance for the full 2020 fiscal year in light of the Covid-19 pandemic, Pfizer reaffirmed the guidance it issued before the pandemic was in full force.

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3M’s Earnings Were Surprisingly Strong. Health Care and Masks Boosted Sales.
The industrial conglomerate 3M turned in better-than-expected earnings results for the first quarter of 2020 in a surprise fueled by the company’s health-care and personal-safety-equipment operations.

The company earned $2.16 a share from $8.1 billion in sales, while Wall Street was looking for $2.03 in per-share earnings and $7.9 billion in sales. Health-care sales jumped 21% year over year. Last year, health-care sales grew 0.3% in the first quarter. Overall, health care represents about 22% of total sales at 3M.

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Caterpillar’s Earnings Miss Expectations
Caterpillar’s first-quarter earnings, at about $1.60 a share, fell short of Wall Street estimates for a result of $1.69, but the stock rose anyway because earnings, right now, don’t matter.

Covid-19 shelter-in-place mandates went into place at the end of March, so conditions for Caterpillar for most of the first quarter qualified as normal. What is most important to investors right now is the shape of the coming economic recovery. There isn’t, however, much in the earnings press release about a recovery. The company, like many other firms, has suspended its full-year financial guidance, cut costs, and gathered cash resources.

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UPS Sales Impress, but Earnings Fall Short
Shipping giant United Parcel Service missed Wall Street earnings estimates while blowing past sales estimates.

It was a wild quarter. Results reflect that. No one knew exactly what to expect. Many industrial businesses that UPS delivers to are closed to help slow the spread of Covid-19. Wall Street earnings estimates, as a result, fell over the past few weeks. But UPS, along with its peer FedEx, are still working hard, delivering packages to homes and essential businesses despite the health risks.

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PepsiCo Sales Surge as Shoppers Stock Up
PepsiCo, the soda and snack giant, reported surging sales in the first quarter.

The beverage maker, which also owns Lay’s and Doritos, said organic sales grew 7.9% in the first three months of the year as consumers stocked up due to lockdown measures and shelter-in-place orders. Chief financial officer Hugh Johnston told analysts he expected second-quarter sales to decline at a low single-digit rate as restaurants, movie theaters, and other venues remain closed around the world.

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Good News on Oxford Vaccine Is Bright Spot in Somber Covid-19 Landscape
A vaccine developed by academic scientists at the University of Oxford is moving quickly into large clinical trials, giving investors a dose of optimism amid a grim landscape.

The vaccine effort, highlighted Monday in a New York Times article, is being run out of the British university’s Jenner Institute, which focuses on vaccine development. The laboratory began Phase 1 trials of the experimental vaccine on April 23, and said on April 24 that it planned to vaccinate 800 volunteers over the course of a month.

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Meat Shortages Are Coming as Coronavirus Shuts Down Packing Plants
The novel coronavirus has upended the U.S. meat-supply chain, with American consumers likely to face shortages of beef and pork before the end of May even as farmers are forced to slaughter millions of unwanted cattle and hogs.

Since the beginning of April, meatpacking plants across the country have been forced to shut in response to viral outbreaks that have infected thousands of workers. Meatpackers work in tight spaces and breathe recirculated air during long shifts, which makes it easy for the virus to transmit across the thousands of workers in a single plant. The United Food & Commercial Workers union estimates that 20 workers in meatpacking and food processing have already died from Covid-19, the disease caused by the new coronavirus.

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Harley-Davidson Braces for Loan Losses
Harley-Davidson reported another quarter of falling revenue in its motorcycle sales. Shipping 10% fewer bikes in the March 2020 quarter than in the 2019 period, the American icon reported an 8% revenue drop. But what knocked earnings down some 44% were the reserves it’s taking on loans it made to its bike buyers.

“Covid-19 has dramatically changed our business environment and it is critical we respond with agility to this new reality,” said Jochen Zeitz, who stepped in as acting chief executive after the February resignations of longtime leader Matt Levatich. He said the company was formulating a new strategic plan for growth and profits.

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Dow Jones Contact Us
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4300 Route 1 North, South Brunswick, NJ 08852
Copyright ©
2020 Dow Jones & Company, Inc. All Rights Reserved. Not for redistribution.
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market or economic conditions.

Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance.

Market Brief: April 9, 2020

A daily summary of news, analysis and data shaping the market.
Market Brief
Thursday, April 9, 2020
An Up Week. U.S. stocks capped significant weekly gains on Thursday after the Federal Reserve made a surprise announcement that it would deploy $2.3 trillion of funds through its lending programs to support the broader economy. The S&P 500 was up 1.4% to end at 2790. The Dow Jones Industrial Average advanced 286 points, or 1.2%, to finish around 23,719, based on preliminary numbers. The Nasdaq Composite climbed 0.8% to finish around 8,154. For the week, the S&P is up 12.1%, the Dow is up 12.7%, and the Nasdaq is up 10.6%. Data showed another 6.6 million Americans claimed unemployment benefits in the latest week. But the disappointing news on the labor market was offset by the Fed’s lending announcements, with the central bank’s unrolling of its $600 billion Main Street Lending program for small and medium sized businesses capturing the attention of investors.

Market Brief won’t be published tomorrow as equity markets will be closed for the Good Friday holiday.

CHANGE
DJIA 23,719.37 285.80
S&P 500 2,789.82 39.84
NASDAQ 8,153.58 62.67
US 10-Year Note 0.73 -0.04
Dollar Index 99.50 -0.62
Crude Oil 23.48 -1.61
Gold 1,733.60 49.30
Global Dow 2,580.78 38.84
Powered by Dow Jones Research, FactSet, Eurostat, SIX Financial Information.
The Fed Is Pouring $2.3 Trillion Into Coronavirus Fight
Corporate and municipal borrowers are getting more backup from the Federal Reserve in a series of initiatives the central bank says could make available as much as $2.3 trillion in new loans.

In addition to an expansion of its corporate-lending facilities, the Fed’s latest moves include several new programs that extend central-bank support to corners of markets where it hadn’t been active, such as municipal bonds and high-yield exchange-traded funds. It will also provide extra support to banks that make small-business loans or participate in the Treasury’s Paycheck Protection Program, or PPP, programs that have so far struggled to get loans to businesses.

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The Fed for the First Time Can Buy Junk Bonds. That Should Help ‘Fallen Angels.’
The Federal Reserve is making its first-ever foray into the junk-rated corporate bond market, saying it will consider buying noninvestment-grade corporate bonds and exchange-traded funds.

As part of an effort to make available $2.3 trillion in new loans amid the coronavirus crisis, the central bank said Thursday that it would buy the bonds of “fallen angel” companies, or companies that get downgraded from investment grade to junk. Companies will qualify if they had an investment-grade rating on March 22 and have since been downgraded to one of the top three tiers of the high-yield bond market (BB+, BB or BB-).

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Saudis, Russians Reach Agreement in Principle to Cut Oil Production
Saudi Arabia and Russia have reached an agreement in principle to cut oil production, The Wall Street Journal reported Thursday.

The Organization of the Petroleum Exporting Countries is holding a virtual meeting with its allies, which include Russia, with a goal to help balance the oil market that has suffered from a drop in demand tied to efforts to stop the spread of Covid-19 and a price war between Moscow and Riyadh that has flooded the world with crude. Under the agreement in principle, Saudi Arabia would remove 4 million barrels a day from its April production levels, while non-OPEC member Russia would cut 2 million barrels a day.

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6.6 Million File for Unemployment Benefits
Claims for unemployment benefits continued to surge last week, with more than 16 million Americans losing their jobs since mid-March as the coronavirus keeps nonessential businesses shut.

The Labor Department said Thursday that for the week ended April 4, 6.6 million people filed for unemployment insurance. That follows an upwardly revised, and record high, 6.9 million in the previous week.

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GE Withdraws Its 2020 Guidance. First-Quarter Earnings Will Miss Expectations.
General Electric is withdrawing earnings guidance for 2020. What’s more, the industrial conglomerate expects first-quarter numbers to come in below Wall Street expectations.

Analysts expected 10 cents in earnings per share. The number will be “materially below” that level. For the year, General Electric had expected to earn about 55 cents a share and generate about $3 billion in free cash flow from its industrial operations.

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Morgan Stanley CEO James Gorman Recovers From Covid-19
Morgan Stanley Chief Executive James Gorman has recovered from the coronavirus.

Gorman contracted the disease roughly three weeks ago but largely worked throughout his illness, a Morgan Stanley spokesman told Barron’s. The bank’s staff was informed of Gorman’s health status on Thursday after he sent a 10-minute video to employees in which he provided an overview of the bank’s business amid the pandemic as well as his own health status. He received medical clearance from doctors more than a week ago.

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Starbucks Withdraws 2020 Outlook as Coronavirus Pandemic Drags on Sales
Starbucks withdrew its fiscal 2020 outlook on Wednesday, adding it expects second-quarter adjusted earnings to come in at 32 cents a share.

Wall Street’s consensus estimate for fiscal second-quarter earnings was recently 39 cents a share, according to FactSet. Analysts had been calling for 59 cents a share as recently as Feb. 28, according to FactSet.

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A Shockingly High Number of Realtors Say Demand for Housing Has Dropped
As the U.S. adjusts to growing unemployment and life under lockdown, 90% of the members of the National Association of Realtors have seen interest in homes drop, according to the results of a new survey.

The association, known as NAR, polled its members to learn how coronavirus is affecting business. Of the more than 5,000 respondents, 90% say they have seen interest decline among homebuyers in their markets—up from 48% in mid-March, the last time the survey was conducted.

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Covid-19 Mortality Is More Than 10% in France, Italy, and the U.K. In the U.S., it’s 3.4%.
Covid-19 cases are approaching 1.5 million. Deaths are approaching 90,000 as the world continues to battle the coronavirus.

Mortality in France, Italy, and the U.K. is more than 10%. Those are the countries hit hardest by deaths. South Korea, Germany, and Canada each have mortality rates below 3%. In the U.S., mortality is about 3.4%. The American figure is elevated because of the high rate of deaths in the New York region.

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Trump Blasts Amazon for the U.S. Postal Service’s Losses
President Donald Trump blamed Amazon.com for the U.S. Postal Service’s losses on Tuesday. He might want to redirect his ire toward Congress.

“The Postal Service has lost billions of dollars a year for many years,” Trump said during Tuesday’s coronavirus task force media briefing. “I’ll tell you who’s the demise of the Postal Service…Amazon or these other internet companies.”

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Dow Jones Contact Us
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4300 Route 1 North, South Brunswick, NJ 08852
Copyright ©
2020 Dow Jones & Company, Inc. All Rights Reserved. Not for redistribution.
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market or economic conditions.

Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance.

Market Brief: April 6, 2020

A daily summary of news, analysis and data shaping the market.
Market Brief
Monday, April 6, 2020
Optimism on Coronavirus. U.S. stocks closed sharply higher Monday, buoyed by declining numbers of deaths from Covid-19 in New York City and Europe. The Dow Jones Industrial Average jumped about 1,627 points, or 7.7%, to close near 22,680, while the S&P 500 added about 175 points, or 7.0%%, to close at about 2663. The Nasdaq Composite Index rose about 540 points, or 7.3%, to close near 7913.
CHANGE
DJIA 22,679.99 1,627.46
S&P 500 2,663.68 175.03
NASDAQ 7,913.24 540.15
US 10-Year Note 0.68 0.08
Dollar Index 100.73 0.15
Crude Oil 26.21 -2.13
Gold 1,708.40 62.70
Global Dow 2,479.68 115.17
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CEO Jamie Dimon Says JPMorgan Chase Can Weather the Storm
JPMorgan Chase CEO James Dimon said in his annual letter to shareholders that the bank’s earnings will be down “meaningfully” this year but touted the company’s broad strength.

JPMorgan Chase has $500 billion in liquid assets and an additional $300 billion in borrowing capacity from the Federal Reserve that it can use to support loans, Dimon said, adding that those figures don’t include additional capacity under some of the Fed’s newly created credit facilities.

Dimon also noted the stability of JPMorgan’s dividend—something that has been called into question at all of the major U.S. banks after their European counterparts were urged to suspend their payouts amid the pandemic.

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Oil Is Falling Again. Here’s the Latest on the Global OPEC Production Deal.
After a three-day rally that launched Brent crude futures 50% higher, the momentum reversed on Monday, and oil was down. Cracks are starting to show up in a rescue plan that international negotiators have been discussing.

Investors are awaiting more clarity on a global plan to cut production to reduce the current oversupply of oil. The Organization of the Petroleum Exporting Countries, or OPEC, and its allies, a group known as OPEC+, plan to talk on Thursday after delaying an expected Monday meeting. For OPEC to make a deal, however, the U.S. will likely have to agree to its own coordinated production cut—a drastic change from the competitive free market ethos that has characterized the U.S. oil industry for decades.

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Carnival Stock Rallies After Saudi Stake Disclosure and a ‘Zero Sail’ Assessment
Shares of Carnival, the largest cruise operator, and its peers were making a strong showing Monday morning amid a broad market rally.

One potential piece of good news for Carnival: Saudi Arabia’s sovereign wealth fund recently took an 8.2% stake in the company. Meanwhile, Carnival has enough liquidity to keep the company afloat through November under a “Zero Sail” scenario outlined by analysts at Wells Fargo Securities.

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California Wildfire Victims Now Are Insisting on a Better Deal from PG&E
California wildfire victims are pushing for a better deal from PG&E.

Pacific Gas & Electric and its holding company PG&E have been in bankruptcy court since January 2019, when they filed to manage the potential costs of a series of historically destructive wildfires caused by the utility’s equipment. On Monday, attorneys representing victims of those wildfires in effect withdrew from a $13.5 billion settlement they reached with the utility late last year. They told the court that their mediation process with the company was “at an impasse.”

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The Fed Has Averted a Systemic Financial Crisis—For Now. Here are 3 Areas to Monitor.
Bad news is said to come in threes, but let’s hope full-blown crises don’t. The Covid-19 global health crisis rapidly became a global economic crisis, but, so far, it has not touched off a financial crisis.

U.S. banks, for the most part, are in good shape, and central bankers injected trillions of dollars to stabilize financial markets—and stand willing to do more. But three areas—emerging markets, corporate bonds, and, of course, the banks themselves—require close monitoring to ensure today’s fragile fiscal stability doesn’t turn into a big problem.

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Citigroup Says Over 10% of High-Yield Bonds Could Default
The high-yield bond market might be rebounding, but strategists are warning that there could be more pain to come—Citigroup says that more than 10% of the market could default.

The two biggest high-yield bond exchange-traded funds rose Monday as investors seemed incrementally more optimistic about a rebound in U.S. economic growth after signs that the spread of coronavirus could be slowing.

But buyers may want to dial down their optimism about lower-rated bonds. Unlike the investment-grade market, the market for high-yield debt won’t get Federal Reserve support. And Wall Street strategists say that risky companies are far more likely to default than they were before the coronavirus brought the economy to a standstill.

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Vir Biotechnology Strikes Covid-19 Deal With GlaxoSmithKline
Shares of Vir Biotechnology leapt more than 25% on Monday, after the company said it is collaborating with GlaxoSmithKline to develop an antibody drug to treat Covid-19.

Vir and GlaxoSmithKline said they believe they could begin testing Vir’s Covid-19 drug candidates in Phase 2 clinical trials within three to five months.

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Gilead Expects to Have 1 Million Doses of an Experimental Covid-19 Drug by Year-End
The biotech company Gilead said it is donating its supply of 1.5 million doses of remdesivir, an antiviral drug being tested as a potential treatment for Covid-19. That would likely be enough to treat 140,000 patients.

The announcement came in a letter from Gilead CEO Daniel O’Day, issued on Saturday. O’Day said the company was working to boost production of remdesivir, cutting the amount of time it takes to produce the drug from a year to six months. He said the company aimed to have 500,000 treatment courses manufactured by October, and 1 million by the end of 2020.

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Zoom Stock Slides on Growing Security and Valuation Concerns
Zoom Video Communications shares are taking it on the chin as concerns about security issues and the company’s lofty valuation weigh on one of the biggest beneficiaries of the coronavirus pandemic and the related economic fallout.

Credit Suisse analyst Brad Zelnick on Monday cut his rating on Zoom shares to Underperform from Neutral, while lifting his price target on the shares to $105, from $95, still below Friday’s closing level of $128.20.

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Coronavirus Has Been Good for Pot. But Ontario’s Shops Are Deemed Not Essential.
The cannabis business has been one of the few sectors benefiting from the Covid-19 pandemic, as customers rushed last month to stockpile staples they considered essential.

But officials in the Canadian province of Ontario are apparently not among those who consider cannabis essential. Cannabis stores in the province closed down on Saturday, after the government excluded recreational pot from its list of essential businesses.

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Dow Jones Contact Us
| Privacy Policy
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4300 Route 1 North, South Brunswick, NJ 08852
Copyright ©
2020 Dow Jones & Company, Inc. All Rights Reserved. Not for redistribution.
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market or economic conditions.

Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance.

Market Brief: April 1, 2020

A daily summary of news, analysis and data shaping the market.
Market Brief
Wednesday, April 1, 2020
Sliding Lower. Stocks kicked off April with steep losses on Wednesday, falling as investors braced for an onslaught of negative news around the Covid-19 pandemic and its economic impact. The Dow Jones Industrial Average finished around 974 points lower, down 4.4%, near 20,943, according to preliminary figures, while the S&P 500 shed around 114 points, or 4.4%, closing near 2,471. The Nasdaq Composite ended near 7,361, off around 340 points, or 4.4%. Stocks fell sharply in late February and March before recouping some of the decline, with the S&P 500 logging a 20% quarterly decline, its largest since 2008, and the Dow falling more than 23% for its biggest first-quarter decline on record and largest quarterly fall since 1987.
CHANGE
DJIA 20,943.51 -973.65
S&P 500 2,470.50 -114.09
NASDAQ 7,360.58 -339.52
US 10-Year Note 0.60 -0.07
Dollar Index 99.43 0.39
Crude Oil 21.05 0.57
Gold 1,600.80 4.20
Global Dow 2,369.06 -96.41
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Whiting Petroleum Is the First Big-Name Oil Producer to File for Bankruptcy
Denver-based oil producer Whiting Petroleum filed for bankruptcy on Wednesday, making it the first substantial public company to do so amid a stunning decline in oil prices.

Shares of Whiting had traded over $150 as recently as 2015, but they fell below $1 in the past few weeks, as the company’s debt troubles drove many investors away. Its stock closed at 67 cents on Tuesday. Oil has lost more than two-thirds of its value this year.

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Oil Giant BP Cuts Spending and Slashes U.S. Shale Output in ‘Brutal’ Environment
BP shares slipped 1.8% on Wednesday, as the oil major cut spending by 25% in what Chief Executive Bernard Looney said could be the “most brutal environment for oil and gas businesses in decades.”

The London-listed company said capital spend for 2020 would now be around $12 billion, 25% lower than its previous guidance, including a $1 billion reduction in spend on its U.S. shale business BPX Energy.

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Saudi Power Play Could Send Oil Below $20 a Barrel for an Extended Period
The near-term fate of the oil industry is in the hands of a very few players—most important, the ruling family of Saudi Arabia. Its decision to move ahead with a production boost on Wednesday means the world will be awash in oil at a time when oil demand is plummeting because of the coronavirus.

The U.S. urged Saudi Arabia and Russia to back off plans to increase production. While Russia is reportedly not going to pump more, the kingdom ignored the plea. It plans to raise production to 12.3 million barrels a day, up from 9.7 million a day in February. Oil prices, already down more than 50% in March, were moving lower on Wednesday.

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There’s More Pain Ahead for Already-Beleaguered Factories
American manufacturing activity slipped in March as the coronavirus and oil price war hit factories and prompted job cuts in an already-shaky sector of the economy.

The Institute for Supply Management said its index, based on a survey of manufacturing companies across the country, fell to 49.1 in March from 50.1 in February. The below-50 print represents contraction, though the decline in activity wasn’t as bad as economists feared. Economists surveyed by The Wall Street Journal expected a reading of 44.5 for March.

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American Industry Declares War on Covid-19. Here’s What That Means.
U.S. manufacturing is mobilizing to build a modern “Arsenal of Democracy” in the battle against the Covid-19 coronavirus.

Instead of ships, tanks, and bombers—products Franklin Delano Roosevelt called for during World War II—America needs ventilators for critically ill patients. Industry has responded and is preparing a huge increase in production in coming weeks.

General Motors, which produced tanks during World War II, will build a Ventec Life Systems ventilator at a plant in Indiana. Ford Motor, which made bombers during the war, wants to build up to 200,000 ventilators in 2020 by partnering with General Electric to build a basic ventilator licensed from Airon.

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AT&T Names Founding Hulu Chief Jason Kilar as WarnerMedia CEO
AT&T Inc. tapped former Hulu boss Jason Kilar as chief executive of its WarnerMedia unit, which houses HBO, CNN and the soon-to-launch streaming service HBO Max.

Mr. Kilar succeeds John Stankey, 57 years old, who last year gained an additional title as AT&T’s chief operating officer, putting him in line to succeed company Chief Executive Randall Stephenson. Mr. Kilar will report to Mr. Stankey.

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T-Mobile Finally Bought Sprint. It Wasn’t Easy.
T-Mobile US has completed its long-pending acquisition of Sprint, the company said on Wednesday morning. The deal combines the previously third- and fourth-largest U.S. wireless carriers, after Verizon Communications and AT&T. In a move mandated by federal regulators, it also equips Dish Network with a collection of assets meant to allow it to become a fourth nationwide competitor.

With the closing of the deal, old T-Mobile’s COO Mike Sievert will become CEO of New T-Mobile, succeeding John Legere. Sievert will oversee the complex process of combining T-Mobile and Sprint’s networks, retail operations, and customer bases. Magenta-wearing Legere had previously said he planned to remain CEO until his contract expired on April 30. He’ll remain on T-Mobile’s board of directors until June 2020.

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Friday’s Jobs Report Will Be Ugly. The Ugliest Is Yet to Come.
Some economists estimate more than 20 million jobs could be lost in coming weeks and jobless claims will extend last week’s record 3.3 million, but Friday’s jobs report isn’t likely to reflect the depth of the labor-market crash because households and businesses were surveyed before coronavirus shutdowns cascaded across the country and layoffs started to mount.

Payroll provider ADP provided an early glimpse of how current data may not reflect reality on the ground as its survey period, like the Labor Department’s, ends on the 12th of the month. ADP said Wednesday that small businesses eliminated 90,000 jobs in March, a decline that was was offset by hiring last month across larger companies, resulting in an overall drop in private payrolls of 27,000.

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Industrial Megadeals Are Still Being Completed as Covid-19 Outbreak Grows
Industrial megadeals are still closing during the Covid-19 coronavirus outbreak.

General Electric stakeholders probably feel a little more secure Wednesday morning. The company has about $20 billion in fresh cash after closing on the sale of its biopharma division to Danaher, the industrial-health care hybrid conglomerate, on Tuesday evening.

United Technologies also received regulatory approval to merge with Raytheon this week. That deal is slated to close on Friday. The merger catalyzes two other huge transactions which will create three new stocks: an aerospace giant, called Raytheon Technologies, along with a stand-alone elevator maker, called Otis, and an air-conditioning company, to be called Carrier.

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Another Hydroxychloroquine Trial Still Leaves Questions on Its Use Against Covid-19
Early data from yet another study of the antimalaria drug hydroxychloroquine in Covid-19 patients is interesting, and perhaps promising, but doesn’t clear up questions about the therapy’s efficacy, analysts say.

The study, conducted by scientists at the Renmin Hospital of Wuhan University and distributed before peer review on Monday, is among the first randomized, double-blind clinical trials of hydroxychloroquine in Covid-19 patients.

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Dow Jones Contact Us
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4300 Route 1 North, South Brunswick, NJ 08852
Copyright ©
2020 Dow Jones & Company, Inc. All Rights Reserved. Not for redistribution.
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market or economic conditions.

Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance.

Market Brief: March 19th, 2020

A daily summary of news, analysis and data shaping the market.
Market Brief
Thursday, March 19, 2020
Central Banks Take More Actions. Stocks ended Thursday in positive territory as the price of oil rebounded and investors digested new central-bank action while waiting for news on the fiscal-stimulus front. Bond yields around the world fell. The Dow Jones Industrial Average closed up about 190 points, or 1%, after having been down more than 700 points shortly after the open and rising over 500 points around midday. The S&P 500 gained 0.5%, and the Nasdaq Composite climbed 2.3%.
CHANGE
DJIA 20,087.19 188.27
S&P 500 2,409.39 11.29
NASDAQ 7,150.58 160.73
US 10-Year Note 1.16 -0.02
Dollar Index 102.59 1.43
Crude Oil 25.40 5.03
Gold 1,475.00 -2.90
Global Dow 2,233.93 -109.53
Powered by Dow Jones Research, FactSet, Eurostat, SIX Financial Information.
ECB Launches Mammoth, Open-Ended Bond-Buying Package
The European Central Bank announced on Wednesday night an extraordinary 750 billion euro asset-buying program to help the eurozone fight the consequences of the coronavirus outbreak and support “all citizens of the euro area through this extremely challenging time.”

After a late-night videoconference call, the ECB’s governing council made it clear that its new “pandemic emergency purchase programme” wouldn’t be constrained by the self-imposed limits of its previous and current quantitative easing policies.

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The Fed Extends Dollar Liquidity to 9 New Central Banks
The Federal Reserve is starting to offer dollar liquidity to a broader range of countries around the world. But strategists say it might not be enough to offset the demand for the U.S. currency from emerging markets.

On Thursday morning, the Fed said it had started temporary currency swap lines with the central banks of nine countries: Australia, Brazil, Denmark, South Korea, Mexico, Norway, New Zealand, Singapore, and Sweden. These nine central banks also received extra help with U.S. dollar liquidity during the 2008-2009 financial crisis.

The step was likely the Fed’s attempt to ease pressure on the greenback, as global banks, investors, and companies rush to secure liquid dollar investments. Because the dollar is the currency of global trade, global companies experiencing steep declines in revenue may need to borrow dollars to pay suppliers, strategists say.

Continue reading ›
The Fed Said It Will Backstop Prime Money-Market Funds. Here’s What That Means.
The Federal Reserve announced late Wednesday night its plan to safeguard the $3.8 trillion held in money-market funds.

The Money Market Mutual Fund Liquidity Facility, or MMLF, will lend money to institutions to purchase high-quality securities from money-market funds. The loans will be secured by those assets. “The MMLF will assist money-market funds in meeting demands for redemptions…enhancing overall market functioning and credit provision to the broader economy,” according to a Fed statement.

In other words, if money-market funds have trouble selling their holdings to meet increasing redemptions, the Federal Reserve Bank of Boston, which the program is being run through, will loan money to institutions to be the buyers for those securities. The program will be in effect through Sept. 2020.

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President Trump Praises Antiviral Treatments in FDA News Conference
In a crowded press conference at noon Thursday, President Donald Trump talked hopefully about potential treatments for the coronavirus. Surrounded by federal medical officials, he touted the prospects of the drug chloroquine. which is widely available for malaria, but not tested or approved to treat Covid-19. Trump also gave shout-outs to still experimental products from Gilead Sciences and Regeneron Pharmaceuticals.

Trump said that he was “very excited” about chloroquine, an inexpensive generic product used for decades against malaria and arthritis. “There are a lot of reasons why I think it could have a positive effect,” said the president. “It’s been out for years and we know it could be taken safely.”

Continue reading ›
Oil Rallies, With U.S. Prices Scoring Their Biggest Daily Percentage Climb on Record
Oil prices bounced off their lowest levels in 20 years on Thursday, with U.S. prices scoring their largest one-day percentage climb on record,

Investors absorbed news of a plethora of central bank and government support measures to combat the economic fallout from the coronavirus pandemic, Russia indicated it would like to see higher prices, and the Trump administration reportedly said it may intervene in oil-price war between Saudi Arabia and Russia.

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Siemens CEO to Step Down by Early Next Year
German industrial engineering company Siemens AG on Thursday said Chief Executive Joe Kaeser would be replaced by current Deputy CEO Roland Busch by early next year, cementing the company’s shift from a conglomerate into a business more focused on digital transformation.

Mr. Busch, a technician who was put on a fast track to succeed Mr. Kaeser last fall, is to take over as CEO at latest after the group’s next ordinary shareholder meeting in February 2021, Siemens said in a statement.

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Ford Suspends Its Dividend, Shuts North American Factories
Ford Motor has suspended its dividend and is temporarily halting car production in the U.S., Canada, and Mexico as it and other companies reel from the spreading coronavirus epidemic.

Ford said the move was necessary to preserve cash and provide additional financial flexibility.

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The U.S. Needs More Ventilators. GM and Ford Might Help Make Them.
As public health authorities ring warning bells about a shortage of ventilators needed to treat the most seriously ill Covid-19 patients, two major car manufacturers said they were looking into helping manufacture the devices.

A General Motors spokesman confirmed to Barron’s that the company is evaluating the possibility of making ventilators, and looking into how it can be useful. Ford didn’t immediately respond to a request for comment, but a spokeswoman told Automotive News that the company is in preliminary talks with government officials in the U.S. and Britain about making ventilators, and was investigating whether it was feasible.

Continue reading ›
Jobless Claims Surge as Companies Shed Workers Amid Coronavirus
Employers have quickly started to shed workers as the coronavirus outbreak closes businesses and keeps consumers home, evidenced by a 33% jump in claims for unemployment benefits.

In the week ending March 14, 281,000 Americans filed for first-time unemployment insurance, the Labor Department said Thursday. That was up 70,000 from the previous week and it reflects the highest level since early September 2017.

Weekly jobless claims are the best indicator investors and economists have at this point to try to gauge the outbreak’s toll on the U.S. economy. Most data series are monthly, and they’re still not picking up the impact because of measurement dates. Some states in recent days have said increases in claims have been massive, and reports have suggested sites to file for unemployment benefits have been overwhelmed.

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Microsoft Teams, Slack’s Rival, Has 44 Million Daily Users. 12 Million Started in a Week.
Microsoft has reached 44 million daily active users for Teams, the collaborative communications service that is part of the Office 365 productivity suite, the company said Thursday. That’s up from the 20 million users disclosed last November.

Teams is the primary rival for Slack Technologies, which announced 12 million users last October. Neither company releases user data on a routine basis. Microsoft said that the user total has accelerated over the last week as more people work remotely amid the Covid-19 pandemic. The user total rose 12 million from March 11 to Wednesday.

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Dow Jones Contact Us
| Privacy Policy
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4300 Route 1 North, South Brunswick, NJ 08852
Copyright ©
2020 Dow Jones & Company, Inc. All Rights Reserved. Not for redistribution.
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market or economic conditions.

Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance.

Market Brief, March 16th 2020

A daily summary of news, analysis and data shaping the market.
Market Brief
Monday, March 16, 2020
Double Digits. Stocks extended deep losses ahead of the closing bell Monday after President Donald Trump said the U.S. economy “may be” headed for recession and that the Covid-19 outbreak could last for months. All three major market indexes notched double-digit percentage losses. The Dow Jones Industrial Average ended with a loss of around 2,997 points, or 12.9%, near 20,189, according to preliminary figures, while the S&P 500 dropped around 325 points, or 12%, to finish near 2,386. The Nasdaq Composite fell around 970 points, or 12.3%, to end near 6,905, for its largest one-day percentage drop in history.
CHANGE
DJIA 20,188.52 -2,997.10
S&P 500 2,386.13 -324.89
NASDAQ 6,904.59 -970.28
US 10-Year Note 0.75 -0.23
Dollar Index 98.03 -0.72
Crude Oil 28.66 -3.07
Gold 1,503.80 -12.90
Global Dow 2,268.11 -202.54
Powered by Dow Jones Research, FactSet, Eurostat, SIX Financial Information.
Fed Cuts Rates to Zero as Financial-Crisis Tools Make a Comeback
The Federal Reserve has cut interest rates back to zero and reintroduced the bond-buying program it used to fight the financial crisis a decade ago. It also reduced the cost of its overnight lending facility for U.S. banks and will expand its facilities to lend dollars to other global central banks.

In a statement late Sunday, the Federal Open Market Committee decided to cut interest rates back to the financial crisis-era range of 0% to 0.25%. It also has decided to buy $500 billion of Treasuries and $200 billion of mortgage-backed securities “over coming months.”

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The Fed’s ‘Whatever It Takes’ Approach Isn’t Enough for the Stock Market
The Federal Reserve revived many of its global financial crisis measures on Sunday to curb the damage from economies struggling with the coronavirus, but markets may need even more before finding their footing—especially as China data overnight came in far uglier than expected.

The Federal Reserve cut interest rates to the range during the financial crisis of 0 to 0.25% and brought back its bond-buying program, saying it would purchase $500 billion of Treasuries and $200 billion of mortgage-backed securities over coming months. Fed Chairman Jerome Powell cited the stress in several financial markets last week and impaired liquidity. Despite the aggressive moves, Powell said the Fed didn’t have the means of reaching households or small businesses. For that, fiscal policy was needed.

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Airlines Want $50 Billion in Aid. It’s Crucial for Them, Lessors, and Jet Manufacturers.
U.S. airlines are seeking a $50 billion aid package from the federal government, according to a report Monday by The Wall Street Journal. And it may not come a moment too soon.

Airlines are scrambling to cut operating costs as the coronavirus pandemic sweeps the globe and grounds airline fleets. United Airlines Holdings said Sunday it plans to reduce scheduled flights by 50% in April and May. Delta Air Lines and American Airlines Group have also cut back on routes and scheduled flights. And the carriers have all disclosed that they’re in talks with the government about assistance, according to the Journal.

Continue reading ›
Manufacturing in New York Records Biggest Monthly Drop in History
Manufacturing activity across the New York region plunged in March, reflecting the biggest one-month drop in history and showing just how hard the coronavirus is starting to hit the U.S. economy.

The New York Fed’s monthly Empire manufacturing survey showed a drop in activity to -21.5 from 12.9 in February. Economists polled by Bloomberg expected a less sharp decline to 5.1.

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Oil Ends at 4-Year Low, With U.S. Benchmark Below $30
Crude prices settled at a four-year low on Monday, with U.S. prices below $30 a barrel, moving in step with plunging global equities after an emergency Federal Reserve interest rate cut did nothing to stem the panic among investors triggered by the rapidly spreading coronavirus.

West Texas Intermediate crude for April delivery on the New York Mercantile Exchange fell $3.03, or 9.6%, to settle at $28.70 a barrel after trading as low as $28.03. The settlement was the lowest for a front-month contract since February 2016, according to Dow Jones Market Data. May Brent dropped $3.80, or more than 11%, to $30.05 a barrel on ICE Futures Europe—the lowest finish since January 2016.

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Exxon’s Debt Rating Is Cut on Oil and Operating Weakness
Exxon Mobil’s credit has long been considered the gold standard in the oil-and-gas industry. But that may be changing.

On Monday, S&P Global Ratings downgraded the company’s issuer credit rating and unsecured debt rating to AA from AA+.

AA is the third-highest rating that S&P gives out and is still a strong investment-grade seal of approval. But Exxon has been adding debt even as its operations are faltering, with refining and chemicals results struggling in the past few quarters. The company’s debt position is now raising worries, particularly given the likelihood that oil prices will stay low for a long time.

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Moderna Stock Jumps After It Doses First Patient in Coronavirus Vaccine Trial
The biotech firm Moderna said Monday that the first patient had been dosed with its vaccine against the novel coronavirus in the Phase 1 study being conducted by the National Institutes of Health.

Shares of Moderna soared on Monday even as major U.S. stock market indexes suffered double-digit percentage losses. “This study is the first step in the clinical development of an mRNA vaccine against SARS-CoV-2, and we expect it to provide important information about safety and immunogenicity,” Moderna’s chief medical officer, Tal Zaks, said.

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France Fines Apple $1.2 Billion Over Distribution Practices
The French Competition Authority, the Autorité de la Concurrence, has fined Apple 1.1 billion euros ($1.2 billion) over anticompetitive behavior regarding the distribution of its products.

Apple and other large tech companies have been subject to increasing regulatory scrutiny on multiple fronts, including the way Apple distributes mobile applications through the App Store.

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Lockheed Martin Names New CEO
Lockheed Martin Corp. Chief Executive Marillyn Hewson will step down from the role in June to be succeeded by aerospace industry veteran James Taiclet, the world’s largest defense company by sales said Monday.

Mr. Taiclet joins from telecom infrastructure specialist American Tower Corp. but has been on the defense giant’s board since 2018, having worked for a variety of other big aerospace companies.

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Cruise Operator Carnival Is Tapping a $3 Billion Credit Facility
Carnival, the largest U.S. cruise operator, is tapping the vast majority of its $3 billion credit facility agreement “to increase its cash position and preserve financial flexibility in light of the current uncertainty in the global markets result from the COVID-19 outbreak,” the company said in a filing Friday.

It’s the latest sign of the quickly deteriorating fundamentals for the industry due to the fallout from the coronavirus outbreak.

Continue reading ›
Dow Jones Contact Us
| Privacy Policy
| Cookie Policy
4300 Route 1 North, South Brunswick, NJ 08852
Copyright ©
2020 Dow Jones & Company, Inc. All Rights Reserved. Not for redistribution.
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market or economic conditions.

Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance.

Money In Motion – Will You Keep Your 401k?

James just landed the opportunity of a lifetime. After spending years climbing the ladder and working his way to the top, he’s finally been offered his dream job. It’s an amazing position, and everything he could want in a company. He’s looking forward to putting in his two weeks’ notice and wrapping up his projects at his current job. But that’s not all he has to think about…

When leaving a job, for whatever reason, there’s a million questions to consider. If you already have a new job opportunity, the question of income is answered – which is great! But what about your other assets? Have you thought about what you’re going to do with your old 401k?

You have a few options when it comes to your 401k. You could cash out, leave it with your former employer, transfer your assets to your new employer’s 401k, or roll it over to an IRA. So, what should you do?

In order to make the best choice, you need to have all of the information. An informed decision is typically the best decision.

So where should you start when making this decision?

Start out by gathering information. Call the plan to find out what types of fees you’re paying. A common misconception about 401ks is that you don’t pay fees on them. Spoiler alert: that’s not even close to true. For example, did you know that your plan subtracts fees for managing the plan? There can also be administrative fees subtracted too.

Compare those fees with your financial advisor. You should also take a look at dividend rates and compare those to your current 401k holdings. Take note of how much money you currently have in your account and what you are currently invested in within your 401k.

Once you have a better idea of what your current 401k situation looks like, it’s time to make a choice about what you plan to do with it. Let’s look at the options again.

1. Cash Out

I know, it’s tempting. A (presumably) big pile of money is just sitting there, and there’s so many things you could do with it.

Cashing out doesn’t mean you get all of the money that was in your 401k. There are taxes and penalties to consider. And worst of all, you’re not giving yourself the opportunity to earn more money.

To avoid these penalties and taxes, I urge you to avoid this option if having these funds in your bank isn’t absolutely necessary.

2. Leave It

If your 401k meets your old company’s minimum requirement, you do have the option to leave it with your former employer. But, leaving it comes with its own set of risks. In most cases, leaving your 401k with your former employer means you will no longer be able to contribute to it. You also run the risk of becoming disconnected from activity and unable to keep up with how your money is being invested. And don’t forget leaving your 401k still means you could be paying those management and administrative fees we talked about earlier.

3. Roll It Over To Your New Employer’s 401k

Your third option is to roll over your 401k money into your new employer’s 401k plan. One major benefit to this option is the new plan might have access to loans, which are not available with an IRA. Also, in general, assets held in a 401k are protected from creditors under federal law.

Just remember, 401ks can have higher fees and a narrow list of investment options for you to choose from. Make sure you call your new employer’s plan and confirm the fees you’ll be paying!

4. Roll It Over To An IRA

Your final option is to roll over your 401k money into an IRA. One major benefit to this option is the increased investment choices. Typically 401ks have only a few options, but with IRAs, depending on the custodian, you have access to all mutual funds, ETFs and securities that are publicly available giving you an increased ability to expand and grow your retirement portfolio. Plus, an IRA offers plenty of flexibility which can come in handy with changing wants and needs.

Rolling over to an IRA is the best way to gain flexibility over what your retirement funds are invested in.

Setting up an IRA can be intimidating for some if they’re new to investing, but that is what financial advisors and retirement planners are for. Working with a financial advisor will help you to stay focused on your retirement goals. Your financial advisor will help you maintain your IRA through regular communication and performance reviews to track and make necessary adjustments to ensure you’re meeting your retirement goals.

Is your money in motion? If you’ve recently switched jobs and are considering what to do with  your ex-employer’s 401k, let’s meet! As a CRPC® designee, I specialize in helping people plan for retirement. Let me help you prepare for the future you want.

3 Top Benefits of Creating a Relationship with Your Financial Advisor

If I asked you who your closest relationships were with you’d probably have a few go-tos, right? Perhaps your spouse, your college roommate, a lifelong friend you’ve known since you were 5 years old… I’m guessing “my financial advisor” didn’t even crack the top ten?

Ouch! I’m offended… 😉

While I’m not suggesting that you and your financial advisor need to be best friends, a strong, genuine friendship with your financial advisor can be extremely beneficial for you.

It may sound silly to be “friends” with your financial advisor, after all, don’t mix business with pleasure, right? But there are rules, and then there are exceptions. In my experience, developing a relationship with your financial advisor is not only beneficial, but in some cases, vital to your financial success.

Below are just a few reasons why you’d benefit from having a relationship with your financial advisor.

Genuine Friendship

Friendship goes both ways. I’m not just expecting you to look at your financial advisor as a friend. The best advisors count their clients as close friends too. Feeling confident in your relationship gives you the peace of mind knowing that your financial advisor will always have your best interest in mind.

Trust

Many advisors tend to invest extremely conservatively. This may sound like a good thing until you end up having to reduce your goals, or extend the time horizon in order to accomplish them.

When you trust your financial advisor as a person, and develop a genuine relationship with them you’re more likely to trust their professional suggestions – as they truly understand what will be the best approach to help you reach your goals. This will help you stick to your investment plan through both rough and good times.

We Can Be So Much More Than Just Financial Advisors

Sure, you work with us because we help you manage your finances and plan for the future. But that’s not all we can do! The best advisors also take on a counseling role through trying or difficult financial times.

For example, business owners tend to tie their identity to their business, so when it comes time to retire, a trusted friend can help guide you to a happy and fulfilling retirement.

See what we mean? Fostering a true relationship with your financial advisor isn’t crazy. As professionals, financial advisors always have your best interest in mind, but developing a friendship with your financial advisor can take your business relationship to the next level.

When I started Pacific Landfall, I wanted to make sure relationships were a priority. That’s why I guarantee regular and open communication with my clients. If you’re tired of not hearing from your financial advisor, it’s time to make a change. Let’s meet!

Money In Motion – Money Management After You’ve Received an Inheritance

So you’ve just inherited a large sum of money, now what?

In the finance world, this inheritance is what we call “money in motion”. Your money isn’t saved in the bank, or invested in stocks, it’s in motion and you need to plan how to best utilize this money to your advantage.

It is one my goals as a wealth management advisor to help individuals manage their “money in motion”. If you’re not familiar with the term, “money in motion” refers to money that is in transition, or hasn’t been given a purpose. Some examples of money in motion include inheritances, switching jobs, or even the sale of a home.

Before you sit down to figure out how you’re going to manage the money, I want to give you some advice on how to make that plan. I’ve seen people make their inheritances last a lifetime, and I’ve seen others blow through it almost instantly. I don’t want to see you make that mistake, let’s make this money last a lifetime.

Here are three of my best money management tips for recent inheritors.

Slow Down & Reflect

I’ve seen heirs with great money management skills that make their inheritance last a lifetime and beyond, but I’ve also seen people spend the money before it’s even reached their pockets. This is unfortunate for two reasons. Now they have no money left for saving and investing for the future, and they just blew through a sum of money with little to no regard for the hard work someone else put in to earn it.

Before you even make a plan for your inheritance, spend some time to reflect. Reflect on the hard work and sacrifices your loved one put in to accumulate this wealth. Just because you didn’t have to put in the work to earn it doesn’t mean that someone else didn’t, and really for that reason you should value it even more highly. When you recognize the value of every dollar, it will help you fight the urge to spend your new fortune on things that only last a moment or that you most likely don’t need.

Make a Plan

Here’s where the money management comes into play. I’m not saying you can’t spend some of the money, but it’s important to have limits. How much will you spend? How much will you save? How much will you invest?

These are very important questions to consider. Making wise money management decisions now can ensure that this inheritance helps you pay off your current debt, put a down payment on a house in ten years, and have a healthy amount saved for retirement when you eventually need it.

Honor Your Loved One

Don’t spend it all on you. Use this money to honor the person who gave it to you. Did they have aspirations to travel the world? Were they passionate about a specific charitable organization? Use the money to take the trip that they couldn’t, or make a positive impact on others. The money won’t last forever, but the memories of traveling the world or doing good, and the memory of being able to honor your loved one will be something that lives with you forever.

I understand that money management isn’t easy, especially when you’ve come into a fortune that you didn’t have the day before. But it’s important to have a plan for money in motion. When money isn’t tied down somewhere, it’s easy to make the mistake of spending too much. And it can happen fast!

If you need help managing an inheritance, let’s meet. I specialize in wealth management, and can help you develop a plan that will make that money last a lifetime. Schedule your complimentary call, or in-person meeting today!