It's the first Monday in nearly a month that S&P 500 futures haven't gone limit-down in reaction to alarming weekend news, though traders are still starting the week with caution. Losses were seen at the start of the session as President Trump did away with the idea of the economy opening back up by Easter and extended social distancing guidelines until April 30. Futures then wavered between gains and losses throughout the night, suggesting another rocky ride for the week ahead. A severe recession is starting to get priced in, yet this will be set against unprecedented stimulus. (SA)

Following in the footsteps of CVS's Aetna, more insurers are promising to forgo cost-sharing charges for people who need coronavirus treatment. Cigna and Humana are waiving out-of-pocket fees for insured members and employer plans, including hospitalizations and ambulance transfers. The waiver applies to all medical costs related to the treatment of COVID-19, including FDA-approved medications and vaccines when they become available. (FT)

The world is drowning in oil that nobody needs and it is causing huge problems for the market. Demand has collapsed, with the grounding of much of the world’s aircraft contributing to a drop of 5 million barrels a day in consumption alone. Some producers are having to pay to have their crude taken away. While major benchmarks are still some way from such levels, West Texas Intermediate for May delivery briefly traded below $20 a barrel this morning. (Bloomberg)

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.

Stocks surged for a third straight day Thursday as investors shrugged off the release of record-breaking initial jobless claims while the Senate passed a massive economic stimulus bill amid the coronavirus outbreak. US Stocks capped off their biggest three-day surge since 1931, over the past three days stocks are up more than 20%. 

Mortgage rates seesawed lower this week after the Federal Reserve stepped in to provide some assurance to lenders who were at a loss as to how to price home loans amid the disruptions caused by the coronavirus emergency.  The 30-year fixed-rate mortgage dropped to 3.50% during the week ending March 26.  Rates had spiked recently as there was no appetite in the secondary market to buy mortgages pushing mortgage rates higher even though the Fed was lowering rates.
Shares of Lululemon are higher after the company reported profit above Wall Street expectations but said they couldn't provide 2020 guidance due to the COVID-19 outbreak.  Lulu’s Sales rose 20% to $1.4 billion. Comparable-store sales rose 9%, and direct-to-consumer net revenue rose 41%. Lululemon said it temporarily closed all of its retail locations in mainland China in February, and that all but one of these locations have since reopened. Retail locations in North America, Europe and elsewhere were closed in March. 
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones

>>US stocks posted their first back to back gains since February yesterday and jumped more than 13% in two days as a coronavirus stimulus deal was passed by Congress. Positive comments from New York Gov. Andrew Cuomo and a former Federal Reserve chief also lifted stocks. 

Americans displaced by the coronavirus crisis filed unemployment claims in record numbers, with the Labor Department reporting a surge to 3.28 million.  The number shatters the Great Recession peak of 665,000 in March 2009 and the all-time mark of 695,000 in October 1982.  Consensus estimates from economists surveyed by Dow Jones showed an expectation for 1.5 million new claims. 

 For those of you who will potentially need relief from monthly mortgage payments at this time can contact their loan servicer for assistance, and they are not generally required to provide documentation to verify their hardship.  Fannie Mae, Freddie Mac and the FHA this week instructed mortgage servicers to offer borrowers facing financial hardship with options.  Primarily, mortgage borrowers can request a forbearance plan, which would reduce or suspend their mortgage payments for up to 12 months, according to the agencies’ guidelines. The exact structure of a forbearance plan will depend on the borrower and servicer in question.

With Northwest Quadrant Wealth Management, I’m Tyler Simones

US Stocks soared yesterday, logging their best day in 87 years as investors bet U.S. lawmakers would deliver soon a stimulus bill to rescue the economy from the damage caused by the shutdowns. 

Sales of newly constructed homes in the U.S. dipped 4.4% on a monthly basis in February to a seasonally adjusted annual rate of 765,000.  January’s upwardly revised figure represented the highest pace of new-home sales since June 2007, marking a cycle high for the U.S. real-estate industry.  The median sales price of new homes sold in January was $345,900. The inventory of new homes for sale dropped to 319,000, representing a 5.0 months’ supply and surpassing January as the lowest supply of new homes on the market since 2017.  Economists all expect this to change dramatically in March as the housing numbers are grinding to a halt with the rest of the economy.

Shares of Nike are sharply higher after the company reported fiscal third-quarter sales that topped expectations and in-line earnings results, reflecting still-strong fundamentals through February even as the coronavirus outbreak generated a host of disruptions for the athletic-wear maker.  While Nike’s brick and mortar retail sales were impacted by the temporary store closures, e-commerce sales helped stem sales declines, with digital sales leaping 30% in Greater China during the quarter. But overall, revenue from China dropped 4% during the quarter, snapping a 22-quarter streak of double-digit percentage growth.

With Northwest Quadrant Wealth Management, I’m Tyler Simones

Stocks fell sharply again yesterday as U.S. lawmakers failed to push through massive fiscal stimulus to curtail the economic blow from the coronavirus.  For a second time in less than 24 hours, a bill that would authorize giant fiscal spending to stimulate the economy failed to clear a key procedural hurdle.

The Federal Reserve announced it would purchase an unlimited amount of Treasury’s and securities tied to residential and commercial real estate to ward off a credit crunch.  The Fed chief said “aggressive action” was needed to soften the blow to the economy from the coronavirus pandemic.  The Fed said it would buy assets “in any amounts needed” to support smooth market functioning and effective transmission of monetary policy. The Fed had previous set a $700 billion limit for asset purchases.

The toy maker Hasbro saw their stock soaring yesterday after their CEO Brian Goldner told CNBC that the company was experiencing strong demand during the coronavirus pandemic.   He also said that their supply chains are back up and running in China.  Shares of Hasbro closed up 12.5%.

The coronavirus pandemic has destroyed global demand for oil, leading to the lowest oil prices in 18 years.  Many gas analysts see gasoline prices in many parts of the US below $1/gallon in the next few weeks.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones

Stocks are set to open sharply lower this morning after the markets appeared unhappy with a lack of government action to address the current and expected fallout from the pandemic.

On top of that, a U.S. central bank official estimated that the unemployment rate could surge from just over 3% to 30% at its peak as businesses shutter in an effort to clamp down on the spread of the deadly illness.

Americans will have an additional three months to file their Taxes according to the US treasury secretary Steven Mnuchin.  All taxpayers and businesses will have to now file and pay their taxes by July 15th without interest or penalties.  The White House had announced previously they were deferring tax payments for 90 days, but that Americans would still need to file by April 15.   Some states have also extended their deadlines.  Oregon is still deciding whether or not to move our date to July.

The New York Stock Exchange is going all-electronic starting today, marking the first time that the centuries-old exchange will operate in regular hours without its legion of trusted flesh-and-blood floor traders.  Over the last 228 years, the NYSE has never operated without a group of traders functioning as the anchor to the U.S.’s biggest trading platform.  The change was scheduled to happen long before the current market environment hit.

With Northwest Quadrant Wealth Management I’m Tyler Simones

Treasury Secretary Steven Mnuchin urged Senate Majority Leader Mitch McConnell and House Speaker Nancy Pelosi to move fast to pass a second package of support measures, warning them that major parts of the economy are already shut down. He said that the objection is to have legislation through Congress and signed by President Donald Trump on Monday. The package announced by the Senate includes tax rebates of $1,200 to individuals targeted at those earning under $99,000 and $208 billion of loans for companies suffering from the outbreak. (Bloomberg)

In a week-over-week comparison, Verizon streaming demand increased 12%, web traffic climbed 20%, VPN jumped 30% and gaming skyrocketed 75%. "We're always built for being prepared for different types of changes in the network," CEO Hans Vestberg declared. "In less than a week, we have transformed this company dramatically." While U.S. carriers have suspended data caps, there are fears about bandwidth usage over in Europe. Netflix and YouTube are tapping the breaks on their download speeds there, reducing bit rates for 30 days. (VZ)

Ford has suspended its dividend and drawn down $15.4bn from two credit lines to boost its balance sheet, as the coronavirus pandemic forces it to shut plants in North America and Europe.  It is the largest draw down any company has made because of the pandemic, according to a Financial Times analysis of public disclosures. The $15.4bn is meant to offset the cost of the shutdown, which begins today and will last until at least March 30.  Ford is borrowing from some of the world’s largest banks, including JPMorgan Chase, Bank of America and Citi.  (FT)

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.

The ink is barely dry on the multi-billion-dollar House bill President Donald Trump signed yesterday and lawmakers are already rushing to agree on a second package. Even as Senators were voting 90-8 in favor of the legislation approved on Wednesday, they were working on measures which propose at least $1 trillion of aid. Senate Majority Leader Mitch McConnell wants Congress to work “at warp speed” on the complex measure which could include direct payment to taxpayers as well as help for industry and local government. With the House in recess this week, it will be Monday at the earliest before anything is ready for Trump’s signature. (Bloomberg)

Another Fed bullet yesterday promised a liquidity facility for money market mutual funds, marking the second program in two days to use a $10B backstop from the Treasury Department’s Exchange Stabilization Fund. It's a repeat from the 2008-era playbook, offering loans to financial institutions for use in buying assets from prime money market funds, which themselves purchase non-Treasury debt. According to the Fed, the "MMLF will assist money market funds in meeting demands for redemptions by households and other investors, enhancing overall market functioning and credit provision to the broader economy." (SA)

Jobless claims rose to 281,000 last week, reflecting only the first indications of the impact the coronavirus will have on the U.S. employment picture.  Companies are just starting to announce coronavirus-related layoffs, so the real damage probably won’t start showing through until next week’s count, which will entail the period through this Saturday.  Much of the layoffs have come from the hospitality industry. (CNBC)

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.

Executives from companies such as Marriott and Hilton convened at the White House on Tuesday to discuss a bailout, consisting of $150B in direct aid for the hotel sector and $100B for related travel companies. They warned that half of the hotels in the country could close this year and the sudden cratering of demand would cause the loss of 4.6M jobs. Chip Rogers, CEO of the American Hotels and Lodging Association, said the economic impact of the pandemic on the hotel industry was already bigger than "September 11th and the 2008 recession combined." (SA)

Following hours of talks that extended well into the night, GM, Ford, and Fiat Chrysler negotiated "extensive plans" with the United Auto Workers union to prevent America's auto industry from coming to a standstill. "They will be working on shift rotation to minimize risk," according to a statement. The 'Big Three' "agreed to review and implement the rotating partial shutdown of facilities, extensive deep cleaning of facility and equipment between shifts, extended periods between shifts, and extensive plans to avoid member contact." (CNBC)

Economists at Morgan Stanley and Goldman Sachs have joined the chorus of other Wall Street prognosticators to declare that COVID-19 has pushed the global economy into recession. It won't be as steep as the 0.8% contraction of 2009, according to the IMF's measure, but would be worse than the 2001 and early 1990s recessions. Treasury Secretary Mnuchin warned of 20% American unemployment without federal action, while today's Fed meeting was canceled following the central bank's emergency actions.

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.

The industry hardest hit by the movement restrictions introduced by governments around the world is air travel, with a growing list of airlines announcing huge capacity reductions as customer demand evaporates. Boeing Co. has asked White House and Congressional officials for short-term aid for itself, suppliers and airlines, as the industry rushes to tap emergency credit lines. President Trump signaled support for carriers, saying the government will back them 100%. (Bloomberg)
 
A potential COVID-19 vaccine from Moderna has moved into human testing, with the first participant receiving treatment on Monday. A total of 45 healthy adults will receive one of three dose levels of the candidate vaccine, called mRNA-1273, and will be followed for 12 months after receiving the second vaccination. The primary endpoint is safety, including the expected adverse events such as excessive immunological responses and injection site reactions. The secondary endpoint is the robustness of the immune response. (SA)
 
The volatility isn't over yet following Wall Street's worst day since the 1987 crash. U.S. stock futures soared overnight and even hit a 4% "limit up" halt at one point, before plunging into the red, only to resurface moments later. Although the contemporary crisis is loaded with bad news, the problem is the unknown, Give me bad news any day over complete uncertainty. (CNBC)
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.
 

In its second emergency rate cut in two weeks, the Federal Reserve reduced its benchmark to basically zero, dropping the target to 0-0.25%. The bank also said it would boost its bond purchases by $700 billion.  Global central banks agreed to widen the scope of their dollar swap lines with the Federal Reserve.  Investor reaction to the surprise further central bank easing has been to use it as an opportunity for more moves to safety. S&P 500 futures hit the bottom of their trading limit shortly after opening and Treasury yields dropped. Overnight, the MSCI Asia Pacific Index was down 3.8% as data from China showed an even worse than expected slump in the first two months of the year. (Bloomberg)

Data from China overnight provided a first glimpse of what the coronavirus can do to an economy amid a prolonged quarantine of millions of people. Industrial output tumbled by 13.5% and total retail sales plunged by 20.5% Y/Y in January and February, according to the National Bureau of Statistics. The urban unemployment rate surged to 6.2% in February, the highest level ever reported, and fixed asset investment slumped by 25%.  (SA)

The largest eight U.S. banks, including BofA, JPMorgan, and Citigroup are putting share buybacks on hold through the end of Q1 and all of Q2 as they put capital to use by helping consumers and businesses. The move sounds smart politically, particularly as the Fed has re-launched QE with a vengeance, but it might dash the hopes of some bank investors. After all, what's the point of over-capitalization if a bank can't buy back stock when shares are cheap? (SA)

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.
 

Stocks plummeted once again yesterday after President Trump and the Federal Reserve failed to quell concerns over the possible economic slowdown, leading to historic moves in U.S. markets.  US Stocks had their worst one day drop since the 1987 Black Monday Crash.

The Federal Reserve said it would inject more than $1.5 trillion of temporary liquidity into the financial system and add purchases of Treasury notes and bonds to increase its balance sheet. The moves were an effort to alleviate what the New York Fed called “highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak.”

The number of Americans who applied for unemployment benefits in early March fell slightly and remained near a 50-year low, indicating the coronavirus has not caused an influx of layoffs so far.  New jobless claims are being watched closely for early signs of damage to the economy from the coronavirus. They are likely to rise soon if falling sales force companies to lay off more workers.

A sliver of good news goes to Oracle who shares rose as much as 4%, as the company reported fiscal third-quarter earnings that were better than analysts had expected.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones

US Stocks traded sharply lower again yesterday and are now officially in Bear Market territory as measured by a 20% correction from the all-time-high stocks set on February 19th.

Higher rents and grocery prices pushed up the U.S. cost of living slightly in February, but inflation was mild overall and there was no sign yet of any influence from the coronavirus.  The consumer price index edged up 0.1% last month.  The increase in the cost of living over the year slipped to 2.3% from 2.5% in January, which had marked a 15-month high.
The Bank of England announced a surprise half-point interest rate cut at the conclusion of a special meeting, following a similar move from the U.S. Federal Reserve last week.

PepsiCo has announced an agreement to buy Rockstar Energy, months after Coca-Cola launched their own energy drink in the U.S. to challenge partner Monster Beverage.  Beverage and snack giant PepsiCo announced they will pay $3.85 billion for Rockstar Energy.  Energy drinks are a fast growing and highly profitable category.
According to an official in the Trump administration they likely to extend the April 15 tax deadline as part of an effort to mitigate the effects of the coronavirus on U.S. households and businesses.

With Northwest Quadrant Wealth Management, I’m Tyler Simones

Stocks were higher in wild trading yesterday as investors weighed the prospects of fiscal stimulus to curb slower economic growth stemming from the coronavirus outbreak. 

Shares of American Airlines rose after the company said they are slashing international and domestic flights as the coronavirus dents travel demand. American said it will shave 10% off its peak summer international flying, including a 55% slash to trans-Pacific flying. United Airlines reported a 70% drop in domestic demand in the last few days and said it will make more deep cuts to flights in the coming months as coronavirus keeps travelers at home.

President Trump, in a meeting with Republican lawmakers on Capitol Hill yesterday, pitched a 0% payroll tax rate that would last through the rest of this year.  There was also discussion of making the payroll tax rollback permanent.  The development comes as Trump and the White House try to put together an economic stimulus plan to counteract the impact from the widening coronavirus outbreak.

Mortgage rates in the United States have fallen to the lowest level ever.  The 30-year fixed-rate mortgage dropped to 3.2%.  Previously, the 30-year fixed-rate mortgage hit an all-time low back in November 2012 in the wake of the recession, when the average rate fell to 3.31%.

With Northwest Quadrant Wealth Management, I’m Tyler Simones.

Stocks traded sharply lower yesterday, their worst day since 2008, as fears about the spread of the coronavirus and an oil price war sent investors scrambling out of stocks.  Early in the day yesterday stocks were down 7% triggering a circuit breaker which halted stocks from trading for 15 minutes.

Most U.S. manufacturers said business began to slow to a crawl in February as supply bottlenecks tied to the coronavirus impaired their ability to get parts.  The Institute for Supply Management said its manufacturing index dipped to 50.1% last month from 50.9%.  Few manufacturing companies are adding new jobs as the manufacturing employment gauge was negative for the seventh straight month. One executive in the transportation industry even said “layoffs are here.”

President Donald Trump said he will be meeting with Senate and House Republicans today to discuss “a possible tax relief measure” that would provide “a timely and effective response to the coronavirus.”. Payroll taxes put more money into the pocketbook of workers but some economists have questioned whether typical stimulus measures will work during the coronavirus crisis, when many may stay at home. That means, even with more money, Americans may not be spending it at restaurants or the movies.  Trump also said the group will be discussing getting hourly wage earners help, “so they can be in a position where they’re not going to miss a paycheck.”

with Northwest Quadrant Wealth Management, I’m Tyler Simones.

Nonfarm payrolls grew far more than expected in February as companies continued to hire amid a growing coronavirus scare.  The Labor Department reported Friday that the U.S. economy added 273,000 new jobs during the month, while the unemployment rate was 3.5%.  Economists surveyed by Dow Jones had been looking for payroll growth of 175,000 and a 3.5% jobless level.  The intensifying concern over the virus means the data will be viewed as stale by investors.  (CNBC)

The 10-year Treasury yield hit an all-time low of 0.694% overnight as the coronavirus continued to push investors into the safety of government bonds.  Investors are meanwhile increasing bets that the Fed will follow this week's surprise 50-basis point rate cut with further easing - at or before its scheduled March 18 meeting. (SA)

Jamie Dimon, the 63-year-old CEO at the helm of JPMorgan for over a decade, was rushed into emergency surgery yesterday after suffering a tear in his aorta. He's now "awake, alert and recovering well." The bank was quick to disclose his condition and be upfront about who's in charge. Daniel Pinto and Gordon Smith, the co-presidents and co-chief operating officers, will take the reins as Dimon recovers (possibly giving a glimpse into a future succession plan). (WSJ)

Facebook = told employees in the Bay Area to stay home and cancel any trips, while Gap shuttered its New York City headquarters after a worker tested positive for the coronavirus. Microsoft also confirmed that two employees have been diagnosed in Washington's Puget Sound region, the area that includes its Redmond headquarters. (SA)

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.

Travel restrictions to contain the coronavirus are multiplying rapidly, with governments around the world adding selective arrival bans on visitors from afflicted nations and companies banning trips by their employees. Airlines could lose up to $113B in revenue for passenger traffic globally in 2020, depending on how the coronavirus spreads, according to the International Air Transport Association. As recently as Feb. 20, IATA estimated the outbreak would cost carriers $29.3B in revenue. (SA)

The monetary response, while perhaps not as globally coordinated as advertised, saw the Bank of Canada yesterday follow the Federal Reserve with its own 50 basis-point rate cut. Perhaps more important is the arrival of a fiscal response. Governments in Asia have already pledged or are considering $38 billion in new spending to counteract the effects of the outbreak. Yesterday in Washington the House passed a $7.8 billion emergency spending bill to deal with the crisis. In Europe, there has been little beyond the promise of major fiscal measures, despite calls from the French Finance Minister for stimulus. (Bloomberg)

S&P 500 is down 76, and the NASDAQ is down 224. The MSCI International Index is down .07%

Oil ministers gathering in Vienna may be close to bridging the gap between Saudi Arabia and Russia as major oil producing nations seek to deal with the recent huge drop in demand. OPEC ministers have agreed on the 1.5 million barrels a day cut in production, which may still be contingent on Russian agreement at the wider OPEC and its allies meeting tomorrow. In the market, the price of a barrel of crude quickly reversed earlier losses as investors reacted to the news. (FT)

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.

U.S. manufacturing continued to expand in February, according to the Institute for Supply Managements’ (ISM) Purchasing Managers’ Index (PMI) for manufacturing. The ISM manufacturing PMI came in at 50.1. Supplier delivery delays due to supply chain disruptions had an artificial impact on keeping the headline reading elevated, showing that despite resilience U.S. manufacturing is also seeing the impact from the coronavirus. 

Woolen blanket maker, Pendleton, is forming its own Outerwear Division after re-acquiring its outerwear license from Item House, Inc. of Tacoma, Washington. Pendleton is known for its heavy woolen blankets, the first product it made on its founding in 1863.

Exercise equipment maker Nautilus has a new $70 million credit facility designed to promote the company's ongoing digital reboot. The loans include a $55 million asset-based revolving loan and a $15 million term loan from Wells Fargo. The company’s shares fell 84 percent last year.

January milk output hit 18.8 billion pounds. That’s up 0.9% from January 2019. The report pegged 2019 output at 218 billion pounds, up 0.4% from 2018, slowest growth rate since 2009. Cow numbers totaled 9.34 million head, down 0.7% from 2018 and up 2.3% from 2010. The 2019 output per cow averaged 23,391 pounds, up 241 pounds. The average annual production of milk per cow has increased 10.6% from 2010, according to the USDA.

Finance ministers and central bankers from the G7 have pledged to “use all appropriate policy tools” to soften the economic impact of the coronavirus but stopped short of announcing immediate action following a call on Tuesday.  The call, led by US Treasury secretary Steven Mnuchin, included finance ministers from the G7 group of countries and central bankers like Jerome Powell, chairman of the Federal Reserve, and Mark Carney, governor of the Bank of England.  Earlier, Australia’s central bank cut interest rates to a record low, prompting Donald Trump to take to Twitter and urge the Federal Reserve to follow suit and cut interest rates in the US. “Should ease and cut rate big,” the president said in a tweet. (FT)
 
The strongest day in more than a decade immediately followed the worst week since the financial crisis (talk about volatility). The Dow surged over 5% on Monday, while the S&P 500 and Nasdaq each jumped more than 4%, boosted by expectations of central bank firepower to battle the economic impacts of the coronavirus. Traders are now pricing in a 100% chance of a 50-basis point rate cut at the Fed's March meeting according to Fed Funds futures. (SA)
 
While talks broke off late last year, Thermo Fisher Scientific = is acquiring Dutch molecular testing firm Qiagen for €10.4B, including assumed debt. It's the second major transaction in the healthcare sector this week after Gilead Sciences agreed to buy Forty-Seven for $5bn to advance into cancer treatments. (Bloomberg)
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.