Historic Data Lows, Virus Worries Tank Stocks……

U.S. equities finished with solid losses, nearly erasing all of yesterday’s gains, as historic lows in a raft of economic data and continued angst over the severe economic and social disruption of the COVID-19 pandemic sapped sentiment. As well, a grim global economic outlook from the IMF and another dose of disappointing banking sector results added to the mix to exacerbate the mood. Treasury yields fell amid a rise in bond prices, while the U.S. dollar gained ground, crude oil prices were lower amid a massive increase in inventories, and gold declined. Overseas, markets in both Europe and Asia finished with widespread losses.

The Dow Jones Industrial Average fell 445 points (1.9%) to 23,504, the S&P 500 Index decreased 63 points (2.2%) to 2,783, and the Nasdaq Composite declined 123 points (1.4%) to 8,393. In moderately heavy volume, 1.1 billion shares were traded on the NYSE and 3.3 billion shares changed hands on the NASDAQ. WTI crude oil shed $0.24 to $19.87 per barrel, while wholesale gasoline was unchanged at $0.72 per gallon. Elsewhere, the Bloomberg gold spot price was $4.95 lower at $1,722.02 per ounce, while the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.6% higher at 99.51.

The airline industry was in focus after late-yesterday’s announcement that the group has reached a deal in principle with the Treasury Department on billions of dollars in government financial aid as part of the payroll support program established under the CARES Act.

Stocks remained volatile, as the markets continued to grapple with the frantic pace out of the healthcare sector to ramp up testing, containment and treatment efforts, along with signs that the coronavirus outbreak may be leveling off in key hot spots in the U.S., which has opened up the discussion of when the world’s largest economy may be able to begin to reopen. The markets have also been buoyed by the flood of global monetary and fiscal policy responses that has dumped trillions of dollars into the financial markets and economy aimed at trying to restore proper financial market functioning and combat the huge spike in unemployment.

Advance retail sales for March fell 8.7% month-over-month (m/m), versus the Bloomberg forecast of an 8.0% drop, and well below February’s upwardly-revised 0.4% decrease. Last month’s sales ex-autos fell 4.5% m/m, compared to expectations of a 5.0% drop and February’s unrevised 0.4% decline. Sales ex-autos and gas dropped 3.1% m/m, compared to estimates of a 5.2% decrease, and February’s reading was unadjusted at a 0.2% decline. The control group, a figure used to calculate GDP, was up 1.7% m/m, north of projections of a 2.0% decrease and versus February’s downwardly-adjusted 0.2% decline.

The Federal Reserve’s industrial production plunged 5.4% m/m in March, below estimates of a 4.0% fall, and February’s negatively-adjusted 0.5% gain. This was the largest drop since the 1940s as manufacturing output fell amid a broad-based decline in most major industries, led by the auto sector, while mining and utilities production also dropped solidly. Capacity utilization fell to 72.7% from the prior month’s unrevised 77.0% rate, and versus expectations of 74.0%. Capacity utilization is 7.1 percentage points below its long-run average.

The Empire Manufacturing Index, a measure of activity in the New York region, fell to a record low of -78.2 in April from the -21.5 level posted in March, and well below forecasts of -35.0. A reading below zero denotes contraction.

The MBA Mortgage Application Index rose by 7.3% last week, following the prior week’s 17.9% drop. The increase came as a 10.1% jump in the Refinance Index overshadowed a 1.8% decline for the Purchase Index. The average 30-year mortgage rate decreased 4 basis points (bps) to 3.45%.

The National Association of Home Builders (NAHB) Housing Market Index showed homebuilder sentiment in April tumbled by a record to 30 from March’s unrevised 72 level, versus forecasts to fall to 55. A level south of 50 depicts poor conditions and the index hit the lowest level since 2012.

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