{"id":13910,"date":"2020-03-23T13:03:33","date_gmt":"2020-03-23T13:03:33","guid":{"rendered":"http:\/\/blog.leavittbrothers.com\/?p=13910"},"modified":"2020-04-20T16:22:58","modified_gmt":"2020-04-20T16:22:58","slug":"before-the-open-mar-23-27","status":"publish","type":"post","link":"https:\/\/blog.leavittbrothers.com\/?p=13910","title":{"rendered":"Before the Open (Mar 23-27)"},"content":{"rendered":"\n Good morning. Happy Friday. <\/span>

\n\n The Asian\/Pacific<\/strong> markets leaned up. Japan, South Korea, Malaysia, Indonesia and Singapore did well; New Zealand, Australia and the Philippines were weak. Europe, Africa and the Middle East<\/strong> are currently very weak. The UK, Denmark, France, Turkey, Germany, Russia, Greece, the Czech Republic, South Africa, Finland, Switzerland, Spain, the Netherlands, Italy, Belgium and Sweden are down the most. Futures in the States<\/strong> point towards a big gap down open for the cash market. <\/span>

\n\n—————
\nVIDEO: Comparing Bear Markets 1980 – 2020<\/a> <\/span>

\n\nVIDEO: Evidence This is More Than a Bear Market<\/a> <\/span>

\n\nVIDEO: Example Trades From This Week<\/a> <\/span>
\n—————<\/span>

\n\n The dollar is up. Oil and copper are down. Gold and silver are down. Bonds are up. <\/span>

\n\n Stories\/News from Seeking Alpha…<\/span>

\n\nAt the beginning of the month, there were roughly 100 confirmed COVID-19 cases in the U.S., but now there are more confirmed cases than both China and Italy, making it the country with the largest outbreak in the world. As testing ramps up, there are also efforts to reopen the economy, with President Trump hearing recommendations from the White House coronavirus task force this weekend. Plans include classifying counties by low, medium and high “risk” levels, though state governors will have the ultimate say on whether to relax stay-at-home orders and business closures.

\n\nNear-term bottom?

\n\nA sharp rally on Thursday saw the Dow climb for a third straight session, recording a 21% surge that put the index back in bull territory. Others argue that the term “bull” can only be applied after notching a new high or can only be identified long after the event. Market participants appeared hopeful about the House’s expected approval of a $2T coronavirus relief bill and brushed off (along with Steve Mnuchin) weekly unemployment claims that soared to a record 3.28M.

\n\nEconomic fallout

\n\nA pullback was seen overnight as Dow futures slid 575 points, while S&P 500 and Nasdaq futures fell 2.5%. Investors may have been reminded that the world economy isn’t in great shape as China reported a huge tumble in factory profits for the first two months of the year – down 38.3% Y\/Y to 410.7B yuan ($57B). That’s the steepest decline on record. Consumer confidence figures are due out later this morning in the U.S., gauging how hard households have been hit by the coronavirus crisis despite efforts to get back to work.

\n\nFed balance sheet tops $5T

\n\nThe Fed’s balance sheet exploded by more than half a trillion dollars over the past week, roughly twice the pace of the next-largest weekly expansion during the global financial crisis. Total assets held by the central bank topped $5T for the first time as it attempts to keep credit flowing to all corners of the market, including Treasurys, commercial paper and municipal bonds. In an interview aired yesterday on the The Today Show, Jerome Powell said there was essentially no limit to the Fed’s emergency lending ability and doesn’t see inflation resulting from current policies.

\n\n…and $5T for the global economy

\n\n“The virus respects no borders,” leaders from G20 nations said after an emergency meeting on Thursday, declaring a commitment to inject over $5T into the global economy and do “whatever it takes” to overcome the coronavirus pandemic. “We will continue to conduct bold and large-scale fiscal support. The magnitude and scope of this response will get the global economy back on its feet and set a strong basis for the protection of jobs and the recovery of growth.”

\n\nCoronavirus support

\n\nRetailers are attempting to fill a void as hospitals and healthcare facilities throughout the U.S. experience shortages of personal protective equipment. Gap (NYSE:GPS), HanesBrands (NYSE:HBI), Ralph Lauren (NYSE:RL) and Canada Goose (NYSE:GOOS) are all shifting production lines from making apparel to manufacturing face masks, scrubs and gowns, as well as utilizing connections in their supply chains. Other companies like Target (NYSE:TGT), Lowe’s (NYSE:LOW) and Home Depot (NYSE:HD) are redirecting supply to frontline healthcare workers.

\n\nCoronavirus testing

\n\nVerily now has more than 1,000 volunteers from across Alphabet (GOOG, GOOGL) working on COVID-19 as it readies a ramp-up across additional regions. The life sciences unit launched a coronavirus screening website last week, which directs people to local testing centers, and has opened “drive-thru” locations itself, manned by employees. Next step? Verily co-founder Jessica Mega said the company is considering integrating the screening process through wearables.

\n\nNo help for big cruise lines

\n\nThe major cruise ship lines are shut out of the $2T coronavirus stimulus package headed for a vote today in the U.S. House, despite President Trump’s desire to help them. The package limits aid to U.S.-incorporated companies with a majority of workers based in the U.S., two criteria that effectively exclude Carnival (NYSE:CCL), Norwegian (NYSE:NCLH) and Royal Caribbean (NYSE:RCL). “There’s a risk that cruise ships are laid up for an extended period of time,” said Wedbush analyst James Hardiman. “They’ll continue to burn cash without any revenue coming in the door.”

\n\nWho’s zoomin’ who?

\n\nThe SEC suspended trading in the largely defunct Zoom Technologies (OTC:ZOOM) – once a distributor of wireless products – after widespread confusion with popular videoconferencing company Zoom Video Communications (NASDAQ:ZM), which has seen a sharp rise in usage and stock price amid the COVID-19 pandemic. That suspension lasts until April 8 – hopefully giving everyone enough time to learn who’s who. Over the past three months, Zoom Video Communications has risen 109%, while Zoom Technologies went from $1.26 to an intraday high of $60 last Friday.

\n\nDon’t forget the oil price war

\n\nA new OPEC+ deal to balance oil markets might be possible if other countries join in, according to Kirill Dmitriev, head of Russia\u2019s sovereign wealth fund. Dmitriev and Energy Minister Alexander Novak were Russia’s top negotiators in the production cut deal with OPEC (the existing pact expires on March 31). Who would be the new members? President Trump said last week he would get involved in the Saudi-Russia oil price war at the appropriate time amid Moscow’s longstanding frustration with rapidly growing U.S. shale.

\n\nWhat else is happening…

\n\nGeneral Motors (NYSE:GM) to cut pay 20% for salaried workers.

\n\nFord (NYSE:F) eyes April dates for plant restarts.

\n\nTesla (NASDAQ:TSLA) to slash staff by 75% at Gigafactory 1.

\n\nIndia’s RBI joins ‘whatever it takes’ rhetoric.

\n\nUTC (NYSE:UTX), Raytheon (NYSE:RTN) deal wins U.S. antitrust approval.

\n\nUnited Airlines (NASDAQ:UAL) taps $500M term loan from Goldman.

\n\n(NYSE:C) pauses job cuts during coronavirus uncertainty.

\n\nFacebook (NASDAQ:FB) nears complete overhaul of board.

\n\nThursday’s Key Earnings<\/B>
\nGameStop (NYSE:GME) +10% turning a profit despite revenue dip.
\nLululemon (NASDAQ:LULU) -2.4% pulling outlook after strong sales.

\n\nToday’s Economic Calendar<\/B>
\n8:30 Personal Income and Outlays
\n10:00 Consumer Sentiment
\n1:00 PM Baker-Hughes Rig Count

\n\n——————————-

\n\n Good morning. Happy Thursday. <\/span>

\n\n The Asian\/Pacific<\/strong> markets closed mixed. India, New Zealnd, Taiwan, Australia, the Philippines and Indonesia did well; Japan, China, Hong Kong and South Korea closed down. Europe, Africa and the Middle East<\/strong> are currently mostly down. Turkey, Greece and Saudi Arabia are up, but the UK, France, Germany, the UAE, Finland, Sweden, Norway, Spain, the Netherlands, Italy, Belgium, Portugal, Switzerland, Austria and the Czech Republic are down. Futures in the States<\/strong> point towards a down open for the cash market. <\/span>

\n\n—————\n\nVIDEO: Example Trades From This Week<\/a> <\/span>\n—————<\/span>

\n\n The dollar is down. Oil and copper are down. Gold is up; silver is down. Bonds are up. <\/span>

\n\n Stories\/News from Seeking Alpha…<\/span>

\n\nToday’s weekly jobless claims report is set to grab the attention of both Wall Street and Main Street, offering proof that the economy is already in recession. The number, which could surge to at least one million, is especially in focus after the U.S. Labor Department asked individual state governments to postpone publishing unemployment data (dusting off the 2008 playbook). That would shatter a previous record of nearly 700,000 back in 1982, when the U.S. hiked interest rates to quash inflation. S&P 500 futures are off by 1.5% ahead of the big release.

\n\nGrimmer picture

\n\nOthers are expecting a drastically larger jobless figure, with Barclays predicting that 2M Americans were laid off last week and Citigroup forecasting the number at 4M. “It’s the tip of the iceberg, and they’re going to be ugly. It depends on the speed at which the claims were filed, and the next week will probably be worse,” said Diane Swonk, chief economist at Grant Thornton. “You have 15.8M people working in leisure and hospitality, and you just shut down the industry,” added Jon Hill, fixed income strategist at BMO.

\n\nLargest spending bill in history

\n\nLast night, the U.S. Senate approved a $2T relief package, that includes checks of up to $1,200 per taxpayer with income of up to $75,000, $500B in funds to help stricken sectors of the economy, $367B in loans to small businesses and $100B for the healthcare system. The package now moves to the House of Representatives for their approval, although there\u2019s already speculation that further stimulus measures will be needed. The House will vote on the bill Friday.

\n\nNegative rates in the U.S.

\n\nYields on both the 1-month and 3-month Treasury bills fell below zero yesterday, marking the first time that happened since 2015, when both bills briefly flashed red and yields fell to minus 0.002%. However, the readings on Wednesday were well below those, with the one-month traded at minus 0.053% and the three-month at minus 0.033%. Japan and large swaths of Europe have had negative-yielding debt for some time now (in Germany all government fixed income instruments except the 30-year bond carry rates below zero).

\n\nECB divisions are simmering

\n\nThe central bank said it will not apply its self-imposed purchase limits (capped at 33% of each country’s debt) on a \u20ac750B bond-buying scheme aimed at combating the coronavirus outbreak. Tensions already erupted into the open in September following Mario Draghi’s last easing package, while German critics have repeatedly taken the ECB to court over the purchases. Hawks on the council argue that if the ECB owns more than a third of a country\u2019s debt it would have a blocking minority in any future debt restructuring negotiations, forcing a vote that could be attacked as monetary financing.

\n\nHealthcare crisis deepens

\n\nSpain overtook China’s coronavirus death toll yesterday with 3,434 fatalities (second only to Italy), highlighting a dire picture as older patients miss out on treatment to younger people with a better chance of surviving. Similar wrenching decisions are taking place in the U.S., with Northwestern Memorial Hospital in Chicago and George Washington University Hospital in Washington exploring a universal do-not-resuscitate policy for infected patients. Atrium Health in the Carolinas, Geisinger in Pennsylvania and regional Kaiser Permanente networks are also looking at guidelines that would permit overriding the wishes of a COVID-19 patient on a case-by-case basis (such as risk to doctors and nurses, or a shortage of protective equipment) but would stop short of imposing DNR orders.

\n\nAnalyzing potential COVID-19 drugs

\n\nAre chloroquine and hydroxychloroquine effective against COVID-19? It’s not yet known, but Oracle (NYSE:ORCL) is beginning a collaboration with the White House on creating a data repository for clinical trials. Two senior administration officials familiar with the matter say the online platform could gather data from physicians who prescribe the malaria drugs and track patient symptoms. Planners have also discussed using it to mail the treatments to patients involved in the trial.

\n\nOther small business relief

\n\nMajor retailers are looking to ease the impact of the coronavirus pandemic, offering help and easing financing to their small business partners. Walmart (NYSE:WMT) is waiving April rent fees for its more than 10,000 businesses that operate within Walmart Supercenters and Sam’s Clubs, including hair and nail salons, optometrists, restaurant franchises, veterinary clinics and banks. Amazon (NASDAQ:AMZN) is meanwhile pausing loan repayments until April 30 for sellers enrolled in its Amazon Lending program, while interest will not accrue during that time.

\n\n‘Virtual’ G20 emergency meeting

\n\nThe G20 is usually a once-a-year event, but as the world confronts the coronavirus pandemic, 2020 host Saudi Arabia is chairing an emergency virtual summit today. Two meetings were additionally held in 2009 and 2010, at the height of the global financial crisis, and many are expecting similar coordinated fiscal measures. Also on watch is the U.S.-China relationship. Fears are running high that the coronavirus could undo the goodwill demonstrated between President Trump and Xi Jinping in January when the “Phase One” trade deal concluded.

\n\nUnprecedented oil glut

\n\nThe collapse in oil demand will lead to a massive oil glut that not even a supply production freeze or cut from OPEC can rectify, according to Goldman Sachs, which predicts a 14M b\/d surplus in Q2. “Any potential agreement between the U.S., Saudi and Russia to freeze or reduce output is too little too late. It would take months to impact inventories globally and would be dwarfed by the current demand losses.” The firm sees Brent crude remaining near $20 a barrel next quarter, while West Texas Intermediate oil will likely fall well below that level as storage swells.

\n\nWhat else is happening…

\n\nStepping down… Groupon’s (NASDAQ:GRPN) CEO and COO.

\n\nMcDonald’s (NYSE:MCD) streamlining U.S. menu during pandemic.

\n\nCheesecake Factory (NASDAQ:CAKE) can’t pay the rent.

\n\nSalesforce (NYSE:CRM) promises no ‘significant layoffs.’

\n\nApple (NASDAQ:AAPL) mulls 5G iPhone delay – Nikkei.

\n\nFord (NYSE:F) credit rating cut to junk at S&P.

\n\nAckman’s Pershing Square (OTCPK:PSHZF) makes $2B on market short.

\n\nWednesday’s Key Earnings<\/B>
\nMicron (NASDAQ:MU) +5.5% AH after Q2 beats, in-line outlook.

\n\nToday’s Economic Calendar<\/B>
\n8:30 GDP Q4
\n8:30 Initial Jobless Claims
\n8:30 International trade in goods
\n8:30 Corporate profits
\n8:30 Retail Inventories (Advance)
\n8:30 Wholesale Inventories (Advance)
\n10:30 EIA Natural Gas Inventory
\n11:00 Kansas City Fed Mfg Survey
\n1:00 PM Results of $32B, 7-Year Note Auction
\n4:30 PM Money Supply
\n4:30 PM Fed Balance Sheet

\n\n———————-

\n\n Good morning. Happy Wednesday. <\/span>

\n\n The Asian\/Pacific<\/strong> markets posted huge gains today. Japan, China, Hong Kong, South Korea, India, Taiwan, Australia, Malaysia, Singapore, Thailand and the Philippines all did great. Europe, Africa and the Middle East<\/strong> are mixed and little changed. Denmark, the UAE, South Africa, Finland, Portugal and the Czech Republic are up; Poland, Germany, Austria and Kenya are down. Futures in the States<\/strong> point towards a down open for the cash market. <\/span>

\n\n—————
\nVIDEO: Comparing Bear Markets 1980 – 2020<\/a> <\/span>

\n\nVIDEO: Evidence This is More Than a Bear Market<\/a> <\/span>
\n—————<\/span>

\n\n The dollar is down. Oil and copper are down. Gold and silver are down. Bonds are down. <\/span>

\n\n Stories\/News from Seeking Alpha…<\/span>

\n\nUp by nearly 3% for most of the night, stock index futures turned negative moments ago following Tuesday\u2019s historic rally. The DJIA climbed more than 2,000 points, or 11.4%, marking its biggest percentage gain since 1933, while the S&P 500 soared 9.4% for its best day since October 2008. Triggering the movement was news that a $2T coronavirus stimulus deal was reached and comments from President Trump saying he wants the nation “opened up and just raring to go by Easter. Next market catalyst? After a series of actions on the monetary and fiscal front, traders need to “see the infections pass an inflection point,” said Vincent Reinhart, chief economist at BNY Asset Management.

\n\nWhat’s in the stimulus package?

\n\nPeople making up to $75,000 a year are expected to receive checks of $1,200. Couples making $150,000 will receive $2,400 with an additional $500 per child. The payments would decrease for those making more than $75,000, with an income cap of $99,000 per individual or $198,000 for couples. The bill is also expected to include roughly $100B in assistance for hospitals, $350B in assistance to small businesses to help them meet payroll, and $500B in aid for corporations, such as airline companies and cruise lines.

\n\nBlackRock to manage Fed’s bond buying

\n\nThe Federal Reserve has hired the world’s largest money manager to shepherd several debt-buying programs on its behalf as the central bank works to shore up an economy reeling from the spread of coronavirus. BlackRock (NYSE:BLK) will serve as an investment adviser and manage assets for three separate programs, including two new facilities to provide liquidity to corporate borrowers, as well as purchases of agency commercial mortgage-backed securities.

\n\nReturn to work statistics

\n\nIn a poll of 119 U.S. companies conducted in mid-March by the American Chamber of Commerce in China, only 22% of the companies surveyed said they’ve resumed normal business operations, while a quarter expect to be there by the end of April. 50% are experiencing “significant revenue declines,” and more than half say they expect 2020 revenues to fall this year if they can’t return to usual levels by the end of April. While the sample size is small, the resumption rate is well below official claims that over 90% of manufacturing companies and more than 60% for services firms are back at work.

\n\nConfident on recovery plan

\n\nAmid a boost from its digital business and growth in North America, Nike (NYSE:NKE) reported quarterly earnings and sales that topped analysts’ expectations after the bell on Tuesday, sending shares up 10% AH. The company also noted that it will follow a playbook established by the company in China as it looks to recover its business in other parts of the world. Nearly 80% of its stores in Greater China are now open, and digital sales in the country are approaching triple-digit growth.

\n\nCOVID-19 at Amazon warehouses

\n\nThe U.S. coronavirus outbreak has spread to at least six Amazon (NASDAQ:AMZN) warehouses, according to the Jeff Bezos-owned Washington Post. In some cases, Amazon shut down facilities for cleaning, and co-workers who were in close contact with their infected colleagues have been quarantined, though some warehouse workers are still sounding the alarm about sanitary practices. “We are supporting the individuals, following guidelines from local officials, and are taking extreme measures to ensure the safety of all the employees at our sites,” Amazon spokeswoman Lisa Levandowski said in an emailed statement.

\n\nSocial distancing at 30,000 feet

\n\nAir travel has already slowed to a trickle with the number of passengers dropping more than 85% from a year ago, according to the TSA. American Airlines (NASDAQ:AAL) is now blocking 50% of all middle seats on every flight, spacing passengers in accordance with public health recommendations. The airline also announced several other changes aimed at reducing contact between flight attendants and passengers, including scaling back food and beverage service and shuttering most airport lounges.

\n\nQuestionable decision?

\n\nThe management at WeWork (WE) is offering members of its community teams in the U.S. and Canada an extra $100 per day or $500 per week to work out of WeWork offices during the coronavirus pandemic. Community team employees handle a range of member services, including signing for packages and taking care of on-site programming. According to WeWork’s website, only two of its co-working spaces are shuttered in North America and none are closed in Europe.

\n\nFacebook ads taking a hit

\n\nIn hardest hit countries, total messaging across platforms has risen more than 50% over the past month, and in Italy “up to 70%” since the COVID-19 crisis arrived in the country. However, Facebook (NASDAQ:FB) doesn’t “monetize many of the services where we’re seeing increased engagement, and we\u2019ve seen a weakening in our ads business in countries taking aggressive actions to reduce the spread of COVID-19.” Facebook also owns Instagram, as well as the popular messaging service WhatsApp.

\n\nShielding U.S. credit reports

\n\nEquifax (NYSE:EFX) is actively working with creditors and lenders to minimize the effects the novel coronavirus may have on consumers’ credit standing. “These are uncharted waters for everyone,” said CEO Mark Begor. “The company is working with policy makers including the U.S. Congress, the Consumer Financial Protection Bureau and the Consumer Data Industry Association to mitigate the negative impact of the pandemic on consumers’ credit files.”

\n\nWhat else is happening…

\n\nIndia lockdown suspends output of Apple (NASDAQ:AAPL) suppliers.

\n\nTokyo Olympics are postponed to 2021.

\n\n#BuildforCOVID19 global online hackathon.

\n\nDefense Production Act ‘leverage’ is boosting supplies.

\n\nU.S. automakers to extend shutdown into April.

\n\nVirus dampens payment volumes at Square (NYSE:SQ).

\n\nOccidental (NYSE:OXY) slashes pay for staff, executives.

\n\nBoeing (NYSE:BA) would reject aid if government requires equity stake.

\n\nTuesday’s Key Earnings<\/B>
\nNike (NKE) +9.9% AH beating estimates, touting recovery plan.

\n\nToday’s Economic Calendar<\/B>
\n7:00 MBA Mortgage Applications
\n8:30 Durable Goods
\n9:00 FHFA House Price Index
\n10:00 State Street Investor Confidence Index
\n10:30 EIA Petroleum Inventories
\n11:00 Survey of Business Uncertainty
\n11:30 Results of $18B, 2-Year FRN Auction
\n1:00 PM Results of $41B, 5-Year Note Auction

\n\n—————————-

\n\n Good morning. Happy Tuesday. <\/span>

\n\n The Asian\/Pacific<\/strong> markets posted big gains. Japan, China, Hong Kong, South Korea, India, New Zealand, Taiwan, Australia, Malaysia and Singapore all did great. Europe, Africa and the Middle East<\/strong> are currently up big. The UK, Denmark, Poland, France, Turkey, Germany, Russia, Greece, South Africa, Finland, Switzerland, Norway, Hungary, Spain, the Netherlands, Italy, Belgium, Portugal, Austria, Sweden, Saudi Arabia and the Czech Republic are all posting big gains. Futures in the States<\/strong> point towards a big gap up for the cash market. <\/span>

\n\n—————
\nVIDEO: Comparing Bear Markets 1980 – 2020<\/a> <\/span>\n

\nVIDEO: Evidence This is More Than a Bear Market<\/a> <\/span>
\n—————<\/span>

\n\n The dollar is down. Oil and copper are up. Gold and silver are up. Bonds are down. <\/span>

\n\n Stories\/News from Seeking Alpha…<\/span>

\n\nThe rollercoaster on Wall Street continued overnight as U.S. stock index futures climbed 5% to hit ‘limit up’ levels. A day late? Equities plunged Monday despite unprecedented efforts by the Fed to expand purchases of U.S. Treasurys and MBSs “as needed,” and implement measures to backstop credit for households, small businesses and major employers. While the U.S. Senate is still at odds over a coronavirus stimulus package, there is some hopeful news as both new cases and deaths dropped for two days running in Italy. “43 days was exactly the same amount of time as it took South Korea to reach its apex. And if such is the case, the U.S. would be 14 days behind Italy,” said Thomas Lee, head of research at Fundstrat Global Advisors.

\n\nFed surprises again

\n\nThe “whatever it takes” attitude was also seen by the Fed’s willingness to buy corporate bonds and corporate bond exchange traded funds. The buying spree is not unlimited – the Fed cannot own more than 20% of any one ETF, or 10% of individual corporate bonds – and purchases will only be made in investment grade corporate bonds, not high yield. While this is new for the U.S., Japan has been buying ETFs (even equity funds) for several years.

\n\nAmerican business may reopen soon

\n\nThe White House is discussing easing social distancing guidelines as early as next week as advisers and business leaders push President Trump to boost an economy beset by deepening job losses nationwide, WSJ reports. “We’re not going to let the cure be worse than the problem,” Trump said at a press briefing late Monday, echoing an earlier tweet. “America will again and soon be open for business. It won’t be that long.”

\n\nEasing the coronavirus lockdown

\n\nChinese authorities are planning to lift the mass quarantine on the central province of Hubei, where the coronavirus first emerged last December. The news comes days after Hubei reported that new infections dropped to zero (if you can believe the statistics). Only locals deemed free from contagion risk will be allowed to leave, while restrictions on the capital city of Wuhan will last two more weeks.

\n\nOver in Europe

\n\n“Once the crisis is over – and we hope this will be the case in several months – we will return to austerity policy,” German Economy Minister Peter Altmaier declared after unveiling a \u20ac750B stimulus package. Meanwhile, Italy is reportedly in favor of giving the bloc’s countries access to the eurozone’s ESM bailout fund with “no conditionality.” GDP in France is already “collapsing at an annualized rate approaching double digits,” according to IHS economist Eliot Kerr, as Markit’s composite PMI came in at 30.2 for March, the lowest figure since the series began in 1998.

\n\nNike reports after the bell

\n\nWhile essentials retailers have seen an uptick in deliveries, it remains to be seen what kind of demand there is for expensive sneakers. Nike’s (NYSE:NKE) results may not entirely reflect the effect of the coronavirus (coming in the May quarter), but they will provide some picture of what’s going on with the company and how the crisis will impact consumers and the economy. On March 16, Nike shuttered all of its stores in the U.S., Canada, Western Europe, Australia and New Zealand and the closures will be in effect until Friday (unless extended).

\n\nU.S. airlines could ground themselves

\n\nMajor U.S. carriers are prepping plans for a potential voluntary shutdown of passenger flights across the U.S. if air traffic controller staffing emergencies continue to crop up or demand falls much further, Dow Jones reports. Also on the table… the federal government could at some point halt all U.S. flights in an effort to deal with the pandemic. Air traffic is already at a minimal level, with the TSA reporting a drop of 80% on Sunday compared to the same day a year ago. Related stocks: American (NASDAQ:AAL), Delta (NYSE:DAL), United (NASDAQ:UAL), Southwest (NYSE:LUV), JetBlue (NASDAQ:JBLU), Spirit (NYSE:SAVE), Hawaiian (NASDAQ:HA), Alaska Air (NYSE:ALK).

\n\nInsider trading vigilance

\n\nThe SEC has issued a sharp warning against trading on nonpublic information related to COVID-19 following stock sales that have sparked calls for investigations. NYSE (NYSE:ICE) Chairman Jeff Sprecher and his wife Sen. Kelly Loeffler sold up to $3M worth of securities in the weeks before market indexes plunged, and on the heels of a private, all-senators briefing about the virus outbreak on Jan. 24. Sales by senators Richard Burr, James Inhoffe and Diane Feinstein have also come under scrutiny.

\n\nPostponing the Olympics

\n\nMore countries are coming out in support of postponing the Olympics, like the U.S. and New Zealand. “The parameters going forward have not been determined, but the Games are not going to start on July 24, that much I know,” said longtime International Olympic Committee member Dick Pound. Any postponement would be a blow for host country Japan, which has pumped in more than $12B of investment, and huge sums are also at stake for sponsors and broadcasters, including Comcast (NASDAQ:CMCSA) and Discovery (NASDAQ:DISCA).

\n\nA community effort

\n\nAs General Motors (NYSE:GM) accelerates ‘Project V’ to build ventilators in Indiana, another Big Three automaker is looking to do its part to combat the coronavirus pandemic. Fiat Chrysler (NYSE:FCAU) is beginning to manufacture more than 1M protective face masks per month, which will be donated to police, EMTs, firefighters and healthcare workers. The company, which is also giving support to increase ventilator production, will disclose “further actions related to the fight against the coronavirus in the coming days.”

\n\nWhat else is happening…

\n\nTwitter (NYSE:TWTR) pulls guidance as it measures virus impact.

\n\nLimit tests to those with COVID-19 symptoms – Roche (OTCQX:RHHBY).

\n\nGilead’s (NASDAQ:GILD) remdesivir wins orphan drug status for coronavirus.

\n\nBoeing (NYSE:BA) suspends Washington state production.

\n\nFacebook (NASDAQ:FB) introduces new paid-time off programs.

\n\nCoronavirus-driven hiring for grocery delivery.

\n\nSoftBank (OTCPK:SFTBY) selling $14B in Alibaba (NYSE:BABA) shares – Bloomberg.

\n\nApple (NASDAQ:AAPL) granted tariff exemption for Apple Watch.

\n\nNordstrom (NYSE:JWN) joins Macy’s (NYSE:M) in suspending dividend.

\n\nToday’s Economic Calendar<\/B>
\n8:55 Redbook Chain Store Sales
\n9:45 PMI Composite Flash
\n10:00 New Home Sales
\n10:00 Richmond Fed Mfg.
\n1:00 PM Results of $40B, 2-Year Note Auction

\n\n———————-

\n\n Good morning. Happy Monday. Hope you had a good weekend. <\/span>

\n\n The Asian\/Pacific<\/strong> markets got hit hard. China, Hong Kong, South Korea, India, New Zealand, Taiwan, Australia, Malaysia, Indonesia, Singapore and Thailand all posted huge losses. Europe, Africa and the Middle East<\/strong> are currently mostly down. The UK, Denmark, Poland, the UAE, South Africa, Finland, Norway, Spain, Portugal, Sweden and Saudi Arabia are all very weak. Futures in the States<\/strong> point towards a positive open (after being lock limit down over night. <\/span>

\n\n—————
\nVIDEO: Comparing Bear Markets 1980 – 2020<\/a> <\/span>\n

\nVIDEO: Evidence This is More Than a Bear Market<\/a> <\/span>
\n—————<\/span>

\n\n The dollar is down. Oil is flat; copper is down. Gold and silver are up. Bonds are up. <\/span>

\n\n Stories\/News from Seeking Alpha…<\/span>

\n\nFollowing a big turnaround on Friday that resumed a selloff on Wall Street, markets went into another tailspin overnight as a Senate vote on a coronavirus rescue package failed to gain sufficient traction. In the words of Chuck Schumer, the $1.8T package was a “large corporate bailout with no protections for workers and virtually no oversight” and the decision (47-47) came up short of the required 60 votes. Futures have now trimmed their losses, with the S&P 500 down 2.8%, as Schumer said “disagreements over the bill could be overcome in the next 24 hours.” The U.S.’s inability to move things forwards stands in contrast to many of its now free-spending peers, though equities are still selling off across most of the globe.

\n\nDire warning

\n\n“The market for commercial real estate mortgage loans in the U.S. stands on the brink of collapse,” according to Colony Capital (NYSE:CLNY) Chairman Tom Barrack, with banks, mortgage REITs and other non-bank lenders now “at a precarious juncture.” A meltdown of this magnitude “would have catastrophic follow-on effects across the American economy” if lenders and the government don’t take prompt action. Echoes of ’08? Mortgage bond sales on Sunday included at least $1.25B of securities by (Morningstar’s five-star rated) AlphaCentric Income Opportunities Fund, which lost more than 30% of its value last week (the fund’s lead portfolio manager is a 20-year Lehman Brothers structured finance veteran).

\n\nFinding a bottom?

\n\nThe difference between a fast or a prolonged recovery in the stock market will come down to three factors: How quickly the virus is contained, whether businesses will have “access to enough capital and liquidity to last the 90 to 180 days,” and whether fiscal stimulus can stabilize growth forecasts, according to David Kostin, chief U.S. equity strategist at Goldman Sachs. With that being said, Goldman forecasts the S&P 500 could be in for a 41% fall from peak to trough, Bank of America believes the selloff might not ease until the index tumbles 47%, while Credit Suisse estimates the benchmark could be in for a 35% drop overall.

\n\nU.S. unemployment may surge to 30%

\n\nAs the U.S. grapples with the coronavirus pandemic, St. Louis Fed President James Bullard expects an unprecedented 50% plunge in GDP and sees the unemployment rate hitting 30% in the coming months. If the projection proves to be true, unemployment would be worse than it was during the Great Depression and three times worse than the global financial crisis. “Everything is on the table,” he said, referring to additional lending programs from the Fed. “There is probably much more in the months ahead depending on where Congress wants to go.”

\n\nAmazon open for employment

\n\n“Across the world, people are feeling the economic effects of this crisis, and I’m sad to tell you I predict things are going to get worse before they get better,” Amazon (NASDAQ:AMZN) CEO Jeff Bezos wrote on Instagram. “We hope people who’ve been laid off will come to work with us until they’re able to go back to the jobs they had. We’re hiring for 100,000 new roles and raising wages for our hourly workers who are fulfilling orders and delivering to customers during this period of stress and turmoil.”

\n\n‘New epicenter’

\n\nNew York state now has more coronavirus cases than France or South Korea, with NYC the “new epicenter” of the COVID-19 outbreak in the U.S. The number of confirmed infections has soared to 15,168 (about half of newly reported cases in America), according to data released by Gov. Andrew Cuomo, who said the state “is testing, per capita, more than any country in the globe.” Cuomo has also asked the federal government to nationalize the purchase of medical equipment as NYC Mayor Bill de Blasio warned the city was just 10 days away from running out of essential equipment.

\n\nGreen light for ventilators

\n\n“Ford (NYSE:F), General Motors (NYSE:GM) and Tesla (NASDAQ:TSLA) are being given the go ahead to make ventilators and other metal products, FAST! Go for it auto execs, lets see how good you are?” President Trump tweeted, after invoking the Defense Production Act last week. Carmakers have already shuttered their operations, but the statement suggests they could be back at work to help the country with a potential health crisis. While it could be difficult to retool an auto assembly line, the companies have 3D printers for components, “clean rooms” in some plants that could meet FDA standards and Tyvek suits used in paint shops that could be re-purposed.

\n\nSupercomputing power

\n\nIBM (NYSE:IBM) is collaborating with the White House Office of Science and Technology Policy and the Department of Energy to launch the COVID-19 High Performance Computing Consortium. “16 systems with more than 330 petaflops, 775,000 CPU cores, 34,000 GPUs, and counting” will be provided to develop predictive models to analyze the coronavirus progression and identify potential treatments. Researchers from around the world can submit proposals, and the Consortium will select the projects that could have the most immediate impact.

\n\nDowngrading streaming quality

\n\nWhile European telecoms operators have been able to cope with the data traffic rise so far, there are fears of network congestion as more people work at home. EU industry chief Thierry Breton has also urged streaming platforms to free up bandwidth for healthcare needs and distance learning. Facebook (NASDAQ:FB) is the latest to “reduce bit rates for videos on Facebook and Instagram in Europe,” joining Netflix (NASDAQ:NFLX), YouTube (GOOG, GOOGL), Amazon (AMZN) and Disney (NYSE:DIS) in downgrading their video quality.

\n\nSoftBank’s biggest buyback ever

\n\nRattled by a plunge in its stock price, SoftBank (OTCPK:SFTBY) is offloading up to \u00a54.5T ($41B) in assets so it can buy back shares and redeem debt. Combined with a previously announced \u00a5500B share buyback program, the company said it could end up repurchasing 45% of its shares outstanding, prompting shares to climb 17% in Tokyo overnight. Other tensions are brewing… Reports last week suggested SoftBank wanted to back away from part of its WeWork (WE) bailout, while the latter said it’s preparing for a fight.

\n\nWhat else is happening…

\n\nBoeing (NYSE:BA) worker at Everett plant dies from coronavirus.

\n\nCash grants for airlines look set to fail.

\n\nGoldman Sachs (NYSE:GS) props up own money-market funds.

\n\nShell (NYSE:RDS.A) slashes costs to weather COVID-19 and price war.

\n\nTrump goes all-in on malaria drug for coronavirus infection.

\n\nApple (NASDAQ:AAPL) cancels restrictions on iPhone buyers.

\n\nIcahn, Occidental Petroleum (NYSE:OXY) near truce – WSJ.

\n\nAirbnb (AIRB) eyes capital raise; IPO in disarray.

\n\nMGM Resorts (NYSE:MGM) boss Jim Murren vacates position.

\n\nThe Germans abandon fiscal restraint in pandemic relief.

\n\nToday’s Economic Calendar<\/B>
\n8:30 Chicago Fed National Activity Index\n","protected":false},"excerpt":{"rendered":"

Good morning. Happy Friday. The Asian\/Pacific markets leaned up. Japan, South Korea, Malaysia, Indonesia and Singapore did well; New Zealand, Australia and the Philippines were weak. Europe, Africa and the Middle East are currently very weak. The UK, Denmark, France, Turkey, Germany, Russia, Greece, the Czech Republic, South Africa, Finland, Switzerland, Spain, the Netherlands, Italy, […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[],"_links":{"self":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/13910"}],"collection":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13910"}],"version-history":[{"count":6,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/13910\/revisions"}],"predecessor-version":[{"id":13921,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/13910\/revisions\/13921"}],"wp:attachment":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13910"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13910"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13910"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}