Equities initially fell for a myriad of reasons including escalated rhetoric against China over the corona virus. The President is prodding the nation to reopen for business while some are fearing the proverbial second wave.

Equities were then cheered by New York’s decline in coronavirus deaths and hospitalizations. California also announced the fewest number of deaths in three weeks. Overall cases fell of r the week by 2.0%, below last week’s average of 2.6%.

Internationally, Italy is beginning to reopen following two months of closure, a reopening that some are stating is too cautious. New Zealand had no new cases for the first time since March and Hong Kong may soon reopen cinemas and gyms.

Many times, I have commented about the liquidity of the bond market. Monday the NY Fed stated it will begin purchasing shares of eligible corporate bonds ETFs in early May. It should be noted the Fed first announced the creation of corporate credit facilities on March 23 albeit the facility has not yet been launched according to Fed Chairman Powell.

A strong argument can be made the reforms from the 2008-09 crisis sowed the seeds for the 2020 crisis. There will be reforms and I hope the inevitable reforms will not create the next major issues.

What will happen today?

Last night the foreign markets were up. London was up 1.35%, Paris up 1.40% and Frankfurt up 1.34%. China was up 1.33%, Japan closed for a holiday and Hang Sang up 1.08%.

The Dow should open nominally higher as more economies move towards easing their lockdowns. Oil is up for the fifth day, the longest run of daily gains in more than 9 months, advancing about 8%, on belief that demand is returning and inventories will decline.

The 10-year is off 5/32 to yield 0.65%


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