Equities led by oil and travel surged the most in about six weeks after promising early results for an experimental vaccine. Commenting about crude, China announced that its oil use—ex jet fuel– is back to year ago levels.

As discussed, production has been greatly reduced. Some have suggested that crude can be back to $50 within 45-60 days if the global economy continues to reopen and if production does not increase.

Wow! This would radically change the dynamics for most producers. As noted many times, crude under $40/barrel would suggest about 80% of American producers would enter bankruptcy.

Commenting about monetary policy, FRB Chair reiterated the Fed is prepared to use its full range of tools and leave the benchmark lending rate near zero until the economy is back on track. Treasury Secretary Mnuchin remarked that he expects economic conditions to improve in the third and fourth quarters.

What will happen today?

Last night the foreign markets were mixed. London was down 0/.27%, Paris down 0.46% and Frankfurt down 0.14%. China was up 0.81%, Japan up 1.49% and Hang Sang up 1.89%.

The Dow should open flat. Oil is up another 3% to around $33/barrel on demand is recovering quicker than anticipated. The 10-year is off 16/32 to yield 0.74%.


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