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The Best of What They Said and I Read Week Ending 3/8/2020

Short excerpts from articles I found interesting.  I may not agree with the author and the following material is not intended as investment advice

  Barron’s – March 6, 2020 – The Stock Market Finished the Week Higher.  The Pain Isn’t Over. – Ben Levisohn

  • “…No, it’s not really the end, but it sure felt that way at certain moments this past week. The coronavirus spread in the U.S. and abroad. Big rallies were followed by equally big drops. The Federal Reserve was worried enough about the U.S. economy to lower its benchmark interest rate by half a percentage point, causing a market panic in the process. And by the end of the week, the yield on the 10-year U.S. Treasury note had fallen to 0.709%, its lowest on record.”
  •  “Yet the major indexes managed to finish the week in the green. The Dow Jones Industrial Average gained 455.42 points, or 1.8%, to 25,864.78, while the Nasdaq Composite ticked up 0.1%, to 8575.62, and the S&P 500 index rose 0.6%, to 2972.37.  That doesn’t do justice to the craziness that was this past week. The S&P 500 index gained 4.6% on Monday as the market rebounded from the previous week’s decline. It dropped 2.8% on Tuesday after the Fed’s surprise rate cut. It rose 4.2% on Wednesday after Joe Biden’s strong Super Tuesday showing, and then dropped 3.4% on Thursday as coronavirus fears seized the market. It looked as if Friday would be a repeat of Thursday—the S&P 500 was down as much as 4%—before comments from a Fed governor about buying securities to prop up the economy helped the index close down just 1.7% on the day.”

  U.S. Global Investors - Investor Alert – March 6, 2020 – Frank Holmes 

  • “…Earlier in the week, the Fed lowered the interest rate 50 basis points in its first emergency meeting since the crisis more than 10 years ago. The Fed has cut rates between regularly scheduled policy meetings only six times since 1998, and in each instance, it cut rates again at its next meeting—March 17, in this case…Legendary investor Jeffrey Gundlach said Thursday in a CNBC interview that he thinks the Fed will cut rates by another 50 basis points at the next meeting in two weeks. The economic impact of the coronavirus continues to worsen, with the S&P 500 down 9 percent in the last 10 days and a growing number of companies have issued sales warnings. Gundlach noted that “Gold is the best thing to own now and is headed to new highs.”
  •  “…Employers added a stronger than expected 273,000 jobs in February, matching the prior month’s revised gain, according to a Labor Department report Friday.  The unemployment rate fell back to a half-century low of 3.5 percent, while average hourly earnings advanced 3 percent from a year earlier.”
  •  “…Treasury yields hurtled toward zero Friday as concern about the global economic and financial impact of the coronavirus spurred demand for havens and traders amped up bets on further central bank easing this month. Yields on the 30-year, 10-year and five-year securities fell to record lows…The White House is considering measures to respond to the economic impact of coronavirus, an administration official said, including deferring taxes for the industries hardest hit by the virus, primarily hospitality and travel.…Oil continues to get beaten down by demand concerns over the coronavirus…Bloomberg reports that oil fell to a more-than two year low on the news…Crude has fallen around 24 percent so far this year and OPEC cut its demand forecast from 990,000 barrels a day to just 480,000.”
  • “…The question increasingly becomes—at least from an economic opportunity standpoint, or an economic threat one—how long does the virus drag on growth? To what extent will supply chains be hit further than they are already?...And of course, if a broader selloff or souring of sentiment ensues globally, which babies get chucked out with the proverbial bathwater? To be sure, COVID-19 concerns topped the charts this week, kicking off what could be a month of the wrong kind of “March Madness.” One is always hopeful for the best outcome. But markets sense uncertainty…There remains much about the virus we don’t yet know.” 

 Kiplinger’s Personal Adviser - Ideas to Act on Now – Should You Refinance? - March, 2020 

  • “The average rate for a 30-year fixed-rate mortgage was recently 3.3%, according to Freddie Mac – down more than one percentage point from the year before – and is probably headed lower.  The average rate for a 15-year fixed-rate mortgage was recently 2.8%.  Is now the right time to refinance?  If it has been several years since you bought your home or last refinanced, there’s a good chance your mortgage rate is more than one percentage point above current rates, which is usually a sign that a refi makes sense.  But you may benefit even if your new rate would be less than a full point lower.  For help making the decision, use the refinancing calculator at www.mtgprofessor.com”

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