Oyster Stew! WTI Crude Spot Rises 21%, US Jobless Claims Up 4.43 Million (But Slowing), New Home Sales Decline -15.4% MoM In March

I feel like we are in the Three Stooges film “Oyster Stew.” Every time we look for good news, more bad news come out.

But here is some good news.

WTI Crude oil is up 21.26% this morning .. to $16.71 a barrel (still low).

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And while US jobless claims rose 4.43 million the past week, the US is several weeks past the peak. (Knock on wood).

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But back to crude. Saudi oil is still negative for heavy and medium crudes to the USA.

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Now for the oyster eating the cracker.

US new home sales fell -15.4% MoM in March.

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As I said, oyster stew.

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The Morning After! US Treasuries Surge, Mortgage Rate Spread Highest Since Q4 2008

It is the morning after the Fed panicked and lowered its lower bound for The Fed Funds Target rate to … 0%. Here is Fed Chair Jerome Powell calling to The Fed to take evasive action!

The result? US Treasuries yields are falling like a rock. US Treasury 10Y yields are down around 20 basis points this morning.

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And unless lenders lower their 30-year mortgage rates, the spread between Bankrate’s 30 year average mortgage rate and the 10 year Treasury yield is at its highest level since Q4 2008, the epicenter of the financial crisis.

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This morning before the US equities markets open, Europe is already down around 7% – 8%.

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Here is Fed Chair Jerome Powell wishing us all the best!

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Stimulypto! U.S. Stocks Rebound on Stimulus Speculation (Fiscal And Fed)

What do you call an expected 3 rate cuts by The Federal Reserve AND fiscal stimulus to combat the coronavirus? STIMULYPTO!!

(Bloomberg) — U.S. stocks turned higher in another wild day on Wall Street, with investors pining for details on the Trump administration’s expected stimulus to combat the coronavirus’s economic impact. Treasuries fell and oil jumped.

The S&P 500 whipsawed from the outset Tuesday, surging 3.5% before turning negative and the rising again. President Donald Trump promised “major” moves to counter the fallout, but he has not communicated his plans to Congress yet. He did say his administration would assist the airline and cruise industries. A 4% rally in European stocks got zapped.

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The Dow has recovered a bit from yesterday’s stock slaughter.

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The unknown fiscal stimulus (likely reduced tax withholding) in addition to the anticipated three Fed rate cuts coming in March.

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Stimulypto indeed!

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Update: after a few speed bumps, the Dow closed up 1165 points. Stocks Jump Most Since 2018 on Stimulus Hope

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And the 10-year Treasury yield is up 26 basis points.

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Fear! Ten Year Treasury REAL Yield Negative Along with TIPS Yields

Fear is still roiling the markets.

The REAL 10-year Treasury yield has gone negative.

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Along with Treasury Inflation Protected Securities (TIPS).

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Here is the TIPS curve compared with the US Treasury actives curve.

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The FRA/OIS is the spread between overnight index swaps (OIS), considered the “risk-free” rate tied to the federal funds rate, and forward rate agreements (FRA), which are tied to Libor. And it is rising fast!

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It is fear driving markets.

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