Stocks sold off Thursday and Friday ending the week with modest losses.

Central banks across the world met this week and took significant actions to fight the virus slowdown. 

• Japan met on Monday and announced it would buy unlimited quantities of government bonds, and an increase in purchases of corporate bonds, commercial paper, exchange traded funds and real estate investment trusts. 
• The U.S. Federal Reserve promised Wednesday to use “its full range of tools to support the U.S. economy in this challenging time.”  The FED also called on Congress and the White House to spend more to prevent deeper economic damage.  On Thursday, the FED announced an expansion of its $600BN Main Street Lending Program to relax minimum loan amounts for smaller businesses and to include larger businesses.  
• The ECB lowered the cost of its emergency loan program for banks to -1.0% but did not announce an increase in it’s bond buying program but stated it was “fully prepared to increase the size of the PEPP and adjust its composition, by as much as necessary and for as long as needed.”

Treasury yields rose with the 30-year bond ending at 1.263% and the 10-Year note at 0.629%.  Crude oil rose to $19.78 and  natural gas rose to $1.885 per MMBTUs.  The U.S. dollar fell against a basket of currencies and gold prices fell to $1707.70 an ounce.

In economic numbers this week:

• The Eurozone reported:
  • Gross domestic product fell at a record annual pace of 14.4% in the first quarter.
  • Inflation fell to a 0.4% annual rate in April from 0.7% in March.
• The S&P CoreLogic Case-Shiller National Home Price Index rose 4.2% year of year in February up from 3.9% in January.
• The Commerce Department reported
  • First quarter gross domestic product (adjusted for seasonality and inflation) fell at a 4.8% annual rate, the biggest decline since 2008.
    • The consumer spending portion of GDP fell at 7.6% rate, the fastest pace since 1980. 
    • Goods spending fell 1.3% as lower spending on automobiles was offset by stockpiling of food and household essentials.
    • Business spending fell 8.6%.
    • Exports fell but imports fell more.
    • Spending on housing rose at a 21% annual rate, due to lower mortgage rates and mild winter weather.
    • The personal savings rate rose from 7.6% in the fourth quarter to 9.6% in the first quarter.
  • March consumer spending fell 7.5%, the steepest decline in records going back to 1959.
  • Personal Incomes fell 2% in March.
  • The personal consumption expenditures price index fell 0.3% in March.  From a year earlier, prices have risen 1.3%.
• The Labor Department reported first time jobless claims in the prior week rose another 3.8MM pushing the total to over 30MM during the past six weeks. 
• Factset reported that with 5% of the S&P 500 Q1 earnings reporting, the blended earnings decline is 13.7% from Q1 2019. 
• The EIA weekly oil report is here wpsrsummary.  Also, the EIA reported in the past week:
  • Field production of crude oil dropped from 12.2MM barrels to 12.1MM barrels per day.
  • Natural gas storage rose by 70BN cubic feet and is above the five year average at this time of year.
• Baker Hughes reported the number of active oil rigs fell 53 to 325 and the number of active gas rigs fell 4 to 81.

Remember we are here to support you, to answer your questions and address your needs.  Please do not hesitate to call us.

Best Regards,

Loren C. Rex, CFP^®, AIF^®, MA                                                  Erik A Smith AIF^®

President                                                                                       Managing Partner

Generations Financial Planning & Wealth Management    269-441-4143

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Battle Creek, MI  49017

Tel 269-441-4090

Carrie Fuce, Assistant 269-441-4091

Toll Free: 800-513-8180

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Visit our Website:  www.genfinplan.com

Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC.  Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor.  Cambridge and Generations Financial Planning & Wealth Management are separate companies and are not affiliated. 

These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice.  The Indices mentioned are unmanaged and cannot be invested into directly.