Your Thursday Market Blip 4/2/20

Your Thursday Market Blip 4/2/20

It was another day of extremes as unemployment claims surged by 6.65 million which indicates a 10% unemployment rate. Meanwhile oil prices jumped 21% on a possible Saudi Russia output cut. At the close the Dow was up 469 at 21,413. Trading volume was higher. BTS remains on the sidelines and said that while all the stimulus could make for a quick recovery the unknown nature and duration of the CCP virus will more than likely lead to a longer U shaped recovery.
Starting tonight at midnight small businesses can apply to banks for the $350 billion forgivable loans for small business program. Gurus are expecting a rush of requests and some banks might not be able to handle the volume or have all the details. The bottom line is that the stimulus package passed last Friday is about to hit the economy with a money drop that equates to 11% of GDP. This is happening at the start of the second quarter and might offset the dire predictions of a 20% drop in GDP predicted by many gurus. Picture a DC10 doing a retardant drop on a California wildfire as an analogy. Its impressive but will it work? We are watching to see how this all plays out.
According to the Wall Street Journal, Boeing will offer early retirement packages to it 160,000 workers in an effort to avoid layoffs and as a way to start aligning the company to what CEO David Calhoun says is a different reality for commercial air travel in light of the pandemic. David said they types of products and services will likely be different as the world emerges from the pandemic and the company must adapt. Boeing is seeking $60 billion in Federal assistance for not for itself but for the entire aerospace manufacturing sector although it is unclear as of yet how that will work.
Freddie Mac’s chief economist Sam “Spam” Khater indicated the coming wave of stimulus money could provide substantial support for the mortgage markets. With interest rates already lower than dirt mortgage applications rose 15.3% last week according to the Mortgage Bankers Association. Refi requests are up 168% from a year ago but weekly data shows new home purchase mortgages are off 10% while refi’s were up 26%. Countering this however some banks are bracing for a possible wave of deferred mortgage payments.