Your Tuesday Market Blip 4/21/20

Your Tuesday Market Blip 4/21/20

Stocks sank for the second day in a row with techs leading the way lower. A bipartisan deal was reached in Congress for a $484 billion aid package. The deal includes $322 billion for the small business loan program which ran dry 5 days ago and $60 billion for farmers. At the close the Dow was down 631 points at 23,018. Trading volume continued to trend lower.
Energy markets continue to turn heads. WTI crude priced at over $9 per barrel today after trading at negative value yesterday. The reason for the negative price was that if you owned a May futures contract you are required to take delivery of 1,000 barrels of oil and with oil storage in Cushing Oklahoma tighter than a C clamp buyers were looking to offload their obligation to take delivery. Meanwhile the prospect of wells being shut-in caused natural gas futures to move higher. The ripple effects of falling oil are interesting. JP Morgan estimated that oil well shut-ins will push the supply of gas down and could force some power plants to start using coal again if they run short of gas. We shall see how that plays out.
With unemployment rising rapidly the housing market is starting to slow. US existing home sales fell 8.5% to a level last seen in 2016 and gurus expect the April data to show further declines. The inventory of homes remains low at 3.4 months and the median home price in March was up 8% from a year ago. Meanwhile mortgage forbearance is on the rise and now stands at 6% of total mortgages up from a longer term trend of a half point. Forbearance means a home owner is at least a month late on their mortgage.
The FDA today approved an in home covid-19 virus self-test made by LabCorp. The test kits will be available for $119 and the consumer must fill out a survey to determine if they are eligible to buy it. The test is self-administered and currently being used by health care workers and first responders but the emergency FDA approval allows the kits to be used by the broader public.