Written by Gary
Fed sees interest rates staying near zero through 2022, GDP bouncing to 5% next year (SPY -0.6%). Investors see an economy facing a torturous slog back from the coronavirus pandemic.
The Market in Perspective
| Here are the headlines moving the markets. | |
 | ConcoPhillips CEO says surprised by swift recovery in oil pricesConocoPhillips Chief Executive Officer Ryan Lance on Wednesday expressed surprise at the quick rebound in U.S. oil prices that slipped into the negative territory in April and said he expects prices to remain volatile in the near term. |
| American, Delta say demand uptick helping cash burn; United requiring health checklistsAmerican Airlines Group Inc and Delta Air Lines Inc said on Wednesday that a modest recovery in demand was helping to slow daily cash burn rates in June after the U.S. government reported record low passenger numbers in April amid the coronavirus pandemic. |
| Fed vows to support U.S. economy’s ‘long road’ to recovery after dire 2020The U.S. Federal Reserve on Wednesday signaled it would provide years of extraordinary support for an economy facing a torturous slog back from the coronavirus pandemic, with policymakers projecting a 6.5% decline in gross domestic product this year and a 9.3% unemployment rate at year’s end. |
| Instant View: Fed sees GDP falling 6.5% in 2020, keeps rates at zeroThe U.S. Federal Reserve on Wednesday signaled years of extraordinary support for an economy facing a torturous slog back from the coronavirus pandemic, with policymakers projecting a 6.5% decline in gross domestic product this year and a 9.3% unemployment rate at year’s end. |
| Oil edges higher, even as U.S. inventory rise revives glut worriesOil rebounded from earlier losses on Wednesday, even as U.S. data showed crude inventories rose to a record high, reviving worries of a persistent glut due to weak demand. |
| U.S. Treasury chief says considering more direct payments in next coronavirus aid billU.S. Treasury Secretary Steven Mnuchin said on Wednesday he would seriously consider more direct payments to individuals in the next phase of coronavirus rescue legislation, adding that funds should also be targeted to help sectors struggling to reopen, including hospitality and tourism. |
| Fiat, PSA $50 billion merger faces lengthy EU antitrust probe: sourcesFiat Chrysler and Peugeot maker PSA face a lengthy EU antitrust investigation after they declined to offer concessions in a bid to allay EU antitrust concerns about their planned $50 billion merger, people familiar with the matter said on Wednesday. |
| Dollar sinks to three-month lows as Fed keeps easing policyThe dollar extended losses, dropping to a fresh three-month low against a basket of major currencies on Wednesday after the Federal Reserve made no policy changes, as expected, and pledged to continue its asset purchases aimed at stabilizing a U.S. economy that has been ravaged by the novel coronavirus. |
| U.S. inflation subdued with the economy in recessionU.S. consumer prices fell for a third straight month in May and underlying inflation was weak as demand for goods and services remained subdued amid a recession caused by the COVID-19 pandemic. |
| “Chaos Is Coming” – Bullion, Bonds, & Big-Tech Bid As Dollar & Dow Dumped“Chaos Is Coming” – Bullion, Bonds, & Big-Tech Bid As Dollar & Dow Dumped Tyler Durden Wed, 06/10/2020 – 16:01 Hugh Hendry warned that “Chaos is coming”…
And, by many measures, it’s already here – as these two muppet-mutilating stocks show… |
| Powell: Fed Will Never Hold Back Support For The Economy Even If Asset Prices Are Too HighPowell: Fed Will Never Hold Back Support For The Economy Even If Asset Prices Are Too High Tyler Durden Wed, 06/10/2020 – 15:56 In recent days there was speculation whether Powell would acknowledge frothy investor mentality as observed by the daily insanity on Robin Hood and other daytrading platforms, resulting from the massive surge in central bank liquidity resulting in a 40% spike in stocks, and whether it would prompt the Fed to at least concede that it is in the process of blowing another bubble. As a reminder, just yesterday SMBC Nikko analyst Masao Muraki said that “soaring risk asset prices (ie imbalances) have reached a point where the Fed may be forced into some kind of action.” Alas, whereas this question did come up during the FOMC press conference, here is what Powell did say: “We’re not focused on moving asset prices in a particular direction at all, it’s just we want markets to be working and partly as a result of what we’ve done, they are working.” He also said that “we are not looking to achieve a particular level for any asset price, instead, œwe want the markets to be working” and that’s what Fed policy has been working toward as part of its effort to lift the economy. His conclusion, however, was om … |
| 4 States Already Showing Signs Of Nascent Second Wave: Live Updates4 States Already Showing Signs Of Nascent Second Wave: Live Updates Tyler Durden Wed, 06/10/2020 – 15:50 Summary: BBG warns 4 states show signs of second wave Mumbai surpasses case total from Wuhan as Indian outbreak worsens Bangladesh, Jakarta reports record jump in new cases Germany expands warning on international travel to non-European countries 9 states see COVID hospitalizations hit record highs National guardsmen deployed in Washington DC test positive AP weighs in on WHO’s latest flip-flop Gottlieb warns Texas on the brink of losing control of the outbreak Greater New York area continues to bend the curve * * * Update (1540ET): Following in the footsteps of a Washington Post report we cited earlier, Bloomberg has just published a report highlighting the disturbing rise in new cases in some states. BBG noted that experts believed the rise in new cases in four states, including California, suggest an incipient ‘second wave’ has already emerged.
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| Seattle Protesters Storm City Hall After Running Cops Out Of Precinct, Establishing “Autonomous Zone”Seattle Protesters Storm City Hall After Running Cops Out Of Precinct, Establishing “Autonomous Zone” Tyler Durden Wed, 06/10/2020 – 15:48 Update (1140ET): Protesters broke into Seattle City Hall Tuesday night to demand the resignation of Mayor Jenny Durkan.
The protesters were aided by Seattle Councilwoman Kshama Sawant, who was seen alongside the protesters inside City Hall, according to Fox News. |
| The techies who got caught in the wrong site at the wrong hourThe techies who got caught in the wrong site at the wrong hourMany from India’s IT majors who had travelled to client locations on business and work visas, got stranded. |
| Equality takes a body blow in Covid’s wakeEquality takes a body blow in Covid’s wakeBeing one of the most unequal countries in the world, India remains in a particularly precarious position. |
| Make no mistake. In Pak, generals are backMake no mistake. In Pak, generals are backIn some ways, this is nothing new. Yet it’s a far cry from the “New Pakistan” Khan promised when he took power. |
| 10 June 2020 FOMC Meeting Statement: Participants See Economy Contracting 6.5% in 2020Written by Steven Hansen The Federal Reserve’s meeting statement included no rate change (as it is already at zero, and their projections are indicating no change in the federal funds rate for the next 3 years), and included the following comment that policy actions to date has been successful:
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| Red Robin Gourmet Burgers cut 55 menu items due to coronavirus and doesn’t plan to bring them backRed Robin has uncovered a number of benefits to having a more streamlined menu, and plans to hang on to it, with the exception of a pizza addition. |
| Outside the Box: Financial incentives have given us ever more aggressive policing ” if we want real change, we must change those incentivesFollow the money. |
| Market Snapshot: Stocks trade lower after Fed says its holding interest rates near zero through 2022 and keeping up bond buyingU.S. stocks zigzagged lower Wednesday afternoon, following the a policy update from the Federal Reserve in which the central bank vowed to hold rates unchanged at near zero for the next two years, while continuing its bond-buying program. |
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