New estimates say the U.S. deficit will total at least $3.7T in calendar year 2020 and an additional $3T in 2021, financed by the sale of Treasuries, largely to the Federal Reserve. If the economy shrinks this year, the fiscal deficit relative to the size of the economy could even approach 15% to 20% (those numbers haven't been seen since WWII). On top of all those deficits, President Trump on Tuesday called for a new infrastructure spending bill worth $2T, while the Fed launched a temporary lending facility allowing foreign central banks to convert their Treasury holdings to dollars. (SA)
Only one stock in the Dow Jones Industrial Average rose during the first quarter and it was only up by a penny. While Microsoft said it didn't expect to reach its quarterly revenue target for the business segment that includes Windows - due to coronavirus interruptions - it also said demand was solid and benefited from high usage of cloud services. Hardest hit on the DJIA was Boeing which saw losses of 54%, as well as energy plays Exxon Mobil and Chevron, and financial names JPMorgan and Goldman Sachs. (Refinitiv)
Today marks the end of the agreed production limits by OPEC and its allies. Saudi Arabia has boosted output to more than 12 million barrels a day, while other major producers such as Iraq also plan increases. Russia, however does not intend to ramp up production, according to a government official. The moves come as the oil market faces something close to a wipeout in demand, meaning the next month could be a game-changer for the industry. In trading this morning, a barrel of West Texas Intermediate for May delivery held close to $20 a barrel. (Bloomberg)
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.