Good evening everyone. 2020 has been a year where you think you’ve achieved peak crazy and then the next day is even more nuts.
Today will be remembered as an historic one in markets. Crude oil for May delivery traded negative. It settled today at -$37.63. That means it would cost you almost $38 to sell one barrel of oil. (You read that right)
There is so much oil that has been removed from the ground while demand has decreased so much that you have to pay to sell.
This is absurd, of course. We will try to explain more below and also hit you with some good links.
Tomorrow, maybe flying monkeys will steal your dog Toto.
Stocks closed lower with the S&P 500 falling 1.79% to start the new week in the red zone. The Dow was worse and the Nasdaq was a little better.
Fear reared its mug as the VIX had its biggest one day jump since March 16. It gained 14.7% to close above 40.
Energy was not the worst sector as you might expect given crude’s spiral, although it did fall more than 3%. Real Estate and Utilities were worse. No sectors closed green.
$IBM reported earnings after the close and trades lower but not much as we type (See more below).
Don’t forget, $NFLX $SNAP $CMG report earnings tomorrow after the close.
Oil Gone Buck Wild
Today, the May contract for West Texas crude settled at negative $37.63.
There is so much oil above ground that we have run out of room to store it.
The May contract is about to expire and if you are long at expiration, you must be prepared to take delivery of the physical oil. Contract holders who have no place to hold physical oil are trapped and must pay to sell.
This is next level crazy even for 2020.
The June contract settled at $20.43 this afternoon which means traders, at least for now, are less worried about settlement a month from now.
The May contract expires on the 2:30 PM ET close tomorrow afternoon so we could see even more pressure on the price tomorrow morning.
Funds will blow up on this, there is zero doubt, and there will be great books written about it.
In the interim, here’s Bloomberg with one of the best explainers we’ve seen for those of you who want more of the detes. And here’s why maybe it’s not that bad via CNBC
Here’s a great chart shared by allstarcharts, it’s a long term Tesla vs Crude Oil Ratio. Gnarly.
The Incredible Growth of Zoom
Zoom has reached 100 million monthly active users faster than Instagram or Fortnite. Remarkable growth and execution during COVID-19.
The chart and commentary below comes from Mary Meeker of Bond Capital who published an in-depth coronavirus trends report.
Here’s the full Bond Cap Coronavirus Trends Report.
IBM reported earnings after the close today. The numbers were:
EPS $1.84 vs $1.80 est.
Revenue: $17.57B -3.5% Y/Y
$IBM ▼ 1% after-hours. Here’s more via CNBC.
MJ at NYSE
Happy 420, Everyone.
Here’s a meme we made in honor of the 420 Holiday.
While you celebrate, check out this great rock climbing documentary set in Yosemite National Park.
Be sure to know when your stocks are reporting. Here’s the full earnings calendar.
Links that Don’t Suck
The True Story of What Happened When A Plane Loaded with 6,000 Pounds of Pot Crashed in Yosemite
We still don’t know the full impacts of the BP oil spill, 10 years later
Germany Breaks Solar Power Record as Smog Clears From Skies
The Coronavirus in America: The Year Ahead
Why People Return to the Sports That Nearly Killed Them
The Market Rant w/ Joe Fahmy and Tom Canfield