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David Becker

US stocks tumbled on Wednesday led by a decline in REITs. The new quarter provided the backdrop of non-paid rents that will be the focus of malls and real-estate owners across the United States. US data was mixed, with ADP announcing that 27K jobs were lost in March but the ISM reported a better than expected manufacturing report. High yields bonds tumbled lower and yields moved higher as risk-off continued. Oil executives are planning to make their way to Washington at the end of the week to determine how they will handle falling oil prices. All sectors in the S&P 500 index were lower, with REITs and Cyclicals underperforming, consumer staples were the best performers in a down tape.

US Employment Drops

US companies cut payrolls by 27,000 in early March before the worst of the coronavirus-induced economic situation according to ADP. Actual losses for the month were far worse as indicated by the millions of people who already have filed unemployment claims. Wednesday’s report covers the period through March 12. Just 6% of companies indicated they are hiring. Economists surveyed had forecast a loss of 125,000 jobs. The March ADP number comes after a February gain of 179,000, revised lower from the initially reported 183,000.

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US Manufacturing Drops

U.S. manufacturing activity contracted in March as the coronavirus outbreak continues to spread. The ISM manufacturing index fell to 49.1 last month from 50.1 in February. The activity was driven down by a steep decline in new orders and production.

EU PMI Data is softer than Expected

Eurozone final PMI reading fell to 44.5 versus  44.6 expected and 44.8 flash reading.  Germany worsened from the flash readings to 45.4, while France improved to 43.2.  Spain and Italy both fell sharply from February to 45.7 and 40.3, respectively.  UK manufacturing PMI was also reported.  It fell slightly to 47.8 versus 47.0 expected and 48.0 flash reading.

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