“The process of intelligently building a portfolio consists of buying the best investments, making room for them by selling lesser ones, and staying clear of the worst.” – Howard Marks

1. The Fed Says it is Going to Start Buying Individual Corporate Bonds — as part of a continuing effort to support market functioning and ease credit conditions, the Fed added functions to its Secondary Market Corporate Credit Facility. The program has the ability to buy up to $750 billion worth of corporate credit. Its March 23 initial announcement is largely considered a watershed moment for the financial markets, reeling from the coronavirus threat spread. Under the latest guidelines, the Fed said it will buy, on the secondary market, individual bonds that have remaining maturities of five years or less. Those purchases will go along with the ETFs the Fed already has been buying, which are balanced toward investment-grade indexes but also include some junk bond funds that track debt which had been investment grade before the crisis but had been downgraded after.
2. Beijing Shuts Schools to Stem Virus as Cases Spread Beyond City — the Chinese capital on Tuesday lifted its emergency response to level two and said that people will have to be tested for the virus before being allowed to leave the city. The stakes are higher in Beijing, where the country’s business and political elite reside, and an aggressive lockdown risks undoing China’s economic re-opening and nascent moves to restart travel with other countries. Beijing on Tuesday closed another food market located near the financial district after a case linked to the original cluster was discovered. Eleven other food markets have been shuttered and almost 300 others sanitized, while nearly 30 housing compounds have been put under lockdown, local officials said.
3. Retail Sales Surges 17.7% in May — The 17.7% advance from the prior month, to $485 billion in receipts, was the biggest gain in data going back to 1992, following unprecedented declines in the prior two months, according to Commerce Department data. All retail categories increased in May, including a 44% surge in sales of motor vehicles and a 29% jump in restaurant receipts. Together, those categories accounted for more than half the overall gain in sales. Among other categories, sales at clothing stores nearly tripled in May from a month earlier, while purchases at building materials outlets climbed about 11% and non-store sales, which consist mainly of Internet purchases, rose another 9%.
4. Tulsa Prepares for Unrest as Protesters March Nationwide — Tulsa officials prepared Friday for up to 100,000 anti-police protesters and Trump supporters to descend on the city, by boarding up stores and setting up metal fences around the BOK Center where President Trump will hold a rally Saturday. Trump declares “Any protesters, anarchists, agitators, looters or low-lifes who are going to Oklahoma please understand, you will not be treated like you have been in New York, Seattle, or Minneapolis. It will be a much different scene!” he wrote on Twitter Friday morning.

The week ahead — Economic data from Econoday.com:

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