Jan 31, 2019

EU FX I Currencies: Dollar drops to 2-week low vs yen on change in Fed outlook

Jim Cramer




GP: Canadian Polymer Bills
francisLM | iStock | Getty Images
The dollar fell against most major currencies on Thursday, dropping to a two-week low versus the yen, pressured by the Federal Reserve’s cautious U.S. economic outlook suggesting the central bank is near the end of its tightening cycle.
The Fed’s dovish stance in Wednesday’s policy statement took the market by surprise even though it has preached patience and balance sheet flexibility for some time.
Analysts said the statement felt like the Fed did a turnaround from its previous generally upbeat stance.
Over the last two months, the dollar index, which tracks the currency versus six major rivals, has fallen around 2.0 percent, on track for its worst two-month performance in a year.
The Fed said it would be patient in raising interest rates further this year as it pointed to growing uncertainty about the U.S. economic outlook. But it did not rule out using a range of tools, including altering the size and composition of its balance sheet, as well as rate cuts, if the economy warranted it.
“The Fed meeting had to be the definition of an about-face,” said Mazen Issa, senior FX strategist at TD Securities in New York. “At the very least, the shift in stance augurs for continued U.S. softness.”
He expects the dollar’s downward path to be “more of a grind”, rather than an “impulsive shift lower.”
TD Securities has now changed its Fed forecast, Issa said. It expects the Fed to hike just one more time, instead of twice, and this would be the last for this cycle.
This afternoon, the dollar fell 0.14 percent against the yen to 108.87 after earlier falling to a two-week low of 108.51.
The greenback also fell 0.04 percent against the Swiss franc, to 0.9945 franc, and was down 0.31 percent against the euro, which traded at $1.1441.
The dollar index, meanwhile, was up .25 percent at 95.58, recovering from a three-week low.
Data showing that the number of Americans filing for unemployment benefits surged to near a 1-1/2-year high last week weighed on the dollar as well. But the numbers may have been skewed by the five-week shutdown of the federal government that has since ended. U.S. new home sales were upbeat, rising nearly 17 percent in November, but that did not impact the dollar.
Cautious words from the Fed sent perceived risk-oriented currencies such as the Australian dollar and the New Zealand dollar rallying against the greenback. The Canadian dollar also benefited from a 15 percent rally in oil prices, with Canada a major exporter.

Source: CNBC

Bond Yields Closing Report: Treasury yields fall further after Fed vows 'patience' in monetary policy

Thomas Franck



U.S. government debt yields fell further Thursday, a day after the Federal Reserve promised “patience” in making future monetary policy decisions.
The yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 2.658 percent, while the yield on the 30-year Treasury bond was also lower at 3.017 percent. The 2-year note yield fell 5 basis points to 2.492 percent, still above the yield on the 5-year note at 2.468 percent.
The moves in trade come after the Federal Reserve adopted a more cautious tone in the previous session. The U.S. central bank said it would be “patient ” with further interest rate hikes, signalling a potential end to its tightening cycle amid signs of a possible economic downturn.
The Fed also removed reference to “further gradual increases” to the federal funds rate in its statement and held its benchmark rate steady, a signal some market participants took to mean that it may slow the pace of interest rate increases in 2019.
In a separate release, FOMC members also mentioned the reduction to the central bank’s balance sheet. The committee issued a separate three-paragraph statement noting that “it is appropriate at this time to provide additional information regarding its plans to implement monetary policy over the long run.” Fed Chair Jerome Powell is hosting a press conference from Washington, D.C.

U.S. Markets Overview: Treasurys chart

TICKERCOMPANYYIELDCHANGE%CHANGE
US 3-MOU.S. 3 Month Treasury2.397-0.020.00
US 1-YRU.S. 1 Year Treasury2.552-0.0320.00
US 2-YRU.S. 2 Year Treasury2.466-0.060.00
US 5-YRU.S. 5 Year Treasury2.442-0.0630.00
US 10-YRU.S. 10 Year Treasury2.635-0.060.00
US 30-YRU.S. 30 Year Treasury3.002-0.0520.00
The number of Americans filing applications for unemployment benefits climbed to near a 1-1/2-year high last week, kindling early concerns that the labor market could be decelerating.
Initial claims for state unemployment benefits jumped 53,000 to a seasonally adjusted 253,000 for the week ended Jan. 26, the highest level since September 2017, the Labor Department said on Thursday. The rise was also the largest since September 2017.
— CNBC’s Sam Meredith contributed reporting.

Source: CNBC

Wall Street Closing Report: S&P 500 rises on strong earnings, closing out the best January since 1987

Fred Imbert



Stocks rose to close out their best January in three decades as strong earnings and a Federal Reserve indicating it will pause rate hikes caused investors to rush back into the market following a vicious December sell-off.
The gain on Thursday was driven by better-than-expected earnings from a range of companies, including Facebook and General Electric. The S&P 500 gained nearly 1 percent and the Nasdaq Composite outperformed, rising 1.6 percent. The Dow Jones Industrial Average traded slightly lower.
Shares of Facebook surged 12.9 percent after the company’s quarterly results easily topped expectations. GE shares jumped 15.3 percent on stronger-than-forecast revenue. These results come during the busiest week of the corporate earnings season. When the week is over, more than 100 S&P 500 companies will have reported. So far, about 70 percent of the companies that have reported have beaten expectations.
A trader works on the floor of the New York Stock Exchange (NYSE).
Bryan R. Smith | AFP | Getty Images
The S&P 500 retreated slightly from its intraday high after President Donald Trump told reporters he wants a big trade deal with China but it’s possible that a comprehensive agreement will not hatched by March 1.
Thursday’s gains put the S&P 500 on track for its best January performance since 1987, having risen 8 percent this month. The broad index is also on pace for its biggest monthly gain since October 2015.
“We’re close to fair value,” said Dave Lafferty, chief market strategist at Natixis Investment Managers. “It feels like a lot of this was a pop from fairly oversold levels in the fourth quarter. The market sort of ran away with itself to the downside and it’s come back.”
Last month, the S&P 500 fell 9.18 percent and briefly dipped into bear-market territory on an intraday basis on Christmas Eve. Since Dec. 24, however, stocks have been on a tear, with the S&P 500 rising about 15 percent.
The market is now “thinking about what is the next catalyst,” Lafferty of Natixis said. “It doesn’t feel, to me, like this pop in January is the beginning of a big new move. It feels like it was just a rebound from oversold levels.”
Big Wednesday pop
The rise Thursday follows a rally from Wednesday, sparked by the Federal Reserve’s latest monetary policy statement. The Fed said it will be “patient” with raising rates moving forward. The Fed also addressed the balance sheet, which had been a concern for investors, in a separate statement. The Fed said it “is prepared to adjust any of the details for completing balance sheet normalization in light of economic and financial developments.”
“Markets are rebounding and some recession fears are fading. Central banks have blinked, moderating their hawkish stance,” Alberto Gallo, head of macro strategies at Algebris Investments, wrote in a note. “If we look at monetary policy today, there are relatively low risks that the Fed may turn aggressively hawkish, ending the cycle prematurely.”
Investors also monitored ongoing U.S.-China trade negotiations. Two sources told CNBC that U.S. and Chinese officials are talking about arranging a meeting between Presidents Donald Trump and Xi Jinping for late February.
Not everyone participated in Thursday’s rise, however. Microsoft fell 1.5 percent after the company reported weaker-than-expected revenue and earnings that barely beat expectations. The tech giant also issued quarterly earnings guidance that was lower than expected. DowDuPont, another Dow member, fell 7.5 percent on the back of mixed quarterly results. Tesla shares dipped 0.8 percent on the back of weaker-than-expected earnings. The company also said its CFO was leaving his post.
Spriha Srivastava contributed to this report.

Source: CNBC

NFA adopts Interpretive Notice entitled NFA Compliance Rule 2-9: CPO Internal Controls System

News & Notices | NFA



2019
Notice I-19-03
January 31, 2019
NFA adopts Interpretive Notice entitled NFA Compliance Rule 2-9: CPO Internal Controls System
NFA recently adopted an Interpretive Notice entitled NFA Compliance Rule 2-9: CPO Internal Controls System (Interpretive Notice). The Interpretive Notice requires commodity pool operator (CPO) Members, which have the ability to control customer funds, to implement an internal controls framework designed to:
  • Protect customer funds; and
  • Provide reasonable assurance that the books and records of a CPO's commodity pools are accurate and reliable and that the CPO is in compliance with all CFTC and NFA requirements.
The Interpretive Notice will become effective on April 1, 2019.
In order to demonstrate an adequate internal controls system, the Interpretive Notice also requires CPO Members to have a strong control environment, which includes adopting and implementing written policies and procedures that are reasonably designed to ensure that the CPO's operations are in compliance with applicable NFA rules and CFTC regulations. The Interpretive Notice further requires CPO Members to have written policies and procedures that fully explain the CPO's internal controls system and maintain records that support the implementation and effectiveness of its internal controls system.
Although a CPO's internal controls system will vary according to the size and complexity of its operations, an adequate internal controls system must include certain key components:
  • Separation of duties, when possible, to ensure that no single employee is in a position to carry out or conceal errors or fraud or have control over any two phases of a transaction or operation; and
  • Completion of a risk assessment to identify the CPO's most critical risks with development and implementation of controls that address those risks.
The Interpretive Notice acknowledges that the risks identified during the risk assessment will vary among CPOs, but identifies three risk areas that are generally applicable to most CPOs' businesses—pool subscriptions, redemptions and transfers; risk management and investment and valuation of pool funds; and use of administrators. The Interpretive Notice also provides guidance on appropriate control activities for each of these three areas.
NFA will provide Member education on these requirements prior to the effective date in order to ensure Members understand their obligations. As part of this Member education, NFA will discuss and answer Member questions on the Interpretive Notice during its upcoming Member workshops in Chicago on February 25 and New York on February 27.
More information on the Interpretive Notice is available in the December 10, 2018 submission letter to the CFTC. If you have any questions regarding these amendments, please contact Patricia Cushing, Director, Compliance (pcushing@nfa.futures.org or 312-781-1403) or Dale Spoljaric, Managing Director, Compliance (dspoljaric@nfa.futures.org or 312-781-7415).

Will Fed’s Dovish Shift Support Gold?

6-8 minutes



arkadiusz-sieron
Big win for the doves! And for gold, as it jumped above $1,320 amid the soft FOMC statement. What’s next?

Committee Will Be Patient

Yesterday, the FOMC published the monetary policy statement from its latest meeting that took place on January 29-30th. In line with the expectations, the US central bank unanimously kept the federal funds rate unchanged at the target range of 2.25 to 2.50 percent (the Fed also kept other interest rates unchanged and reaffirmed its “Statement of Longer-Run Goals and Monetary Policy Strategy”):
In support of these goals [maximum unemployment and price stability], the Committee decided to maintain the target range for the federal funds rate at 2-1/4 to 2-1/2 percent.
The pause in hiking was not the only change in the statement from the December version. First, the assessment of the economic activity was revised downward a bit. It was described as rising at a ‘solid’ rate, while one month earlier it was a ‘strong’ rate. The next two changes are much more important. The FOMC dropped its pledge of “further gradual” rate hikes. In December statement, one could find the following sentence:
The Committee judges that some further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective over the medium term.
Now, it’s gone. Instead, the FOMC included a sentence in which it announced being patient:
In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes.
That decisions seem to be incomprehensible given “generally strong U.S. macroeconomic performance”, as Powell put it. However, the problem is that the Fed has seen some cross-currents and conflicting signals about the outlook, mainly the slowdown in economic growth in China and Europe, unresolved trade tensions or uncertainty about Brexit. Hence, the growing evidence of cross-currents pushed the Fed to become more patient awaiting greater clarity.
The wait-and-see approach is not only about the risk-management. Another justification is the weakened case for raising the interest rates due to the lack of inflationary pressures and receded risks of financial imbalances:
In addition, the case for raising rates has weakened somewhat. The traditional case for rate increases is to protect the economy from risks that arise when rates are too low for too long, particularly the risk of too-high inflation. Over the past few months, that risk appears to have diminished.

And What About Balance Sheet Normalization?

The Fed also released a statement on the balance sheet normalization. It indicated it’s willingness to adjust the size of its balance-sheet runoff, although it was supposed to work on an autopilot:
The Committee is prepared to adjust any of the details for completing balance sheet normalization in light of economic and financial developments.
Moreover, the Fed announced that it would continue to use administered rates to control the policy rate, with an ample supply of reserves. It means that, as we explained it to our Readers a long time ago, the normalization of the size of the portfolio will be completed sooner, and with a larger balance sheet, than in previous estimates.

Implications for Gold

To sum up, the FOMC was dovish both on the interest rate policy and the balance sheet policy. Although Powell denied that there is a “Powell put”, he said everything what the markets wanted to hear. Or, even more, as the FOMC statements and Chair’s press conference were actually more dovish than expected. In consequence, the stock markets went up, while the U.S. dollar declined against the euro or the Japanese yen (see the chart below).
Chart 1: USD/JPY exchange rate from January 29 to January 31, 2019.
USD/JPY exchange rate from January 29 to January 31, 2019
So, the price of gold jumped above $1,300 in the response to the dovish signals from the Fed, as one can see in the chart below.
Chart 2: Gold prices from January 29 to January 31, 2019.
Gold prices from January 29 to January 31, 2019
Will it be just a temporary spike or will we see a continuation of the rally? Well, it’s never easy to say, but the addition to the FOMC statement the part about being patient implies that the Fed will not hike interest rates in the next few months at least. It means that the greenback will not be supported by the Fed’s tightening. With weaker US dollar, gold has more room to go up.
To be clear: the interest rate hike are still possible in 2019, when the uncertainty clears a bit and all these cross-currents calm. However, a big dovish shift in the Fed’s stance should support the yellow metal for some time (and unless investors, now with Powell’s put at hand, shift into riskier assets).
If you enjoyed the above analysis, we invite you to check out our other services. We provide detailed fundamental analyses of the gold market in our monthly Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. If you’re not ready to subscribe yet and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!
Disclaimer: Please note that the aim of the above analysis is to discuss the likely long-term impact of the featured phenomenon on the price of gold and this analysis does not indicate (nor does it aim to do so) whether gold is likely to move higher or lower in the short- or medium term. In order to determine the latter, many additional factors need to be considered (i.e. sentiment, chart patterns, cycles, indicators, ratios, self-similar patterns and more) and we are taking them into account (and discussing the short- and medium-term outlook) in our trading alerts.
Thank you.
Arkadiusz Sieron, Ph.D.
Sunshine Profits‘ Gold News Monitor and Market Overview Editor
Back

Source: Sunshine Profits

CMI Gold & Silver I Metals: Spot Prices as of the Close of Trading in New York.

Spot Prices as of the  close of trading in New York
 
Thursday, January 31, 2019
 
 
 
GOLD
 
TODAY
 
$1,319.70
CHANGE
 
+$10.60
WEEK AGO
 
$1,278.80
MONTH AGO
 
$1,280.10
YEAR AGO
 
$1,357.65
SILVER
 
TODAY
 
$16.05
CHANGE
 
+$0.14
WEEK AGO
 
$15.28
MONTH AGO
 
$15.50
YEAR AGO
 
$17.51
PLATINUM
 
TODAY
 
$826.00
CHANGE
 
+$7.00
WEEK AGO
 
$800.50
MONTH AGO
 
$795.80
YEAR AGO
 
$1,015.40
PALLADIUM
 
TODAY
 
$1,342.50
CHANGE
 
-$17.00
WEEK AGO
 
$1,324.00
MONTH AGO
 
$1,270.35
YEAR AGO
 
$1,107.45
GOLD/SILVER RATIO
 
82.22

Source: CMI Gold & Silver

Crude Oil Closing Report: Oil prices give up gains, but US crude still headed for big January jump

Tom DiChristopher




Reusable Oil Texas
Oil pumpjacks in the Permian Basin oil field are getting to work as crude oil prices gain.
Spencer Platt | Getty Images
Oil prices turned sharply lower on Thursday, though U.S. crude remained on track to break a three-month losing streak.
Crude futures have powered through a steady flow of weak economic data from China, the world's second biggest oil consumer. The energy complex has been boosted by OPEC-led production cuts aimed at draining oversupply and U.S. sanctions on Venezuela, which threaten to disrupt global trade flows and bolster prices.
U.S. West Texas Intermediate crude prices were last down 40 cents at $53.83 a barrel, after hitting a fresh two-month high at $55.37. WTI is heading for a roughly 18.5 percent gain.
Brent crude, the international benchmark for oil prices, rose 24 cents to $61.89 a barrel around 1:47 p.m. Brent is currently up about 15 percent in January, for its best monthly gain since April 2016.

Despite the strong monthly performance, both benchmarks remain in bear market territory, with WTI down about 30 percent from its 52-week high in October. The crude price collapsed to roughly 18-month lows in the final quarter of 2018 on growing oversupply, weak demand signals and technical trading.
At the end of the January rally, the oil market is on the cusp of another leg higher, according to Craig Erlam, senior market analyst at brokerage OANDA.
"A break through $55 in WTI and $65 in Brent would be a very bullish signal for these and could be the catalyst for more significant upside, with oil having stabilised over the last few weeks following the post-Christmas bounce," Erlam wrote in a briefing.
The latest bullish catalysts came on Wednesday, when U.S. government data showed U.S. gasoline stockpiles fell by 2.2 million barrels after eight straight weeks of increases. U.S. crude inventories rose by less than 1 million barrels after a series of large builds.
Oil prices later extended gains after the Federal Reserve said it will be "patient" in raising U.S. interest rates, bolstering the stock market and pushing down the U.S. dollar. Crude is sold in dollars, so a weaker greenback makes the commodity more affordable to holders of other currencies.
Crude is also drawing support from new U.S. sanctions on Venezuela's state-owned oil firm PDVSA. The penalties announced this week are aimed at regime change.
About half of Venezuela's roughly 1 million barrels per day in exports go to U.S. refineries. The sanctions are forcing Venezuela to find new offtakers, primarily in India and China, and prompting American refiners to substitute the barrels.
The U.S. is also sanctioning Iranian oil exports, raising concerns about supplies of medium, heavy and sour crude grades used to produce products like diesel and jet fuel.
At the same time, Saudi shipments to the United States have been falling, as OPEC and 10 other nations including Russia aim to keep 1.2 million bpd off the market.
Earlier this week, Saudi Energy Minister Khalid al-Falih said the kingdom will target output at 10.1 million bpd, down from its January goal and below its quota under the so-called OPEC+ deal. Saudi Arabia is the world's top exporter and is making the deepest production cuts.
A move higher for oil may now depend on the U.S., where output is consistently hitting new records each month and now stands around 12 million bpd, said Mike Kelly, head of exploration and production research at Seaport Global.
"The accounts that we talk to say that, really, to want to get involved in oil, I have to see the world's swing producer — which is now us here in the U.S., the shale guys — they have to temper their growth a little bit," he told CNBC's Futures Now on Wednesday.
Forecasts from the Department of Energy show growth from several major shale oil regions slowing at the start of the year. January also saw the biggest reduction in rigs operating in U.S. oil fields since April 2016, according to Reuters analysis.
A shortage of pipelines needed to carry oil from the wellhead to refineries and export terminals is creating bottlenecks in the Permian Basin, the nation's top shale region. Drillers are also under pressure to generate positive cash flow and return value to shareholders.
"We can't grow at 2 million barrels a day year-over-year here in the U.S. if demand is growing at potentially half of that," Kelly said. "We are seeing this nice move now where investors are holding these oil companies' feet to the flames."
The ongoing U.S.-China trade dispute is still hanging over the market and threatens to exacerbate a slowdown in Chinese growth that could dent fuel demand. Negotiators from the two countries are meeting in Washington ahead of a March deadline to prevent higher tariffs on hundreds of billions in goods.

Source: CNBC

Metals Price Closing Report: Gold hits 9-month peak on Fed rate freeze; eyes monthly gain

Marilyn Haigh




Reusable: Gold bullion bars and coins 030109
Gold bullion bars and coins.
Getty Images
Gold rose on Thursday to its highest in nine months, after the U.S. Federal Reserve pulled the reins on monetary tightening, weakening the dollar and keeping bullion on track for its fourth straight monthly gain.
Spot gold was up 0.08 percent to $1,320.58 per ounce at 12:33 p.m. ET. Its session high was $1,326.30, the highest since April 26.
Spot gold has gained more than 3 percent so far this month.
U.S. gold futures rose 0.74 percent to $1,325.30.
“The ongoing trend in precious metals markets continues. The much more dovish-than-expected Fed stance continues to support commodity prices across the board, weaken the dollar and support the precious metals complex as well,” said David Meger, director of metals trading at High Ridge Futures.
The dollar also modestly extended losses after data showed the number of Americans filing for unemployment benefits rose to a 1-1/2-year high, feeding concerns of an economic slowdown.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, have climbed 4.6 percent this month, the biggest monthly gain since September 2017.
On Wednesday, the Fed offered no alterations to its interest rate outlook, conceding quivers in the country’s “macroeconomic performance.” It said its balance sheet would remain larger than anticipated.
Analysts said market players see a much slimmer chance of a rate hike, while the U.S. Treasury yield curve now portends possible Fed rate cuts. Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
“The market now sees about a one-in-four chance of a 2019 Fed rate hike, while the curve is pointing to a small chance of a cut occurring as early as 2020,” INTL FCStone analyst Edward Meir said in a note.
While the news propelled world stocks to their biggest January gains on record, risks to the global economy remain, with market participants focused on trade talks between the United States and China.
Investors worry Washington’s criminal charges against Chinese company Huawei and its chief financial officer could hurt the talks.
If the sides cannot reach a deal, Washington has threatened to more than double tariffs on Chinese goods on March 2.
Global demand for gold rose 4 percent last year, as central bank purchases surged to their highest levels since 1967, the World Gold Council said.
Palladium fell 0.37 percent to $1,356, while platinum rose 0.25 percent to $817.
Silver fell 0.09 percent to 16.05 having hit its highest since July 2018, at $16.19, during the session.

Source: CNBC

FXTM Trading Schedule for Lunar New Year 2019

2 minutes



Due to the upcoming public holiday in Hong Kong (Lunar New Year), FXTM’s trading schedule will change from 5 February to 7 February.
Please refer to the table below for the schedule of all the instruments that are subject to changes.
Instrument04.02.201905.02.201906.02.201907.02.2019
ForexNormal TradingNormal TradingNormal TradingNormal Trading
Cryptocurrencies
Available under FT Global Limited
Normal TradingNormal TradingNormal TradingNormal Trading
US SharesNormal TradingNormal TradingNormal TradingNormal Trading
Spot MetalsNormal TradingNormal TradingNormal TradingNormal Trading
Spot CommoditiesNormal TradingNormal TradingNormal TradingNormal Trading
Spot IndicesNormal TradingNormal TradingNormal TradingNormal Trading
Spot Indices (HSI50)*Closing at 06:00*Closed*Closed*Closed
*All hours are provided in EET (Eastern European Time) – Server Time in MT4.
Please note that in the event of decreased liquidity in the market, FXTM may switch trading on low-liquidity instruments to “Close Only” or can close all trading on these instruments.
Additionally, in the event of low liquidity, spreads might significantly increase from their normal average level.
If you have any questions or concerns about these changes, please don’t hesitate to contact FXTM’s dedicated customer support team.
Still not trading with FXTM? Register Today!

Source: Forex Time

Polar vortex death toll rises as record-shattering Arctic blast keeps the Midwest in a deep freeze

By Katie Mettler,




Amy B Wang
General assignment reporter covering national and breaking news

Angela Fritz
Extreme weather, natural disasters, climate change

Alex Horton
General assignment reporter covering national and breaking news
MADISON, Wis. — Millions of people across the Midwest are enduring a freeze normally reserved for the Arctic Circle as temperatures dropped to nearly 50 degrees below zero Wednesday. The frightful cold, bottoming out to record lows Thursday, was blamed for several deaths across the region, and fears grew for the most vulnerable populations.
In Mt. Carroll, Ill., a trained weather observer reported that temperatures plunged to minus-38 degrees Thursday morning, according to the National Weather Service. If certified, it would be the state’s lowest temperature on record, supplanting a minus-36 degree day in Congerville on Jan. 5, 1999.
The frigid temperatures across the Midwest taxed the infrastructure that was keeping the coldest parts of America warm. Electrical grids collapsed, airline gas lines froze, and authorities encouraged the largely home-bound population of the hardest-hit states to turn thermostats down to ease the burden on utility systems. Even that wasn’t always enough. Power outages roiled swaths of Wisconsin and Iowa, plunging thousands into a brief, unheated darkness.
The dry, frigid air caused frostbite within minutes, led to spontaneous nosebleeds and turned even a brief foray outdoors into a potentially deadly activity. Officials across multiple states have linked at least six deaths to the weather, including several people who may have frozen to death in Milwaukee, Detroit and Rochester, Minn. Authorities said a reported death in Peoria, Ill., may have also been weather-related.
University of Iowa officials said an “unresponsive” student had been discovered behind an academic hall and later died at the hospital. Authorities haven’t released a cause of death, but police told a local TV station they believe the extreme weather was a factor; the Press Citizen reported that the air temperature at the time the student was found was minus-22, with a wind chill of minus-51.
Classes at the university were canceled from Tuesday evening through midday Thursday because of the weather. “We urge students, faculty, and staff to use good judgment and avoid serious risks during these extreme weather conditions,” the school said in a campus alert.
Governors in Wisconsin and Michigan declared states of emergency and ordered all state government offices closed; some state agencies in Illinois were closed, as well.
“I am urging people to prepare for this severe weather and to exercise caution when traveling or going outdoors,” Wisconsin Gov. Tony Evers said.
Cotton, Minn., had a record low of minus-56 on Thursday. Thermometers in Moline, Ill., dropped to minus-33, five degrees lower than the old record of minus-28, set in 1996. Rockford, Ill., hit minus-30 degrees at 6:45 a.m. Central time, which broke the old record of minus-27 set on Jan. 20, 1982.
The capitol building in Madison, where people sought shelter during business hours, remained open as the temperatures outside plunged to minus-24; the estimated wind chill made it feel like minus-48 degrees.

A harbor light is covered with snow and ice on Lake Michigan in Chicago. (Nam Y. Huh/AP)
It was colder than Alaska’s North Slope in many places. Norris Camp, Minn., where temperatures dropped to minus-48 degrees Wednesday, with the wind chill pegged at minus-65, was the coldest reporting location in the United States as of Wednesday evening and one of the coldest spots on Earth.
Even Hell, Mich., froze over: The community outside of Ann Arbor was expected to see temperatures drop to minus-26 overnight into Thursday. The nearby University of Michigan took the rare step of canceling classes through Thursday.
From Minnesota to Michigan, the polar vortex prompted school closures, mail service interruptions and thousands of flight cancellations, most of them in and out of Chicago. Scores of restaurants, grocery stores and coffee shops shuttered for the day or shortened business hours. In Chicago, “Disney on Ice” and the musical “Hamilton” were among many performances to go dark; in this weather, the show could not go on.
For the region’s most vulnerable — even those hardened to the Upper Midwest’s long winters — this polar vortex has been especially perilous.
Karen Andro, director of Hope’s Home Ministries at First United Methodist Church in Madison, has spent much of the past few days coordinating with other nonprofits and government agencies to arrange transportation, hot meals and warming centers for the city’s homeless residents. She reflected on past winters, when one person froze to death on the steps of a church and another had a heart attack walking between shelters, and said that services here have improved.
“The cold exacerbates everything,” Andro said, noting that homeless people with mental illness, disabilities and health problems are at extreme risk.
Early Wednesday morning, there remained a small but dangerous gap in service. An hour before sunrise, dozens of men, bundled up and carrying their belongings in grocery bags and suitcases, ventured into the frigid morning air. It was minus-24 degrees, and winds made it feel like minus-48.
“They should take a bus and pull it right here,” said Randy George Friesen, 66, who carried two bags six blocks from the auxiliary shelter where he slept Tuesday night to the headquarters of Porchlight, an organization that assists homeless people. The man’s glasses were frosted over, his snow white beard was frozen and he had used scarves to tie a blue blanket around his wide shoulders.
Friesen said he didn’t understand why there wasn’t a shuttle between the two warm buildings.
“That will never happen,” said Murrel Swift, 48, who also made the journey between shelters. Tiny white crystals had accumulated on his thick eyelashes.

Murrel Swift in downtown Madison, Wis. (Lauren Justice for The Washington Post)
Inside the shelter, night manager Maurice Robinson was rattled. One guest had attacked another with a bike lock, prompting the police, fire department and EMS to descend upon Porchlight. On nights like Tuesday, when the temperature is life-threatening, the city’s shelters do not turn away anyone — even if an individual has been previously banned for bad behavior or intoxication.
Porchlight was more crowded than usual, and Robinson had to place people on mats along a hallway wall. At least eight men streamed in hours after the scheduled check-in time — at 1:09 a.m., 2:22 a.m., 2:37 a.m.
“The cold brings a lot of people in,” Robinson said.
Even some Midwestern homes were not cold-proofed refuges for hardened residents.
Brian Wallheimer, a science writer for Purdue University, corralled his three young children at home in Rockford, Ill., after schools closed their doors Wednesday. The freezing air infiltrated his two-story home northwest of Chicago, he said, and frost has accumulated on the window sills and door hinges.
“I’ve never seen that happen,” Wallheimer, 39, said, as his children — 9, 6 and 4 years old — hatched plans to build a blanket fort in the basement.
In addition to grade school and university closures throughout the Midwest, districts and colleges from Pittsburgh to Buffalo also canceled classes because of extreme weather.
Wind chill estimates plummeted to minus-50 in the Dakotas and northern Minnesota on Wednesday. The Arctic air will loosen its grip on the Midwest by Thursday afternoon; temperatures might even approach zero degrees in Chicago and Milwaukee. By the weekend, daytime temperatures will be above freezing across most of the Midwest.
As Chicago neared record lows ahead of the expected thaw, the Chicago area’s Metra commuter rail suspended some train service after extreme temperatures caused wiring problems. Some Chicago Transit Authority buses were being turned into mobile warming shelters for the homeless, the Associated Press reported, while Lyft said it would offer free rides to warming centers in the city, as well as in the Twin Cities, Madison, Milwaukee and Detroit.
In Rochester, Minn., where temperatures dropped to minus-27 degrees Wednesday, all municipal transit services were suspended after buses began experiencing mechanical difficulties. Xcel Energy asked Minnesota customers to lower their thermostats to 63 degrees until Thursday morning, “if possible,” to help “ensure that all of our customers continue to have gas service during this bitterly cold weather.”
Michigan Gov. Gretchen Whitmer made a similar request Wednesday night, urging Michiganders in the Lower Peninsula to turn their thermostats down to 65 degrees or lower until Friday at noon, citing “extremely high demand for natural gas and a facility incident.”

A snowplow clears West Washington Avenue in Madison, Wis. (Lauren Justice for The Washington Post)
As many as 13,500 customers experienced power outages in Wisconsin and Iowa by midday Wednesday, according to utility company outage maps. Workers scrambled to restore electricity in a race to keep homes and businesses warm in the dangerous cold.
Most outages were resolved in a matter of hours.
About 900 We Energies customers were without power for about an hour and a half on Wednesday afternoon in West Allis, Wis., after neighbors on a residential street heard a transformer bang and saw a spark immediately before the lights went out.
They closed their curtains to keep cold air from leaking in around window panes and opened cabinet doors to prevent pipes from freezing.
“I was amazed how fast they got it back,” said Dan Bark, whose house sits diagonally across from the damaged power lines. “We were trying to figure out contingency plans.”
He pondered taking his family and cats to his mother’s home nearby. Bark has a generator, but it was in the garage — and frozen. He conceded that was not ideal, but he also had never seen the temperatures dip quite so low.
“This is the coldest it’s ever been,” Bark said.
Wang, Fritz, Horton and Wootson reported from Washington.
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