3 April 2020

1) Unemployment claims have jumped twice the previous week’s numbers, with 6.6 million Americans filing for benefits. This brings the last two weeks total of new unemployed to 10 million. The speed and scale of job losses are unprecedented. The record for loses in a month had been 695,000 in 1982. The coronavirus has wiped out more jobs in two weeks than were lost in the worst months of the last recession. Companies based on white-collar workers, have been able to keep their people working with work at home, but as revenues dry up, it’s questionable how long before they too will be forced to start layoffs. The growing number of laid off workers unable to pay their bills could well lead to a cascade of further layoffs and business failures.

2) While the price of oil has always had an effect on the equities, the recent plunged has had a more profound effect and therefore causing the roller-coaster volatility of the markets. This dramatized how very central oil is to the entire modern world. Stabilizing the oil prices would greatly help stabilizing the markets, and therefore the whole world economic system. Central to this is for Russia and Saudi Arabia to end their price war and resume limiting production. But central to this is Russia’s desire to damage American domestic oil production by destroying the shale oil companies, which would reduced American’s influence in the world especially in the middle east where Russia is very active.

3) Already wracked by fiscal problems from decline of the milk product markets, dairymen now suffer a further decrease in their market as a result of the coronavirus crisis. This is a result of restaurants, schools and other food service outlets reduced to stopping operations and therefore not needing milk products. The dairy industry is still producing, but doesn’t have anyplace to sell their milk, so the industry is asking the government to increase its purchases of dry milk, butter and cheese.

4) Stock market closings for – 2 APR 20:

Dow 21,413.44 up 469.93
Nasdaq 7,487.31 up 126.73
S&P 500 2,526.90 up 56.40

10 Year Yield: down at 0.63%

Oil: up at $24.90

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