1) A second virus shock wave is already hitting China’s factories as European factories are delaying orders and asking for delays in payments as the coronavirus sweeps across Europe closing their factories. These are cutting off orders to Chinese factories just as they were beginning to come back to life, a double hammer blow to China’s economy. Estimated April to May sales are expected to be down as much as 40% from last year. This is raising grave doubts about the world’s second largest economy being able to repair damage and return to its pre-virus station.
2) The Index of Consumer Sentiment dropped to 89.1 in March, the lowest level since October 2016, a three year low. It is the fourth largest in nearly 50 years. Further declines is dependent on the success of curtailing the spread of the virus and how soon households receive funds from the government stimulus. To date, there are 540,000 cases of coronavirus with America overtaking China and Italy with the most cases having a total of 85,000.
3) The Department of Justice is investigating the credit scoring firm FICO for possible antitrust violations. There are three other major credit companies: Equifax, Experian and TransUnion. FICO is the only scoring model accredited by mortgage loan companies Fannie Mae and Freddie Mac. The DOJ investigation comes after TransUnion’s antitrust countercase against FICO. The lenders determine which credit scoring system is utilized on a loan application, not the consumer or loan applicant.
4) Stock market closings for – 27 MAR 20:
Dow 21,636.78 down 915.39 Nasdaq 7,502.38 down 295.16 S&P 500 2,541.47 down 88.60
Over 3.3 million Americans have claimed unemployment benefits because of the coronavirus, the U.S. Labor Dept has indicated this past week. The virus has taken a toll on businesses, income wages and society’s everyday way of living.
These numbers reflect a growing number of Americans who are currently unemployed and are seeking financial relief; because of what the COVID-19 virus has done to their working wages. Many people have insisted that the impact has burdened them into massive financial debt.
It also has to be noted, that the United States has now surpassed all other countries with the most infected individuals who have tested positive for COVID-19. Over 85,000 people in the USA have the coronavirus, as presented by data by John Hopkins University on March 26, 2020 (US infections 85,840).SB
Sources: US Labor Dept; John Hopkins University Covid-19 Data
1) President Trump has proposed easing restrictions after the 15 day shutdown ends next week, to restart the devastated U.S. economy. But many states protest this as too soon, that the spread of the coronavirus will just resume with the efforts thus far wasted. The apex of the outbreak could still be 14 to 21 days away. So far, more than 42,000 Americans have contracted COVID-19 with about 620 having died. The World Health Organization warned that the United States could possible become the next epicenter of the pandemic. The virus has shuttered thousands of businesses, throwing millions out of work with state governors ordering about 100 million people (one third of the nation’s population) to stay at home. Economic activity has ground to a halt in major cities.
2) First economic data coming in shows the U.S. is now in a recession, with the biggest economic slump on record for March. Various metrics and indexes of economic activity show the same thing, as the economies (both U.S. and global) grind to a halt. Some consider that once the ‘shelter in place’ and ‘none essential business close’ orders are lifted, that world business will just spring back into action as if nothing had happened. But many economist consider the recession will just deepen with jobs already being slashed at a pace not witnessed since the 2009 global financial crisis. Small businesses don’t have the cash to weather even a short shutdown, and many will fail, which in turn will drag other larger businesses down too.
3) Due to the coronavirus, the revenues for the US Postal Service has drastically dropped off leaving the service short of cash needed for operations. There are warnings in Congress that the USPS may have to cease operations in June, forcing layoffs of thousands of postal employees. The service will require massive infusion of government funds to ensure continual operations necessary for American society. Additionally, postal workers are also falling victim to the infection with 13 already reported sick.
4) Stock market closings for – 24 MAR 20: The Dow had its single largest point gain in a single day.
Dow 20,704.91 up 2112.98 Nasdaq 7,417.86 up 557.18 S&P 500 2,447.33 up 209.93
1) The International Monetary Fund stated the global recession caused by the coronavirus pandemic could be worse than the global financial crisis of 2008-9. However, the world economic output should recover in 2021 because of the extraordinary fiscal actions already being taken by many countries and their central banks. But for a 2021 recovery, countries need to prioritize containment and strengthen health systems.
2) The U.S. is entering a recession, but the ultimate fear is a protracted malaise akin to a depression. Some prominent economy watchers are drawing comparisons to the Great Depression, although falling short of forecasting another one, based on the fact that the world has not seen a synchronized interruption in economic output in decades as was seen with the Great Depression. The U.S. will suffer a huge economic contraction as businesses close and Americans stay home, with some estimates that the economy will have the worst quarter since 1947.
3) Most U.S. small businesses have only days to stay afloat amid the coronavirus crisis. Only about half of the 30 million small businesses in America have a 15 day cash reserve needed to survive. The shelter in place orders have cut business revenues to near zero almost over night. Particularly hard hit is the service industries such as restaurants, landscaping, personal services and salons. These small businesses employ about 60 million people, or half of American’s work force. Many of the businesses were already operating on razor thin margins before the virus crisis. With so little cash reserves, they are forced to immediately reduce hours or layoff employees to survive.
4) Stock market closings for – 23 MAR 20:
Dow 18,591.93 down 582.05 Nasdaq 6,860.67 down 18.84 S&P 500 2,237.40 down 67.52
1) Today, more coronavirus concerns have surfaced that most airlines will go bankrupt soon without government bailouts. The virus has shut global aviation down because of virus outbreaks as well as travel restrictions that are intended to contain the virus. Within weeks, many airlines will need government help to avoid bankruptcy. Major U.S. airlines are seeking $50 billion dollars in financial assistance because of the steep falloff in U.S. travel demand. Estimates are for $25 billion dollars in grants, $25 billion dollars in loans and significant tax relief to survive.
2) Monday markets opened with another sharp downfall of all three major markets despite the Federal Reserve embarking on a massive monetary stimulus campaign to curb the slowing economic growth from the coronavirus. Shortly after opening, trading was halted for fifteen minutes from a ‘circuit breaker’ triggered by the S & P 500. The U.S. central bank has launched a massive $700 billion dollar quantitative easing program designed to help cushion the economic downside from the virus. The Dow was down 11% while both the Nasdaq and S & P fell more than 10%.
3) As fears grow of a world economic downturn, which will put economic stress on the U.S. economy, people are becoming concerned about their jobs. American workers may lose their jobs by the millions as the effects of the virus ripple through the financial system, the impact being devastating. The disease has spread rapidly around the world with whole nations shutting down as well as major cities. It’s unknown just what the impact will be for the world economy, when major economic areas isolate themselves from the system, even for a few weeks. Many segments of the economy are reporting significant problems which can lead to further problems across the U.S. and world economy. All this translates into layoffs, at a time when the young people of America have limited opportunities.
4) Stock market closings for – 19 MAR 20:
Dow 20,087.19 up 88.27 Nasdaq 7,150.58 up 160.73 S&P 500 2,409.39 up 11.29
1) Fully 70% of the American economy is consumer spending. Even through wages and incomes have been stagnant for many households, the consumer has continued to spend. It is not new investment by corporations, tax cuts or big new federal spending programs that stimulate the economy, but rather it’s consumer spending. However, fears of the coronavirus is dampening that spending by curtailing business trips, personal travel, sports and other outings. With the interest rate near zero, the major tool used to combat a recession is now impotent.
2) The collapse of the long standing deal between Saudi Arabia and Russia, to limit oil production, fell through this weekend sending oil prices crashing from oil supplies surplus. The coronavirus has caused China to limit economic activity and therefore reduced China’s oil consumption leading to further oil surpluses. China’s purchase of oil is down 20%. The low oil prices has made the world economy very unstable and therefore volatile. For America, independent oil companies have gone deeply into debt to pay for the shale oil extraction process, who are now threaten by low oil prices making it impossible to pay that debt. Failure of these oil companies could ripple through the American economy to pull other segments down.
3) Airlines across the world continue to sink deeper into crisis from the worsening coronavirus epidemic reducing the number of passengers, who are foregoing travel fearing the virus. The situation is made worst by not being able to predict how long the crisis will likely last and therefore unable to make accommodating plans. The lockdown of Italy has further aggravated world air travel, especially with the interruption of tourism just as the tourist season would be ramping up.
4) Stock market closings for – 10 MAR 20
Dow 25,018.16 up 1,167.14 Nasdaq 8,344.25 up 393.577
1) Many on Wall Street are betting the Federal Reserve Bank will again reduce the cost of borrowing in light of the coronavirus economic threat. Futures contract traders consider there is nearly a 60% chance of a rate cut this March, when the Feds meet, in an effort to counter the effects of the virus on America’s economy. While it appears the spread of the pathogen is declining in China, elsewhere in the world it’s on the rise.
2) Oil prices continue its downward spiral with a twelve month low for U.S. crude. The drop in oil prices is in anticipation of slowing of the U.S. and world economies, a direct result of the spreading coronavirus threat. China, a major world importer of oil, has cut back purchases as it containment policies reduces oil consumption from limited travel to and from major cities, as well as travel within those cities.
3) The home food delivery business continues to grow with DoorDash filing the paperwork with the SEC (Security and Exchange Commission) to start the IPO (Initial Public Offering) process to offer stock to the public. The IPO process has met with poor results from unprofitable companies like Lyft Inc. and Uber Technologies Inc. while WeWork was forced to abandon its IPO last year because of a poor showing of its stock. DoorDash faces the same challenges as Lyft and Uber..
4) Stock market closings for – 27 FEB 20: This is the worst point decline ever for the three markets. The Dow has dropped 3,000 points since Monday.
Dow 25,766.64 down 1190.95
Nasdaq 8,566.48 down 414.30
S&P 500 2,978.76 down 137.63
#TheCastPodcast last episode of the 2019 year. Your hosts Sammy BE @EcoFireTV, Luisa L @LuisaModels & Jon “Da Don” Sterling @TheDramaBlock, closed 2019 very strong of course; 2020 will be way stronger.
The crew wrapped up the greatest moments in 2019, as well as accommodating outstanding guests, who dropped gems and jewels about their $$$$money moves$$$, in their respective businesses plus MORE FUN…. 2020 we R just getting started…. 2020 Let’s Go Get Em’……..
1) As the coronavirus continues the slowing of China’s economy, coupled with a general slow down in world economies, world oil prices are dropping. China is the world’s largest oil importer, with speculation that if oil continues to drop, America can expect a drop in gasoline prices, possibly going below $2 a gallon.
2) The credit card company Visa is planning major changes to the rates U.S. merchants pay to accept its cards. These changes are the biggest changes in a decade, with Visa hoping to encourage people to abandon checks and cash. Higher rates are coming for transactions on e-commerce sites, while certain retailers such as real estate and education will see lower rates. Retailers have long complained about the $100 billion plus dollars they spend each year to accept electronic payments.
3) Ford Motor Co. has posted a fourth quarter loss and provided weaker than expected 2020 forecast due to continued higher warranty cost, lower vehicle volumes, lower results from Ford Credit branch, and higher investment in future transportation. This is coming at a time when Ford and other automakers are making huge investments in producing a line of electric cars and trucks. For the fourth quarter, Ford is reporting a net loss of $1.7 billion dollars, or 42 cents a share. Revenue for the fourth quarter was down 5% to $39.7 billion dollars.
4) Stock market closings for – 4 FEB 20:
Dow 28,807.63 up 407.82 Nasdaq 9,467.97 up 194.57 S&P 500 3,297.59 up 48.67