1) Speculation abounds over what the next stimulus package will have, such as extended income support for the unemployed and underemployed. New temporary subsidies for low wage workers. Cheap loans for small and medium size businesses with additional support for state and local governments. Cost estimates for a second stimulus program range from one to two trillion dollars. But like the first stimulus package, no one is offering ideas how this money will be paid off, especially if economic expansion doesn’t materialize.
2) The worlds fastest super computer is now Japan’s Fugaku supercomputer developed by Riken and Fujitsu with backing from the Japanese government. It has a speed of roughly 415.53 petaflops, which is 2.8 times faster than the US Summit supercomputers at 148.6 petaflops. The Fugaku was under development for six years and will start full time operation by April 2021, although it has been pressed into service in the coronavirus crisis, running simulations on how droplets would spread in office spaces with partitions. Previously, the fastest supercomputers have belong to America and China.
3) The sales of existing homes has dropped in May, a result of the coronavirus impact on the economy. The sales of existing homes in May fell 9.7% compared with April, which makes for an annual decline of 26.6%. This is the largest decline since 1982 when interest rates were 18%. There remains a shortage of housing which is helping to uplift the market, and therefore the economy as soon as the crisis has subsided.
4) Stock market closings for – 22 JUN 20:
Dow 26,024.96 up 153.50 Nasdaq 10,056.48 up 110.35 S&P 500 3,117.86 up 20.12
1) Sales of homes in the U.S. have dropped their biggest drop in nearly 10 years, because of the coronavirus crisis in April. The upending of the labor market and the broader economy has undercut demand for housing. Sales of existing homes have plunged 17.8% with existing home sales making up about 90% of U.S. home sales. In addition, April showed a record collapse in homebuilding and permits. With unemployment up past 38 million people and still climbing, it’s expected the home sale market will remain depressed for long after the pandemic crisis is over. The problem is further exasperated by a four month inventory of homes where a six to seven month supply is considered a healthy balance between supply and demand.
2) More contraction of consumerism with more retailers announcing closing of stores. The retailers Victoria’s Secret and Bath & Body Works will be permanently closing about 300 stores in America and Canada. With the young people of America having fewer good job opportunities and less disposable income, the hyper-consumerism economy born in the seventies is finding it harder to sustain itself, raising questions of what economic model might replace the present one . . . and what the job future would be for the young.
3) Companies have been borrowing at a rampant pace to shore up their liquidity during the pandemic. The wireless carrier AT&T is joining in with a new bond sale of $12.5 billion dollars of unsecured bonds in five parts. The intent is to take advantage of a global rally in credit to refinance their outstanding debt. Their 40 year security has a yield 250 basic points over the Treasuries. In the last few years, AT&T has been reducing its debt of nearly $200 billion dollars now down to $164 billion dollars, most of the debt coming from its acquisitions of Time Warner Inc and DirectTV.
4) Stock market closings for – 22 MAY 20:
Dow 24,465.16 down 8.96 Nasdaq 9,324.59 up 39.71 S&P 500 2,955.45 up 6.94
1 ) Ford Motor Company announces a 10% reduction in its work force by eliminating 7,000 jobs world wide. These jobs are salaried white-collar jobs, which are part of a major restructuring to eliminate bureaucracy and increase the number of workers reporting to each manager. Technologies allow large corporations to streamline their management staff and thereby reduce their staff.
2) The U.S. home sales fell unexpectedly in April with persistent weakness in lower-priced housing market. This market segment had been experiencing an acute shortage of properties. Economist had been forecasting a 2.7% rise in home sales, but the existing home sales dropped 4.4% from last year, making this the 14th straight year-on-year decrease in home sales. Existing home sales make up about 90% of U.S. home sales.
3) The United States Postal Service has started a two week test of commercialized autonomous vehicle technology to carry the mail cross country via robot driven semi-trucks. The test run is between Phoenix and Dallas with five round trips, each 2,100 long. Each test truck will have a safety driver on guard and an engineer. The test vehicles will travel the interstates through Arizona, New Mexico and Texas. To drive the same route would require multiple human truck drivers.
4) 21 MAY 19 Stock market closings:
Dow 25,877.33 up 197.43 Nasdaq 7,785.72 up 83.35 S&P 500 2,864.36 up 24.13