29 July 2020

1) The fast food mega-giant McDonald’s is reporting a bigger than expected drop in global restaurant sales across the world. This is a result of the pandemic restricting sales of their drive thru and delivery operations, and in some cases shutting restaurants down completely. With second quarter sales down by 30%, McDonald’s is facing a bumpy and expensive recovery. The franchise chain has 39,000 restaurants worldwide, of which 96% are now open, verses 75% at the start of the second quarter. Store sales were down 39% in April but by June was down only 12%. Net income is down by 68% for $483.8 million dollars. McDonald’s is permanently closing 200 locations in the U.S. amid those losses, more than half located in Walmart stores.

2) The Federal Reserve has announced that its lending programs will be extended until the end of the year. This indicates the feds don’t think the U.S. economy is weathering the pandemic storm very well and needs continued help. The program lends to small and medium sized businesses and was due to expire at the end of September. Continuing the program will provide a critical backstop to help the economy recover. This Thursday will bring the first look at the second quarter gross domestic product, which is the broadest measure of the economy, but it’s expected to show an ailing economy.

3) For the second time, the renowned gun maker Remington Arms is filing for bankruptcy. This is the second time in two years that Remington has filed for Chapter 11 bankruptcy protection. Chronic low sales is blamed for Remington’s decline, despite the overall increase in sales of guns in America because of the pandemic. One by one, American gun manufactures have succumb to imports. Remington reports assets of $100 million dollars compared to $500 million dollars in liabilities.

4) Stock market closings for – 28 JUL 20:

Dow 26,379.28 down 205.49
Nasdaq 10,402.09 down 134.17
S&P 500 3,218.44 down 20.97

10 Year Yield: down at 0.58%

Oil: down at $41.07

24 July 2020

1) The parent company of Ann Taylor and Lane Bryant clothing chains, the Ascena Retail Group Inc., will close more than half its stores, a total of more than 1,000 stores. The troubled retailer was struggling like many other retailers to remain afloat, but the Covid-19 crisis tipped the scales into bankruptcy. Ascena has about 40,000 employees and there’s the expectation of cutting its 2,800 stores down to just 1,200 with significant losses of jobs. The chapter 11 will erase about $1 billion dollars in debt from its $12.5 billion dollars of liabilities, which includes $1.6 billion dollars of funded debt. Retailers have been among the hardest hit by Covid-19 lockdowns coupled with online shopping, which drained revenues and pushed so many retailers into bankruptcy.

2) Almost 16,000 restaurants have closed permanently from the Covid-19 pandemic, an indication of just how deeply the virus has affected the food industry, especially the restaurants. So far, about 60% of the restaurant closures have been permanent, with the number increasing with time. Restaurants now surpass the retail industry in the highest total business closures since the start of the pandemic. Bars and the night life industry has met the same fate, with 5,454 total business closures of which 2,429 are considered permanent closures, or 44% lost.

3) There is mounting evidence that America’s fragile economic recovery is faltering even as the pandemic seems to be leveling out. Reservations for restaurants are waning, air traffic is leveling off and foot traffic at stores is dwindling again. With rising infections in California, Texas and Florida, there is a growing sense that the recovery is fading. Small businesses have suffered the worst, having limited cash reserves and ability to obtain loans, and therefore are failing at record numbers. To compound the problem, there is weaker spending by consumers. Hopes for a real recovery depend more and more on an effective vaccine being created and available. Until there is one, there appears little hope that the economic will make any real lasting progress towards recovery.

4) Stock market closings for – 23 JUL 20:

Dow 26,652.33 down 353.51
Nasdaq 10,461.42 down 244.71
S&P 500 3,235.66 down 40.36

10 Year Yield: down at 0.58%

Oil: down at $41.21

Wealth Being Sustained In Hidden Shell Corporations

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By: Economic & Finance Report

Wealthy people have used shell corporations and trusts to establish purchases of property in the U.S. and around the world. Shell corporations allow individuals to protect their identities and avoid tax encumbrances.

Wealthy individuals utilize these safe havens for the availability to secure their identities and their earnings.  This is not a new trend to say the least but it is increasing,  as more people attain assets and diversify their financial portfolios.-SB