13 August 2020

1) Another national retail outlet, Stein Mart, is going the way of the brick and mortar retail system announcing they are closing all their stores in bankruptcy amid Covid-19 pandemic. Based in Jacksonville, Florida the company operates 281 stores in 30 states with 9,000 employees. Stein Mart ‘going out of business’ sale is expected to begin in August 14 or 15 with complete liquidation of inventory, with the anticipation of all stores closed by the fourth quarter of 2020. The retailer joins a long list of businesses to file for bankruptcy protection amid the coronavirus crisis.

2) With all the money being pumped into the economy by the government, there were fears of fueling inflation. Those fears were increased with the July consumer price data showing that prices are indeed on the rise. But some are saying these price increases are a result of supply and demand dynamics from the pandemic, and will fall once the supply system becomes stable with production reaching equilibrium again. It’s just a matter of time.

3) Amid suspicion of a rigged election by authoritarian leader Alexander Lukashenko, Germany and Lithuania is calling for renewed sanctions on Belarus. Claiming a landslide victory in his presidential election, Lukashenko has cracked down on protesters and demonstrators. The EU (European Union) has call an extraordinary meeting of foreign ministers to discuss the situation, considering the election was neither free nor fair, and efforts to suppress demonstrations as unacceptable. The EU is considering reinstating sanctions. The protest have been violent with about 1,000 people arrested to add to the 5,000 already being held, and injuries to both protesters and police.

4) Stock market closings for – 12 AUG 20:

Dow 27,976.84 up 289.93
Nasdaq 11,012.24 up 229.42
S&P 500 3,380.35 up 46.66

10 Year Yield: up at 0.67%

Oil: up at $42.56 +0.01

15 June 2020

1) The Independent Restaurant Coalition estimates that 85% of the independent restaurants may go bust by the end of 2020. The independent restaurants comprise 70% of all the restaurants in America. These restaurants rely more heavily on dine-in revenue, which the franchise chains don’t because of their drive up and take out business is well established, while also having a corporate safety net or support system to fall back on. It will be a long time before dine-in revenue returns to pre-pandemic levels because independents depend on densely packed dinning rooms to generate sufficient revenue to meet expenses, something that social distancing prevents. Most owners just don’t have the cash reserves to survive.

2) J.C. Penny stores will begin their ‘going out of business’ sales having just received bankruptcy court approval to begin liquidation sales at those stores closing permanently. There are 242 stores closing leaving about 600 stores to continue. Sales could start as early as this weekend. J.C. Penny is the largest company to file for Chapter 11 bankruptcy since the pandemic started. Penny faces a crucial deadline of 15 July for a business plan, which without one, the company is expected to pursue a sale instead, which could mean total liquidation.

3) Some are proposing negative interest rates for U.S. bonds as some European countries are doing. The rational for negative interest rates is they spur economic growth, which is controversial among economist with evidence that it really works being mixed. Lowering interest rates encourages businesses and individuals to invest and spend more, which helps the economy grow. The doubts about negative interest rates is companies and individuals would rather hold cash which cost nothing rather than pay to park their money in the bank. This encourages the money to be loan out rather than be parked, which often means riskier loans. While there are studies made of how effective negative interest rates are, so far the results are mixed.

4) Stock market closings for – 12 JUN 20:

Dow 25,605.54 up 477.37
Nasdaq 9,588.81 up 96.08
S&P 500 3,041.31 up 39.21

10 Year Yield: up at 0.70%

Oil: up at $36.56

20 May 2020

1) Just three months after filing for bankruptcy, the Pier 1 retail chain is closing down all its retail store outlets as soon as possible. This drastic action is blamed on store closure from the pandemic and failure to find a buyer. After modeling several options for remaining in business, they found liquidation was the best option to maximize Pier 1’s assets. Plans are to sell its remaining inventory, website and intellectual property. Once a large seller of home goods, the company has suffered severely from online retailers such as Amazon and Wayfair, while big box stores such as Target and Walmart have increased their marketing of home goods products. The fifty-eight year old retailer joins several other big name store chains now in bankruptcy, in what appears to be a fundamental change in consumerism.

2) The damage to employment continues to spread, starting with 1 million public sector workers possibly losing their jobs. All governments are seeing a drop in revenue from businesses being shut down because of the coronavirus. With limited money- cities, counties and states are facing layoffs of their workers until things improve. Restaurants have loss 417,000 jobs to closure. The low wage workers account for 86% of job losses, while over two hundred hospitals have laid off staff because of elective procedures being suspended to accommodate Covid-19 patients, because hospitals have experienced cash crunches.

3) The ride sharing service Uber has had steep revenue losses from the pandemic shutdown, and so announced another 3,000 layoffs to bring their total layoffs to 6,700 or 25% of its workforce. It’s anticipated this action will save the company more than $1 billion dollars annually. Additionally, the company is reorganizing into transportation (Uber Works) and food delivery (Uber Eats).

4) Stock market closings for – 19 MAY 20:

Dow 24,206.86 down 390.51
Nasdaq 9,185.10 down 49.72
S&P 500 2,922.94 down 30.97

10 Year Yield: down at 0.71%

Oil: down at $31.86

3 July 2019

1) The U.S. economy has entered its 121st month of economic growth setting a new record. Some experts are saying the real economic recovery may only be in its infancy. It’s just this last year that the gross domestic product caught up with estimates of its potential. Periods when GDP exceed potential are when workers typically enjoy the greatest wage gains. There are concerns of a changing environment with global trade disputes and other risks slowing down the economy.

2) Another daily newspaper has announce it is closing down, in what this year has been a rash of daily newspaper closing as well as massive layoffs. The Vindicator of Youngstown Ohio, which just celebrated its 150th anniversary, will cease publication the end of August, with 144 people losing their jobs. Virtually all daily newspapers have had deep cuts in staff these last couple of years, giving credence to the prediction that all the daily newspapers in America will be gone in ten years, displaced by newer mass media technologies.

3) The Payless ShoeSource is going out of business, closing all of its 2,500 retail stores. Once the largest and most successful family owned business in the country, the chain is succumbing to competition from big-box stores and on-line retailers. Founded in the 1960s, its demise could be the largest retail liquidation in history. Payless strategy uses customer self help allowing a minimal labor force of one manager and a couple of cashiers.

4) Stock market closings for- 2 JUL 19:

Dow               26,556.14    up    19.32
Nasdaq            7,958.05    up    45.06
S&P 500           2,926.73    up    12.95

10 Year Yield:    down   at    1.98%

Oil:    up   at    $56.66