28 July 2020

1) Economist are warning that the economy needs help now to avoid faltering. As the President and Congress struggle to create another economic aid package, evidence is growing that the U.S. economy is headed for trouble, especially if the government doesn’t take steps to support hiring and economic growth. Experts say the economy is in a pretty fragile state again and needs another shot in the arm. Unemployment is still at a high 11.1% and hiring seems to be slowing in July, so the economy is likely to weaken further. Few economist consider that the recovery will be a V-shaped path, that is, the sharp recession will be followed by a quick rebound. In addition to helping the millions of unemployed Americans, the governments needs to help businesses from going bust.

2) There are five trends which indicate the U.S. economy is not rebounding as hope. The first is ‘Direction Requests’ on smart phones for walking and driving directions, have gone flat over the last few weeks indicating people are staying at home. The second is ‘Restaurant Bookings’ which show a 60% drop from last year. Third trend is ‘Hotel Occupancy’ which has stagnated with occupancy at 47%. ‘Air Travel’ was slowly increasing, but has also stagnated this last month with air travel down 70% from last year. Finally, ‘Home Purchases’ is increasing at a slow rate, a reflection of peoples uncertainty and changing employment status of potential buyers.

3) Price of gold continues to climb, as investors seek the safety of the yellow metal amidst economic fears of the future. Gold has historically been a refuge for money in times of economic uncertainty, a panic investment. Bullion has climbed to a record high of $1,946 per ounce. The real interest rates (less inflation) is driving investors to gold, as well as the tumbling dollar. Silver bullion is also increasing in price as another safe heaven for investing.

4) Stock market closings for – 27 JUL 20:

Dow 26,584.77 up 114.88
Nasdaq 10,536.27 up 173.09
S&P 500 3,239.41 up 23.78

10 Year Yield: up at 0.61%

Oil: up at $41.66

22 April 2020

1) Many retailers have closed their stores because of the COVID-19 outbreak. Analysts think that over the coming years, many of these stores will remain closed for good. Analysts forecast that 100,000 stores will close by fiscal 2025, the hardest hit will be the apparel retailers accounting for 24,000 closures. Most retail categories will be impacted, with consumer electronics to see about 12,000 closures, while home furnishings and grocery retailers will each have about 11,000 closures. The most insulated retailers are those that have fared best during the pandemic, including Walmart, Target and Costco Wholesale. Home Depot and Lowe’s, plus dollar stores such as Dollar General and off-price retailers like Ross Stores and TJ Maxx are also well-positioned to survive. The once powerful department stores, which were the shopping meccas that anchored malls and main streets, are now considered in their death throes with very few expected to survive.

2) As oil futures continue to slide down, the extra oil is being stored in giant ocean supertankers as oil traders scramble to find places to keep their product. There is now 160 million barrels of oil which is being stored on tankers, a record amount. The previous record was 100 million barrels during the 2009 financial crisis. A large portion of this oil is stored in about 60 super tankers called very large crude carriers (VLCC) which can hold up to 2 million barrels each. Every conceivable place to store oil is being explored, while also the U.S. government is replenishing its strategic reserves stored in old underground oil fields.

3) The Bank of America is expecting gold prices to rise to $3,000 an ounce amid the deepening world economy, which is more than 50% above the existing price record. Much of this is driven by fears that the Federal government is just printing money for the trillions of dollars being spent to counter the stopped economy because of the coronavirus. The feeling being that the ‘feds can’t print gold’ and so it will hold its value. Historically, gold has been a ‘panic investment’, a safe heaven for hard economic times, a hedge against money dropping in value.

4) Stock market closings for – 21 APR 20:

Dow 23,018.88 down 631.56
Nasdaq 8,263.23 down 297.50
S&P 500 2,736.56 down 86.60

10 Year Yield: down at 0.57%

Oil: up at $13.12