1) It’s not just American businesses who are feeling the effects of the Covid-19 crisis from reduced sales, American charities are also suffering a major drop in revenues for the same reason. With the recession straining household budgets, people are less able to contribute resulting in charities losing billions of dollars since this spring. Furthermore, traditional money raising methods such a concerts, festivals and galas have been canceled or scaled back to a fraction of their previous size. Many charities are now working to make the holiday season productive to make up shortfalls in revenue.
2) The repressiveness of the Hong Kong police was further exposed when police chased down and tackled a 12 year old girl in a shopping mall. Video footage of several police officers pinning the hapless girl down on the floor went viral worldwide with a public outcry over the excess use of force against political dissenters. The incident touched off angry shouts from onlookers. The police tactics are being criticized as an indiscriminate treatment of children who are not taking part in protest. The girl complained she felt targeted because of her age, that being young has become a crime in Hong Kong, further increasing concerns that the regime is targeting their young for repression.
3) The markets continue their decline after a five week winning streak as investors begin to worry about stretched valuations. The decline is being lead by the technology stocks, which has met a heavy decline for the tech-heavy Nasdaq. Remarks by President Donald Trump to decouple the U.S. economy from China further added to the market’s jitters. The high flying technology company Tesla has suffered it worst one day loss since March with an 18% drop in the price of its stock.
4) Stock market closings for – 8 SEP 20:
Dow 27,500.89 down 632.42 Nasdaq 10,847.69 down 465.44 S&P 500 3,331.84 down 95.12
1) Five American companies make up 24% of the S&P 500 Index, the big high tech companies Apple, Amazon, Microsoft, Facebook and Alphabet. These five companies made up 17% of the index at the start of the year. This makes a significant part of American net worth and security for retirement dependent on just a handful of stocks, which makes some financial advisers nervous having their eggs in too few baskets. One hiccup in the technology sector could mean major losses across the board.
2) Another shooting of a young black man Monday in South Los Angeles has sparked more protest that could lead to more city rioting. The man was stopped for violating vehicle codes, but then ran, with the police in hot pursuit. When police caught up with him, he punched one policeman in the face at which time a semiautomatic pistol dropped out causing both policemen to open fired. Since the victim didn’t have the weapon in hand, nor was it ever pointed at either police officers, so there are questions about the shooting. So far, protests have been peaceful.
3) The U.S. Justice Department is investigating the protest leaders and their funding in Portland and other cities for possible criminal activity. With riots and civil unrest now at a hundred days, and significant monetary loses have been occurred, questions are being raised about who is behind the well organized protesters seemingly intent on violent confrontation. Of especial interest is the loosely organized far left Antifa and the Black Lives Matter, and who is ultimately controlling their operations through funding and why.
4) Stock market closings for – 1 SEP 20:
Dow 28,645.66 up 215.61 Nasdaq 11,939.67 up 164.21 S&P 500 3,526.65 up 26.34
1) Online grocery shopping continues to reach higher numbers, as Americans show little inclination to return to the stores. Grocery sales hit a record $7.2 billion dollars in June, up 9% from May. There are now 45.6 million households using online grocery pickup and delivery services for a larger portion of their grocery needs. The coronavirus crisis has cause drastic increases in grocery shopping online. People are now using online for buying a few items instead of just for their major shopping trips.
2) Seattle has passed a payroll tax which targets large businesses, called the JumpStart Tax. This tax is a tiered system of taxation with the highest tax levels for companies with annual payroll expenses of more than $1 billion dollars. The tax also is grated for individual income levels starting at amounts over $150,000. The prime target for the tax is Amazon, who is expected to accelerate its move to secure office space outside of Seattle. Amazon has an expansive Seattle footprint, but in recent years has moved to establish a presence in areas outside of the city. There are fears that the tax will pin Seattle’s economic future on local businesses remaining strong.
3) New York City plans to invest $157 million dollars to expand high speed internet service to low income residents as part of its plan to offer universal broadband service to New Yorkers. To pay for the expansion, the internet service providers would be charged for using the city’s infrastructure. The financially strapped city would fund the expansion by diverting $87 million from the police budget, which is being cut. But for the long run, the city is seeking state legislation to require internet service companies to pay for the use of the infrastructure they used to do business.
4) Stock market closings for – 7 JUL 20:
Dow 25,890.18 down 396.85 Nasdaq 10,343.89 down 89.76 S&P 500 3,145.32 down 34.40
1) Again, there is additional unemployment this week with 2.4 million people filing for unemployment benefits this last week. This brings the total U.S. unemployment during the pandemic up to 38 million, with continuing claims at 25.07 million, the highest level on record. The good news is the filings continue to decline from previous weeks. So far, there’s no indications that the easing of the lockdowns is having any effect on the unemployment dilemma.
2) The apparel retailer chain ‘The Gap’ is accelerating its implementation of robots in warehouses to assemble online orders, thus avoiding the use of human contact during the pandemic. The Gap is tripling the number of item picking robots in use to 106 by the fall. With the pandemic forcing the closure of its stores nationwide, their online sales shot up just when social distancing rules reduced their staff. Each robot does the work of four humans in a warehoused that was already highly automated. This is an example of increased automation occurring during times of economic shock, leaving fewer jobs for when the economy improves. These are times when employers shed less skilled workers by replacing them with technology and higher skilled workers thereby reducing their labor cost.
3) The second crisis for the American economy is arriving. The pandemic is having sever consequence for state and local governments with lockdowns eviscerating their finances. Monies needed to pay for public services and infrastructure have withered leaving governments to do triage of the services they provide. Basic services such as police, fire fighting, health, trash and water/sewer services are threatened with curtailment for lack of monies to pay salaries and supplies such as gasoline. Such actions is politically dangerous which can fuel political extremism that threatens democracy. Losses of state and local revenues are estimated to be 15 to 45 percent, or an overall loss of $1.75 trillion dollars a year. With growing doubts of re-employment after the crisis passes, this economic crisis is long term.
4) Stock market closings for – 21 MAY 20:
Dow 24,474.12 down 101.78 Nasdaq 9,284.88 down 90.90 S&P 500 2,948.51 down 23.10