1) The markets took a sharp drop over fears of another shutdown as the number of Convid-19 cases began rising from states starting to opening up for business. The Dow Jones dropped over 1,800 points, closing on the worst day sell-off since March. It appears that this pandemic is going to linger longer than was anticipated. Texas has reported three consecutive days of record breaking Covid-19 hospitalizations. Nine counties in California are reporting spikes in hospital admissions from the virus. The U.S. now has topped 2 million cases in this pandemic. Also, oil prices have taken a sharp downward slide.
2) Inventories of unsold diamonds are increasing, with the five largest diamond producers having stockpiled excess inventories of about $3.5 billion dollars and could go as high as $4.5 billion dollars. World wide demand for diamonds has plummeted, with the renowned diamond supplier De Beers reporting diamond sales in May of about $35 million dollars, compared to last year’s $400 million dollars. The world wide lock down has closed jewelry stores across the world thereby reducing sales to a small fraction of normal. The diamond market resembles the diamond slump of the 2008 financial crisis.
3) More than 1.5 million Americans filed new jobless claims for the first week of June, again decreasing from the previous week of 1.9 million. This is in contrast to the 6.9 million claims in April, with a stead decline each week since then. There was 2.5 million jobs added to the American economy, largely due to 2.7 million workers returning from furloughs. Still, more than 40 million Americans have lost their jobs because of the pandemic forcing shutdowns of so many businesses across America. But the gradual improvement of employment is boosting hopes for a quick economic recovery, however, there remains the problem of technology displacement of jobs. In times of economic stress, businesses are seeking ways and means to cut operating cost, and that gives a niche for entry of new technologies that eliminate the human. Experts in Artificial Intelligence estimate that as much as 50% of the jobs will disappear in 15 to 25 years.
4) Stock market closings for – 11 JUN 20: The stock market is like a rectal thermometer- it’s rude and crude but surprisingly effective at showing sickness.
Dow 25,128.17 down 1861.82
Nasdaq 9,492.73 down 527.62
S&P 500 3,002.10 down 188.04
10 Year Yield: down at 0.65%
Oil: down at $36.17