1) Retail giant Target has announced it is raising the minimum wage they pay to store and warehouse workers to $15 an hour, a $2 increase. Target had 350,000 workers employed in 1,900 stores across America. The company is also extending the benefits it started offering during the pandemic, including a new one of free visits to a virtual doctor. All this increases Target’s operating cost by more than $1 billion dollars a year. The company’s margins have been under pressure from pandemic related expenses, in addition to selling fewer high margin items such as apparel and accessories, as well as customers shifting to online shopping. Rival Walmart has announced they are testing a totally cashierless store as a way of limiting human contact because of the Convid-19 threat, but a cashierless store also means reduce labor cost, a goal long sought after by retailers.
2) There is a spike in mortgage demand driven by the record low interest rates. There is a 21% increase in mortgage applications from this time last year. The easing of the pandemic is releasing the pent up demand caused by the shutdown. A 30 year mortgage with 20% down fixed rate has an interest rate now of 3.3%. Refinancing continues to play a significant part in the home mortgage market.
3) Hilton Hotels is laying off 22% of its corporate workforce of 2,100 employees as a result of the coronavirus, while also extending furloughs for many of its corporate staff for an additional 90 days. The virus crisis has brought the hotel business to a near complete halt. The industry has lost about 7.7 million jobs, although occupancy has started to increase, signaling the worst may be coming to an end.
4) Stock market closings for – 17 JUN 20:
Dow 26,119.61 down 170.37
Nasdaq 9,910.53 up 14.66
S&P 500 3,113.49 down 11.25
10 Year Yield: down at 0.73%
Oil: down at $37.65