Radio show bullet points:
Stocks opened lower Thursday addressing post- the Labor Department’s weekly report on new jobless claims showed another 2.981 million individuals filed for first-time unemployment benefits.
On May 13, the S&P 500 closed at its lowest level since April 23 and the Nasdaq turned negative for the year to date, amid a rising warnings from economists and officials over the outlook for the virus-stricken economy, as well as signs of tensions between the U.S. and China.
Powell expects the unemployment to peak “over the course of the next month or so,” after the jobless rate climbed to a record high of 14.7% in April, based on Bureau of Labor Statistics monthly data. The lower end of the income spectrum have borne the brunt of the declines, with the Fed finding nearly 40% of people in households making under $40,000 a year lost their jobs in March.
Major investment firms have issued a disappointing forecast in the near-term. Goldman Sachs anticipate the unemployment rate will peak at 25%, up from their previous estimate of 15%.
V-Shape Recovery
- The biggest names in finance are coming around to a view that seemed unlikely a few weeks ago: Stocks are vastly overvalued .Legendary investors Stan Druckenmiller and David Tepper are saying that the risk-reward of holding shares is the worst they’ve encountered in years. Druckenmiller on Tuesday called a V-shaped recovery -- the idea the economy will quickly snap back as the coronavirus pandemic eases -- a “fantasy.”
$3 trillion in Treasury stimulus, may not be enough to compensate for unemployment, a wave of bankruptcies and no end in sight to the pandemic.
Tepper’s comments were a change from late March, when he said he was “nibbling” at stocks, buying into companies focused on technology or hospitals and health care. Tepper, who runs the $13 billion Appaloosa hedge fund, told CNBC on Wednesday that valuations are “nuts” for some individual stocks on the Nasdaq. He also highlighted banks and airlines as difficult areas in which to invest right now.
When reached by phone on Wednesday, billionaire Leon Cooperman pointed to an email he wrote in late April that predicted the government’s actions to combat the pandemic will lead to higher taxes and more regulation. He estimated the S&P 500 should be trading lower -- somewhere between 2,200 to 2,800 -- which suggests stocks could fall as much as 22%.
How we reopen
As the U.S. emerges from over a month-long lockdown, in which states and municipalities prohibited all but essential businesses from operating, retailers aim to recover from pandemic-related losses. Retail sales dropped 8.7% in March, the largest monthly dip ever recorded. Now, although some states like New York and California are still shut down, most of the U.S. has partially reopened.
Almost all stores said they would increase cleaning protocols and institute social distancing measures, including limiting the number of customers in stores, closing fitting rooms, mandating staff wear masks and gloves, providing customers hand sanitizer, installing protective shields at cash registers and using social distancing markers. Some of the retailers who are addressing COVID 19 in a special policies are mentioned below
Abercrombie & Fitch
American Eagle
Apple
Bed Bath & Beyond
Belk
Best Buy
David’s Bridal
Corona status
Nobody is yet committing to flogging their own headquarters and, in the short term, the need for social distancing within offices may prop up demand. But some bosses are predicting radical changes that will delight chief financial officers eyeing potential savings from dumping expensive city-centre locations.
As opposed to what we thought before, COVID -19 hits hard not only on the elderly people.
