Morning News: June 5, 2020
Posted by Eddy Elfenbein on June 5th, 2020 at 7:01 am

Unfazed By Pandemic, Bank of Japan to Keep Economic Recovery View

‘Europe Finally Got the Message’: Leaders Act Together on Stimulus

‘Intelligent Lockdown’ Worked Because the Dutch Follow Rules

Futures Gain As Recovery Optimism Lingers Ahead Of May Jobs Data

U.S. Unemployment Rate Seen Near 20% As COVID Slams Jobs Market Again In May

Fed Vow Boosts Debt Binge While Borrowers Cut Thousands of Jobs

Pompeo Calls Nasdaq’s Strict Rules A Model To Guard Against Fraudulent Chinese Companies

Tenants’ Troubles Put Stress on Commercial Real Estate

‘How It’s Going …’ Goldman Executive’s Email On Racial Inequality In America

For Some Minority-Owned Businesses, Their Lenders Are Now Their Defenders

Brooks Bros., ‘Made in America’ Since 1818, May Soon Need a New Calling Card

Joshua Brown: Commercial vs Household Bankruptcies in May 2020 & “We are overreacting because if it looks like you’re overreacting, you’re probably doing the right thing”

Howard Lindzon: What.A.Rally.

Ben Carlson: Massive Up and Down Moves in Stocks in the Same Year Are More Common Than You Think

Michael Batnick: Animal Spirits: The Unluckiest Generation

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Jobless Claims = 1.877 million
Posted by Eddy Elfenbein on June 4th, 2020 at 11:20 am

Today’s jobless claims report came in at 1.877 million. That’s another decline, our ninth in a row, but it was worse than expectations.

Economists surveyed by Dow Jones had been looking for 1.775 million new claims. The Labor Department’s total nevertheless represented a decline from the previous week’s upwardly revised total of 2.126 million. Filings under the Pandemic Unemployment Assistance program totaled 623,073.

This was the first time the government’s weekly jobless claims report came under 2 million since the week ended March 14.

“Even as states reopen, claims in the millions are an indicator that the economic pain of the COVID-19 crisis is still acute,” said Daniel Zhao, senior economist at job placement site Glassdoor.

Tomorrow is the big May jobs report.

Yesterday, the S&P 500 rose for the fourth day in a row and the seventh time in the last eight sessions. As I write this, the index is up by a tiny bit.

Morning News: June 4, 2020
Posted by Eddy Elfenbein on June 4th, 2020 at 7:05 am

Rally Pauses Ahead of ECB Stimulus Plan

Germany Finally Splurges, But Not Without Fresh Criticism

China Steps Back in Airline Dispute With the Trump Administration

Senate Approves More Time to Spend Paycheck Protection Loans

U.S. Jobless Claims Understate Reality With Gaps in Federal Data

America’s Safety Net Is Failing Its Workers

401(k) Plans Move a Step Closer to Pooling With Private Equity

Vanguard’s Eight-Year Quest to Crack $1 Trillion Market Drags On

GM Plans Electric Van for Business Users In Bid to Pre-Empt Tesla

GM CEO Mary Barra Expects North American Plants to Return to Near Pre-Coronavirus Levels By Late June

AMC Theatres Has ‘Substantial Doubt’ It Can Reopen

Former U.A.W. President Gary Jones Pleads Guilty

Ben Carlson: Animal Spirits: The Unluckiest Generation

Joshua Brown: Troy Prince Introduces Wall Street To Talent They Haven’t Discovered Yet

Howard Lindzon: ‘If You Had Told Me’ … and Fashology Takes Flight

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S&P 500 Is Over 3,100
Posted by Eddy Elfenbein on June 3rd, 2020 at 11:20 am

This morning’s ADP payroll report showed that the U.S. economy shed 2.76 million jobs last month. As bad as that is, it’s much better than expectations.

The stock market is up again today. The S&P 500 broke through 3,100. The index is up for the fourth day in a row and the seventh time in the last eight sessions.

Sherwin-Williams (SHW) made a new high today and FactSet (FDS) is very close to a new high.

Morning News: June 3, 2020
Posted by Eddy Elfenbein on June 3rd, 2020 at 7:06 am

Oil Prices Hit 3-Month Highs On Expectations OPEC+ Will Extend Deepest-Ever Production Cuts

Huawei Hid Business Operation in Iran After Reuters Reported Links to CFO

Trump Administration Escalates Global Fight Over Taxing Tech

Major Employers Left Out of Government’s Coronavirus Relief Plan

A Decade’s Worth of Progress for Working Women Evaporated Overnight

Google Faces $5 Billion Lawsuit In U.S. For Tracking ‘Private’ Internet Use

Zuckerberg Defends Hands-Off Approach to Trump’s Posts

Mukesh Ambani Won the World’s Most Expensive Sibling Rivalry

Tiffany Stock Plunges 9% After Report That LVMH Deal Could Fall Through

The Other Fossils in the Boardroom

Howard Lindzon: Panic With Friends – Jenny Lefcourt of Freestyle VC Joins Me To Talk Entrepreneurship and Investing

Nick Maggiulli: How Big is the Racial Wealth Gap?

Ben Carlson: Why We Don’t Learn From History

Joshua Brown: On the Link Between Economic Inequality and Social Injustice

Jeff Carter: Shame

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+38% From the Low
Posted by Eddy Elfenbein on June 2nd, 2020 at 4:28 pm

The stock market closed at another new high, although our Buy List trailed the market. Energy stocks had a very good day, and since we don’t own any energy, that hurt our relative strength. The Buy List may soon be positive for the year. We’re not far away.

Stocks tied to the reopening of states outperformed once again. Citigroup, Wells Fargo and Bank of America all rose at least 0.9%. Gap climbed 7.7%. Southwest gained 2.6%.

“This is a healthy reversion as you’re seeing some of the laggards come back in line,” said Jeff Kilburg, CEO of KKM Financial. “If anything, this is going to help sustain a more bullish stance in the marketplace.”

Tomorrow, we get the ADP payroll report. Then on Thursday, there’s another jobless claims report. Of course, Friday is the big jobs report for May.

Morning News: June 2, 2020
Posted by Eddy Elfenbein on June 2nd, 2020 at 7:03 am

China Buys U.S. Soybeans After Halt To U.S. Purchases Ordered

Oil Prices Rise Before OPEC+ Meeting About Extending Output Cuts

Global Shares Cruise To Three-Month Highs, Dollar Shows The Strain

A Tug-of-War Between Bulls and Bears Is Muddling Risk Indicators

Sell, Stow Or Dump? Retailers Wrestle With Mountain Of Unsold Stock

JPMorgan’s Math Shows Why U.S. Stocks Can Keep Rallying

Retailers, Battered by Pandemic, Now Confront Protests

Black Workers, Already Lagging, Face Big Economic Risks

KKR Spends Big and Fast to Avoid Mistakes of 2008 Crisis

IRS Fails to Pursue Thousands of Rich Tax Cheats, Watchdog Says

Volkswagen Closes $2.6 Billion Investment In Self-Driving Startup Argo AI

BlackRock Is Biggest Beneficiary of Fed Purchases of Corporate Bond ETFs

Embraer Seeks Business Partners But Not A Repeat of the Boeing Deal

Joshua Brown: “This is simple and straightforward, unless you are committed to misunderstanding it.”

Howard Lindzon: Momentum Monday – Rioting, Looting and Froth

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A Two-Month High for the S&P 500
Posted by Eddy Elfenbein on June 1st, 2020 at 3:54 pm

The stock market is up again today. This comes after a painful weekend of protests across the country.

This is the first business day of the month and that’s usually when the ISM Manufacturing report comes out. I like this report because the lag time is fairly low. This morning’s report came in at 43.1. That’s actually not so terrible, though it’s not good.

U.S. manufacturing activity eased off an 11-year low in May, the strongest sign yet that the worst of the economic downturn was behind as businesses reopen, though the recovery from the Covid-19 crisis could take years because of high unemployment.

The Institute for Supply Management (ISM) said on Monday its index of national factory activity rose to a reading of 43.1 last month from 41.5 in April, which was the lowest level since April 2009. A reading below 50 indicates contraction in manufacturing, which accounts for 11% of the U.S. economy.

Economists polled by Reuters had forecast the index rising to 43.0 in May.

This morning’s construction spending report showed a decline of 2.9%. That’s also bad but not as bad as it could have been. It’s the lowest number since October 2018.

The S&P 500 looks to close today at a two-month high.

Morning News: June 1, 2020
Posted by Eddy Elfenbein on June 1st, 2020 at 7:04 am

Poor Countries Face a Debt Crisis ‘Unlike Anything We Have Seen’

‘Lemon’ Or Not, Trump Is Stuck With Phase 1 China Trade Deal

China Halts Some U.S. Farm Imports, Threatening Trade Deal

In Hong Kong, China Threatens Businesses and Workers

Wall Street and Fed Fly Blind As Coronavirus Upends Annual Stress Tests

Rich World’s Jobs Crisis Jolts Money Flows To Millions

Goldman Rolls Back Its Pessimistic Outlook for American Stocks

Banks Have a Mountain of Deposits So They Don’t Need PPP Funding

Record Ratings and Record Chaos on Cable News

Nestlé Loses Fight With Impossible Over Meatless Burger Branding

IBM, the Silent Job Cutter, Stokes Worker Anxiety, Speculation

Fall Is Now Jam-Packed for Book Publishers. That Could Be A Problem.

Ben Carlson: Winners & Losers from the Work From Home Trend & Why Bad is Stronger Than Good (There is No Opposite of Trauma)

Roger Nusbaum: Interesting Volatility Fund

Jeff Miller: Are We There Yet?

Howard Lindzon: Scott Belsky (Chief Product Officer of Adobe) Joins Me On ‘Panic With Friends’

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U.S. Savings Rate Soars to 33%
Posted by Eddy Elfenbein on May 29th, 2020 at 10:54 am

The day after the GDP report, we get reports on personal income and spending. This time was an odd one. For April, personal income rose by 10.5% while personal spending decreased by 13.6%. The lockdown has screwed with even boring economic stats. The savings rate soared to 33% as Americans are stockpiling cash.

The personal savings rate hit a historic 33% in April, the U.S. Bureau of Economic Analysis said Friday. This rate — how much people save as a percentage of their disposable income — is by far the highest since the department started tracking in the 1960s. April’s mark is up from 12.7% in March.

The swiftness and severity of a U.S. economic recovery hinges on whether consumers continue to stockpile cash or start to spend again.

“There is a tremendous uncertainty and virus fear that is lingering, and that is restraining people’s desire to go out and spend as they normally would,” said Gregory Daco, chief U.S. economist at Oxford Economics.

The previous record savings rate was 17.3% in May 1975, according to FactSet. The savings rate was elevated above 13% throughout most of the early 1970s. The increase in savings came as spending declined by a record 13.6% in April.

The stock market was doing well yesterday but dropped in the afternoon. The trend is continuing into today’s market. Traders could be nervous ahead of President Trump’s comments on China at today’s news conference.