The last thing we needed today was good news. The economy unexpectedly added 2.5 million jobs in May. But I wish this hadn’t happened today.
This morning the Trump Administration ordered China to close its consulate in Houston by Friday. China vowed to retaliate, calling the move illegal. The United States accused Chinese diplomats of aiding a nationwide pattern of economic espionage and attempted theft of scientific research.
Let the stimulus logrolling begin (I hope): Republicans near $1 trillion (maybe) with Democrats at $3 trillion as McConnell describes his plan on Senate floor
Of course, there isn’t actually a Republican bill in the Senate yet, but in a floor speech today Senate Majority Leader Mitch McConnell said “The American economy needs another shot of adrenaline.” McConnell also noted that infections are “climbing in hot spots around the country.” At least we’re edging toward something that looks like the usual pattern of talks and compromise between the Democratic controlled House or Representatives and the Republican Senate. The wildcard, the thing that could derail any compromise, is a list of supposedly “line in the sand” demands from the White House. If President Trump is serious when he says he won’t sign a bill that doesn’t contain a payroll tax cut or that does contain more money for testing, then we could still wind up with no deal by the time Congress is scheduled to go on recess on August 10. That recess is scheduled to extend through September 7.
With 160 coronavirus vaccine candidates under development around the world, it’s not surprising that we would get reports on three successful, if very early, trials today.
Charles Schwab misses on revenue and earnings drop 21% over year–but long-term metrics stay on track
On Thursday, after the close of trading in New York, brokerage Charles Schwab (SCHW) reported net revenue of $2.4 billion for the second quarter, a 9% drop year over year and short of the $2.47 billion projected by Wall Street analysts. Non-GAAP adjusted earnings fell 21% for the quarter from the same period of 2019. At 54 cents a share earnings were above the Wall Street consensus of 52 cents. But key fundamentals of the business remained on track.
This morning shares of Amazon (AMZN) burst higher out of the box, gaining 5.98% as of noon New York time. The catalyst, it appears, was a new target price from Goldman Sachs of $3800 a share, up from the previous target of $3000. The shares had closed at $2961.97 on Friday, July 17. That big move in Amazon was enough to move the Standard & Poor’s 500 higher by 0.33% and the NASDAQ Composite up 1.41%. The Technology Select Sector SPDR (XLK) ETF was up 1.46% at noon. But the Amazon move wasn’t done
Market worries that a smaller-than-expected drop in new claims for unemployment portends future downturn in economy
Initial jobless claims in regular state programs totaled a seasonally adjusted 1.3 million in the week ended July 11, down just 10,000 from the prior week, the Labor Department reported this morning. That’s the smallest drop in the new claims since March and feeds into worries that the recovery in the jobs market is stalling as states pause or reverse re-openings. Economists had expected initial claims for the week to fall to 1.25 million.