Jim’s Extra! Of the 3 reasons I think the re-opening economy will disappoint, the biggest is state budget cuts
I remain a skeptic about how fast a re-opening of the economy will actually produce economic growth. For 3 reasons.
The July data for unemployment and incomes has the potential to be very nasty indeed.
What’s a week without a good chance that the Federal Reserve will roil the stock market? On Thursday June 25, the Federal Reserve will release results of its annual bank stress tests on June 25. At stake will be bank plans for dividend payouts. Banks that don’t pass the tests or where bank capital is skirting near the minimum required to ride out an economic shock won’t get Fed approval for their plans to pay dividends.
I admit it. I feel silly talking about price targets and valuations in this market. After all everything is just going to the sky. Infinity and Beyond!!! But, as silly as I may feel, I don’t think the gods of investing have repealed the laws of valuation.
Apple re-shuts some U.S. stores on rise in coronavirus in Florida, Arizona, North Carolina and South Carolina
Nothing sums up the uncertainty of the re-opening economy and the continued coronavirus pandemic than news today that Apple (AAPL) is temporarily again shutting some of its U.S. retail stores. The 11 closed stores are in Florida, Arizona, North Carolina and South Carolina, states that are seeing spikes in coronavirus infections and hospitalizations.
If the contest between the stock market–which sees a rapid V-shaped recovery for the economy–and the Federal Reserve–which sees a slow recovery very stretching over two years, today’s report on New Claims for Unemployment comes down on slow recovery side. Initial jobless claims for regular state programs totaled 1.51 million in the week ended June 13. That was down again from the 1.57 million in the previous period, but the 58,000 weekly drop was the smallest since claims began to retreat in early April. Economists surveyed by Bloomberg had expected a decline to 1.29 million initial claims.
It wasn’t a day for big moves in U.S. stocks. The Standard & Poor’s 500 closed ahead 0.06% and the Dow Jones Industrial Average finished off 0.15%, for example. Nobody wants to get every far ahead of the trend–whichever direction it’s pointing to.