Coin Shortages, Stimulus Plans & Housing Slumps – Daily Financial News Summary for Wednesday, June 17, 2020

Stocks fluctuated on Wednesday, as investors continued to keep an eye on the coronavirus news and the recovery of the economy. The S&P 500 and the Dow Jones fell by 0.36% and 0.65%, respectively. The NASDAQ rose by 0.15%. This is the fourth straight day in a row of gains for the NASDAQ.

Texas has seen a big increase in coronavirus cases recently. The number of Covid19-related hospitalizations increased by 11% within 24 hours yesterday. This is the largest one-day jump since the beginning of June. Florida and Arizona are two other states that have been recently struggling with an onslaught of new cases. These cases have all occurred since the ease of the lockdown restrictions.

Andrew Hunter of Capital Economics spoke Wednesday about the significant increase in retail sales that occurred between April and May: “The 17.7% m/m rebound in retail sales in May indicates that, as the lockdowns were eased in many states, activity started to recover more quickly than we – and others – had been anticipating. As a result, we now estimate that real consumption and overall GDP both contracted at a 30% annualized pace in the second quarter, rather than the 40% fall we previously expected.”

READ MORE: https://callputstrike.com/2020/06/17/coin-shortages-stimulus-plans-housing-slumps-daily-financial-news-summary-for-wednesday-june-17-2020/

COVID-19 Recovery: How Business Owners Can Bring Customers Back

Thousands of businesses all around the United States are currently finding themselves in the same dilemma; they need to figure out how to convince their customers to come back. Fears of the coronavirus have kept millions of people housebound for months and left businesses empty. Now that the COVID-19 restrictions are being lifted, companies need to figure out how to show customers that their brick and mortar store is better than buying online.

READ MORE: https://callputstrike.com/2020/06/17/covid-19-recovery-how-business-owners-can-bring-customers-back/

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Stocks were turbulent on Monday, but the three major indexes ended the day in the green. The Dow Jones rose by 0.6, the S&P 500 increased by 0.8 and the NASDAQ climbed by 1.4%.

The Federal Reserve announced today that it would be buying corporate bonds in individual companies in order to continue trying to stimulate the economy and provide liquidation. This is in addition to the ETFs that the Fed is already purchasing. The Fed said that it will be purchasing company debt that will become mature in five years or less. In a news release, the Fed said: “[the broader goal is] to create a corporate bond portfolio that is based on a broad, diversified market index of U.S. corporate bonds.” This announcement provided a boost to stocks during the day, causing the Dow to climb by 1,000 points.

Hertz car rental company plummeted by over 20% Monday. This was after the company released in a government filing that shareholders are expected to lose all their investment. The company had previously attempted to raise $500 million in equity. Hertz is currently undergoing Chapter 11 bankruptcy. Hertz said that the only way that bondholder debt can be repaid is if consumer activity is suddenly revamped to the amount it was before the pandemic hit.

https://callputstrike.com/2020/06/15/corporate-bonds-stimulate-markets-to-close-the-day-daily-financial-news-summary-for-monday-june-15-2020/

Marketing Gone Bad: Pepsi’s Big Philippines Mistake in the 90’s

Pepsi, the global CPG company, is well-known among consumers. However, one major event that happened during the 1990s isn’t currently as widely talked about. This event is when Pepsi made one typo that caused fatal rioting in the Philippines.

In the 1990s, Coca-Cola had already broken into the Philippine market. Pepsi knew that they were falling behind and wanted to stay on track with their competitor. The Philippines had a population of over 62 million people at that point, so Pepsi knew that the demand would be there. However, even though the consumer base was large, many people in the Philippines were poor and the economy was struggling financially.

Pepsi’s executives wanted to do something big in order to announce the company was entering the Philippine market. They knew that the vast majority of citizens didn’t have much money, so they decided to opt for a financial incentive. Every Pepsi bottle cap would have a number inside of it. This number would correlate to a prize that would be revealed later on. The plan was to have two winners take home $40,000, while also having many people win smaller amounts.

https://callputstrike.com/2020/06/15/marketing-gone-bad-pepsis-big-philippines-mistake-in-the-90s/

Markets Rebound, Nestle Aims To Sell Waters Business & Airlines Fly Higher | Daily Financial News Summary for Friday, June 12, 2020

Major indexes made a rebound Friday, following a poor trading session on Thursday. The Dow Jones rose by 1.90, the S&P 500 by 1.31%, and the NASDAQ by 1.01%. Despite the gains today, all three indexes have posted their first weekly loss in a month.

Oil fell again, for the second day in a row. West Texas Intermediate fell by 0.2%, settling at $36.26 per barrel. This is the first time that West Texas Intermediate has ended in a loss in the past seven weeks.

Gita Gopinath of International Monetary Fund spoke in a video released Friday about the state of the economy and how its recovery has been slower than expected. She used the words “significant scarring” to describe the economy’s current state. IMF is expected to release an updated global growth projection on June 24. This is to follow April’s projections of a 3% global contraction.

A possible second wave of the coronavirus has hit certain areas in the United States. Texas saw an increase of over 2,500 new cases within a single day yesterday. Arizona, Utah, and New Mexico have all seen a 40% increase in new cases recently. Arkansas, Florida, North Carolina and South Carolina all experienced an over 30% increase in cases last week. Officials in Texas discussed the idea of reinstating the stay-at-home order.

Naeem Aslam from AvaTrade spoke about Friday’s rebound: “I suspect the bounce is a dead cat bounce because the sentiment is further dented by the fresh comments by the chief economist of the IMF who said that the world economy is growing much slower than the anticipation and the scars of the coronavirus pandemic may linger for much longer.”

Consumer sentiment rose in June, for another month in a row. In May, consumer sentiment was at 72.3. This increased to 78.9 in June, above the estimate of 75. This was the largest margin of increase since 2016. This is an indication that consumers are becoming more confident with the condition and future expectations for the economy. Said Richard Curtin of the University of Michigan’s Survey of Consumers: “The turnaround is largely due to renewed gains in employment, with more consumers expecting declines in the jobless rate than at any other time in the long history of the Michigan surveys.”

Nestle announced its plan to sell most of its Nestle Waters business in North America within the next 6-8 months according to inside sources, with the exception of its international brands like San Pellegrino and Perrier. This would include its regional spring water brands, including Poland Spring, Deer Park, and Ice Mountain.  It also would include its purified water business and beverage delivery service. Its direct-to-consumer and office beverage delivery service brands include ReadyRefresh by Nestle and the Nestle Pure Life brand would also likely be a part of the final sale.

READ MORE: https://callputstrike.com/2020/06/12/markets-rebound-nestle-aims-to-sell-waters-business-airlines-fly-higher-daily-financial-news-summary-for-friday-june-12-2020/

The Reality of Winning Prizes on Game Shows

Thousands of Americans watch game shows every single day. It can be exciting to answer questions along with the contestants and imaging winning the grand prize. However, it is important to remember that winning prizes on a game show isn’t all that it’s cracked up to be.

READ MORE: https://callputstrike.com/2020/06/12/the-reality-of-winning-prizes-on-game-shows/

DJIA Plummets 1861 Points As COVID-19 Spikes – Daily Financial News Summary for Thursday June 11, 2020

Stocks fell significantly on Thursday among fears that a second wave of the coronavirus will soon wash over the United States. All three major indexes were down by the end of the day, with the Dow Jones falling by 6.9%, the S&P by 5.9%, and the NASDAQ by 5.3%. This was the third session in a row of losses for the Dow and the S&P 500.

Oil prices dropped on Thursday. This is partially due to the concern of oversupply and also due to the fear of the second wave decreasing the demand for oil. West Texas Intermediate fell by 8.24%, to stop at $36.24 per barrel. Today was its worst session since April 27. Brent Crude dropped by 7.6% down to $38.55 per barrel.

Not everyone considered Thursday’s bleak market performance to be a bad thing. David Trainer of New Constructs, a research firm, spoke about this being the opportunity for investors to jump into the market. He said: “It’s time to buy the dip. Now is the chance to pick up stocks at a discount. Many investors missed the melt up in stocks over the past few weeks. The market is fairly valued, in my opinion, so large pullbacks create opportunity for value investors.”

President Donald Trump tweeted his disagreement with the Federal Reserve’s estimated drop in GDP for the remainder of 2020. According to them, GDP will drop by 6.5% in 2020 and regain 5% in 2021. His tweet read: “The Federal Reserve is wrong so often. I see the numbers also, and do MUCH better than they do. We will have a very good Third Quarter, a great Fourth Quarter, and one of our best ever years in 2021. We will also soon have a Vaccine & Therapeutics/Cure. That’s my opinion. WATCH!”

The Labor Department’s weekly unemployment report showed that 1.542 million Americans had filed during the week of Mary 31 – June 6. This is a decrease of the prior week, which was 1.897 million who filed.

Many energy, travel, and banking companies saw losses today. Oneok, the natural gas company, saw a decrease of 15%. This was after the company issued a statement about a public offering of 26 million shares.

READ MORE: https://callputstrike.com/2020/06/11/djia-plummets-1861-points-as-covid-19-spikes-daily-financial-news-summary-for-thursday-june-11-2020/

Can It Keep Delivering: US Postal Service Outlook

In the time before the global pandemic, the demand for the United States Postal Service (USPS) was declining. In the time of email and texting, people simply didn’t write as many letters to each other. Now, in the midst of the crisis, how is the US postal service faring?

In the week of March 31 – April 7, the number of regular mail deliveries dropped by 24%. However, the amount of commercial mail volume (including people ordering packages from Amazon) increased by 30%. The Postal Service is predicting a decrease in mail volume by at least 50% over the next year.

READ MORE: https://callputstrike.com/2020/06/11/can-it-keep-delivering-us-postal-service-outlook/

Fed Pledges Support & GrubHub Looks To Europe – Daily Financial News Summary for Wednesday, June 10, 2020

Stocks fell on Wednesday, as investors heard from the Federal Reserve about their updated financial policy. The Dow Jones dropped by 0.69, the S&P 500 by 0.53, and the NASDAQ by 1.04.

The Federal Reserve released its latest policy statement today. Interest rates are to remain unchanged at their range of 0% – 0.25%, as was expected by investors. Federal officials have estimated that the unemployment rate at the end of 2020 will be at 9.3%. In future years, it is expected to remain unnaturally high, with an estimated 5.5% by the end of 2022. Output for the year is predicted to be 6.5% lower this year as compared to last year. For 2021, the output should rise by 5%.

Said Fed Chair Jerome H. Powell: “Nearly 20 million jobs have been lost on net since February. The downturn has not fallen equally on all Americans.” The Fed has indicated that they will support the economic recovery and will continue to buy government-backed debt, such as mortgage-backed securities and Treasury securities, in order to keep the market at a functional level.

The United States budget deficit has close to doubled due to the additional spending for pandemic relief purposes. The deficit has grown to $1.88 trillion, which is a new record. At this point last year, the deficit was near $730 billion.

https://callputstrike.com/2020/06/10/fed-pledges-support-grubhub-looks-to-europe-daily-financial-news-summary-for-wednesday-june-10-2020/

Lower Costs Lead To Renewable Energy’s Revival

In the past, the United States has never made a considerable effort to switch from fossil fuels to renewable energy. Even though we have had the ability and the technology available for many years, it has simply been more convenient to use fossil fuels and coal. However, due to the global pandemic, the United States is on track to start using renewable energy more than fossil fuels for the first time in history.

In an effort to encourage more places to use renewable energy, the cost of the industry has decreased significantly in recent times. The cost to build a large wind farm has dropped by over 40% over the last ten years. Solar costs have dropped by over 80% during that same time frame. In addition to this, the cost of natural gas has fallen to the lowest that it has ever been during 2020.

Many companies are recognizing this shift in costs and have been adjusting the way that they do business. For instance, Xcel Energy, which is a large electric utility company in Colorado, announced that they would be replacing their older coal-fired units ten years earlier than originally planned. They switched these with wind, solar, battery storage, and natural gas alternatives, saving them $213 million in total.

https://callputstrike.com/2020/06/10/lower-costs-lead-to-renewable-energys-revival/

COVID-19 Spreads & Vroom Goes Public – Daily Financial News Summary for Tuesday, June 9, 2020

Major indexes were mixed on Tuesday, as the multi-day rally was paused. The Dow Jones fell by 1.09%, and the S&P 500 by 0.78%. The NASDAQ rose by 0.29%. Major technology companies such as Amazon, Facebook, Apple, and Netflix helped contribute to the NASDAQ’s increase today.

Yesterday, the National Bureau of Economic Research (NERB) announced that the U.S. economy has been in a recession since February. This announcement so far has had a relatively small negative impact on the stock market. Said Brent Schutte of Northwestern Mutual: “We’ve been telling people to ignore the economic data. The market is a forward-looking mechanism – it’s looking forward to a better future, it’s reflecting the fact that we’re opening large swaths of the U.S. economy without significant spikes in cases. We do suspect that in the future, while the returns certainly aren’t going to be what they are today or what they have been over the past few months, there still is value left in different parts of the market for investors.”

READ MORE: https://callputstrike.com/2020/06/09/covid-19-spreads-vroom-goes-public-daily-financial-news-summary-for-tuesday-june-9-2020/

What is the Correlation Between the Stock Market and the Economy?

By now, everyone has heard about the global pandemic known as COVID-19 and the havoc it has wrecked upon the world. People have lost their jobs, their businesses, and many have lost their lives. The U.S. economy is currently in a recession, but major stock market indexes are performing record highs. Since the economy is so bleak right now, some people are wondering how the stock market is rallying so high.

Just before the pandemic came to the United States, the economy and the stock market were both doing well. The economy’s GDP had grown by 2.3% in 2019. Domestic economic activity was just peaking in February, which is when the major indexes, the Dow Jones, the S&P 500 and the NASDAQ, reached record highs as well.

When Covid19 started running rampant throughout the country, both the economy and the stock market suffered. Millions of jobs were lost, and many businesses were forced to shut down. The low point for the stock market was March 23, when the Dow Jones fell 37.12% from its high on February 12. This was also the day when the S&P 500 had fallen 34.06% from its high on February 19. The NASDAQ fell 30.26% from its highest point to its lowest point.

Currently, the economy is in a recession, but stocks are soaring high. On June 8, the three major indexes finished above, or close to, their record highs. The NASDAQ closed at 9,924.74, which is a new record. The Dow Jones closed at 27,572.44, which is only 6.7% off its high point in mid-February. The S&P 500 ended the day at 3,232.39, a mere 4.5% off its highest point.

READ MORE: https://callputstrike.com/2020/06/09/what-is-the-correlation-between-the-stock-market-and-the-economy/

Markets & COVID Cases Gain Across America as NYC Opens. Recession announced – Financial News for Monday June 8, 2020

Major indexes climbed Monday, carrying on last week’s rally. The Dow Jones increased by 1.70%, the NASDAQ by 1.13%, and the S&P 500 by 1.20%.

CNBC’s Jim Cramer, the host of Mad Money, spoke Monday about the positive turn of the economy. He believes that the stock market is climbing too quickly as compared to the slower recovery of the economy. He said: “Where are the sellers? It’s almost as if people decided Covid is over. It’s a ‘V-shaped’ rally, and you better get on board. The Friday rally, as sweet as it was off the employment number, has not brought out any sellers. I often think that there has to be sellers at a certain level.”

The airline, travel and leisure industries continued to soar on Monday, continuing last week’s streak. American Airlines rose by 6% today, which is adding to its 77% increase last week.

The Federal Reserve is set to release an updated policy statement on Wednesday. They will also be showcasing its economic projections, the first since December. Interest rates are not expected to be cut, as they are already in the 0%-0.25% range. It is likely that interest rates will remain near zero for the next two years, in order to stimulate the economy back to normal levels.

The National Bureau of Economic Research (NBER) released information today showing that domestic economic activity peaked in February. This means that the expansion that started in June 2009 (at the end of the last recession) lasted until February 2020. This is the longest expansion period on record. The NBER spoke about the situation: “[…] The committee recognizes that the pandemic and the public health response have resulted in a downturn with different characteristics and dynamics than prior recessions. Nonetheless, it concluded that the unprecedented magnitude of the decline in employment and production, and its broad reach across the entire economy, warrants the designation of this episode as a recession, even if it turns out to be briefer than earlier contractions.”

READ MORE: https://callputstrike.com/2020/06/08/markets-covid-cases-gain-across-america-as-nyc-opens-financial-news-for-monday-june-8-2020/

Beyond Pandemics & Protests: The Biggest Challenges for Financial Advisors

The role of a financial advisor means many different things. Advisors take on the responsibility of guiding their clients through building an asset portfolio, helping them improve their personal financial situation, and being available as a lifeline in the event that things are crashing down in their lives. Advisors are often seen as a fix-all for every problem that clients can think of, especially in times of uncertainty like Americans are experiencing during the COVID-19 pandemic, as well as the ongoing Black Lives Matter protests. This is why great financial advisors can come at a cost. Here are some of the biggest challenges facing the modern-day financial advisor.

READ MORE: https://callputstrike.com/2020/06/08/beyond-pandemics-protests-the-biggest-challenges-for-financial-advisors/

Markets & Trump Jump For Joy On Jobs Report – Daily Financial News Summary for Friday June 5, 2020

Stocks jumped Friday, closing off a very positive week. The Dow Jones increased by 3.0%, the S&P 500 by 2.4%, and the NASDAQ by 2.1%. The S&P 500 is currently up over 45% since its low on March 23 and is now only down by 1% for the year 2020. The NASDAQ has risen by over 47% since March 23 and is up by 9% since the start of 2020. The Dow Jones is down by 4.9% as a total for 2020 so far.

The Labor Department’s monthly job report was released Friday morning. Surprisingly, it showed that 2.5 million jobs had been added to the United States economy during the month of May. Expectations were that 8 million more jobs would be lost. The unemployment rate was 14.7% in April and fell to 13.3% in May. The anticipated unemployment rate among economists was thought to be closer to 20% for May.

The gain in jobs has been the largest one-month surge that the United States has had since 1939. Very rarely does the economy see over 1 million new jobs added in the span of one month. It seems likely that many of these restored jobs were just temporary layoffs due to the pandemic. Leisure and hospitality workers made up almost half of the 2.5 million jobs gained. Tony Bedikian of Citizens Bank stated: “Barring a second surge of Covid-19, the overall U.S. economy may have turned a corner, as evidenced by the surprise job gains today, even though it still remains to be seen exactly what the new normal will look like.”

READ MORE: https://callputstrike.com/2020/06/05/markets-realdonaldtrump-jump-for-joy-on-jobs-report-daily-financial-news-summary-for-friday-june-5-2020/

Unemployment Benefits – How Long Will They Last?

The global pandemic has affected the United States’ job market in a very significant way. Currently, the unemployment rate in the United States is almost 15%, which is an all-time high for the country. Last week alone, 1.877 million Americans applied for unemployment benefits. The government is currently providing each person who applies at $600 per week. However, this benefit will not last forever. How long will the benefits last for, and what will happen afterward?

Typical unemployment benefits provide about 40% of a worker’s lost wages. The CARES Act was put into place to allow for an additional $600 per week per individual. As of right now, it is expected that the $600 per week will last until the end of July 2020. Democrats have discussed extending the payments into next year, but Republican lawmakers are not in favor of extending the policy.

Many in the restaurant industry, as an example, have said until restaurants can operate at capacity, they won’t earn more than their unemployment benefits. This is often argued by occupations like restaurant waiters and waitresses that rely mostly on earning tips for their wages, where many restaurants can only operate at 25% capacity.

READ MORE: https://callputstrike.com/2020/06/05/unemployment-benefits-how-long-will-they-last/

Airlines Skyrocket while Stock Markets Dive – Daily Financial News Summary for Thursday June 4, 2020

Stocks fell from their June rally, as all three major indexes slipped into the red on Thursday. The Dow Jones fell by 0.6%, the S&P 500 by 0.9%, and the NASDAQ by 1.1%.

Earlier today, the NASDAQ-100 hit an intraday record high. The index has increased by over 43% since its low point on March 23. This record high is mainly due to the significant increases in Amazon, PepsiCo, Costco, and PayPal. These companies have gained 30%, 26%, 8%, and 85% since March 23, respectively. The NASDAQ-100 was down about 1% by the end of the trading day.

The Labor Department released the weekly unemployment report, which was worse than estimated, partially contributing to the loss in the major indexes. Last week, unemployment was filed by 1.877 million Americans, as compared to the estimated 1.775 million. The Labour Department’s monthly jobs report will be released tomorrow.

READ MORE: https://callputstrike.com/2020/06/04/airlines-skyrocket-while-stock-markets-dive-daily-financial-news-summary-for-thursday-june-4-2020/

Investigating the Financial & Political Impact of U.S Protests

On Memorial Day, May 25, 2020, George Floyd, a black man was killed by a white police officer. This happened as Floyd was getting arrested and he was unarmed and was not resisting arrest. This triggered a surge of riots and protests in dozens of American cities. Thousands of people marched in protest of racism and police brutality. The financial impact of these protests is still unknown, but predictions are being made.

READ MORE: https://callputstrike.com/2020/06/04/investigating-the-financial-political-impact-of-u-s-protests/

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Obama Speaks, AMC Struggles & The New York Times Climbs – Daily Financial News Summary for Wednesday, June 3, 2020

Stocks rose again on Wednesday, as cautious hope for the reopening of the economy continued. The S&P 500 and the NASDAQ both saw their fourth day of increases in a row, at 1.4% and 0.8%, respectively. The Dow Jones finished the day at 2.1% higher.

Health officials have been worried that the continuing protests, which continued today, in the United States might result in a surge of new infections from Covid19. However, the confirmed number of cases has stayed consistent from Tuesday to Wednesday, rising 1.2% between the two days.

Oil prices reached a 12-week high today. West Texas Intermediate rose by 1.3%, to settle at $37.29 per barrel.

A report released from Automatic Data Processing showcased that the number of lost jobs fell significantly from April to May. In April, 20.2 million jobs were lost. In May, only 2.76 million jobs were lost. Economists had previously estimated that the loss of jobs in May would be closer to 8.5 million. The Labor Department’s employment report is set to be released on Friday, which will provide a more accurate count.

Zoom continued to rise in value on Wednesday, as the company released its sales and earnings data earlier this week. Zoom reported a net income of $27 million this quarter, as compared to $200,000 this time last year. This has resulted in their sales growing by 169% as more businesses use Zoom in lieu of face-to-face meetings. Zoom’s share price rose by 7.58%.

AMC EntertainmentHoldings Inc. is still seeing losses, as movie theaters remain closed to the public. A representative from AMC spoke about expecting a loss for the first quarter of 2020, as its share price fell by 2.5%.

READ MORE: https://callputstrike.com/2020/06/03/obama-speaks-amc-struggles-the-new-york-times-climbs-daily-financial-news-summary-for-wednesday-june-3-2020/

Investing & Retirement: Different Types of IRAs

READ MORE: https://callputstrike.com/2020/05/05/investing-retirement-different-types-of-iras/

Business Education, Investing, Market Insider, News, Stock Market, Trader Talk