[Market Madness] Edition 0093
Nothing Like Good 'Ole Stimulus
In the meantime
Well folks, Tesla ripped after market with a positive earnings report and sizzled out at the open. The markets in general are lagging behind today, caught up in the drama caused by ongoing stimulus talks, and the release of federal agents into protest-heavy cities. This action by Donnie seems to be widening the divide between himself and the gubernatorial leaders who he’s utterly declared unfit. Gubernatorial leaders (Governors) have begun voicing concerns about this as well as state and federal legal teams investigating the legality of using federal agents as a means of force within state jurisdictions.
“The Constitution leaves the “so-called police power” in the hands of state and local officials. It is one of the “powers not delegated the United States” and instead is “reserved to the states,” as the 10th Amendment says.” (excerpted form LA Times article)
On the stimulus side, rumors have surfaced that the talks have included another round of physical checks in the same denomination ($1,200/person, $2,400 for couples) and a potential extension of unemployment benefits, but reduced to $400/week instead of the original $600/week. Both Republicans and Treasury Secretary Mnuchin have scrapped Donnie’s idea for a payroll tax cut in what will be the initial draft of the bill — he’ll likely have some bad words to say about it, and possibly threaten with a veto if he does not get his way. It looks like there will be a bitter battle over every word in the bill, as news sources discussing the initial workings of the bill seem to highlight many disagreements across the aisle. The hope still remains for the bill to meet the August deadline, but one can only hope. Read more here.
Elsewhere, overseas indices were mixed, gold is up, oil is down, and volatility is ticking up. Secretary of State Pompeo continues to push the China rhetoric, urging citizens of China to divert from the government’s direction. Tensions continue to flare up, and will likely come to a head soon. The markets sold off today, closing the day well into the red.
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Fundamentals
Thursday’s Close:
Dow Jones: -1.31%
S&P 500: -1.23%
NASDAQ: -2.29%
US 10 YR: 0.580%
Crude OIL: $41.08
Market Madness Portfolio: -1.25%
COVID 19 Global Cases: 15,321,211
Indices Overseas:
FTSE 100: +0.071%
Nikkei 225: -0.58%
Hang Seng: +0.82%
TEDRATE: 0.11
LIBOR (3 month): 0.26350%
Jobless jump
For the first time since April, unemployment claims have risen, a signal of a economic recovery stall. The rise was recorded at 1.416 million, higher than the estimate on Wall Street of 1.3 million. As we discussed yesterday, the high frequency economic data from the NY Fed showed economic stagnation, and we are further solidifying this idea today with the faltering jobs recovery information. This week (last week’s claims, since the data lags by one week) of unemployment claims marks the 18th straight week of 1 million plus claims. The heightening of claims from last week to this week puts further emphasis on both the severity of the rising COVID 19 cases on the economic recovery as well as the focus on the next round of fiscal stimulus.
Since we cannot change the outcome of these numbers, we must look ahead. The next point of interest/worry is going to be the July jobs report from the BLS. This will come out on August 7, and will recap all jobs data from July. If last week’s jobless claims is any indicator, it would be concerning to see a retraction in the overall job pattern when looking at the month. The jobless news, in combination with everything else going on, has led to a market decline today. Parsing through all the information available to a market participant right now seems utterly nightmarish. All we can do now is hope that continued Fed involvement and the passing of new stimulus will keep liquidity in the markets.
Read more here, here, and here.
Quick Takes
Masks in Texas? (via NY Times)
More on federal agents in Portland. (via NY Times)
South Korea announces economic recession after second straight quarter of GDP decline. (via WSJ)
Introducing… the Seattle Kraken, the newest NHL team. (via home page)
Tesla seeks legal action against Rivian. (via CNBC)
More on the controversial new Fed nominee. Some fear loss of Fed independence. (via CNBC)
Reader’s Corner
The reader is suggested to find positive and upbeat media outside of the storm within finance and politics. Find a moment to smile, like watching this GIF of a cute dog.
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