Another reason stocks are rallying? A belief in negative interest rates by early 2021
The Fed funds futures market, which trades bets on where the Federal Reserve’s benchmark interest rates are headed, has rallied this week to send prices for futures contracts in early 2021 above 100. Above 100 traders are pricing in negative interest rates from...
Another week, another 3.17 million new claims for unemployment, but stocks move higher
Initial claims for unemployment totaled 3.17 million for the week ended May 2, the Labor Department reported today. Economists surveyed by Bloomberg had projected 3 million new claims for the week. This week’s total was down from the 3.85 million initial claims...
Not good news for the capital goods sector: Fed finds 42% of non-financial U.S. public companies are discussing slashing investments
A new study by the Federal Reserve that looked at 600 earnings calls last month found that 42% of American non-financial public companies are discussing slashing investments. Another 17% are focused on drawing down on credit lines (The study, conducted by Fed ,...
Today’s big job losses in ADP survey don’t bode well for Thursday new unemployment claims and Friday government jobs report
Employment at U.S. companies plummeted in April by the most in records back to 2002, according to numbers fro the ADP Research Institute release today.. The report reflects data through April 12 in order to align with the report from the Labor Department for April,...
Disney misses Wall Street projections on earnings; signals worse to come
How did Wall Street analysts get Disney (DIS) earnings today so wrong? Analysts had been projecting earnings of 86 cents a share. The company reported earnings of just 60 cents for the company’s second quarter. The bigger-than-Disney takeaway here is...
Inflation continues to fall; deflation a possibility
The Organisation for Economic Cooperation and Development said annualized inflation across the group of 37 advanced economies slowed to 1.7% in March from 2.3% in February. That’s the biggest deceleration since the 2008 global financial crisis. Energy prices...
Credit crunch hits credit cards hard
Credit card issuers have already cut the credit limits or closed credit card accounts entirely for about 1 in 4 credit card holders–almost 50 million Americans–in the past 30 days, according to a survey byLending Tree’s Compare Cards website. The...
Treasury to borrow $3 trillion during April to June quarter
Okay, the Treasury actually will need to borrow only $2.99 trillion, but close enough, no? It will still be a record. The previous record for borrowing in a single quarter was $530 billion in the July to September 2008 quarter in the fallout from the global financial...
It’s May–time for a mortgage and rental crisis
By the end of April 3.8 million homeowners had sought mortgage relief and were not making their payments. That’s a 2,400% increase from early March, Black Knight, a mortgage technology and data provider, told the Washington Post. The problem may be even worse...
Wells Fargo and JPMorgan Chase stop accepting applications for home equity loans
As economic indicators go, this isn’t one that I follow in normal times. In normal times banks are happy to accept an application for a home equity loan from anyone who owns a house. Real estate is a good credit risk. In normal times. But if you’re still...
So this is volatility! Don’t beat yourself up if you don’t get each day right
On Wednesday, I felt really stupid. I don’t believe in this rally. I still think we’re due for the bear to come roaring back. And I think the bottom in this market is still somewhere ahead. But on Wednesday April 29, I felt completely WRONG. The Standard...
Adding Coke to my Dividend Portfolio
Today’s shocking announcement from Royal Dutch Shell (RDS-A) that it would cut its 10% dividend, to 16 cents a share is a brutal reminder of one of the big challenges facing dividend investors. Royal Dutch shares were down 12.02% as of 3 p.m. Nw York time today,...
Another 3.8 million new claims for unemployment in past week and job losses shift to white color jobs
The job losses continued, as expected, with 3.84 million people filing new claims for unemployment in the week that ended on April 25. That follows on 4.44 million new claims for unemployment in the prior week. Economists surveyed by Bloomberg had projected 3.5...
Fed keeps policy stable, says 0% rates as far as the eye can see
As expected the Federal Reserve left interest rates at their current level of 0%-0.25%. And there were very few changes in the central bank’s language. But a few subtle shifts are worth noting, I believe. The Fed said in early April that “We have also committed...
So much for the 2014 economic rally: U.S. GDP fell annualized 4.8% in the first quarter
The U.S. economy contracted at a 4.8% annualized pace in the first quarter. That’s the worst slide since 2008 and the first down quarter for growth since 2014. Consumer spending, no surprise in days of coronavirus shelter at home orders, led the decline (with a...
Are we headed into an era of longterm deflation? Will the Fed say it’s worried about deflation after tomorrow’s meeting?
As long as I can remember (which is only back about 40 years when it comes to the economy) the worry has been inflation. From the stagflation of the late 1970s, to Paul Volcker’s brutal but successful assault on inflation in the early 1980s, to the seemingly...
Why McConnell’s idea to let states and cities go bankrupt is great–if you want to make the coronavirus recession worse
I’ll bet Mitch McConnell has Federal Reserve chair Jerome Powell tearing his hair out. McConnell has repeatedly said in recent days that he’s opposed to any plan to provide $500 billion or so of Federal (that is taxpayer money) to state and city...
Selling ONEOK out of my Dividend Portfolio ahead of earnings and after ex-dividend date
The greatest danger of any dividend position right now is from a cut to the dividend payout. That kind of cut would send even an already crushed stock lower. I think that’s the possibility facing shares of ONEOK (OKE) when it reports earnings on April 28. The...
The re-opening rally is back on
Today is all about optimism–forget plunging oil prices, uncertain earnings, or a first quarter drop in GDP– for an upturn in the economy as more states–Colorado is newest to climb on board–re-open parts of their economies. Today, at least, no...
Brazil ETF falls 8% today on double blows of political scandal and coronavirus response (or lack thereof)
As of the close on April 24, the iShares MSCI Brazil Capped ETF (EWZ) was down 7.71% today to $22.15. Brazil is facing an intertwined crisis as a president who has called the coronavirus pandemic a “fantasy” also struggles with a political crisis that...
Let’s hear it for stability–thank goodness, so far today is dull on the U.S. market
No big moves. No major disruptions. No threats of meltdowns. Today has been a welcome breather, a bit of stability, for  market that’s had more than its share of excitement this week. So far. It’s only 1:30 p.m. in New York. And we could see selling or...
“Flop” in remesivir antiviral drug in Chinese trial takes starch out of stocks
The Financial Times reported that a Chinese trial for Gilead Sciences’s (GILD) antiviral drug remdesivir against Covid-19 ended without meaningful conclusions on its efficacy. That was enough to reverse the gains in the Standard & Poor’s 500 on the...
So how quickly would Americans resume “normal” activities? New survey gives an answer or two
A new survey from CBS News shows that most Americans would be reluctant to head out to former activities even if stay-at-home orders were lifted now. Only 13%, for instance, would be comfortable going to a large sports or entertainment event if a stay-at-home order...
Another 4.4 million new claims for unemployment reported today
More than 4.4 million Americans filed for unemployment benefits for the week ended April 18, according to the Labor Department today. From March 15 to April 18 26.5 million people have filed initial claims for unemployment. Economists estimate that the national...
Just a reminder: weekly report on new claims for unemployment tomorrow
The projections from economists are that the total initial claims for unemployment will fall to 4.5 million for the week ended on April 18. That would still be a horrendous number. The total weekly figure at the beginning of this spike was 280,000. Last week, 5.25...
Selling Restaurant Brands into today’s “another coronavirus rescue bill” bounce
There was that little detour for the complete and utter meltdown in the oil market, but now I’m resuming my plan to sell into the “re-opening the economy rally.” That rally is in its last stages I believe, with its life extended by another...
Congress moves close to $470 billon deal with $310 billion for small business
The Senate could vote as early as 4 p.m. today to approve  $470 billion coronavirus rescue bill that includes $310 billion to replenish the small business forgivable loan program. The House would take up the deal on Thursday but need unanimous consent to move the bill...
Coca-Cola says it starts to feel the coronavirus slowdown in April
Coca-Cola (KO) beat on earnings and revenue in the first quarter. But, the company said today, April 21, monthly volumes have slumped in April by about 25% globally. The most likely cause of the pattern: Consumers stocked up on Coke products as the coronavirus...
Yesterday’s carnage in the May oil futures spreads today to the June futures
After plunging below $0 on Monday as the May futures contracts neared expiration, West Texas Intermediate continued its descent with the price of oil on the June futures falling to $10 a barrel. The problem, clearly, isn’t in just a technical glitch in the...Jim’s Daily Email Alerts:
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