Apple said it will close an additional 14 stores, all in Florida, as the company takes preemptive action amid an increasingly alarming spike in COVID-19 cases across a number of US states.
That brings the total to 32. The company first announced plans to reclose some locations late last week, after it became apparent that the risk of a second wave in the US is real. All seven Houston stores were closed on Wednesday.
News of the Florida closures came on a day when Texas governor Greg Abbott froze the state’s reopening push and Houston exhausted its ICU capacity. California reported another 5,349 cases, the second-most ever for a day. Cases in Arizona rose 5.1%, twice the 7-day average rate.
Read more: Texas Freezes Reopening Push As Houston Faces ‘Apocalyptic’ July 4th
Nevertheless, equities in the US managed to climb after a choppy session defined by disconcerting headlines and wild balderdash out of Donald Trump’s Twitter feed, where the president lashed out at Black Lives Matter, quoting an unnamed “leader” whose remarks Trump said are tantamount to “Treason, Sedition [and] Insurrection!”
It would be funny — but it’s not.
Although tech underperformed marginally into the US afternoon, it’s worth noting that the Nasdaq 100/S&P 500 ratio has now very nearly reached dot-com highs.
Big-cap tech is gunning for its best quarter in nearly two decades.
And yet, some worry the rally suffers from a lack of breadth. As ever, there are myriad ways to measure market breadth, but it’s worth noting that a disconnect is opening up between the Nasdaq Composite and the number of constituents trading above their 50-day moving average.
Meanwhile, a new RBC survey shows a surge in respondents who think valuations are too high.
“Those who say valuations are attractive or very attractive plummeted to one of the lowest levels we have seen since we started conducting the survey in 1Q18 (just 13%)”, the bank writes, adding that “those who say valuations are expensive or very expensive surged [to] 56%” the highest ever.
Looking ahead, the question on everyone’s mind is (or at least should be) “Who’s next?” Which state will follow Texas in formally pausing the reopening push? And how will the White House react?
Fed chatter on Thursday featured references to the surge in cases. Esther George said a prospective second wave will represent a “persistent risk” going forward. During a webinar hosted by the Florida Chamber of Commerce, Raphael Bostic reminded anyone who needed a refresher that “ultimately our economy operates on confidence”. It goes without saying that confidence could be undermined if the news flow continues to suggest the country never escaped the first wave of COVID.
“While there is an obvious imperative to try to get back to normal, if the virus itself becomes normal within the population, then there will never be a return to previous economic normalcy”, Rabobank warned Thursday. “We are all still hanging our hopes on a vaccine, which is where we have been since day one”.
Total virus cases in the US rose 1.7% on the day, the largest gain since May 30.
“Relative to our 1Q20 survey, expectations of when businesses/daily life will go back to normal have been pushed out further”, RBC wrote, in the same note cited above. “The most popular response to our question… is 2Q21, with 27% of the votes. In our March survey, 3Q20 was the most popular choice with almost half (44%) of the votes”.
A total of 4% said “normal” won’t be back until 2023, if at all.
“As US infections rise again, markets are re-assessing the chances of a rapid return to ‘normal’ economic activity”, SocGen’s Kit Juckes wrote, adding that “if we have to learn to live with and control a virus for some time, rapid recoveries in PMIs and labor markets will stall at a lower level of activity”.
The good news is, that kind of delay could prompt more in the way of stimulus. On that score, Nancy Pelosi said Thursday that her recent chats with Steve Mnuchin have been “more general” in nature and not focused on the next relief bill. She did say that in her estimation, the Treasury secretary is getting the message from the Fed that more relief is necessary.
Oh, and the virus is once again ahead of Trump in the news (h/t EB).
Maybe the White House should charge COVID-19 with “treason, sedition and insurrection”.
25% of the deaths from covid are in the 50-65 age group.
That age group were ( note past tense) some of the bigger spenders into our economy. This demographic age group are staying home and will continue to stay home, at least I know that is what I am doing.
Jeez, how can we worry about a second wave when the first one won’t go away? A very disorganized pandemic if you ask me.
LOL
We’ll just keep that R-zero right around 1 and see how long we can ride out the first wave. As good as things are going now, maybe we can avoid a second wave by getting up to a plateau and just staying there for the next 12 to 18 months. Such a feat would be a first for a “developed” nation, of which the US still considers itself.
I will never understand how anyone can read Trump’s twitter rants and still maintain the illusion that he is fit for office or demonstrates any leadership skills. Yet he is still viewed by many voters as the better choice for the economy and confronting China. It goes to show how much gut feel and tribalism overrule reality much like the discussions around the US government debt/deficits. I’m not saying we don’t all have blindspots, but in the case of Trump, it’s like his followers are out on the road trying to drive from inside a sensory deprivation tank.
Dayjob, to your point regarding Trump’s supporters… The only thing worse than a large group of small-minded bigots is a large group of emboldened and positively-reinforced small-minded bigots.
#MAGAfukyeah
Do you ever get the feeling that too large a percentage of our high school graduates can readily pass an illiteracy test?? A couple of generations like that and I can certainly see where a large group of bigots or idiots can be had. Trumps people??
While there are likely many supporting Trump who are not too bright, it is facile to call all his supporters stupid. If you listen to Fox News for instance, you will find most believing in the stupidity of his opposition. Not a good idea to underestimate your opposition…its like calling the market “stupid” for not knowing there is a recession. A week or two ago someone on these boards pointed to Laguna Beach, CA as a home of the 1%. While most in Laguna are well off, most also work for a living. A little North in Newport Beach however there were a huge number of huge yachts covered in pro-Trump signs (it became a “thing”). The local government had to step in when fights kept breaking out. These are wealthy people, trust funders and business owners, who are perhaps not academics but aren’t stupid. I’m thinking Trump has tapped a populous combination of the feelings righteous indignation of the “disrespected” working white man by others, and the entitlement of the wealthy. These are the forces of which revolutions are made. Woe be to the 1% who doesn’t let some cash really “trickle down”, maintain a meaningful middle class, and at least a modicum of the myth of class mobility.
You raise a very important distinction. I do think it’s important to recognize the many different kinds of intelligence and not to underestimate the appeal of Trump (fool me once). A lot of smart and wealthy people couldn’t care less what Trump says as long as they are making more money in the short-term even if it harms the economy and economic mobility in the long-term. You’re also right about people feeling disrespected and Trump tapping into that regardless of whether there is a legitimate basis for whatever grievances they perceive.
I suppose at the end of the day, politics isn’t much different than rooting for a sports team for a lot of people. It isn’t necessarily about the policy so much as it is “our team,” and of course, the ref is always screwing our team over.
Unfortunately, this election might come down to “dementia” or “stupidity”.
Biden, to his credit, did come out and say that if he were President he would require masks to be worn in public. Seems so obvious.
I’d gladly take “dementia” (even if it’s exaggerated by his opponents) in this case especially since I have confidence in the people that Biden would have in his cabinet.
Going back to the “screwing our team” mentality, I think the perfect encapsulation of that is the latest NYTimes/Siena poll that showed that half of white people over 50 in the battleground states think discrimination against whites is as big a problem as discrimination against minorities. I’m genuinely curious what examples of discrimination those folks have directly experienced or if it’s largely the typical “war on Christmas” reporting that makes them feel that way. Regardless, Trump is like the pitcher who throws spitballs and throws a hissy fit (think George Brett pine tar incident) when the ump calls him on it except Trump is the commissioner’s son and can get rid of the ump if he pleases.
Regarding “dementia”, pullleease people! Joe Biden has a speech impediment, it doesn’t mean he has dementia! He has been a stammerer all his life and look where he is now. Google The King Speech and please watch it. We don’t discriminate against people in wheelchairs or with limps or that are blind so open your minds to trying to understand his disability.
Nobody. The fact that some people may support Trump and have yachts and businesses doesn’t mean they’re smart in the sense that they realize what a threat he is to American Democracy. Specially his unrelenting attacks on the justice system. Or they may be like the farmers who supported Trump thinking he was going to help them after decades of promises left unfulfilled by the Democratic or Republican party then in power. I can’t think of a single reason anyone with any real education would think he isn’t a mistake for history to not repeat. And Mitch McConnell as the idiot who left him in office.