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rickgthf
Senior Advisor

Covid, looks like trouble ahead, the implications.

Big spikes in new cases for several states, in particular, Texas, North Carolina, Florida, & Arizona, put down to the cavalier incautious behavior over the Memorial Day holiday.    Arizona is near hospital capacity The lesson is clear, if you don't respect this virus, it will make you respect it.

  The implications are clear if we get a second wave, or even a good spike, people will reduce their activity and the economy will suffer.  Gasoline consumption (and ethanol) will remain modest.

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8 Replies
BA Deere
Honored Advisor

Re: Covid, looks like trouble ahead, the implications.

It`s like a horror movie, is there 3 minutes left or 30 minutes left?  If it`s 30 minutes left, then the "bad guy" really isn`t dead yet.  Smiley Happy   The real test is going to be when school starts in the fall, if a spike is avoided then, that`ll be good.

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sdholloway56
Senior Advisor

Re: Covid, looks like trouble ahead, the implications.

Lotta people trying to make it fit into their script but it is just a novel virus and will do what pretty virulent novel viruses do, in the absence of major behavior modification.

These spikes are driven by reopening, but we'll probably see more stemming from the protests, starting in a few days.

I think Chairman Powell's assessment of the economic trajectory will probably turn out to have been optimistic but it is still pretty stunning- an annual GDP print of -6.5 and 9.5% unemployment by the end of the year are still historically awful. And if growth does return to 5% in '21 then we'll be back where we started sometime in '22.

Stock market needs to tank now, so that the WH and Mitch will start fitting the turbochargers onto the printing press in order to have an economy for the election.

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sdholloway56
Senior Advisor

Re: Covid, looks like trouble ahead, the implications.

Only 200K fewer than last week on continuing claims at 18.9M.

And that's with many states well into reopening, and who knows how many still on payrolls for PPP. As that runs out over the next month they'll need to be employed only because there is demand for what they produce.

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sdholloway56
Senior Advisor

Re: Covid, looks like trouble ahead, the implications.

Spinnin' and hopin' doesn't count for anything other than maybe owning the daily news cycle and pumping stocks for a while.

The 'rona calls the tune.

BTW, the tuition bill has arrived for some of the lunatic day trade crowd. Hope they can pay it with house money.

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rickgthf
Senior Advisor

Re:It's pretty obvious by now that a good portion of .....

It's pretty obvious by now that a good portion of all that coronavirus emergency money has just gotten sucked into the stock market.  At some point, investors are finally going to realize that the economy isn't going to bounce back as fast as they might think and that money will vanish into thin air leaving future taxpayers with the debt.

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sdholloway56
Senior Advisor

Re: Re:It's pretty obvious by now that a good portion of .....

Also bad PR for "capitalism" as we call it.

Tens of millions unemployed, many more economically insecure and "the market" just gave Jeff Bezos $50B.

Hope his ex held on to her stock.

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sdholloway56
Senior Advisor

Re: Re:It's pretty obvious by now that a good portion of .....

Even if the US pandemic is flattened and dispersed for the moment, the global situation is out of control.

I think that the OECD is probably high with their dour outlook for global growth. 

 

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sdholloway56
Senior Advisor

Re: Re:It's pretty obvious by now that a good portion of .....

World case adds up 21 pct from 7 day MA yesterday.

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