Coronavirus, All the Time… The U.S. took steps to mitigate the spread of the virus, mandating that restaurants and other places that people gather close for at least three weeks.
What it means – Now we’re getting serious. By closing restaurants to anything but delivery service, we’re putting 15.6 million jobs at risk. The trade association expects six million or so to lose their jobs, which would push the unemployment rate from 3.5% to 7.5% in less than a month… and that’s just restaurant workers. What about Uber drivers, theater workers, hotel workers, airport workers… the list goes on. We’re taking big steps to slow the spread of a virus before we’re clear on many things.
As testing increases, it’s likely we’ll find that thousands more were infected and then recovered, which means the fatality rate will fall, probably dropping below 0.5%. When this is over, we will probably question if we over-reacted. Some of us have been asking that question since the beginning.
On the flip side, many are getting a forced taste of working from home and finding that not commuting can be a wonderful thing. It will be interesting to see how this changes our work balance after the virus panic fades.
Federal Reserve to Print $700 Billion, No One Cares… The Fed announced it will buy $500 billion of U.S. Treasury bonds and $200 billion of mortgage-backed bonds. Equities rolled over anyway.
What it means – To be fair, the move wasn’t aimed directly at stocks. The Fed wants banks and other institutions to know that it stands ready to buy quality collateral so that the fixed income and lending markets remain liquid. That’s not a trifling thing.
As investors cash out and businesses slammed by closings draw down lines of credit, some institutions have wondered how they’ll get cash. The Fed is making sure that the back end of the financial system doesn’t freeze up, which is its job.
Joe Biden Wins Big in Florida… Joe Biden trounced Bernie Sanders in the Sunshine State primary.
What it means – It’s all over, but the crying… by the Bernie Bros. Joe Biden beat Bernie Sanders by a wide margin in the Florida primary, putting together a coalition of older, minority, and educated voters. Sanders is said to be reassessing his campaign, while Tulsi Gabbard finally gave up the ghost and endorsed Biden.
The stock market briefly fell to the lowest level since the end of 2016, erasing all the gains of the Trump presidency, taking with it one of his main positive claims. If the markets don’t recover substantially before November, or if the reaction to the virus is thought to be overblown, Biden could have a good chance of taking the Oval Office.
Retail Sales Fell 0.5% in February… Analysts expected sales down 0.1%. Coronavirus worries were just starting to affect the markets at the end of last month.
What it means – This falls into the “bc,” or before coronavirus category, like so many other reports. The national association of retailers estimates that retail sales fell more than 30% last weekend as the “shelter in place” orders started. With most of the nation, or at least the major urban areas, following some sort of lockdown protocol, retail sales will fall through the floor.
When this is over, sales will recover, except in oil. Gasoline purchases will be low for months, if not years, unless the Saudis and Russians come to an agreement.
Housing Starts Dipped 1.5% From January, Up 39% Over Last Year… Pushed around by weather, housing starts dropped a bit.
What it means – In another “bc” report, February housing starts came in a little better than expected, but still down from January. The good news is that starts are so much stronger than at this point in 2019. The bad news is that housing permits fell 5.5% from the 13-year high reached in January. The overall news is that these numbers will tank next month when we figure in the effects of the coronavirus.
Newton, Oregon Tells Citizens Don’t Call 9-1-1 Over Toilet Paper… As the Newton Police Department said on their Facebook page, they can’t believe they have to write this. They had to tell citizens to stop calling 9-1-1 because they couldn’t find toilet paper in the stores.
The police department gently explained that 9-1-1 is for emergencies, and that people dealt with their bodily functions for millennia without toilet paper. They even described some historical alternatives, such as rope soaked in seawater and leaves. Ending on a humorous note, the NPD wrote, “This, too, shall pass.”
Data supplied by Dent Research/Delray Beach Publishing
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