Showing posts with label mall. Show all posts
Showing posts with label mall. Show all posts

Sunday, May 24, 2020

WEEKEND WRAP: Governments Throw $$$ Billions At Drug Companies; Mall Rents Go Unpaid; Unemployment Soaring; Stocks Higher

Spurred by an announcement by Moderna (MRNA) that early trials of a possible COVID-19 vaccine were positive, stocks rode a big Monday rally to better than three percent gains across the major indices. All but the NYSE Composite closed at 11-week highs, the Comp. falling just points short.

The irony of the rally was that Moderna, a company that has never made a single dime of profit (they've lost $1.5 billion since 2016), closed last Friday at 66.68, finished Monday at an even $80 per share, but closed out the week at 69.00. In between, there were some big paydays for insiders. If that wasn't proof enough that the market is a crony capitalist playground, then something's wrong with people's world views.

It was the ultimate slap in the face to the American public by the rich and connected, the one-percenters, who made a show of fake news over something ultimately immaterial. It was a very sad display of fascism in practice.

To make matters even worse, Moderna received up to $483 million in federal funding to accelerate development of its coronavirus vaccine. Governments around the world are throwing money at well-heeled companies working on a vaccine. In the United States, the Biomedical Advanced Research and Development Authority (BARDA), a federal agency that funds disease-fighting technology, has announced investments of nearly $1 billion to support coronavirus vaccine development and the scale-up of manufacturing for promising candidates. Johnson and Johnson, Sanofi, and GlaxoSmithKline are among about 100 companies being funded for research toward a coronavirus vaccine by countries from Canada, to Singapore, to France.

The US government committed up to $1.2 billion to fund Oxford University and drug maker, AstraZeneca, in a race to produce a vaccine by October, it was announced on Friday.

The quickest a vaccine has ever been developed is four years from phase one trials to working vaccine on the market. No vaccine for a coronavirus has ever been successfully developed. SARS and MERS are variants of coronaviruses. There are no vaccines to protect against them.

This is just the common folly of the age in which we live. Instead of spending time explaining to people how to strengthen their individual immune systems - the best defense against all diseases and viruses - world governments spend taxpayer dollars funding companies that don't need any extra money. It's an incredible waste of capital, but you can bet the executives of the Big Pharma companies (one of Washington's biggest lobbying groups) and high-ranking scientists are making bank on your dollar.

Meanwhile, back in the real world, the "official" unemployment figure is 14.7%, with more than 36 million Americans out of work. Wall Street continues to party while Main Street gets the shaft, as usual. Lockdowns and social distancing restrictions have blown a hole in small businesses, many of which will never recover and will be bankrupt within months, if not already.

Malls are going broke. The biggest mall in the country, Minnesota's Mall of America, is two months delinquent on it's $1.4 billion loan. Other mall landlords report collecting less than 25% of rent due from April and May. With June approaching quickly, many retailers will be three months behind on rent payments and subject to lockouts, forced liquidations, and other draconian measures written into their leases.

Bankruptcies are mounting and delinquency notices are flying around everywhere. With retail operations - from clothing stores to hair salons to baseball card shops and everything in between - suffering as a result of the nearly nationwide two-month lockdown, many employees who were furloughed will not have jobs to go back to when everything begins to get back to some semblance of normal. That means extended unemployment for millions, poverty and homelessness set to soar.

The federal government's additional $600 a week in unemployment benefits via the CARES act will run out at the end of July, just in time for back-to-school sales that may not happen because some schools won't be reopening and many colleges are planning to allow only limited on-campus activity, with many classes offered via the internet only.

The world has changed, and is changing, though it doesn't appear to be for the better, at least at first blush.

Gold and silver caught bids on the paper markets this week with gold trading as high as $1756.90 per ounce, closing out at $1732.70 bid. Silver was an even better performer, ripping through the $17 per ounce price on Monday, trading as high as $17.57 per ounce before settling in at $17.19 on Friday.

In the physical market, premiums have begun to ease after an incredible supply-demand tug-of-war. Dealers are still facing shortages of certain items, but on eBay, at least, prices were lower for the week, although still well above spot prices.

Here are the most recent prices (Sunday, May 24) for specific items on eBay:

Item / Low / High / Average / Median
1 oz silver coin / 22.74 / 38.98 / 30.72 / 29.60
1 oz silver bar / 25.45 / 39.50 / 29.84 / 26.98
1 oz gold coin / 1,855.00 / 1,985.00 / 1,894.48 / 1,894.27
1 oz gold bar / 1,839.93 / 1,987.95 / 1,869.38 / 1,855.52

Oil was up, treasuries were fairly flat for the week. It's a beautiful holiday weekend, so we're calling this a wrap, right here.

Get out and get some sun!

At the Close, Friday, May 22, 2020:
Dow: 24,465.16, -8.94 (-0.04%)
NASDAQ: 9,324.59, +39.71 (+0.43%)
S&P 500: 2,955.45, +6.94 (+0.24%)
NYSE: 11,331.97, -19.63 (-0.17%)

For the Week:
Dow: +779.74 (+3.29%)
NASDAQ: +310.03 (+3.44%)
S&P 500: +91.75 (+3.20%)
NYSE: +384.65 (+3.51%)