Wednesday morning, ADP reported a loss of 20,236,000 US private sector jobs in April, a record likely never to be broken again (unless an asteroid hits somewhere along the East or West coast).
Job losses covered the entire spectrum, with 11,274,000 jobs lost by businesses with fewer than 500 employees, and 8,963,000 losses by businesses with over 500 employees. The numbers comfirm what everybody already knows, that the United States and the world at large are at the beginning of a Greater Depression, many metrics having already surpassed the Great Depression of the 1930s.
For the week ending May 1, US residential mortgage applications edged up 0.1% while the interest rate on a 30-year fixed loan fell to its lowest level ever, checking in at 3.4%, according to the Mortgage Bankers Association. Purchase activity remains almost 19 percent below year-ago levels.
Stocks gained on Tuesday, though the rally was shunted late in the day, shaving off roughly two-thirds of the gains in the final hour of trading.
While stocks seem to be always going up in recent days, all rallies have been capped by violent resurges of selling, as was the case on Friday, when the major indices gave back all the gains of the week in one session. Stocks have traded in a relatively stable, narrow range since April 6, after the markets had rebounded smartly off the March lows. The S&P 500, during that span, has fluctuated between a low of 2663 and a high of 2939, the all time high of 3386.15 (February 19, 2020) a fading memory.
COVID-19 and the government response to the outbreak has caused wild swings, anguish, and some recovery, after the Federal Reserve, in conjunction with the US Treasury Department has sought to stabilize equity markets, buying up every losing asset they could find, from junk bonds to munis.
Despite the gargantuan lifting by the Fed, stocks are still being stung by first quarter earnings releases showing how disruptive just two to three weeks of partial shutdown (late March) had on the bottom line of various companies.
One of the latest casualties is Disney (DIS), which posted first quarter earnings (fiscal second quarter) of 60 cents against expectations for 91 cents after the closing bell Tuesday. The company, which owns a variety of media and entertainment assets, including movies, ABC, ESPN, Disneyland, DisneyWorld, and other theme parks around the world, also found it necessary to eliminate its semiannual dividend of 88 cents per share for the first half of their fiscal year (October-March). Instead of paying out the $1.6 billion to shareholders, the company will keep the cash for itself, ostensibly to cover ongoing expenses.
Profits at the "magic kingdom" fell 90% year-over-year.
Putting it bluntly, the Mouse in the House just screwed over a large swath of investors expecting a payout on the dividend. Imagine the frustration and angst of not only seeing the stock fall from an all-time high of 161 (November, 2019) to as low as 85 in March, but now to have what was thought to be a guaranteed dividend denied. The stock is trading right around 100 per share as of Tuesday's close.
Also cutting its dividend, Wendy's Co. (WEN) reported Wednesday that its first-quarter net income declined 54.9 percent to $14.4 million from last year's $31.9 million.
Earnings per share were $0.06, down 57.1 percent from $0.14 a year ago. Adjusted earnings per share were $0.09, compared to prior year's $0.14. The company - which reported flat to declining same-store sales across all markets and a number of outlets running out of beef patties on Tuesday - lowered its dividend for the second quarter from 12 cents per share to 5 cents per share, payable on June 15, to shareholders of record as of June 1.
On Tuesday, shares of rental car company Hertz (HTZ) fell more than 14% after it disclosed that it received approval from its lenders to continue negotiations through May 22 to “develop a financing strategy and structure that better reflects the economic impact" of COVID-19. The company, which operates rental car business, many located at airports around the country, is on the ropes and close to filing Chapter 11 reorganization bankruptcy.
Shares of the company, which had reached a 52-week high of 20.29 on February 20, have slid to three dollars in May, closing at 3.01 on Tuesday.
Also on the ropes are retailers Nordstrom (JWN), closing 16 stores permanently, and J. Crew (private), which filed for chapter 11 on Tuesday. Neiman Marcus is reportedly close to chapter 11, and rumors that JC Penny's is in talks with lenders are circulating. An avalanche of store closings, restructurings, and bankruptcies are expected in the sector over the next few weeks and months.
Amid all the chaos, most analysts still insist that major banking firms, such as Bank of America (BAC), wells Fargo (WFC), Citi (C), and JP Morgan (JPM), are all well enough capitalized to survive cascading defaults in commercial real estate, residential real estate, consumer brands, lines of credit, credit cards, student loans and other funding vehicles.
Others are not so certain, expecting rather that the entire edifice of global debt is about to become torn down amid a worldwide pandemic and depression resulting in the collapse of fiat currencies, governments, and central banks.
Whatever your individual outlook, it may be wise to amplify that to the downside by orders of magnitude.
At the Close, Tuesday, May 5, 2020:
Dow: 23,883.09, +133.33 (+0.56%)
NASDAQ: 8,809.12, +98.41 (+1.13%)
S&P 500: 2,868.44, +25.70 (+0.90%)
NYSE: 11,135.40, +79.12 (+0.72%)
Wednesday, May 6, 2020
Tuesday, May 5, 2020
The Fraud Continues: States Defy Feds' Phony Recommendations; Treasury Self-Dealing With Federal Reserve; Remdesivir Fake Medicine
The levels of fraud and corruption at the highest echelons of government, business, finance, and media are astonishing.
A few examples:
FEDERAL GUIDELINES FOR RE-OPENING STATES
States are quickly moving forward on reopening their cities, countries, stores, and service businesses after as much as seven weeks of virtual lockdown and social distancing recommendations from the federal government have rendered their economies little more than zombified, debt-ridden vestiges of the recent past.
The governors of the individual states were provided guidelines by the feds to follow as protocol for safe re-openings, including a declining number of new COVID-19 cases reported over a 14-day period. No state has achieved that metric, though more than 40 are already at some stage of operational functionality.
It's not the states which are - in open defiance of the non-binding federal guidelines - committing fraud or demonstrating any kind of corrupt practice, it is the federal government, in their feeble attempt to keep businesses closed down, effectively destroying the American economy by way of suggesting guidelines to which states could not possibly have adhered.
As the federal emergency declaration ended on April 30, at the same time and prior to that date, the federal government was urging more vigorous testing and rushing tests to states, in full knowledge that the tests for coronavirus would result in higher numbers of positive cases. Not only are a majority of states now testing for the presence of the virus, but they are also testing for antibodies, an indicator that the subject - whether showing symptoms or not (mostly the latter) - had the virus and has either recovered or is recovering. By default, those test results will be added to the number of positive cases for COVID-19, on the assumption that the presence of antibodies confirms coronavirus at some past date.
Thus, the federal government will be able to show increasing numbers of infections and possibly assert that states re-opened too soon and should go back to shutdown mode. That's a fraud because the reason for more positive cases appearing in states is due to increased testing and piling on antibody test results, not that the disease is spreading at a more rapid rate.
What will be telling are the number of deaths from the virus. If there are more positive cases appearing, but the number of deaths slows or remains relatively the same, it would be clear that the virus is neither as deadly as previously assumed nor as prevalent in the most at risk segments of the population.
REMDESIVIR AND HYDROXYCHLOROQUINE
It was widely reported last week that a drug developed by Gilead Sciences (GILD), remdesivir, produced positive results in clinical trials and was fast-tracked by the FDA for front-line use by hospitals in treatment of COVID-19, despite there being no evidence whatsoever that the drug produced anything more than a lessening of time to recovery of roughly 30%. There was no reduction in mortality rates or severity of illness. Remdesivir costs about $1000 a dose, which will be paid out by health insurance companies or more likely, the federal government.
Meanwhile, all news and scientific enquiry into the widely-used, generic Malaria treatment, hydroxychloroquine, has been barred from public consumption, despite many studies showing its efficacy in shortening the time of illness, and lessening the severity of illness. It is also being widely used around the world as a prophylactic, along with zinc and vitamins C and D, as a preventative measure. The drug is available widely for about one daller per dose.
The government, medical community, and media have concocted a story wherein the less-effective $1000 a pop drug that doesn't work very well in combating the disease is preferred over the proven-to-be-effective one dollar drug.
SOCIAL DISTANCING
This one is simple. Anyone urging people to social distance by six feet is either a fraud or a moron. It's widely known that this coronavirus is transmitted by aerosol, through tiny droplets which can suspend n the air over a distance of up to 29 feet, and it also remains active in ventilation systems, like those on cruise ships, apartment buildings, hospitals, stores, malls, everywhere.
FEDERAL RESERVE AND THE TREASURY
When congress passed the CARES Act and the president signed the $2.3 trillion into law, one provision was $450 billion from the exchange stabilization fund to the Federal Reserve. The Exchange Stabilization Fund (ESF) is a U.S. Department of Treasury emergency reserve fund which includes holdings of U.S. dollars (USD), other foreign currencies, and special drawing rights (SDR) funds.
This allowed the Fed to leverage that money 10 times or more in loans or outright bailouts to banks, failing companies, strapped municipalities and other connected entities. It effectively made the US treasury a shareholder in the Federal Reserve, a private bank, putting taxpayer money into the mix.
It was announced on Monday that the Treasury would be issuing $3 trillion of bonds to cover the costs related to the CARES Act and COVID-19. These bonds will eventually end up in the hands of the Federal Reserve, of which the Treasury Department is a shareholder.
In the private sector, this would be known as self-dealing, a crime punishable by a good length of time in prison for the perpetrators and/or a hefty fine and barring from financial markets.
In the case of the Fed and Treasury, it's business as usual. Nobody is questioned on the legality of it and nobody goes to jail. Bear in mind, all of this money is a further debt burden to American taxpayers.
When this news came out Monday morning, stocks erased their sizable losses and ended narrowly positive.
Those are just the tip of a proverbial iceberg of fraud and deception.
Generally speaking, Americans are gullible, kind, and fairly easy-going. There are elements of the population, however, that understand enough about politics, mathematics, medicine, and the law to be hopping mad. The American public is being defrauded by its own government, business, medical, and business leaders.
When will enough people say, "enough is enough," and demand change or seek retribution?
At the Close, Monday, May 4, 2020:
Dow: 23,749.76, +26.07 (+0.11%)
NASDAQ: 8,710.71, +105.77 (+1.23%)
S&P 500: 2,842.74, +12.03 (+0.42%)
NYSE: 11,056.28, -2.29 (-0.02%)
A few examples:
FEDERAL GUIDELINES FOR RE-OPENING STATES
States are quickly moving forward on reopening their cities, countries, stores, and service businesses after as much as seven weeks of virtual lockdown and social distancing recommendations from the federal government have rendered their economies little more than zombified, debt-ridden vestiges of the recent past.
The governors of the individual states were provided guidelines by the feds to follow as protocol for safe re-openings, including a declining number of new COVID-19 cases reported over a 14-day period. No state has achieved that metric, though more than 40 are already at some stage of operational functionality.
It's not the states which are - in open defiance of the non-binding federal guidelines - committing fraud or demonstrating any kind of corrupt practice, it is the federal government, in their feeble attempt to keep businesses closed down, effectively destroying the American economy by way of suggesting guidelines to which states could not possibly have adhered.
As the federal emergency declaration ended on April 30, at the same time and prior to that date, the federal government was urging more vigorous testing and rushing tests to states, in full knowledge that the tests for coronavirus would result in higher numbers of positive cases. Not only are a majority of states now testing for the presence of the virus, but they are also testing for antibodies, an indicator that the subject - whether showing symptoms or not (mostly the latter) - had the virus and has either recovered or is recovering. By default, those test results will be added to the number of positive cases for COVID-19, on the assumption that the presence of antibodies confirms coronavirus at some past date.
Thus, the federal government will be able to show increasing numbers of infections and possibly assert that states re-opened too soon and should go back to shutdown mode. That's a fraud because the reason for more positive cases appearing in states is due to increased testing and piling on antibody test results, not that the disease is spreading at a more rapid rate.
What will be telling are the number of deaths from the virus. If there are more positive cases appearing, but the number of deaths slows or remains relatively the same, it would be clear that the virus is neither as deadly as previously assumed nor as prevalent in the most at risk segments of the population.
REMDESIVIR AND HYDROXYCHLOROQUINE
It was widely reported last week that a drug developed by Gilead Sciences (GILD), remdesivir, produced positive results in clinical trials and was fast-tracked by the FDA for front-line use by hospitals in treatment of COVID-19, despite there being no evidence whatsoever that the drug produced anything more than a lessening of time to recovery of roughly 30%. There was no reduction in mortality rates or severity of illness. Remdesivir costs about $1000 a dose, which will be paid out by health insurance companies or more likely, the federal government.
Meanwhile, all news and scientific enquiry into the widely-used, generic Malaria treatment, hydroxychloroquine, has been barred from public consumption, despite many studies showing its efficacy in shortening the time of illness, and lessening the severity of illness. It is also being widely used around the world as a prophylactic, along with zinc and vitamins C and D, as a preventative measure. The drug is available widely for about one daller per dose.
The government, medical community, and media have concocted a story wherein the less-effective $1000 a pop drug that doesn't work very well in combating the disease is preferred over the proven-to-be-effective one dollar drug.
SOCIAL DISTANCING
This one is simple. Anyone urging people to social distance by six feet is either a fraud or a moron. It's widely known that this coronavirus is transmitted by aerosol, through tiny droplets which can suspend n the air over a distance of up to 29 feet, and it also remains active in ventilation systems, like those on cruise ships, apartment buildings, hospitals, stores, malls, everywhere.
FEDERAL RESERVE AND THE TREASURY
When congress passed the CARES Act and the president signed the $2.3 trillion into law, one provision was $450 billion from the exchange stabilization fund to the Federal Reserve. The Exchange Stabilization Fund (ESF) is a U.S. Department of Treasury emergency reserve fund which includes holdings of U.S. dollars (USD), other foreign currencies, and special drawing rights (SDR) funds.
This allowed the Fed to leverage that money 10 times or more in loans or outright bailouts to banks, failing companies, strapped municipalities and other connected entities. It effectively made the US treasury a shareholder in the Federal Reserve, a private bank, putting taxpayer money into the mix.
It was announced on Monday that the Treasury would be issuing $3 trillion of bonds to cover the costs related to the CARES Act and COVID-19. These bonds will eventually end up in the hands of the Federal Reserve, of which the Treasury Department is a shareholder.
In the private sector, this would be known as self-dealing, a crime punishable by a good length of time in prison for the perpetrators and/or a hefty fine and barring from financial markets.
In the case of the Fed and Treasury, it's business as usual. Nobody is questioned on the legality of it and nobody goes to jail. Bear in mind, all of this money is a further debt burden to American taxpayers.
When this news came out Monday morning, stocks erased their sizable losses and ended narrowly positive.
Those are just the tip of a proverbial iceberg of fraud and deception.
Generally speaking, Americans are gullible, kind, and fairly easy-going. There are elements of the population, however, that understand enough about politics, mathematics, medicine, and the law to be hopping mad. The American public is being defrauded by its own government, business, medical, and business leaders.
When will enough people say, "enough is enough," and demand change or seek retribution?
At the Close, Monday, May 4, 2020:
Dow: 23,749.76, +26.07 (+0.11%)
NASDAQ: 8,710.71, +105.77 (+1.23%)
S&P 500: 2,842.74, +12.03 (+0.42%)
NYSE: 11,056.28, -2.29 (-0.02%)
Sunday, May 3, 2020
Stocks Flat As States Begin to Reopen; COVID-19 Still Wreaking Havoc on Lives, Markets
This installment of the WEEKEND WRAP is going to be one of the shortest since the onset of the coronavirus crisis because noting much of consequence occurred, other than the "breakthrough" with Gilead Science's remdesivir clinical trial.
Turns out, remdesivir, as was already known, has little effect on the virus and doesn't reduce mortality at all. The study was purposely shortened to include only the data that shows the drug reduces the time to recovery by about 30%. Big deal. You take it - at $1000 a dose - and you recover in ten days rather than 14, at a cost of some $6-8000. Yeah, great. Four fewer days with a bad cold and a big pharmacy bill.
Hydroxychloroquine with zinc supplements and healthy doses of Vitamins C, D3, and Quercetin (or red wine, onions, green tea, apples, berries) before infection will likely prevent one from contracting the virus, and, the same combination after infection (if started early) will shorten the duration and severity.
Proven.
Mainstream media and government won't allow this information to even be considered.
The release of the remdesivir story was timed to coincide with the release of first quarter GDP, which was a very disappointing -4.8 percent. It's worth noting that many mainstream economists, like those from Bank of America and Goldman Sachs, downplayed the first quarter and thought it was going to come in as a positive number, proving, once again, that expert opinions should be treated in a similar manner to online stock touts. Both are better avoided and trusting in your own gut.
Most states have at least partially re-opened their economies, lead by Georgia, Florida, Tennessee and other Southern and some Midwestern states, notably Iowa, the Dakotas, Kansas, Nebraska, Oklahoma, Missouri, Texas). Some eight states never actually issued lockdown orders in the first place.
Meanwhile New York, New Jersey, Connecticut, Massachusetts, Virginia, Michigan, California, and others are still operating under lockdown restrictions.
This Wired.com article from April 30 offer some accurate state-by-state reporting.
Stocks finished the week about where they started (see below).
Treasuries closed out the week with the 2-year note yielding 0.20%, the 10-year, 0.64%, and the 30-year, 1.27%. There was limited movement. The 2-year down two basis points, the 10-year up four, and the 30-year up 10. The curve steepened 10 basis points to 117, essentially all driven by the 30-year.
Oil seems to be stabilizing, but at a price that will slaughter some smaller producers. WTI crude finished the week at its high of $19.69 a barrel on the June contract. Predictions are for a sloppy termination of the current contract, though nothing quite like the end of the May contract when oil prices turned negative.
Precious metals continue to be massaged and depressed. Gold futures closed out on Friday at $1700.40 per troy ounce. Silver futures finished at $14.97. The gold/silver ratio stands at 113.6, near a 5000-year high. The sensible move, for investors would be to be buying silver for the foreseeable future, as premiums on both metals are high, though, on a percentage basis, the silver premiums are drastic. It's nearly impossible to purchase silver for under $20 an ounce in quantity. Smaller amounts, such as one ounce coins and bars carry premiums of 70 to 100% or higher, whereas gold premiums are about $130-160, less than 10%.
It's actually far easier to purchase silver than gold, especially on ebay, where delivery delays such as those being experienced by dealers, are cut down to a few days rather than weeks. Delivery delays are slowly abating, but minimum order sizes remain in place at many online dealers.
It appears as though stocks are going to tumble on Monday, as word leaked out that Berkshire Hathaway, the holding company of Warren Buffett, is going to be selling hard into the recent rally. A retest of the March lows could be underway as stocks finished dramatically lower Friday - which happened to be May 1 - wiping out the week's gains.
The Dow Jones Industrial Average has failed repeatedly to break through the 50% retrace line off the lows, and that could portend a significant shift in risk assessment.
At the Close, Friday, May 1, 2020:
Dow: 23,723.69, -622.03 (-2.55%)
NASDAQ: 8,604.95, -284.60 (-3.20%)
S&P 500: 2,830.71, -81.72 (-2.81%)
NYSE: 11,058.57, -313.77 (-2.76%)
For the Week:
Dow: -51.58 (-0.22%)
NASDAQ: -29.57 (-0.34%)
S&P 500: -6.03 (-0.21%)
NYSE: +40.68 (-0.37%)
Turns out, remdesivir, as was already known, has little effect on the virus and doesn't reduce mortality at all. The study was purposely shortened to include only the data that shows the drug reduces the time to recovery by about 30%. Big deal. You take it - at $1000 a dose - and you recover in ten days rather than 14, at a cost of some $6-8000. Yeah, great. Four fewer days with a bad cold and a big pharmacy bill.
Hydroxychloroquine with zinc supplements and healthy doses of Vitamins C, D3, and Quercetin (or red wine, onions, green tea, apples, berries) before infection will likely prevent one from contracting the virus, and, the same combination after infection (if started early) will shorten the duration and severity.
Proven.
Mainstream media and government won't allow this information to even be considered.
The release of the remdesivir story was timed to coincide with the release of first quarter GDP, which was a very disappointing -4.8 percent. It's worth noting that many mainstream economists, like those from Bank of America and Goldman Sachs, downplayed the first quarter and thought it was going to come in as a positive number, proving, once again, that expert opinions should be treated in a similar manner to online stock touts. Both are better avoided and trusting in your own gut.
Most states have at least partially re-opened their economies, lead by Georgia, Florida, Tennessee and other Southern and some Midwestern states, notably Iowa, the Dakotas, Kansas, Nebraska, Oklahoma, Missouri, Texas). Some eight states never actually issued lockdown orders in the first place.
Meanwhile New York, New Jersey, Connecticut, Massachusetts, Virginia, Michigan, California, and others are still operating under lockdown restrictions.
This Wired.com article from April 30 offer some accurate state-by-state reporting.
Stocks finished the week about where they started (see below).
Treasuries closed out the week with the 2-year note yielding 0.20%, the 10-year, 0.64%, and the 30-year, 1.27%. There was limited movement. The 2-year down two basis points, the 10-year up four, and the 30-year up 10. The curve steepened 10 basis points to 117, essentially all driven by the 30-year.
Oil seems to be stabilizing, but at a price that will slaughter some smaller producers. WTI crude finished the week at its high of $19.69 a barrel on the June contract. Predictions are for a sloppy termination of the current contract, though nothing quite like the end of the May contract when oil prices turned negative.
Precious metals continue to be massaged and depressed. Gold futures closed out on Friday at $1700.40 per troy ounce. Silver futures finished at $14.97. The gold/silver ratio stands at 113.6, near a 5000-year high. The sensible move, for investors would be to be buying silver for the foreseeable future, as premiums on both metals are high, though, on a percentage basis, the silver premiums are drastic. It's nearly impossible to purchase silver for under $20 an ounce in quantity. Smaller amounts, such as one ounce coins and bars carry premiums of 70 to 100% or higher, whereas gold premiums are about $130-160, less than 10%.
It's actually far easier to purchase silver than gold, especially on ebay, where delivery delays such as those being experienced by dealers, are cut down to a few days rather than weeks. Delivery delays are slowly abating, but minimum order sizes remain in place at many online dealers.
It appears as though stocks are going to tumble on Monday, as word leaked out that Berkshire Hathaway, the holding company of Warren Buffett, is going to be selling hard into the recent rally. A retest of the March lows could be underway as stocks finished dramatically lower Friday - which happened to be May 1 - wiping out the week's gains.
The Dow Jones Industrial Average has failed repeatedly to break through the 50% retrace line off the lows, and that could portend a significant shift in risk assessment.
At the Close, Friday, May 1, 2020:
Dow: 23,723.69, -622.03 (-2.55%)
NASDAQ: 8,604.95, -284.60 (-3.20%)
S&P 500: 2,830.71, -81.72 (-2.81%)
NYSE: 11,058.57, -313.77 (-2.76%)
For the Week:
Dow: -51.58 (-0.22%)
NASDAQ: -29.57 (-0.34%)
S&P 500: -6.03 (-0.21%)
NYSE: +40.68 (-0.37%)
Friday, May 1, 2020
The World Has Been Hoaxed; Hydroxychloroquine Works; Rent Strike, Mass Protests On Tap for May 1
April is over and done. The month that saw the WuHan Flu, coronavirus, COVID-19, SARS-COV II, or whatever you prefer calling it spread like wildfire throughout the United States and the world also produced the best performance in the S&P 500 since 1987.
As if the stock market's miraculous rebound off the March lows wasn't enough, the Fed's balance sheet, thanks to sopping up trillions in debt of all varieties - from corporate issuance to high yield (junk) to munis to the usual nasty mortgage=backed securities (MBS) and low-yielding treasuries - increased by some $2.23 trillion to a record amount of more than $6.6 trillion.
Also showing up on the national radar are people who are refusing to go back to work because they are making more on unemployment, states reopening businesses with some restrictions and precautions, Florida opening beaches while California closes them down, a GDP for the first quarter of -4.8%, and various misdirections, untruths, fabrications, and outright lies due to conflicts of interest by doctors (including the CDC's Dr. Anthony Fauci) promoting Gilead Science's remdesivir as a primary treatment of COVID-19 with little to no evidence that it does anything more than shorten the length of hospitalizations.
All the while, evidence continues to pile up showing hydroxychloroquine (HCQ) as a drug with a wide range of uses in not only diminishing the severity of coronavirus symptoms, but possibly acting as a preventive treatment, i.e., Lupus patients, who are prescribed Plaquenil (the brand name for HCQ), do not contract coronavirus.
Various studies from countries around the world have shown early use of HCQ is highly effective in combating the coronavirus, though the mainstream media refuses to report any positives about the drug, preferring to bombard the public with questionable research on remdesivir, a drug that can cost as much as $100 per dose, where HCQ can be produced in massive quantities for about a dime per dose.
Peak Prosperity's Chris Martenson, who has been doing incredible daily reporting on the crisis, has details in his latest video:
While the US continues to lurch toward some degree of normalcy at the end of a six-week near-nationwide lockdown, many questions linger, not the least of which being how badly the American public has been hoodwinked by the wealthy elite and their cohorts in government. From all appearances, it seems the public has been royally screwed this time around.
The economy is in tatters, more than 30 million lost their jobs, but what is likely going to be worse, are the millions of small businesses which have been severely hampered or outright destroyed by government overreach. Many of these businesses will not come back in the summer, or the fall. They are gone forever, and with them, their owners facing financial ruin. It will take years to undo the damage wrought by the government response to a virus that essentially affects people over 50 or those with pre-existing serious medical issues.
Friday, May 1, will offer some pushback agains the federal tyranny. There's a nationwide rent strike being waged in big cities and small, along with a May Day work stoppage promoted by employees of some of the multi-national companies that were not forced to shut down for the past six weeks, including Wal-Mart, Amazon, Target, and others. Protests will be very visible, as will the outrage expressed in Michigan, where governor Gretchen Whitmer is extending the lockdown until May 28.
Protesters there have already been storming the Capitol, and some were actually armed inside the Capitol building on Thursday, though that received scant notice on the evening TV news. This explosive situation merits closer attention, as what happens in Lansing, Michigan's capitol, may serve as a template for popular uprisings in places like Virginia, California, New York, Massachusetts, and any other state that believes they can keep the general population under lock and key indefinitely.
With warmer weather and a weekend ahead, some payback may be forthcoming from an angry, frustrated American public.
In other markets, gold and silver were beaten down as they usually are at the end of the month, though the dislocation between spot, futures, and actual prices for acquiring physical metal has completely blown up. Silver especially is out of whack, with premiums over the futures price of anywhere from 30 to 100% now commonplace. Gold premiums are still in the 10-15% range, though dealers have been and continue to impose minimums with lengthy shipping delays.
Oil markets continue to fluctuate wildly as the supply glut and demand collapse refuse to abate. Beyond giants Russia and Saudi Arabia, countries which produce oil as a primary revenue source are going to be devastated, while in the US, rig counts are plummeting as shale drilling operations are being shut down. They're unable to make money at the current prices and investors are being wiped out along with the lenders who financed operations. WTI crude, as of Friday morning is hovering just under $19 a barrel, though it's been as low as $10.64 earlier this week. The June futures contract is beginning to look like another disaster - as was the May contract - in the making.
Treasuries have been relatively unmoved during the week, though the 30-year bond has increased yield from 1.17% last Friday to 1.28% Thursday. The curve has steepened slightly, though not in any statistically meaningful way. 118 basis points covers the entire complex.
Equity futures are pointing to a very ugly open Friday, with Dow futures down more than 450 points.
Could this be the "sell in May and go away" signal? Possible, but the real fallout may not occur until late July or August when earnings and the first reading of second quarter GDP will shock the markets, not just in the United States, but globally. The Greater Depression is ramping up.
At the Close, Thursday, April 30, 2020:
Dow: 24,345.72, -288.14 (-1.17%)
NASDAQ: 8,889.55, -25.16 (-0.28%)
S&P 500: 2,912.43, -27.08 (-0.92%)
NYSE: 11,372.34, -245.89 (-2.12%)
As if the stock market's miraculous rebound off the March lows wasn't enough, the Fed's balance sheet, thanks to sopping up trillions in debt of all varieties - from corporate issuance to high yield (junk) to munis to the usual nasty mortgage=backed securities (MBS) and low-yielding treasuries - increased by some $2.23 trillion to a record amount of more than $6.6 trillion.
Also showing up on the national radar are people who are refusing to go back to work because they are making more on unemployment, states reopening businesses with some restrictions and precautions, Florida opening beaches while California closes them down, a GDP for the first quarter of -4.8%, and various misdirections, untruths, fabrications, and outright lies due to conflicts of interest by doctors (including the CDC's Dr. Anthony Fauci) promoting Gilead Science's remdesivir as a primary treatment of COVID-19 with little to no evidence that it does anything more than shorten the length of hospitalizations.
All the while, evidence continues to pile up showing hydroxychloroquine (HCQ) as a drug with a wide range of uses in not only diminishing the severity of coronavirus symptoms, but possibly acting as a preventive treatment, i.e., Lupus patients, who are prescribed Plaquenil (the brand name for HCQ), do not contract coronavirus.
Various studies from countries around the world have shown early use of HCQ is highly effective in combating the coronavirus, though the mainstream media refuses to report any positives about the drug, preferring to bombard the public with questionable research on remdesivir, a drug that can cost as much as $100 per dose, where HCQ can be produced in massive quantities for about a dime per dose.
Peak Prosperity's Chris Martenson, who has been doing incredible daily reporting on the crisis, has details in his latest video:
While the US continues to lurch toward some degree of normalcy at the end of a six-week near-nationwide lockdown, many questions linger, not the least of which being how badly the American public has been hoodwinked by the wealthy elite and their cohorts in government. From all appearances, it seems the public has been royally screwed this time around.
The economy is in tatters, more than 30 million lost their jobs, but what is likely going to be worse, are the millions of small businesses which have been severely hampered or outright destroyed by government overreach. Many of these businesses will not come back in the summer, or the fall. They are gone forever, and with them, their owners facing financial ruin. It will take years to undo the damage wrought by the government response to a virus that essentially affects people over 50 or those with pre-existing serious medical issues.
Friday, May 1, will offer some pushback agains the federal tyranny. There's a nationwide rent strike being waged in big cities and small, along with a May Day work stoppage promoted by employees of some of the multi-national companies that were not forced to shut down for the past six weeks, including Wal-Mart, Amazon, Target, and others. Protests will be very visible, as will the outrage expressed in Michigan, where governor Gretchen Whitmer is extending the lockdown until May 28.
Protesters there have already been storming the Capitol, and some were actually armed inside the Capitol building on Thursday, though that received scant notice on the evening TV news. This explosive situation merits closer attention, as what happens in Lansing, Michigan's capitol, may serve as a template for popular uprisings in places like Virginia, California, New York, Massachusetts, and any other state that believes they can keep the general population under lock and key indefinitely.
With warmer weather and a weekend ahead, some payback may be forthcoming from an angry, frustrated American public.
In other markets, gold and silver were beaten down as they usually are at the end of the month, though the dislocation between spot, futures, and actual prices for acquiring physical metal has completely blown up. Silver especially is out of whack, with premiums over the futures price of anywhere from 30 to 100% now commonplace. Gold premiums are still in the 10-15% range, though dealers have been and continue to impose minimums with lengthy shipping delays.
Oil markets continue to fluctuate wildly as the supply glut and demand collapse refuse to abate. Beyond giants Russia and Saudi Arabia, countries which produce oil as a primary revenue source are going to be devastated, while in the US, rig counts are plummeting as shale drilling operations are being shut down. They're unable to make money at the current prices and investors are being wiped out along with the lenders who financed operations. WTI crude, as of Friday morning is hovering just under $19 a barrel, though it's been as low as $10.64 earlier this week. The June futures contract is beginning to look like another disaster - as was the May contract - in the making.
Treasuries have been relatively unmoved during the week, though the 30-year bond has increased yield from 1.17% last Friday to 1.28% Thursday. The curve has steepened slightly, though not in any statistically meaningful way. 118 basis points covers the entire complex.
Equity futures are pointing to a very ugly open Friday, with Dow futures down more than 450 points.
Could this be the "sell in May and go away" signal? Possible, but the real fallout may not occur until late July or August when earnings and the first reading of second quarter GDP will shock the markets, not just in the United States, but globally. The Greater Depression is ramping up.
At the Close, Thursday, April 30, 2020:
Dow: 24,345.72, -288.14 (-1.17%)
NASDAQ: 8,889.55, -25.16 (-0.28%)
S&P 500: 2,912.43, -27.08 (-0.92%)
NYSE: 11,372.34, -245.89 (-2.12%)
Thursday, April 30, 2020
More Stock Fakery As Indices Jump On Remdesivir Hope, Fading -4.8% GDP; Dividend Cuts Continue
Stock market fakery took on a whole new dimension Wednesday, as news of a potential treatment breakthrough for coronavirus (Gilead' Science's remdesivir) was released just before an incorrect reading on first quarter GDP - of 4.8% growth rather than the actual -4.8% contraction - was released.
Together, the two news breaks fueled a jump in stock futures an hour prior to the opening bell. The
The remdesivir announcement came from the familiar face of Dr. Anthony Fauci, who now says he let the news out somewhat early because he was concerned about the possibility of the news leaking out from elsewhere.
Rubbish. Fauci is deeply entrenched within the government COVID-19 team. His very own "leak" was timed to front-run the damaging news of contraction in first quarter GDP. He, along with tag-team partner, Dr. Deborah Birks, and Treasury Secretary Steven Mnuchin, are all in on the big con, keeping the pandemic narrative alive and well, avoiding any kind of actual progress that could be made, obfuscating useful information, offering bad advice, and generally keeping the public as much in the dark as possible with a huge assist from mainstream media, which now reports almost exclusively on coronavirus-related stories all the time, every-day, ad nauseum.
There's little doubt that the orchestrated, concerted effort to extend lockdowns, provide conflicting and misleading information, scare people into irrationality, and keep the United States in a crippled condition is a White House operation. President Trump and Vice President Pence have to know what's what, and they are either complicit or playing a long game that should result - if they're just playing along for now - in revelations (and hopefully, charges) this summer of corruption at the CDC and elsewhere in the government.
While there's little clear-cut evidence to suggest that the president isn't in on the entire scam, he remains somewhat solid amongst his base of supporters, but there are troubling signs that he's not been completely honest throughout the crisis. In case the crisis persists through the summer, Trump is going to have a difficult time winning re-election, even though his opponent, Joe Biden, is a very weak choice for the Democrats.
Getting back to the timing of the Wednesday morning announcements, the GDP release was almost immediately corrected, from a positive 4.8% to negative 4.8%, though there's no mention of the fake +4.8% announcement which was banged out first in order to trick the algorithms, and it worked, but overall, the remdesivir story overshadowed the dire GDP numbers and the FOMC policy announcement and press conference later in the day. The effective result was good for more than a two-percent gain in the Dow, S&P and NYSE Composite and a 3.57% rise on the NAASDAQ.
As far as remdesivir being a panacea for controlling, containing, and/or defeating coronavirus, the indefatigable (and reliably honest) Chris Martenson explains:
Thus, in a nutshell, fake news triumphs over reality, and stocks soar as the US economy is now firmly into a recession, along with many other countries, including Spain, France, South Korea, Indonesia. One might be persuaded into admitting that the Global Depression has begun in earnest and that somehow encourages investors to buy more stocks.
As the stock market gains are a matter of record, the sad reality is that share prices didn't go up on buys by the likes of Goldman Sachs or JP Morgan or any of the big banks' trading units. The purchases on Wednesday will most assuredly be credited into the accounts of weakened pension funds, which will take more severe losses in the next round of selling.
The game is rigged completely against the public.
On the dividend front, from where this blog hastily retreated Wednesday morning, the overnight news that Royal Dutch Shell slashed its dividend for the first time since World War II, supplies more evidence of the depth of this downturn.
Alongside the British companies, stand the 81 (as of Monday morning... there are more now) US companies which either reduced their dividend or eliminating it altogether.
Taking a quick look at the Dow components, we see that Boeing (BA) has already suspended its dividend earlier this year, which was a whopping $8.22 a share. The stock has fluctuated wildly since, but has collapsed from a 52-week high of 391.00, to close yesterday at 139.00. When a stock loses 64% of its share price, eliminates its dividend, lays off workers, and faces numerous lawsuits, that stock should be trading in single digits. It's almost worthless or could actually be tallied in the liability column. The outlook for Boeing is grim, though Wall Street investors have seen fit to boost it recently from 89 to its current price, which is likely to be hammered in the next downturn. Boeing is not a buy or even a hold. The time to sell this dog was months ago.
A few other candidates for dividend cuts or suspension include the obvious, ExxonMobil (XOM), which has missed three of its last four earnings estimates and reports for the first quarter on May 1 (Friday). The current dividend is $3.48, offering a yield of 7.33%. With the price of oil having cratered over the past two months, this company is likely to miss its earning targets again and the likelihood of cutting the dividend is very high.
On Wednesday, Chevron (CVX) announced a dividend of $1.29 a share to investors of record through May 19, payable June 20. whether this will be the last of the 5.45% yielding dividend remains to be seen. While it may be enticing to hold CVX through its first quarter earnings report (May 1) until the ex-dividend date, a drop in the price of the stock of less than 1.5% (about 1 1/2 points) would render that gamble a moot point. And, if the company announces a dividend cut and the stock goes down more, it turns into a major loss.
Among the companies on the Dow that have already reported first quarter earnings is Johnson & Johnson (JNJ). The company raised its quarterly dividend to $1.01 per share from 95 cents per share, as it announced earnings on Monday. Comparatively, this company looks rock-solid.
Merck (MRK) and Pfizer (PFE) each reported earnings on Tuesday of this week. Merck beat big, posting 1.50 per share against estimates of 1.34, keeping its annual dividend of 2.44 intact (3.02% yield), but cutting guidance.
Pfizer (PFE) also beat, retaining its annual dividend of 1.52 (3.99% yield). The company may be one to produce or share in the creation of some COVID-19 treatments or vaccines, though those potentialities go with an undue level of risk.
Intel (INTC) recently reported first quarter earnings at 1.45 per share over estimates for 1.28. The tech firm sports a dividend of 1.32 (2.25% yield) and is probably a safe bet to keep paying that out. However, here's where the math becomes important. If Intel tanks again - it fell to 42.86 in March from a high of 69.29, the paltry sum garnered from the dividend will be little consolation with the stock down 30 percent or more.
One of the worst plays of dividend-bearing Dow stocks going forward could be Apple (AAPL). The darling of Wall Street and the Swiss National Bank (a major shareholder), Apple's 3.08 annual dividend yields just 1.07%. with the stock trading with a multiple of 20-24 recently, even a minor downturn wipes out any gain from the dividend. Apple is unlikely to cut the dividend, as it is flush with cash. This one could go either way.
That's a snapshot look at a number of Dow stocks. We'll be examining more of them on Friday morning and over the weekend in the WEEKEND WRAP.
Just in, the U.S. Labor Department released its weekly jobless claims figures Thursday morning, and another 3.839 million Americans filed for unemployment benefits during the week ending April 25. That boosts the number of jobless in America to 30 million, unofficially putting the unemployment rate at 20%, the highest since the Great Depression.
This time, it appears that Wall Street won't be celebrating. Futures have been eroding all morning, with Dow futures off nearly one percent with the opening bell less than an hour away.
At the Close, Wednesday, April 29, 2020:
Dow: 24,633.86, +532.31 (+2.21%)
NASDAQ: 8,914.71, +306.98 (+3.57%)
S&P 500: 2,939.51, +76.12 (+2.66%)
NYSE: 11,618.23, +298.54 (+2.64%)
Together, the two news breaks fueled a jump in stock futures an hour prior to the opening bell. The
The remdesivir announcement came from the familiar face of Dr. Anthony Fauci, who now says he let the news out somewhat early because he was concerned about the possibility of the news leaking out from elsewhere.
Rubbish. Fauci is deeply entrenched within the government COVID-19 team. His very own "leak" was timed to front-run the damaging news of contraction in first quarter GDP. He, along with tag-team partner, Dr. Deborah Birks, and Treasury Secretary Steven Mnuchin, are all in on the big con, keeping the pandemic narrative alive and well, avoiding any kind of actual progress that could be made, obfuscating useful information, offering bad advice, and generally keeping the public as much in the dark as possible with a huge assist from mainstream media, which now reports almost exclusively on coronavirus-related stories all the time, every-day, ad nauseum.
There's little doubt that the orchestrated, concerted effort to extend lockdowns, provide conflicting and misleading information, scare people into irrationality, and keep the United States in a crippled condition is a White House operation. President Trump and Vice President Pence have to know what's what, and they are either complicit or playing a long game that should result - if they're just playing along for now - in revelations (and hopefully, charges) this summer of corruption at the CDC and elsewhere in the government.
While there's little clear-cut evidence to suggest that the president isn't in on the entire scam, he remains somewhat solid amongst his base of supporters, but there are troubling signs that he's not been completely honest throughout the crisis. In case the crisis persists through the summer, Trump is going to have a difficult time winning re-election, even though his opponent, Joe Biden, is a very weak choice for the Democrats.
Getting back to the timing of the Wednesday morning announcements, the GDP release was almost immediately corrected, from a positive 4.8% to negative 4.8%, though there's no mention of the fake +4.8% announcement which was banged out first in order to trick the algorithms, and it worked, but overall, the remdesivir story overshadowed the dire GDP numbers and the FOMC policy announcement and press conference later in the day. The effective result was good for more than a two-percent gain in the Dow, S&P and NYSE Composite and a 3.57% rise on the NAASDAQ.
As far as remdesivir being a panacea for controlling, containing, and/or defeating coronavirus, the indefatigable (and reliably honest) Chris Martenson explains:
Thus, in a nutshell, fake news triumphs over reality, and stocks soar as the US economy is now firmly into a recession, along with many other countries, including Spain, France, South Korea, Indonesia. One might be persuaded into admitting that the Global Depression has begun in earnest and that somehow encourages investors to buy more stocks.
As the stock market gains are a matter of record, the sad reality is that share prices didn't go up on buys by the likes of Goldman Sachs or JP Morgan or any of the big banks' trading units. The purchases on Wednesday will most assuredly be credited into the accounts of weakened pension funds, which will take more severe losses in the next round of selling.
The game is rigged completely against the public.
On the dividend front, from where this blog hastily retreated Wednesday morning, the overnight news that Royal Dutch Shell slashed its dividend for the first time since World War II, supplies more evidence of the depth of this downturn.
"Investors risk putting money into the markets in order to stand a chance of achieving a better return than cash in the bank. While rates on cash savings accounts have been drifting down for a while, investment dividends were widely considered to be much more reliable.
"Sadly that is no longer the case, given how more than 300 companies on the UK stock market have this year said they won't be paying dividends for the time being or paying a much lower level than before. This figure includes 41 companies in the FTSE 100."
-- Ross Mould, investment director at AJ Bell
Alongside the British companies, stand the 81 (as of Monday morning... there are more now) US companies which either reduced their dividend or eliminating it altogether.
Taking a quick look at the Dow components, we see that Boeing (BA) has already suspended its dividend earlier this year, which was a whopping $8.22 a share. The stock has fluctuated wildly since, but has collapsed from a 52-week high of 391.00, to close yesterday at 139.00. When a stock loses 64% of its share price, eliminates its dividend, lays off workers, and faces numerous lawsuits, that stock should be trading in single digits. It's almost worthless or could actually be tallied in the liability column. The outlook for Boeing is grim, though Wall Street investors have seen fit to boost it recently from 89 to its current price, which is likely to be hammered in the next downturn. Boeing is not a buy or even a hold. The time to sell this dog was months ago.
A few other candidates for dividend cuts or suspension include the obvious, ExxonMobil (XOM), which has missed three of its last four earnings estimates and reports for the first quarter on May 1 (Friday). The current dividend is $3.48, offering a yield of 7.33%. With the price of oil having cratered over the past two months, this company is likely to miss its earning targets again and the likelihood of cutting the dividend is very high.
On Wednesday, Chevron (CVX) announced a dividend of $1.29 a share to investors of record through May 19, payable June 20. whether this will be the last of the 5.45% yielding dividend remains to be seen. While it may be enticing to hold CVX through its first quarter earnings report (May 1) until the ex-dividend date, a drop in the price of the stock of less than 1.5% (about 1 1/2 points) would render that gamble a moot point. And, if the company announces a dividend cut and the stock goes down more, it turns into a major loss.
Among the companies on the Dow that have already reported first quarter earnings is Johnson & Johnson (JNJ). The company raised its quarterly dividend to $1.01 per share from 95 cents per share, as it announced earnings on Monday. Comparatively, this company looks rock-solid.
Merck (MRK) and Pfizer (PFE) each reported earnings on Tuesday of this week. Merck beat big, posting 1.50 per share against estimates of 1.34, keeping its annual dividend of 2.44 intact (3.02% yield), but cutting guidance.
Pfizer (PFE) also beat, retaining its annual dividend of 1.52 (3.99% yield). The company may be one to produce or share in the creation of some COVID-19 treatments or vaccines, though those potentialities go with an undue level of risk.
Intel (INTC) recently reported first quarter earnings at 1.45 per share over estimates for 1.28. The tech firm sports a dividend of 1.32 (2.25% yield) and is probably a safe bet to keep paying that out. However, here's where the math becomes important. If Intel tanks again - it fell to 42.86 in March from a high of 69.29, the paltry sum garnered from the dividend will be little consolation with the stock down 30 percent or more.
One of the worst plays of dividend-bearing Dow stocks going forward could be Apple (AAPL). The darling of Wall Street and the Swiss National Bank (a major shareholder), Apple's 3.08 annual dividend yields just 1.07%. with the stock trading with a multiple of 20-24 recently, even a minor downturn wipes out any gain from the dividend. Apple is unlikely to cut the dividend, as it is flush with cash. This one could go either way.
That's a snapshot look at a number of Dow stocks. We'll be examining more of them on Friday morning and over the weekend in the WEEKEND WRAP.
Just in, the U.S. Labor Department released its weekly jobless claims figures Thursday morning, and another 3.839 million Americans filed for unemployment benefits during the week ending April 25. That boosts the number of jobless in America to 30 million, unofficially putting the unemployment rate at 20%, the highest since the Great Depression.
This time, it appears that Wall Street won't be celebrating. Futures have been eroding all morning, with Dow futures off nearly one percent with the opening bell less than an hour away.
At the Close, Wednesday, April 29, 2020:
Dow: 24,633.86, +532.31 (+2.21%)
NASDAQ: 8,914.71, +306.98 (+3.57%)
S&P 500: 2,939.51, +76.12 (+2.66%)
NYSE: 11,618.23, +298.54 (+2.64%)
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