Dow sank 250, decliners over advancers 5-2 & NAZ dropped 26. The MLP index added 2+ to the 141s & the REIT index fell 6+ to 332. Junk bond funds slid lower & Treasuries were in demand. Oil shot up 3+ to the 18s (still depressed) & gold went up 3 to 1716.
AMJ (Alerian MLP Index tracking fund)
Consumer spending, the engine of the US economy, plunged by 7.5% in Mar as the coronavirus pandemic forced businesses to close and triggered a massive surge of job losses. The Commerce Dept's report said the biggest monthly decline recorded came as “consumers canceled, restricted or redirected their spending.” Consumer spending accounts for nearly 2/3 of GDP & has been a key driver of the economy in recent years. A steep decline in spending dragged down GDP the broadest measure of goods and services produced across the economy, at a seasonally adjusted annual rate of 4.8% in Q1, the dept said. The severity of the coronavirus-induced downturn will be reflected more accurately in Q2, when the nation's economy came to a near standstill to mitigate the spread of the virus. Estimates vary widely but economists agree it'll be bleak. In the past 6 weeks, more than 30M Americans have lost their jobs, curtailing their willingness to spend money. Even when the economy reopens, Federal Reserve Chairman Jerome Powell said Americans may still be hesitant. "You would think behavior will change as people gain confidence, so the sooner we get the virus under control, the sooner people can regain that confidence and regain our economic activity,” he said.
McDonald’s (MCD), a Dow stock & Dividend Aristocrat, is expecting steeper same-store sales declines in Q2 as intl restaurant closures due to the coronavirus pandemic continue to weigh down sales. Global same-store sales shrank 3.4% in the first 3 months of the year after plunging 22% in Mar. “Looking at comparable sales, we expect the second quarter as a whole to be significantly worse than what we experienced for the full month of March,” CEO Chris Kempczinski said. More than ½ of restaurants in the intl operated markets segment, which includes France & Australia, are closed. 4 countries in the segment — the UK, Spain, Italy & France — have closed down restaurants entirely to slow the spread of the virus. In Apr, the segment's same-store sales are down about 70%. Kempczinski said that it is difficult to generalize how the company is recovering as countries in Europe & Asia allow restaurants to reopen. In the US, same-store sales are showing signs of improvement. From mid-Mar to mid-Apr, sales at locations open at least a year tumbled 25%, but MCD's estimates that Apr's same-store sales only fell 20%. The stock fell 3.94.
If you would like to learn more about MCD, click on this link:
club.ino.com/trend/analysis/stock/MCD?a_aid=CD3289&a_bid=6ae5b6f7
McDonald’s says this quarter’s same-store sales will be worse. Here’s why
As dreary as the numbers are, there is some consolation. Filings for unemployment claims continred to increase as expected, but the number is decreasing every week. Consumer spending data was pretty much expected. MCD's data is a reminder that the road to recovery will be very rocky around the globe. So far, investors are taking the negative news with relative clam. The bulls like to see that. Meanwhile there is strong demand for gold.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 17.66 | +2.60 | +17.3% |
| GC=F | Gold | 1,717.90 | +4.50 | +0.3% |
Consumer spending, the engine of the US economy, plunged by 7.5% in Mar as the coronavirus pandemic forced businesses to close and triggered a massive surge of job losses. The Commerce Dept's report said the biggest monthly decline recorded came as “consumers canceled, restricted or redirected their spending.” Consumer spending accounts for nearly 2/3 of GDP & has been a key driver of the economy in recent years. A steep decline in spending dragged down GDP the broadest measure of goods and services produced across the economy, at a seasonally adjusted annual rate of 4.8% in Q1, the dept said. The severity of the coronavirus-induced downturn will be reflected more accurately in Q2, when the nation's economy came to a near standstill to mitigate the spread of the virus. Estimates vary widely but economists agree it'll be bleak. In the past 6 weeks, more than 30M Americans have lost their jobs, curtailing their willingness to spend money. Even when the economy reopens, Federal Reserve Chairman Jerome Powell said Americans may still be hesitant. "You would think behavior will change as people gain confidence, so the sooner we get the virus under control, the sooner people can regain that confidence and regain our economic activity,” he said.
Spending plummets in biggest drop on record as virus crushes businesses
First-time filings for unemployment insurance hit
3.84M last week as the wave of economic pain continues, though
the worst appears to be in the past, according to Labor Dept
figures. The forecast called for 3.5M. Jobless
claims last week came in at the lowest level since
Mar 21 but bring the rolling 6-week total to 30.3M as part of
the worst employment crisis in US history. Claims hit a record 6.87M for the week of Mar 28 & have declined each week since then. Last week's initially reported figure was revised up by 15K
to 4.4M, meaning that the most recent total is a decrease of
603K. Continuing claims rose to just shy of 18M, a rise of 2.2M from the previous week. The 4-week moving average, which smooths volatility, jumped to
13.3M, an increase of 3.7M from the previous week’s
average. The
surge in unemployment has come amid efforts to contain the coronavirus
spread. While some states & municipalities have begun bringing their
respective economies back online, much of the key US infrastructure
remains on lockdown. Filings continue at a high pace as the
gov has expanded the list of those eligible for benefits & amid
continued difficulties at state offices for claims filers. The Economic
Policy Institute earlier this week estimated that the current claims
level probably undercounts by as much as 12M those who are
eligible for benefits but not getting them due to the inability to file
or other roadblocks.
US weekly jobless claims hit 3.84 million, topping 30 million over the last 6 weeks
McDonald’s (MCD), a Dow stock & Dividend Aristocrat, is expecting steeper same-store sales declines in Q2 as intl restaurant closures due to the coronavirus pandemic continue to weigh down sales. Global same-store sales shrank 3.4% in the first 3 months of the year after plunging 22% in Mar. “Looking at comparable sales, we expect the second quarter as a whole to be significantly worse than what we experienced for the full month of March,” CEO Chris Kempczinski said. More than ½ of restaurants in the intl operated markets segment, which includes France & Australia, are closed. 4 countries in the segment — the UK, Spain, Italy & France — have closed down restaurants entirely to slow the spread of the virus. In Apr, the segment's same-store sales are down about 70%. Kempczinski said that it is difficult to generalize how the company is recovering as countries in Europe & Asia allow restaurants to reopen. In the US, same-store sales are showing signs of improvement. From mid-Mar to mid-Apr, sales at locations open at least a year tumbled 25%, but MCD's estimates that Apr's same-store sales only fell 20%. The stock fell 3.94.
If you would like to learn more about MCD, click on this link:
club.ino.com/trend/analysis/stock/MCD?a_aid=CD3289&a_bid=6ae5b6f7
McDonald’s says this quarter’s same-store sales will be worse. Here’s why
As dreary as the numbers are, there is some consolation. Filings for unemployment claims continred to increase as expected, but the number is decreasing every week. Consumer spending data was pretty much expected. MCD's data is a reminder that the road to recovery will be very rocky around the globe. So far, investors are taking the negative news with relative clam. The bulls like to see that. Meanwhile there is strong demand for gold.
Dow Jones Industrials
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