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Nell's News

By our colleague, Nell Sloane from GT Capital Trading Group:

Stock bulls point to the massive amount of Fed stimulus that has been injected into the U.S. economy and the likelihood of even more stimulus to come perhaps as soon as early-August.

Bears on the other hand point to the continued rise in coronavirus hospitalizations and some U.S. consumers and business owners pausing to reassess risk.

There's also starting to be a lot more debate about employment moving forward... United Airlines said yesterday it could be forced to shed almost half its U.S. workforce, telling 36,000 employees they could be furloughed from Oct. 1 forward because of the pandemic-driven slump in passenger demand.

At the same time, nearly 70,000 tech-startup employees world-wide have lost jobs since March. Startups in the San Francisco region, including Silicon Valley, have shed more than 25,500 jobs, including layoffs at high-profile companies such as Uber, Groupon and Airbnb.

I should also note, Levi Strauss reported yesterday they will be laying off 700 corporate workers as the company reported a loss of -$364 million in its second-quarter compared with a profit of +$29 million for the year-ago second quarter.

Bears are also quick to point to the massive fallout in retail and how it might ultimately impact employment. Brooks Brothers, founded in 1818, filed for bankruptcy yesterday. The retailer has more than 200 stores in North America and 500 worldwide. Women's retailer Lane Bryant and Ann Taylor also announced yesterday they were filing bankruptcy and are preparing to close at least 1,200 of its 2,800 stores as soon as this week.

Remember, less than half of our workforce has a college degree and many depend on jobs in the retail, restaurant, and hospitality sectors.

St. Louis Federal Reserve Bank President James Bullard yesterday said he expects unemployment will fall below 8% by the end of the year, compared to the current rate of 11.1%.

From my perspective, it will be interesting to see where and how these jobs are replaced.

Another round of Fed stimulus should buy a bit more time but then what?

We have to get a vaccine or improved treatments soon rather than later so we can get ALL the consumers back participating.

If 10% to 20% of the U.S> consumers remain on the sideline that could really weigh on employment and corporate profitability.

There's no question, the Fed stimulus has been massive, but will it be enough to extend to all for the entire length of time needed to reach the other side of this pandemic?

With more bankruptcies being announced each day there's starting to be some questions?

Any business weaknesses that were present pre-corona are certainly being exploited in today's economy.

As many are saying, it's out with the old and in with the new... be certain you are making the necessary adjustments. This is not the environment to be fighting against the waves and going down with the old ship. When the storm is brewing is when you want to be searching for and surfing the new waves...

Thought this was interesting:

Chiefs QB Gets Paid! Quarterback Patrick Mahomes and the Chiefs have reached an agreement on a 10-year contract extension, the team confirmed on Monday. The deal will be worth an NFL-record $503 million, reports NFL Network. They also pointed out that the quarterback's contract is the largest in sports history and this marks the first time an NFL player has been the highest-paid player in sports! Let's not forget, Mahomes already has an impressive portfolio of endorsement deals, from Oakley to State Farm, Adidas to Procter and Gamble. I also heard, one of his other endorsement deals, Airshare, comes with extra perks besides the money. He has access to the private jet company’s airliners whenever he wants to travel as part of his deal. Wow...,not bad for a 24-year old starting his third year on the job!

Gold ETF Inflows Hit Record: Nearly $40 billion flowed into gold-backed exchange-traded funds in the first half of the year, topping the previous annual record and highlighting robust investor demand for precious metals during the coronavirus pandemic. The flood of money into the gold market comes with bullion prices reaching their highest level in nearly nine years. Prices are up nearly 20% for the year approaching their all-time high of $1,891.90 from August 2011. These funds, such as SPDR Gold Shares, have grown in popularity in recent years because they are an easy way for investors who generally don’t invest in commodities to add gold to their portfolios. Shares of gold miners like Newmont Corp. and Barrick Gold Corp. have soared in recent weeks, bringing their year-to-date advances above 45%. Precious metals are also getting a boost from unease about November’s U.S. presidential election, geopolitical concerns, and worries about inflation. Despite the surge, some traders caution that positive news about coronavirus vaccine developments and the global economic recovery could be a headwind for precious metals Source WSJ

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