Archives of “Economy of the United States” tag

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Trump lambastes Twitter, says it is doing nothing about the lies and propaganda from China

  
  Analysis
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Trump tweets out more criticism against Twitter

Twitter is doing nothing about all of the lies & propaganda being put out by China or the Radical Left Democrat Party. They have targeted Republicans, Conservatives & the President of the United States. Section 230 should be revoked by Congress. Until then, it will be regulated!

And so the drama continues to unfold. Once again, just be mindful of the situation here in case it creates further negative spillovers for tech stocks in general.

Chinese oil demand is reportedly almost back to pre-coronavirus crisis levels

  
  Analysis
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Bloomberg reports on the matter

The report says that Chinese oil demand is all but back to levels last seen before nationwide lockdown measures were imposed to curb the spread of the coronavirus outbreak, according to people with inside knowledge of the country’s energy industry.

Adding that consumption of gasoline and diesel has fully recovered as factories reopen and commuters drive rather than use public transport.
The exact level of oil demand in real time – according to executives and traders who monitor the country’s consumption – is said to be about 13 million bpd, which is just shy of the 13.4 million bpd seen around May 2019 and the 13.7 million bpd seen in December 2019.
For some context, the apparent drop in Chinese oil demand was seen at around 20%:
However true the figures are from this report, it is certainly giving hope to oil bulls that the market can recover from the severe imbalance – and perhaps more quickly than thought – that we are seeing currently. WTI crude is now up by over 8% on the day to $31.85.

Trump from the golf – says coronavirus destruction could have been stopped by China

  
  Analysis
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President Trump speaking on a TV golf telecast (NBC) – Trump phoning in the comments.

Various remarks, but once again on his bungling of the crisis (latest update has US deaths above 88,000) seeks to blame others: 
  • Says COVID-19 destruction could have been stopped by China
  • says US needs sports back to boost the country’s psyche
  • we want big, big stadiums loaded with people
President Trump speaking on a TV golf telecast (NBC) - Trump phoning in the comments. 

Mixed results from the major indices

  
Analysis, US Market
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Dow down. S&P modestly higher. Nasdaq higher

The major indices are ending the day with mixed results
The Dow is ending lower. The S&P is near unchanged and the Nasdaq is up about 0.8% on the day
The final numbers are showing:
  • The Dow fell -109.33 points or -0.45% at 24221.94
  • The S&P rose 0.39 points or 0.01% at 2930.19
  • The Nasdaq rose 71.02 points or 0.78% at 9192.34
The European markets were mostly lower exception of the UK FTSE which eked out a is small 0.06% gain.
Dow down. S&P modestly higher. Nasdaq higher

Trump says that if China does not buy US goods the US will end the trade deal

  
  Analysis
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Trump referring to phase 1 of the US-China deal

On the face of it this sort of comment makes sense – if one side does not uphold it then the deal is in danger yes. The more applicable interpretation though is that tensions between the US and China are increasing, not only placing the existing deal in peril but making progress on further phases unlikely, or at least slower.
Oh, here we go, more on another source of tension being stoked by the US administration:
  • Strong report coming on how the virus developed in China

Federal Reserve says rates to stay at bottom until economy on track

  
  Analysis
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Federal Reserve rate decision highlights April 29, 2020

Federal Reserve rate decision highlights April 29, 2020
  • Rates unchanged in a range of 0.00%-0.25%, as expected
  • Fed says rates to stay at lower bound until economy has weathered recent events and on track to achieve unemployment and inflation goals
  • Fed funds rate 2-year projection vs 1.6% prior
  • Fed funds rate 3-year projection vs 1.9% prior
  • Fed funds rate long-term projection vs 2.50% prior
Powell will host a virtual press conference at 1830 GMT. The next scheduled meeting is June 9-10

US advanced GDP for 1Q -4.8% versus -4.0% estimate

  
Analysis, Economy
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US GDP for 1Q 2020

The US advanced GDP data for the 1Q came in at +4.8% initially but the headlines were then corrected to read -4.8% vs -4.0% estimate.
  • Personal consumption fell -7.6% vs -3.6% estimate
  • Core PCE rose 1.8% vs 1.7% estimate
  • GDP price index rose 1.3% vs 1.0% estimate
The data signals the start of the recession.  The worst is yet to come as GDP is expected to plunge in the 2Q
US GDP

S&P cut Australia to AAA negative

  
  Analysis
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S&P cut Australia outlook to negative from stable

Rating is AAA still.
This is not wholly unexpected from S&P
AUD down a few pips on the announcement
S&P cite:
  • reflects substantial deterioration of Australia’s fiscal headroom
More:
  • large Australian budget deficits likely to be temporary
  • virus a severe economic c and fiscal shock
  • government deficit to average 7.5% of GDP in 20/21
  • annual growth to fall to 1.3% in FY 2020

US President Trump re hydroxychloroquine drug – “strong signs” it works on the coronavirus

  
  Analysis
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White House press briefing on coronavirus, Trump remarks

  • Trump says they’ve bought a “tremendous amount” of hydroxychloroquine
  • claims there are “strong signs” it works on the coronavirus
Trump says has a bought 29m doses of the drug
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Note:
Anthony Fauci, America’s most respected infectious disease expert, and others emphasize that it hasn’t been proven safe/effective
Fauci pictured here behind Trump at an earlier briefing.
White House press briefing on coronavirus, Trump remarks  

S&P affirms US rating at AA+, outlook stable

  
  Analysis
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Is there a “too big to downgrade” rating?

Especially in the current global predicament
S&P ratings
  • US rating is constrained by high government debt and fiscal deficits, both are likely to worsen this year after the coronavirus shock
‘likely’ to worsen??? Nothing unlikely about it.
More:
  • expect US economic recovery in 2021, which will partly compensate for loss of output this year, then continued GDP growth afterwards
  • expects general government deficit to fal;l below 5% of GDP by 2022
  • expects the US economy to contract around 1.3% in 2020
  • recovering by 3.2% in 2021
  • 2.5% in 2022
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