- Combined, these ten countries account for almost 80% of new daily infections, which were up by 231,000 per day on average over the last week. (…) Notably, the rate of increase in new cases has slowed in hard hit Florida and Arizona in recent days. (Fathom Consulting)
- California recorded new highs in both coronavirus deaths and total number of cases on Wednesday, as troubling data emerged across the United States and more than 1,100 deaths were reported for the second consecutive day.
- The average number of tests conducted nationwide has grown by 80 percent since early June, to 780,000 per day. Daily case counts have grown by 215 percent in the same period. Thirty-one states show an increase in cases beyond what would be expected from expanded testing, if the severity of the outbreak had remained about the same. (NYT)
PANDENOMICS
Jobless Claims See First Rise in Months as Virus Cases Surge Filings for jobless benefits rose for the first time in nearly four months to 1.4 million as some states rolled back reopenings because of the pandemic.
Initial unemployment claims rose by a seasonally adjusted 109k to 1.4 million for the week ended July 18, the Labor Department reported Thursday, well above the highest week on record before this year, which was 695,000 in 1982. That was the first weekly rise in applications since the week ending March 28. However, the number of Americans receiving unemployment benefits through regular state programs that cover the majority of workers, decreased by 1.1 million to 16.2 million for the week ended July 11.
Record-Low Mortgage Rates Fuel a Jump in Home Sales Sales of previously owned homes in the U.S. rose 20.7% in June as the housing market shook off high unemployment and buyers with pent-up demand seized on record-low mortgage rates.
Sales of previously owned homes rose 20.7% in June over the prior month to a seasonally adjusted annual rate of 4.72 million, according to data from the National Association of Realtors released Wednesday, the biggest monthly increase on record going back to 1968. The surge in existing-home sales follows other recent bullish indicators such as rising new-home sales, robust home-builder activity and a flood of mortgage applications.
Driving sales are apartment renters seeking more space, young families moving to the suburbs, and wealthy city dwellers looking for second homes, brokers and economists say. At the same time, the supply of houses for sale remains low, with the pandemic making potential sellers cautious about letting people tour their homes. (…)
June sales marked an 11.3% decrease from a year earlier. Many potential buyers remain on the sidelines, concerned about job security or the health risks related to visiting homes. (…)
Mr. Yun said activity was higher in small towns and suburbs than in urban centers. Compared with a year earlier, sales increased for homes between $250,000 and $500,000, while declining for lower-priced and higher-priced homes. (…)
The housing market typically accounts for between 15% and 18% of the U.S. economy, according to the National Association of Home Builders. (…)
Economists warn that growing Covid-19 outbreaks in some parts of the country, including Arizona, Texas and Florida, could slow the market’s gains. Some buyers from New York and California are delaying their trips to Miami to shop for homes due to concerns about the state’s rising case count, said Danny Hertzberg, an agent with Coldwell Banker Realty. (…)
There were 1.57 million homes for sale at the end of June, up 1.3% from May but down 18.2% from June 2019, NAR said.
Small Businesses Brace for Prolonged Crisis, Short on Cash and Customers Hopes for a quick economic recovery from the coronavirus pandemic have been dashed, and companies are exhausting rescue funds. Many are shutting down or slashing jobs again.
(…) Small businesses such as restaurants, dog-care centers and manufacturers brought back staff beginning in mid-April, believing they could get back to business. Now, many are shutting down or slashing jobs again as local officials and consumers pull back and the pandemic shows no signs of abating. (…)
An estimated 1.85 million U.S. businesses closed their doors or temporarily suspended operations in the second quarter, according to Oxxford Information Technology Ltd. in Saratoga, N.Y., which tracks roughly 32 million U.S. businesses of all sizes using data from credit bureaus, surveys and government sources.
Raymond Greenhill, Oxxford’s president, forecasts that total losses this year will be greater than in the last recession, when 20%, or roughly 4.5 million businesses, disappeared in just over a year. He added that some of the losses will be offset by new business formation. (…)
Small businesses that rely less on face-to-face interactions have been less vulnerable. Data from Gusto, a small-business payroll provider, shows that weekly headcount growth had by mid-July returned to pre-pandemic rates. Gusto’s data are based on 100,000 small businesses nationwide, skewing slightly toward firms in white-collar businesses such as technology and legal services. (…)
Just two-fifths of small-business employees who had worked in January were logging hours in early April, according to Homebase, a provider of scheduling and time management software. The roughly 500,000 employees it tracks are mostly hourly workers in restaurants, retailers, hair salons and other Main Street businesses. (…)
Three-quarters of employees who had been working as of January were clocking in by early June, according to Homebase. But then in late June and into mid-July, its data show a pullback in people working. (…)
Nearly one-third of small businesses had less than one month of cash reserves on hand at the end of June, according to the Census Bureau. (…)
A July survey conducted by the National Federation of Independent Business, a small-business advocacy group, found roughly 22% of PPP loan borrowers have laid off or anticipate having to lay off employees after using their loan, according to the 615 survey respondents. (…)
The U.S. Is on the Verge of Lockdown 2.0 Governments will have no choice but to ban behavior that spreads Covid-19. The public will do the rest by shutting in again.
(…) It’s not hard to see what’s happening. With Covid-19 infections surging in Sun Belt states and a few other states experiencing second waves, Americans are being rationally prudent and staying home. The fear this time isn’t as great as in March, when much less was known about the disease, but it’s still enough to tank the recovery. (…)
The most dangerous activities are places where people are talking loudly in a crowded indoor setting for a long time — bars, parties, concerts, indoor sporting events, indoor religious services and so on. Offices, gyms, hair salons and indoor restaurants are somewhat dangerous.
New lockdowns, therefore, should focus on banning only the highest-risk activities. (…)
Nightlife, indoor events and house parties can’t be allowed, but most other activities are possible with adequate precautions. That will allow Americans to return to a semblance of normal life, even in areas with high infection rates. And with vaccines and antibody treatments showing promise in trials, even these restrictions may only have to last a few months.
This sort of lockdown lite probably has the highest economic return of any policy that governments can do right now. They will hurt the economy only minimally, and they will hasten the day when the epidemic is no longer scaring people into staying home.
Share of business closures on Yelp that were temporary vs. permanent
South Korea Slumps Into a Recession The economy fell into a recession as it contracted for a second consecutive quarter
Gross domestic product shrank by 3.3% in the second quarter from the prior quarter when it contracted 1.3%, Bank of Korea data showed Thursday. (…) Year-over-year, the economy contracted 2.9% in the second quarter, following a 1.4% expansion in the previous three months. (…)
EARNINGS WATCH
We got 75 reports with a 77% beat rate and a +14.8% surprise factor. The 75 companies had aggregate earnings down 38.6% on revenues down 5.1%.
Q2 earnings are now seen down 41.2% vs -43.0% on July 1. Q3 estimates: -23.9% vs -25.0%. Q4: -12.8% vs -13.2%. Full year 2020: -22.8% vs -23.5%. 2021: +30.3% to $163.32 vs + 31.5%.
Trailing EPS: $140.37.
Insiders Who Nailed Market Bottom Are Starting to Sell Stocks
Almost 1,000 corporate executives and officers have unloaded shares of their own companies this month, outpacing insider buyers by a ratio of 5-to-1, data compiled by the Washington Service showed. Only twice in the past three decades has the sell-buy ratio been higher than now.
Data from InsiderInsights.com showed a similar trend. Over the past four weeks, companies with insider selling have outnumbered those with buying by 186%, approaching the 200% level that has tended to mark short-term market tops in the past decade, according to Jonathan Moreland, the firm’s director of research. (…)
In terms of total value, insiders sold $52.6 million of shares last week while their purchases reached $3.4 million, according to data compiled by Bloomberg.
