“The stock market is not the economy. But rarely has the gap between Wall Street and Main Street felt so wide.
“The United States is going through its worst race crisis since 1968 following the death of George Floyd, an unarmed black man, at the hands of a police officer in Minneapolis. Riots have hit cities across the nation. Looting is rampant. And President Donald Trump is threatening to send in the military to stop the violence.
“The civil unrest could exacerbate the coronavirus pandemic that has already killed more than 100,000 Americans. That in turn could deepen the economic collapse that has forced more than 40 million people to file for unemployment. Meanwhile US-China relations are imploding, imperiling the trade war ceasefire reached between the world’s two largest economies…
“Joe Brusuelas, chief economist at RSM International, said he can’t recall a time when the disconnect between Wall Street and the real economy was this great..
““The market is broken. It no longer reflects a forward outlook that is truly aligned in the real economy,” he said. “That’s a problem because at some point, the public will say these markets are rigged.”
https://edition.cnn.com/2020/06/03/investing/stocks-market-dow-jones-riots-coronavirus/index.html
“Hedge funds are getting ready for another slump in stock markets after growing uneasy that surging prices do not reflect the economic problems ahead.
“Some managers fear that equity investors, used to buying the dips during the decade-long bull market that ended in March’s sharp sell-off, have become too complacent about how quickly economies can recover from the coronavirus crisis and how effective stimulus packages from central banks and governments can be.”
https://www.ft.com/content/e1e1c3ef-1849-46bc-a472-2af8c0aabe5b
“The mighty U.S. Dollar is having a wobble, falling to its lowest level on a trade-weighted basis since March…
“…with interest rates at zero, the federal deficit soaring and U.S. bond yields barely above the rest of the developed world, there’s not much incentive for investors to be parked in dollars. Washington’s dispute with Beijing won’t be helping, and neither will the civil unrest of recent days and the prospect of mass unemployment.”
https://www.bloomberg.com/opinion/articles/2020-06-03/the-mighty-u-s-dollar-is-having-a-wobble
“In a regulatory filing today, AMC Theatres says that it has “substantial doubt” it will be able to continue operations this year even after sheltering restrictions are lifted and cinemas are allowed to reopen. Though rumor has it Amazon may be stepping in to buy the company.
“”We are generating effectively no revenue,” the company said…”
https://sfist.com/2020/06/03/amc-theatres-in-danger-of-complete-financial-collapse/
“The last three months have been catastrophic for segments of the trucking business, after an already tough period that started in late 2018…
“In 2019, as a result of the sharp downturn in the freight business, declining mileage rates, and pressures from debt, hundreds of smaller trucking companies filed for bankruptcy.”
https://wolfstreet.com/2020/06/03/trucking-skids-into-ditch-hits-bottom-after-19-months-of-downturn/
“This week, Wells Fargo confirmed that auto loans could be the catalyst that sends the U.S. economy into a death spiral.
“The bank announced that it would not be accepting new auto loan applications from most independent dealerships. The news underscored a growing issue bubbling beneath the surface of the U.S. economy—consumer debt.”
https://www.ccn.com/auto-appocolypse-could-shove-us-economy-off-cliff/
“April’s employment report set records for all the wrong reasons. The unemployment rate increased from 4.4% to 14.7%, the largest one month increase in history and the highest rate in the history of official government data (started in 1948)…
“On Friday the Department of Labor will release May’s employment report, and expectations are for an additional 9 million people to have lost their jobs.”
“Three former UK chancellors have warned the government to prepare for 1980s levels of unemployment as the coronavirus crisis sinks Britain into the deepest recession in living memory.
“Lord Alistair Darling, George Osborne and Philip Hammond said the government urgently needed to announce measures to cushion the blow as job losses began to mount.”
“Home prices in London’s wealthiest districts fell the most since the global financial crisis in April as sellers agreed to wider discounts to secure deals…
“…prices are now down just over 5% in the past year, the broker’s data show.”
“Experts have warned that millions are gambling with their future by relying on inheritance to boost their pensions…
“But many may have to change their plans: depressed stock markets caused by the coronavirus pandemic and an expected slump in house prices means many will end up getting much less than they had first thought.”
“The country’s biggest lenders have been warned by the Bank of England to bolster their planning for a no-deal Brexit as worries grow that the UK will fail to strike a trade deal with the EU.
“It is understood that Andrew Bailey, the Bank’s governor, told bank bosses in a conference call on Tuesday to push on with their Brexit contingency preparations.”
“The UK government is struggling to rebuild stockpiles of drugs eroded by Covid-19 amid fears that a “no-deal” Brexit will jeopardise medicine supplies just as a second coronavirus wave hits the country.
“Matt Hancock, health secretary, has accepted the need to finalise a formal plan to rebuild a six-week stockpile of drugs, but senior Whitehall officials said that the impact of coronavirus on supply chains and stockpiles was causing serious concern.”
https://www.ft.com/content/4611bf7d-c749-4cfd-bf7c-7a5e2967f9f7
“Germany’s Second Coronavirus Stimulus Package Brings Total Support to €1.3 Trillion.
“Scale of support has raised concerns about lopsided recovery in Europe, where many governments have struggled to put together similar packages.”
“India is gradually unlocking its economy after a shutdown that lasted more than two months.
“But it’s unlikely to be business as usual for millions of retailers, small enterprises and factories… they are all bogged down by low demand, falling exports, labour shortages and new rules of operation requiring social distancing and other safety measures to curb the pandemic.”
https://www.bbc.co.uk/news/world-asia-india-52905093
“Stay-at-home measures triggered by the coronavirus pandemic has kept most of India’s 1.3 billion population indoors since late March, leading to a collapse in business activities.
“Goldman Sachs Group Inc. expects gross domestic product to contract 5% in the fiscal year through March 2021, which would be India’s deepest recession ever.”
“A slump in China’s government bonds is set to deepen as traders’ hopes for aggressive monetary easing quickly evaporate…
“Investors are concerned that Beijing will refrain from using broad easing to help the economy after the authorities announced a new policy to boost credit growth.”
“A surge in online shopping wasn’t enough to pull Australia’s retail sector out of its worst slump on record for this time of year…
“Clothing and footwear were the hardest hit, but historic lows were also recorded across the food and hospitality sector.”
“Mortgage stress levels among Australians have continued to soar amid the global outbreak of COVID-19, with data showing more than 1.4 million Australian households are now in mortgage stress and almost 100,000 could soon default on their loans.”
“Some of the world’s poorest countries and emerging market economies may need to restructure their debt in the future, the head of the International Monetary Fund said on Wednesday, adding that simply freezing debt payments might not suffice.”
“Argentina’s ninth default on external debt is now official after Fitch and S&P cut bond ratings to default status.”
https://yaleglobal.yale.edu/content/argentina-default-buenos-aires-times
“A recent study by the Egyptian Center for Thought and Strategic Studies warned of an acute food crisis in the African continent due to the coronavirus.
“The study, which was published on the center’s website, confirmed that the potential global food crisis will have dangerous effects on the countries of the African continent.”
https://www.egypttoday.com/Article/1/88257/Study-reveals-food-crisis-in-Africa-due-to-coronavirus
“A group of starving foreign nationals [in South Africa] have had to resort to eating one meal of one boiled potato each per day, as they hope to survive the continued lockdown without any income or other sources of food.”
“The coronavirus outbreak could trigger a $25tn (£20tn) collapse in the fossil fuel industry…
“The looming fossil fuel collapse could pose “a significant threat to global financial stability” by wiping out the market value of fossil fuel companies, according to financial thinktank Carbon Tracker.”
https://www.theguardian.com/business/2020/jun/04/coronavirus-crisis-collapse-fossil-fuels-demand
“Russia’s President Vladimir Putin has declared a state of emergency after 20,000 tonnes of oil leaked into a river within the Arctic Circle.
“The spill happened when a fuel tank at a power plant near the Siberian city of Norilsk collapsed last Friday.”
https://www.bbc.co.uk/news/world-europe-52915807
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