The Standard & Poor’s 500 Index flirted with its February high last week. The Index erased double-digit losses in just 175 days, Historically, it has taken about four years for U.S. stocks to recover after a drop of 20% or more.
“Since bottoming in March, the S&P 500 has risen about 50%, with more than 40 of its members doubling. More than $12 trillion dollars of share value that vanished is now all but restored.”
Here’s what happened last week:
- It was the best of times. It was the worst of times. Earnings season has offered a conundrum. During the second quarter, more companies in the Standard & Poor’s 500 Index are beating analysts’ estimates than ever before. The stinger is that year-over-year earnings, which reflect company profits, are worse than ever before.
- Some look to Europe. Some asset managers are overweighting European stocks. They see better opportunities relative to the United States because of the region’s robust public health infrastructure and vigorous policy response.
- Are you ready for some…Nope. Two of the country’s wealthiest college football conferences, the Big-10 and Pac-12, announced play will be postponed until Spring 2021 due to the coronavirus. The ACC and SEC plan to take the field in the fall. The University of Nebraska Cornhuskers – a Big-10 team – has suggested it might go rogue.
- Ouch! The disappearance of enhanced unemployment benefits, a.k.a. federal pandemic unemployment compensation (FPUC), has the potential to take a bite out of the economy. Consumer spending is a mainstay of U.S. economic growth. With no additional FPUC, research indicates we may see a 44% decline in local spending. If the FPUC supplement is reduced to $200, spending would fall by 28%.
- Maybe $300. President Trump’s memo extending FPUC benefits would provide $300 a week for five weeks (not $400 through December, as originally suggested). State leaders have indicated that it will take time to implement the policy, if they decide to implement it.
- Is it a beer? Is it a cocktail? No, it’s hard seltzer. Fizzy, flavored water spiked with alcohol is disrupting the beverage market by stealing share from beer and wine. In 2018, 10 hard seltzer brands were available. In 2019, there were 26 brands on the market. Now, more than 65 brands are battling it out.
- Speakeasy, 2020-style. Covid-19 closures have produced a fitness black market – the speakeasy gym. “You know, illegal, hush hush, like the underground bars during the Prohibition era. These underground gyms appear to be popping up everywhere, from LA to New Jersey.”
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