Coronavirus, Kim Jong Un: O2 Wealth Economic Update, April 24, 2020

U.S. and World News

  • iStock-1211588220Some states are moving forward with reopening business and easing restrictions as they attempt to put the economy back on track. Georgia has allowed barber shops, tattoo parlors, hair salons, massage parlors, and gyms to open cautiously, with requirements such as screening of customers, wearing protective gear, and additional cleaning. Governor Brian Kemp of Georgia has faced criticism for opening business prematurely in a state that has lacked sufficient testing. This morning President Trump signed into law a $484 billion coronavirus relief bill that will primarily provide additional funding to small businesses while also providing funding to hospitals and efforts to increase testing. Some larger public companies have been criticized for taking government aid when unnecessary, while other companies such as Neiman Marcus have announced that they would file for bankruptcy protection. President Trump indicated this week the possibility of social distancing guidelines being extended into early summer and Dr. Anthony Fauci stated that the coronavirus will likely return in the fall. Developing a vaccine remains a critical task for the world and health care giants Johnson & Johnson, Pfizer, and Moderna remain optimistic about their efforts.
  • Speculators say that Kim Jong Un’s health is in danger following his absence from a birthday celebration of North Korea’s founding father, Kim Il Sung. It was reported that Kim underwent cardiovascular surgery, leading to rumors about his ill health, while a South Korean newspaper reported that Kim is “currently touring provincial areas with his close aides.” The Kingdom that is known to lack transparency, has admitted this week to having cases of the coronavirus. President Trump stated that he believes the report of Kim Jong Un’s illness is incorrect.

Markets

  • Markets finished the week lower. The S&P 500 lost 1.3% and closed at 2,837. The Dow Jones fell 1.9% and closed at 23,775. Year-to-date, the S&P 500 is down 11.7% and the Dow Jones is down 16.1%.
  • Yields moved lower this week. The 5 year and 10 year U.S. Treasury Notes are yielding 0.36% and 0.59%, respectively.
  • The spot price of WTI Crude dropped this week. Prices tumbled 31.8% and closed at $17.08 per barrel. Year to date, Oil prices are down 72.0%.
  • The spot price of Gold spiked 2.6% and closed at $1,726.80 per ounce. Year to date, Gold prices are up 13.8%.

Economic Data

  • Initial jobless claims fell by 810,000 to 4.4 million and the four-week moving average of claims rose by 280,000 to 5.8 million. Claims rose by 379,000 in Florida, 41,000 in West Virginia, and by 31,000 in Texas. Claims fell by 219,000 in New York, 106,000 in Michigan, and by 105,000 in California.
  • Existing home sales fell by 8.5% to a seasonally-adjusted-annualized rate of 5.27 million units versus expectations for a decline of 9.0%
  • Sales of new single-family homes fell by 15.4% to a seasonally-adjusted-annualized rate of 627,000 units versus expectations for a reading of 644,000 units
  • New orders for durable goods fell by 14.4% versus expectations for a decline of 12.0%
  • Durable goods ex-transports fell by 0.2% versus expectations for a decline of 6.5%
  • Core capital goods orders rose by 0.1% versus expectations for a decline of 6.7%
  • Core capital goods shipments fell by 0.2% versus expectations for a decline of 7.0%
  • The University of Michigan’s index of consumer sentiment increased by 0.8 points to 71.8 versus expectations for a reading of 68.0

Fact of the Week

  • The average price of gas in the US today is $1.745, the lowest level since February of 2016. At the beginning of the year, the average price at the pump was $2.57, a decline of 32% this year. The lowest current price at any gas station in the US is $0.75 in Francis Creek, Wisconsin. (Source: GasBuddy)

Rich Gartelmann CFP® – (630) 844-5730 rgartelmann@oldsecond.com
Steve Meves CFA® – (630) 801-2217 smeves@oldsecond.com
Brad Johnson CFA®, CFP® – (630) 906-5545 bjohnson@oldsecond.com
Jacqueline Runnberg CFP® – (630) 966-2462 jrunnberg@oldsecond.com
Ed Gorenz – (630) 906-5467 ejgorenz@oldsecond.com
Mike Demski – (630) 966-2430 mdemski@oldsecond.com
Mike Cava CFA®, CFP® – (630) 281-4522 mcava@oldsecond.com

Visit Old Second Wealth Management

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