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The Best of What They Said and I Read Week Ending 8/2/2020

U.S. Global Investors – July 17, 2020 – Frank Holmes

  • “…The major market indices finished mixed this week. The Dow Jones Industrial Average lost 0.84 percent. The S&P 500 Stock Index rose 0.93 percent, while the Nasdaq Composite climbed 2.71 percent. The Russell 2000 small capitalization index lost 0.81 percent this week…The 10-year Treasury bond yield fell 4 basis points to 0.539 percent.”
  •  “…Apple blew past expectations for its fiscal third-quarter earnings…Apple reported growth across all its product lines, from the iPhone, which has seen slowed growth in recent years, to its booming wearables and services businesses…Exxon Mobil reported the biggest loss in its modern history…Amazon reported a record quarterly profit and 40 percent sales growth…Facebook beat expectations for revenue, profits and user growth…Goldman Sachs says stocks have never been more vulnerable to the failure of a few mega-companies and the risks of a blunder are quickly piling up. The stock market's gains have been largely driven by five tech stocks and one misstep by any of them could send the market reeling.”
  •  “…The homeownership rate, led by young buyers, jumped to the highest since 2008, signaling that the housing boom underway before the pandemic has only accelerated…Consumer spending increased for a second straight month in June…The Commerce Department said on Friday that consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 5.6 percent last month after a record 8.5 percent jump in May as more businesses reopened.  Orders for durable goods lasting at least three years rose to 7.3 percent in June for the second straight month after historic declines in the early spring.”
  •  “…The U.S. economy saw the biggest quarterly plunge in activity ever with second quarter GDP June plunging 32.9 percent on an annualized basis, according to the Commerce Department’s first reading on the data released Thursday. Economists surveyed by Dow Jones had been looking for a drop of 34.7 percent…The number of Americans applying for jobless benefits rose for the second straight week. Claims had been on a steady decline after peaking in late March.”

 Bloomberg News – July 31, 2020 – People Fear They’ve Got Too Much Cash in Their Bank Accounts – Donald Moore

  • “The savers are getting restless.  Running out of guaranteed ways to get meaningful returns, some people are increasingly being tempted to raid their interest-earning cash savings to load up on assets such as bitcoin, gold and stocks. The comfortable, if small, returns of high-yield savings accounts are looking less palatable as volatile assets take off.”
  •  “…The last few months have, in some respects, been a boon for account balances. Nationwide lockdowns enacted to slow the spread of Covid-19 have cut consumer spending, and stimulus checks arrived for millions of Americans…Mint, a financial planning platform, told Bloomberg that its customers deposited 16% more into their accounts between March and June compared with the same period last year. There’s one problem: Now isn’t a great time to hold onto money.”
  •  “…Other traditionally safe vehicles have taken a hit as well. The average rate for five-year certificate of deposits is 0.47%, down from 1.88% the same period last year, according to Federal Deposit Insurance Corp. data.  Bitcoin is up about 55% in 2020, while gold has risen 29%, smashing the record price set in 2011, as investors flock to the precious metal as a hedge against inflation. Stocks, meanwhile, have surged since bottoming out at the start of the coronavirus outbreak in the U.S.: From March 23 to July 1, the S&P 500 rallied 40%, its best 100-day performance since 1933, according to Bespoke Investment Group.”

  The Kiplinger Lettter – July 31, 2020

  • “Congress may soon make traditional driver’s license cards passé. A Senate bill would allow for electronic versions of state-issued IDs, accessible on mobile devices, by updating the 2005 REAL ID Act. Proponents say digital IDs offer enhanced security protections over traditional identification. Efforts to respond to COVID-19 will likely delay passage of the legislation. But it has already cleared the Senate Homeland Security Committee, where it has the support of the panel’s top Republican...Ron Johnson (WI)…and Democrat…Gary Peters (MI). The travel industry also backs the proposal. Don’t be surprised if the measure eventually sneaks into a must-pass bill to fund the government. The issue will continue to gain traction globally. 

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