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Tuesday, June 2, 2020

Global Markets Edge Higher as U.S. Futures Slip - The Wall Street Journal

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International markets made small gains, while U.S. stock futures declined, as investors weighed signs of economic recovery against risks stemming from U.S.-China tensions, the coronavirus and social unrest in the U.S.

Futures tied to the S&P 500 slipped 0.3%, suggesting the benchmark index will open lower. The Stoxx Europe 600 rose 0.9%, led by shares in auto and auto-part manufacturers, after a public holiday in much of the continent Monday.

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In Asia, Hong Kong’s Hang Seng Index and stock benchmarks in Japan and South Korea rose between 0.5% and 1.5%. China’s Shanghai Composite added 0.2%, and Australia’s S&P/ASX 200 rose 0.3%.

“The equity market has been pricing in a smooth recovery of the economy, although it might be too optimistic while overlooking some potential risks,” said Anthony Chan, chief Asia investment strategist at Union Bancaire Privée.

Among other risks, Mr. Chan cited the possibility of fresh coronavirus outbreaks, bringing new lockdowns, and a fragile geopolitical backdrop. He said the Trump administration could take more-severe measures related to Hong Kong ahead of the U.S. presidential election in November.

The U.S. dollar has slid in recent sessions, and riskier currencies such as the Mexican peso have strengthened, on optimism about economic recovery.

On Tuesday in Hong Kong, the WSJ Dollar Index, which measures the U.S. currency against 16 others, was fractionally stronger at 92.01. It peaked above 97 in March.

U.S. indexes rose Monday as investors embraced signs that global factory activity was on a path toward recovery and largely shrugged off violent protests in U.S. cities.

In bond markets, the yield on the 10-year U.S. Treasury note eased to 0.657%, down from 0.662% on Monday.

Brent crude, the global oil benchmark, gained 1.2% to $38.78 a barrel.

An alliance of oil-producing nations led by Saudi Arabia and Russia is close to a deal that would extend their collective production cuts through Sept. 1.

Among the risks investors may be overlooking, according to Union Bancaire Privée’s Anthony Chan, is the possibility of Trump administration measures related to Hong Kong.

Photo: jerome favre/Shutterstock

Write to Xie Yu at Yu.Xie@wsj.com and Joe Wallace at Joe.Wallace@wsj.com

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Monday, June 1, 2020

Jim Cramer on Wall Street's relation to George Floyd protests: 'The market has no conscience' - CNBC

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Wall Street rallied after a weekend chock full of protests across the U.S. because the market is blind to social justice, CNBC's Jim Cramer said Monday.

"At the end of the day, the market has no conscience. Investors are simply trying to make money, and that's why they're crowding into the stay-at-home economy stocks," the "Mad Money" host said, "because the stay-at-home economy just got a major extension for many investors [and] right or wrong, thoughtless or cerebral, it's worth exploiting."

The Dow Jones Industrial Average picked up almost 92 points, or 0.36%, to close the session at 25,475.02. The S&P 500 rose 0.38% to 3,055.73, and the Nasdaq Composite moved 0.66% to 9,552.05.

Thousands of people in America and countless others abroad have spent days on end protesting — most of them peacefully — racism and police brutality in the wake of the police-involved killing of George Floyd in Minneapolis on Memorial Day. 

When it comes to the market, investors have their own beliefs and cast judgments on current events, but the market generally doesn't react to social justice — if the demonstrations don't impact the corporation's bottom line, said Cramer, who voiced his support for peaceful protesters.

"Until very recently, nobody was investing with an eye toward making the world a better place — whatever that might mean," he said. "While there's now a younger generation that invests with their hearts as well as their heads — and I share a lot of that sentiment — for the most part, people still pick stocks because they're trying to make money."

He is worried, however, how the mass demonstrations nationwide could impact public health as the country continues to grapple with both the coronavirus pandemic and tough economic conditions. While protesters have good reason to take to the streets, their congregation in close spaces could lead to another spike in Covid-19 infections, leading to another reason for employers to delay calling employees back into the office, Cramer said.

"That's why I'm concerned that we're going to get a huge second wave of infections, far earlier than people thought," he said. "Plus, in the places where protests turned violent, it gives businesses another reason to shut down or keep their employees working remotely. From this stock market's perspective, everything that happened this weekend means the stay-at-home economy will last longer than we thought."

Given those factors, the former hedge-fund manager recommended that investors keep investing into the stay-at-home plays. His suggestions came after Michigan's Gretchen Whitmer earlier that day became the latest governor to lift a state's stay-home order as the country gradually reopens the economy.

Cramer recommended Zoom Video, despite the stock's nearly 14% run on Monday. The household video software name is set to report quarterly earnings after Tuesday's close.

"Zoom's running today because there's a decent chance it might go higher after it reports. During my 40 years of investing, you rarely get situations like this," he said. "Buy high and sell higher is a bad strategy, people, but in this crazy market, anything can happen."

As employees continue to work from home and use products such as Zoom, cybersecurity will continue to be in high demand as companies look to protect their networks, he added.

"As long as there's a huge level of enthusiasm for stocks like Zscaler, Okta, ... Fortinet, Proofpoint [and] Crowdstrike, which reports after the close tomorrow, the averages can keep climbing," he said. "These cybersecurity plays were practically made for this moment."

Amazon, Facebook, DraftKings and DocuSign are the other stay-at-home winners, he said.

"Put it all together, and it's not that the market is totally heartless, although it certainly has no heart," Cramer said. "It's that buyers are oblivious to the risk of purchasing stocks that have run and run and run some more."

Disclosure: Cramer's charitable trust owns shares of Amazon and Facebook.

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Stock market news live updates: Stock futures open little changed as protests continue, economic data stabilizes - Yahoo Finance

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Stock futures opened roughly flat Monday evening, as investors eyed stabilizing economic data alongside ongoing protests across the country, which spurred some concerns of a ramp-up in coronavirus cases following a deescalation in the outbreak.

Big Tech firms and the tech-heavy Nasdaq continued their run of outperformance Monday, with the Nasdaq just 2.7% below its recent all-time high from February 19 as of Monday’s close.

On the economic data front, an index of U.S. manufacturing activity released Monday morning rose for the first time since January, stoking hopes that worst of the downturn was over, even as the gauge held in contractionary territory.

“We say better days ahead as the Institute of Supply Management still makes the claim that the broader economy is no longer in recession as long as their index is 42.8 or higher,” Chris Rupkey, chief financial economist for MUFG Union Bank, said in an email of the index, which came in at 43.1 for May. “One small step for manufacturing today means one giant leap for the broader economy.”

Stocks ended Monday’s session higher despite the tensions across the country as demonstrators rallied against police brutality following the senseless killing of George Floyd, an unarmed black man, by officers last week. President Donald Trump said in a press conference late Monday that he would deploy the U.S. military in cities and states that did not crack down enough on the unrest.

The protracted mass gatherings – many of which came alongside instances of looting, vandalism and destruction of retail outlets – led at least some analysts to speculate at the prospect of a re-escalation of Covid-19 cases, which could weigh on the economic recovery.

“The timing could not have been worse. All of a sudden we have 90% of the population in the U.S. in a phase-back state, and now you are trying to reopen the small businesses and the social unrest really derails the economic recovery,” Deepak Puri, Deutsche Bank Wealth Management Americas chief investment officer, told Yahoo Finance’s The First Trade. on Monday. “I don’t think this is going to be something that permanently hampers economic output, but it really makes concerns.”

Some policymakers shared similar worries.

"We're talking about reopening in one week in New York City, and now we're seeing these mass gatherings over the past several nights that could in fact exacerbate the COVID-19 spread," New York Governor Andrew Cuomo said during a press conference Monday.

New York City is set to have a curfew stretch from Monday night at 11 p.m. to 5 a.m. Tuesday morning ET, during which thousands of police officers will patrol the streets, according to a statement from Cuomo and NYC Mayor Bill de Blasio. New York City joins more than three dozen other cities across the nation that have instilled curfews in recent days, as officials try to prevent further violence and property damage coming alongside some of the demonstrations.

In Minneapolis, where the protests began, curfews are set to remain in place for at least the next two nights, though some members of the National Guard who had earlier been activated have been sent home, Minnesota Governor Tim Walz said.

—

6:48 p.m. ET Monday: President Donald Trump says he will ‘deploy the United States military’ in cities, states that fail to deploy ‘sufficient’ response to protests

President Donald Trump said during a press conference Monday evening that he would deploy the U.S. military in cities and states he felt did not undertake enough of a response to quell the violence of recent days amid the protests.

“Today I have strongly recommended to every governor to deploy the National Guard in sufficient numbers that we dominate the streets. Mayors and governors must establish an overwhelming law enforcement presence, until the violence has been quelled,” Trump said. “If a city or state refuses to take the actions that are necessary to defend the life and property of their residents, then I will deploy the United States military and quickly solve the problem for them.”

—

6:06 p.m. ET Monday: Stock futures open little changed

Here were the main moves at the start of the overnight session for U.S. equity futures, as of 6:06 p.m. ET:

  • S&P 500 futures (ES=F): 3,051.75, down 2.25 points (-0.07%)

  • Dow futures (YM=F): 25,443.00, down 20 points (-0.08%)

  • Nasdaq futures (NQ=F): 9,586.50, down 8.5 points (-0.09%)

Protesters march against the death in Minneapolis police custody of George Floyd, in the Manhattan borough of New York City, U.S., June 1, 2020. REUTERS/Mike Segar

—

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Stock Markets Rise Despite U.S. Violence: Live Updates - The New York Times

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Credit...Vincent Yu/Associated Press

Global markets rose on Monday despite jitters over the violence in the United States, as investors looked to further signs of recovery from the coronavirus and a lack of major retaliation from the United States in its dispute with China over the fate of Hong Kong.

Stocks in London and Paris were more than 1 percent higher in early Monday trading, though markets in Germany and a number of other countries were closed for a holiday. Asian markets rose strongly, paced by an increase of more than 3 percent in Hong Kong and more than 2 percent in mainland China shares.

Despite the unrest in the United States, futures markets were indicating Wall Street would open modestly higher.

Investors were cheered by results from surveys of purchasing managers around the world, which showed uneven but steady progress in recovering from the coronavirus outbreak. They also saw President Trump’s response on Friday to China’s efforts to take a heavier hand in Hong Kong’s affairs as less severe than it could have been. Mr. Trump said the United States would begin rolling back the special trade and financial status it grants to the former British colony but left many of the details unsaid.

Markets did not totally dismiss the problems in the United States. Prices for U.S. Treasury bonds were mixed, and the American dollar slipped in value compared with other major currencies.

For all the pain that the virus has caused the 25,000 or so who live in Bernal Heights, a dense little neighborhood built around a grassy hill in the south of San Francisco, it has also brought them together as a community — a pattern that is playing out in neighborhoods around the country.

Neighbors have formed a small newspaper for children. Socially distanced street dance parties and cocktail hours have taken over, block by block, as the sun sets. Some people have created a new micro-social safety net, turning bookshelves into sidewalk food banks and garages into medical-supply distribution centers. Email lists and text chains for each block are buzzing.

And as sheltering in place eases, some of the changes in Bernal Heights are turning permanent.

“The scale of life has changed,” said Francesca Russello Ammon, an associate professor of city and regional planning at the University of Pennsylvania. “Your world has shrunk. The neighborhood and the block become really important.”

When Ryan Stagg, 27, started baking bread for his neighbors in a one-bedroom apartment on Wright Street, he offered it for free, dangling each loaf in a basket, over the fence and down to the sidewalk.

But he and his fiancée, Daniella Banchero, were both out of work, and their landlord was unwilling to reduce their rent, so they started to charge $9 for a big sourdough loaf and expanded the menu, adding cinnamon rolls ($3), cookies ($2) and crumb cakes.

Recently, they have started using a commercial kitchen in a restaurant that’s been shuttered. And they applied to start a proper registered business: The Bernal Bakery.

Credit...John Minchillo/Associated Press

There is widespread agreement that the United States economy will soon begin to recover from coronavirus lockdowns. The big debate is whether that rebound will resemble a V, a W, an L or a Nike Swoosh.

Increasingly, economists and analysts are penciling in another glyph: a question mark, writes Jeanna Smialek.

Forecasters often label their expectations for a post-recession rebound with letters — a “V” suggests a rapid recovery, a “W” a double-dip, and so on — but that’s hard to do this time around. As all 50 states begin to open up and consumers trickle out of their homes, the path ahead is wildly uncertain, making prognostication dicey.

It isn’t just Wall Street forecasters eschewing the alphabet in favor of a range of what-if’s. From the Federal Reserve to the White House, analysts have suggested that posing confident prognostications is probably more misleading than helpful. John C. Williams, president of the Federal Reserve Bank of New York, said during an appearance last week that it was important for policymakers to prepare for every eventuality, rather than focus on one type of recovery.

What is the very best way for people with more money than they need to quickly hand it over to those in need, so they can use it for food, shelter and other necessities?

It isn’t easy to find a satisfying answer. Sites and services like GoFundMe can connect donors with real people, but they may lack vetting of recipients, their back stories or their plans. Donors with large amounts to give may want to use tax deductions to increase what they can afford to donate, but may not be able to get them through one-off cash transfers.

The elusiveness of perfect solutions has inspired a variety of social entrepreneurs to pursue various forms of direct giving. If you’ve sent money via DonorsChoose to help a teacher pay for a classroom project, you get the basic idea: Give a little money, know exactly where it’s going, have some sense of who’s getting it and have someone between you and the recipient to provide at least some verification.

Two existing organizations and one new entrant are offering some of the most satisfying ways of providing few-strings-attached assistance. Modest Needs Foundation and GiveDirectly, both nonprofit organizations, are using years of experience to pay people’s bills or hand them money to pay for things themselves. And the 1K Project is facilitating money transfers, although without the tax deductions the other two can offer donors.

GiveDirectly partnered with Propel, a company that helps recipients of SNAP (the Supplemental Nutrition Assistance Program once known as food stamps) manage their benefits. They receive a message at random offering the money, a bit like a lottery that they don’t have to enter.

  • The Centers for Disease Control and Prevention announced sweeping new recommendations on the safest way for American employers to reopen their offices to prevent the spread of the coronavirus. The recommendations include: checking temperatures as employees arrive at work, spacing desks six feet apart, and requiring masks. Suggestions run from technical advice on ventilation systems (more open windows are most desirable) to suggested abolition of communal perks like latte makers and snack bins.

Reporting was contributed by Matt Richtel, Ron Lieber, Nellie Bowles, Carlos Tejada and Jeanna Smialek.

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The coronavirus forces face-to-face politics online - The Texas Tribune

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The pandemic has made political campaigns a little less visible and a lot less personal.

Political flyers aren’t hanging from our front doorknobs. Town hall meetings are held on computer screens now, cutting down on the cost of cupcakes and on many of the benefits of public discussions in big rooms. Fundraisers that would typically move smoothly from a candidate speech to a check and a handshake are now held online, with links for donors who want to send electronic contributions and add their names to hyperactive email lists.

Most Texas candidates aren’t busy campaigning for votes right now; most have secured their nominations and are preparing for the November general election. But candidates in Democratic and Republican Party runoffs are prepping for a July 14 election preceded by two weeks of early voting starting June 29. There’s also a special state Senate election in Central Texas on the ballot.

Winning voters’ attention for a runoff election, especially in the middle of the summer, is a tough proposition. The pandemic and other national news crowds out state and local political conversations. The runoff electorate is a smaller civic herd to begin with. That makes it easier to contact likely voters, but critical to get them to the polls — and to make sure they know a candidate’s name when they get there.

“Pandemic changed expectations about what a field campaign should be,” says Pritesh Gandhi, who’s in a runoff with Mike Siegel to pick the Democratic challenger to U.S. Rep. Mike McCaul, R-Austin. A candidate still has to do all of the normal things — talk to people, win their favor, attract their votes, maybe collect some donations. But everything that used to be done in person now has the word “virtual” in front of it.

Gandhi does what he calls “virtual block walking,” using the phone instead of his feet to go door to door. “Virtual events have been the best-attended events of the campaign,” he says, comparing his runoff campaign with the one that preceded the March primary.

The details of what works and what’s different depend on the race. Statewide candidates don’t campaign door to door in the way that state House, state Senate or congressional candidates do. The state’s too big, and time is too short.

Individual contact with voters is done electronically and by mail and — when it’s time to vote — sometimes by phone. But the town hall meetings around the state that would give voters a chance to see candidates in the flesh aren’t happening, says Chrysta Castañeda, a Democrat running for an open seat on the Texas Railroad Commission. Her opponent in July is former state Rep. Roberto Alonzo of Dallas; the winner will face Republican Jim Wright, who upset Railroad Commissioner Ryan Sitton in the March primary.

That commission, which regulates the state’s oil and gas industry, isn’t well known. Candidates of both political parties struggle to get attention — especially when there’s a flashy presidential race at the top of the ballot to distract voters. Castañeda says the collapse in the price of oil and the state of the economy have turned up the volume, but the July elections still aren’t the subject of everyday conversation in the state.

“It’s surprising how quickly we’re converting to a virtual campaign, and it’s more efficient than what I was doing,” she says. Flying around the state to town hall meetings and fundraisers has been replaced by virtual events that each have attracted 30 to 100 voters.

The delay in the runoff election — originally scheduled for May but pushed to July in the face of the pandemic — hasn’t given any candidates an advantage, in Gandhi’s estimation.

“April was a dead month,” he says. “It was lost for everyone.”

Things have picked up considerably. This is normally the season for Austin fundraising events, where candidates from all over Texas seeking state offices go to the state capital to raise money from lobbyists and special interest groups, often in a kind of serial check-harvesting operation held in adjacent rooms at a historic opera house now known as the Austin Club.

That’s not happening. Zoom is happening. It’s a way to hear from a candidate and to prompt like-minded or self-interested donors to send money. But it doesn’t build relationships the same way. Live fundraisers give donors and candidates a chance to meet in a way that’s not possible when the audience is a grid of faces on a computer screen.

The July runoffs are a trial run for the November general election. Voters will be wearing masks and carrying hand sanitizer, just like the election judges who handle their ballots. The courts are still deciding how many of those voters will be allowed to vote by mail. But the changes are on the other side, too, where candidates are trying to figure out how to connect with people they can’t see face to face, to build communities of people they’ve never actually met.

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Autonomous Delivery Robots Market 2020-2024 | Growth of e-Commerce Industry to Boost Growth | Technavio - Olean Times Herald

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The Flawed Politics of a Law-and-Order Campaign - The New Republic

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Polling was far rarer in 1968 than it is today. A Louis Harris survey conducted in August, just before the Democratic convention, found that voters held contradictory opinions on questions related to national unrest. On one hand, voters tilted right as 59 percent agreed that  “Negroes who start riots” were a major cause of the breakdown of law and order. But in the same national survey, 73 percent of voters sensibly felt that “the rights of many people can be endangered in the name of law and order.”

In many ways, the midterm elections two years later (with 25 Democratic Senate seats on the ballot compared to 10 for the Republicans) offered a clearer test of the law-and-order issue. Nixon, now president, unleashed Vice President Spiro Agnew in a campaign that can be seen as a precursor to Trumpism. Taking the low road, Agnew vilified the news media, liberal intellectuals (“effete corps of impudent snobs”), and antiwar critics, labeling Democratic Senate candidates as “hopeless, hysterical, hypochondriacs of history.” (New York Times columnist James Reston called that line “the worst example of alliteration in American history.”)

Concocting a toxic brew of rhetoric aimed at campus demonstrators (police and National Guardsman had murdered students at Kent State and Jackson State in May),  rioters, and the fear of a rising crime rate, Agnew waged holy war on what he called “radical liberals.” Even though he was essentially only replicating what Nixon had done two years prior, this time, it backfired, because Nixon, the incumbent president, could be blamed for allowing the nation to descend into chaos. By September of 1970, only 39 percent of Americans viewed Nixon’s “approach to crime and law and order” favorably, according to a Harris poll.  

In the end, despite one of the most favorable Senate maps in history, the Republicans gained just two seats. Even more impressive was that the Democrats ended up with 11 additional governorships, the party’s biggest statehouse sweep since 1938.

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