Market Continues Recovery As Dimon’s Words Soothe Investors

The very states I mentioned are looking at huge budget deficits. They will be forced to cut public sector employees like government workers, policeman, firemen, and teachers if they do not get financial assistance from the Federal Government. It is why Mr. Cuomo ventured up to Washington to consult with President Trump last week. The states need help to plug budget holes, as do many cities. It is probably inevitable there will be not only budget cuts, but higher taxes on constituents and businesses. Not a pretty picture, unless the country can get the economy back on track. Let’s just say your skepticism is warranted.

In the market this week, continued optimism on reopening helped stocks post strong gains. Chase CEO Jamie Dimon remarked at a bank conference he thinks there is a strong possibility of a V- shaped recovery. Boy, I hope you are right, Mr. Dimon. If there is one bank CEO that does have credibility, it is him. On the earnings front, Canadian banks Royal Bank of Canada and the Bank of Montreal missed their numbers. One high profile investor, Steve Eisman (Big Short) has long been short the Canadian banks. An area that is showing strength is housing, where the high end is best represented by Toll Brothers. It reported a good number last week. Also posting a beat in the housing space was Lumber Liquidators, the flooring supplier. In technology, Salesforce put up yet another good number while Workday missed it’s mark. Looking at big box retailers, always impressive Costco missed slightly while Big Lots exceeded it’s guidance. Now, let’s look at some other noteworthy items.

Politically, the dual dilemma of China’s actions in Hong Kong and Twitter’s editors helped bring the Donald out of his shell. I know, it’s tough to get him to pop his head out. Restrictions on Hong Kong relationship with the United States and a new executive order on the liability limit (rule 230) of media organizations were the result. The more intense focus is on the civil rights issue from the George Floyd incident in Minneapolis. Moreover, questions about this incident and other similar ones in Georgia and Kentucky, along with others from prior years, are clearly justified. In connection, the rioting and looting which took place over the weekend in Minnesota and other municipalities is disturbing. People invested their hard earned money in those businesses, whether it was individuals or corporations, and that some leaders decided they were not worth protecting is yet another example of why today’s politicians have very little credibility. Hopefully, there is nowhere to go but up. On that encouraging note, stay safe and cool, and thanks for reading the blog this week.

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Disclaimer: Thanks for reading the blog this week and if you have any questions or comments, please email me at information@y-hc.com. Y H & C Investments, Yale Bock, and the family of Yale Bock ...

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Adam Reynolds 2 months ago Member's comment

What does Dimon base his belief of a V-shape recovery on?