The most important factor in survival is neither intelligence nor strength but adaptability. - Charles Darwin

At a time when many retail businesses face serious economic issues, the resilience and flexibility of many entrepreneurs never fails to disappoint.  Restaurants, faced with the prospects of no possibility of having open space for a while, have turned to drive up orders and making food for hospitals as a way to fill the gap.  Coffee shops now sell liquor, or liquor stores sell coffee and other perishable items.  Salons and restaurants are busy installing plastic shields to maintain local distancing requirements when they are allowed to open. 

You see, the spirit and creativity of those placed in very difficult circumstances bubbles to the surface in their efforts to overcome obstacles, much of which has nothing to do with the virus.  Right now, the challenges of being in business are extraordinary, and it can be seen by the soaring unemployment numbers and mounting bankruptcy figures which are piling up by the day.  According to an article in the Washington Post (as of 4/29/2020), GobalData Retail estimates the lockdowns have forced the temporary closures of 263,000 stores.  UBS estimates that more than 100,000 stores could wind up closing by the end of 2025.  You can see from these figures alone that business owners will need all their resiliency and flexibility to face the challenge at hand.  Survival.  

Of course, to have a fighting chance, you have to be allowed to operate.   Some good news on that front  is beginning to take place. Yesterday, 15 states began lifting their restrictions on businesses.  Fifteen more will join the initial group on Monday, so over half the country will be on it’s way to allowing enterprises to move towards becoming fully functional.  The leaders in the quest to open their states have been in the south, where Republican governors in Texas, Georgia, Mississippi, Florida, and South Carolina have been the first to rush in and get their states open.  In contrast, liberal bastions like NY, NJ, Illinois, and California, continue to extend stay at home restrictions.  The natives in these states are getting antsy, to say the least.  In Michigan, citizens stormed the state capital to protest the lengthening of the restrictions (by a month).  In California, Orange County beach cities of Huntington and Newport Beach, places I am very familiar and the core of Republican voters in California, assembled huge crowds objecting to their inability to just go to the beach.  The freedom was taken away by Governor Gavin Newsome on Wednesday. 

Questions are popping up all over the country about the infringement of individual freedoms by Governors, including a case in Pennsylvania that the Supreme Court wants more information about.  In New York, media star Governor Andrew Cuomo is facing questions about his nursing home policies and wasted expenditure of millions of dollars ordering unused equipment.  We will see how all of this plays out as the question of public health and safety and the measures being used by the government will be put to the test over the next few months.  If you are a business owner, essentially you are being forced to start over.  Not an easy task.

Here in Las Vegas, yesterday the group that owns the Station Casino's properties laid off thousands of workers because of the uncertainty of when their properties can open.  The largest employers in the state, casino and hotel giants MGM, Caesars, Wynn Resorts, and Las Vegas Sands, all are looking at similar situations where they will not open until June at the earliest.  Of course, very few small businesses have access to resources like these giants.  For this reason, you are going to see more protests as the little guy, the average Joe, the mom and pops, seem to be the forgotten entity in this crisis.  Darwin’s advice never looked so appropriate.

In the financial markets this week, the largest companies in the world reported earnings this week.  Facebook, Microsoft, Apple, and Amazon led the headlines and generally they were good with the growth in cloud services at Microsoft and Amazon quite impressive.  Facebook’s advertising revenues held up well, and Apple came in as expected with services, payments, and wearable's seeing good growth. 

The big news in the energy markets was the dividend cut by behemoth Shell, which chopped its annual payment to shareholders by over 50%.  BP, Exxon, and Chevron did not cut their dividends, but all are forced to face with the currently unsustainable prospect of paying out more to their shareholders than their operations are able to generate.  The situation is related to oil demand and oil prices.  Most oil companies are shutting in production (stopping it) because the economics of drilling costs at 30-100 bucks a barrel and selling at $20-25 is not going to work.  Over the next quarter or two, if oil demand and the price for black gold heads back to a workable level, the dividends will remain in place.  If not, the other big guys will be forced to cut back on their payments, too.  As a long time oil bull, it is a tough time to be an energy owner.  Of course, part of being a shareholder is owning positions when things aren’t peachy keen, and the current environment certainly qualifies.  

On the macroeconomic front, job losses of 3.8 million versus 3.5 expected didn’t help investor confidence.  In the political realm, the news about General Michael Flynn essentially being set up by the FBI and Justice Department only adds fuel to the fire that will rage around the 2020 Presidential Campaign.  Here was a guy who fought for the country for over 20 years and was treated like a criminal by the prior administration.  In fact, they went out of their way to put him a situation where he would ultimately serve prison time.  Apparently, a big source of their animosity was his disagreement with Mr. Obama on the terms of the Iran deal.  Make no mistake, this is the same bunch of people who are asking to run the country again, with the only difference that Mr. Biden would be in charge.  Yes, if this sounds like a partisan argument, it is indeed.  Mr. Flynn deserves better, and this will be another log on the fire of a very contentious campaign over the next six months.  Make sure you have plenty of water and are able to easily adapt, as it is going to be a long, hot summer.