Stocks and News
Home | Week in Review Process | Terms of Use | About UsContact Us
   Articles Go Fund Me All-Species List Hot Spots Go Fund Me
Week in Review   |  Bar Chat    |  Hot Spots    |   Dr. Bortrum    |   Wall St. History
Week-in-Review
  Search Our Archives: 
 

 

Week in Review

http://www.gofundme.com/s3h2w8

AddThis Feed Button

   

05/30/2020

For the week 5/25-5/29

[Posted 10:00 PM ET, Friday]

Note: StocksandNews has significant ongoing costs and your support is greatly appreciated.  Please click on the gofundme link or send a check to PO Box 990, New Providence, NJ 07974.

Edition 1,102

America Is Crying

It was already a depressing week for America after we hit 100,000 deaths on the coronavirus front, and then we had the lynching of George Floyd in Minneapolis and the ensuing violence around the country.  I have a lot on the topic near the end of the column.

But there is so much more I want to say, only time does not permit it today.  That said, I’m the ‘wait 24 hours’ guy and I want to see how this all plays out in the coming days.

For now I’ll just say this.  I’ve been around the globe a bit.  I’ve experienced a lot.  I’ve seen many different cultures.

I’ve also said more than once in this space that America is overrated.  Oh, don’t worry.  After I’m overseas, I still love landing in the USA.  But we must do better. 

I’ll address the race relations issue head on next WIR.  But tonight I’m thinking of my friend in Newark, Mary, whose son I helped for years before he died senselessly in a Newark hospital.  I’m thinking of some of the relationships I had at Wake Forest.  I had two ‘little brothers’ in my fraternity who were black, though neither ended up going through the full pledge process for different reasons, but two real good guys.  [Nonetheless, two more of my failures…my “Book of Failures” is up to six volumes, by the way, kind of like Edward Gibbon’s “Decline and Fall of the Roman Empire”… Amazingly, President Trump has never failed…once!  Can you believe that?]

In the meantime, be sure to read LZ Granderson’s column down below.

Covid-19 Death Tolls

World 366,418
United States 104,542
UK 38,161
Italy 33,229
France 28,714
Brazil 27,944
Spain 27,121

Japan 874
South Korea 269
Taiwan 7

The number who’ve lost their lives in the U.S. is greater than the number of U.S. servicemen and women killed in Korea, Vietnam, Iraq and Afghanistan – over an aggregate 44 years of fighting.

All President Trump could do in marking our grim milestone was muster up a tweet Thursday morning:

“We have just reached a very sad milestone with the coronavirus pandemic deaths reaching 100,000.  To all of the families & friends of those who have passed, I want to extend my heartfelt sympathy & love for everything that these great people stood for & represent.  God be with you!”

Earlier in the week, Trump tweeted:

“For all of the political hacks out there, if I hadn’t done my job well, & early, we would have lost 1 ½ to 2 Million People, as opposed to the 100,000 plus that looks like will be the number.  That’s 15 to 20 times more than we will lose.  I shut down entry from China very early!”

The U.S. had 25,000 new cases today.  We are seeing a spike in some Southern states.  Whether or not this has to do with reopening is too soon to tell.

But the world had its highest number of cases yet today!  Yes, this is far from over.

Covid Bytes

--Cases have been spiking in not just Brazil and Mexico, but also Argentina, Colombia, Chile and Peru.  And now Argentina defaulted on its sovereign debt for the ninth time in its history.

But cases are also now spiking in South Africa, India and Banglaesh, while the death toll rises in Russia, which had its biggest one-day tally today, 232, which all are in agreement is nonetheless lower than reality.

In Russia, early in the week the official number of doctors who had died was 100, but a tally being kept by Russia’s physicians and nurses of their friends and associates was at 300!

The WHO’s Dr. Mike Ryan said, “Right now, we’re not in the second wave. We’re right in the middle of the first wave globally.

“We’re still very much in a phase where the disease is actually on the way up,” Ryan told reporters. 

The numbers bear that out.

President Trump initiated a travel ban on Brazil to help prevent the spread of the virus, though it’s largely too late.  As was the case with Europe before the travel ban there was initiated in March, in the case of Brazil, thousands and thousands have been arriving in the U.S. for weeks.

--Quebec nurses and orderlies are pleading for time off this summer, ahead of a possible second wave of infections in the fall, as Canada’s hardest-hit province from the virus wrestles with a staffing crunch.  Quebec Premier Francois Legault says the province is short 10,000 healthcare workers.

Quebec has more than 60% of Canada’s nearly 7,000 deaths.

--Spain said it would reopen its borders to tourists in July and its top soccer division will kick off again on June 8.  Foreign visitors contribute around an eighth of Spain’s economic output.  There have been growing calls for Prime Minister Pedro Sanchez to resign over his handling of the crisis, particularly the economic fallout.

--Japan on Monday fully lifted a state of emergency and declared success in checking the coronavirus.

“We’ve been able to bring down infections and deaths by a far greater degree than other Group of Seven and major developed countries relative to the size of population,” Mr. Abe said.  “We have showed the power of the Japanese model.”

Abe and the nation are praying they can still hold the Olympics next summer in Tokyo, but for that we’d need a widely available vaccine by early in the year at the latest, I’m guessing.

The U.S. Economy…Big Picture

Initial claims for unemployment insurance came in at the lowest level in 10 weeks, while continuing claims decreased for the first time since late February, offering a sign that the world’s biggest economy might be emerging from some of the worst damage inflicted by the pandemic.

Jobless claims reached more than 40 million in the past 10 weeks (2.12 million this past week, though down 323,000 from the week before).

Continuing claims, which trail the initial figure by a week, decreased by 3.86 million to 21.05 million through May 16.

The decline is judged to be related to people being called back to work in states that have lifted their lockdown orders and reopened, but we’ll see what the next few weeks brings on this front.

Next Friday we will receive the May jobs report and the unemployment rate is expected to hit 20% or more.  But this is most likely the bottom.

St. Louis Federal Reserve President James Bullard said on Fox Business that the economy should see a sharp rebound after suffering the worst economic growth ever in Q2, with the unemployment rate dropping below double digits by year-end, but a prolonged economic shut-down risks morphing “into a financial crisis and makes this so much worse.”

Bullard said “Very likely behind the worst quarter will be the best quarter of all time from a growth perspective, because logically, businesses will open back up.  This shock is very different from other ones we’ve seen.”

Bullard added that with regards to the expanded unemployment benefits, “You want to incentivize people” to work, so it would not be appropriate as the recovery takes hold to extend the extra $600 per week in unemployment, the additional benefit expiring at the end of July.

Indeed, some employers face restaffing difficulties from a labor pool containing many who will be better off unemployed, at least until the supplemental benefits expire.

Minneapolis Fed President Neel Kashkari and former Goldman Sachs CEO Lloyd Blankfein had a telling exchange on Twitter.

Kashkari asked how Blankfein would go about returning to normalcy himself, after Blankfein questioned whether the continued broad lockdowns are worth the economic pain.

Kashkari:

“Genuinely curious, Lloyd: are you going back out to movie theaters, restaurants and commercial planes?  Or are you sequestering until there’s a vax since you are in high risk age group? The people will determine the lockdown based on their own sense of safety.”

Blankfein:

“Hospitals are not overwhelmed; most of us will be exposed anyway since we can’t sequester until there’s a vax; and we know which groups need protection from worst outcomes.  Is the public health benefit from broad lockdowns at this point worth such extreme damage to livelihoods?”

And that’s today’s debate in a nutshell.

Daniel Henninger / Wall Street Journal

“How is it reasonable to stop people from resocializing given the reality of data where they live and their own experience with the virus?

“If the virus revives in the fall, will the relatively low mortality rates experienced in most states be worse than recorded so far, especially with hospital capacity renormalizing?  Is it worth rethinking the justification for the 6-foot social-distance barrier amid the bankrupting of tens of thousands of restaurants, cultural institutions, musicians with no source of income until performance spaces open, and store owners – even in Covid-conscious New York City?

“No decision maker advising or ordering the shutdowns – whether Donald Trump, Anthony Fauci, Deborah Birx or any governor – could have known in early March how this virus was going to behave among 328 million people living across the U.S.’s 3.5 million square miles.  But they do now.

“Public-health officials have performed well.  They need now to get past the blunt instrument of expecting compliance with protocols based on minimized social interaction, or risk the erosion of their credibility.”

Economist Nouriel Roubini, aka Dr. Doom for his gloomy predictions, having foresaw the financial crisis in 2008 before many others, does not see a rapid recovery.  The jobs lost, in both rich and poor countries “are going to come back only in part, with lower wages, no benefits, part-time,” he told the BBC Talking Asia program.  “There will be even more insecurity of jobs and income and wages for the average working person.”

As economies reopen, Roubini cautions: “You can open the stores but the question is whether they’re going to come back.  Most of the shopping centers in China are still empty.  Half of the flights aren’t there. German shops are open but who wants to go and shop?”

But there will be a greater split between the U.S. and China, and many Asian countries will be forced to choose between the two superpowers.

“Each one of them is going to say to the rest of the world, either you are with us or against us,” Roubini says.  “Either you use my AI systems, my 5G, my technologies, my robotics.  Or you are using the one of my rival’s.  Therefore there is going to be a more divided world.”

---

China officially ratified a plan Thursday to write a national security law for Hong Kong that exerts Beijing’s broader, new control over the semi-autonomous territory in a bid to prevent a return of the months of often-violent protests last year.

The Beijing-backed Hong Kong government sought to assure its citizens that the law would not infringe on their freedoms, while the pro-democracy opposition described the move as the end of the core values that set the former British colony apart from the rest of China.

“From now on, Hong Kong is nothing but just another mainland Chinese city,” pro-democracy lawmaker Claudia Mo said.

So President Trump said he’d announce new policies on China today, hurting sentiment on Wall Street yesterday and this morning, but then it proved to be a total nothing-burger.  The United States is terminating its relationship with the World Health Organization, something Trump has been threatening to do, he said he was directing his administration to begin the process of eliminating special treatment for Hong Kong, but the president then did not mention any action that could undermine the Phase One trade deal that Washington and Beijing struck early this year, a concern that had cast a cloud over the market.

Trump World

--In one of his tweets late last night, as I write in full down below, President Trump, referring to the violence in Minneapolis, said he was ready to send in the National Guard “& get the job done right.”  He added, “Any difficulty and we will assume control but, when the looting starts, the shooting starts.  Thank you!”

It was the culmination of a war on Twitter and social media.  All week he was ranting and raving.

Thursday, he signed an executive order that aims to curtail social media’s legal liability protections – two days after Twitter slapped fact check labels to a pair of his tweets about fraud in mail-in voting for the first time.

“@Twitter is now interfering in the 2020 in the 2020 Presidential Election,” Trump tweeted Tuesday, shortly after the company flagged his posts as misleading.

“They are saying my statement on Mail-In Ballots, which will lead to massive corruption and fraud, is incorrect, based on fact-checking by Fake News CNN and the Amazon Washington Post. Twitter is completely stifling FREE SPEECH, and I, as President, will not allow it to happen!”

“We’re here today to defend free speech from one of the greatest dangers it has faced in American history,” Trump said before signing the executive order in the Oval Office.

“A small handful of powerful social media monopolies,” Trump said, “had unchecked power to censure, restrict, edit, shape, hide, alter virtually any form of communication between private citizens or large public audiences.”

Trump declared, “We can’t let this continue to happen, it’s very, very unfair.”

Trump’s order directs federal agencies to look at whether they can place new regulations on the tech giants like Twitter, Facebook and Google, which owns YouTube.

The order also seeks to clarify regulations under Section 230 of the Communications Decency Act, a 1996 landmark federal law that largely exempts online platforms from legal liability for material posted by their users, allowing them to be treated more like publishers.

Rolling back those regulations would expose the tech companies to more civil liability through lawsuits.

Facebook CEO Mark Zuckerberg raced to a TV camera Thursday morning to say that Facebook would not fact-check Trump the way Twitter did.  Trump’s bullying seems likely to work.

Zuckerberg reasoned that the social media platforms shouldn’t be the “arbiters of truth.”

Patrick Tucker / Defense One

“A new presidential order targeting social media companies for perceived bias would hurt their ability to block bots and defuse disinformation, experts and lawmakers say.

“The order seeks to limit legal protections for companies that run online platforms, according to a draft revealed on Thursday. The order argues that a social-media company that labels factually inaccurate tweets as such, for example, forfeits its immunity from libel suits – a protection granted by section 230(c) of the Communications Decency Act, or CDA – because it is acting as a traditional editor and publisher, not a neutral platform.

“The order goes on to instruct the Federal Communications Commission, or FCC, to propose regulations to govern how social media companies can punish rule breakers, such as by suspending accounts for purging content. It instructs the FCC to make sure that such actions are taken ‘within good faith’ of the CDA.

“That could mean social media companies would have to try to notify users before taking action.  The order also gives the National Telecommunications and Information Administration, or NTIA, broad authority to propose further rules and regulations for social media companies ‘that the NTIA concludes may be appropriate to advance the policy described…’

“The order follows complaints from right-wing groups who have said that they are unfairly targeted for suspension and content removal by the platforms’ moderators.

“Tech policy experts who spoke to Defense One said that the order would limit the ability of social media networks to block efforts to use their platforms for manipulation and disinformation, since the companies would need to give each disinformation-spreading bot a sort of hearing before it purges them….

“Sen. Mark Warner, D-Va., who sits on the Senate Intelligence Committee and has made disinformation and online platforms a legislative focus, said that the order is an ‘effort to cow platforms into allowing Trump, dark money groups, and right-wing militias to continue to exploit their tools to sow disinformation, engage in targeted harassment, and suppress voter participation.’  He described the order as a ‘distraction from the legitimate efforts to establish common sense regulations for dominant social media platforms.’….

“Trump issued the new order after Twitter on Tuesday labeled a provably false tweet about mail-in ballots with a ‘fact check’ link.  That action could open them up to special scrutiny for editorializing, but exactly who is empowered to perform that scrutiny is legally unclear.  Twitter doesn’t take political campaign money and can’t really be considered a monopoly by any reasonable standard, so it’s hard to see how relevant regulations that govern politically-paid speech and monopolies might apply to them….

“(Daphne) Keller (fellow at Stanford’s Center for Internet and Society) said the (executive order) ‘reads like a stream-of-consciousness tweetstorm that some poor staffer had to turn into the form of an Executive Order. The underlying issues it raises are really important, of course: We need an informed public debate about the power of platforms over public discourse.  But that’s not what the EO is. It isn’t reasoned discussion, and for the most part, it isn’t even lawmaking.’”

--President Trump pressed the Democratic governor of North Carolina on Monday to “guarantee” that he will allow “full capacity” at this summer’s Republican National Convention.

“I love the Great State of North Carolina, so much so that I insisted on having the Republican National Convention in Charlotte at the end of August.  Unfortunately, Democrat Governor, @RoyCooperNC is still in Shutdown mood (sic) & unable to guarantee that by August we will be allowed full attendance in the Arena,” the president wrote on Twitter.

Trump said Republicans “must be immediately given an answer by the Governor as to whether or not the space will be allowed to be fully occupied.  If not, we will be reluctantly forced to find, with all of the jobs and economic development it brings, another Republican National Convention site.”

No you won’t.  You already have scores of contracts in Charlotte you can’t just break.

Just another distraction.

--U.S. hospitals said they have pulled way back on the use of hydroxychloroquine, the malaria drug touted by President Trump as a Covid-19 treatment, after several studies suggested it is not effective and may pose significant risks.  The drug’s efficacy has so far failed to pan out in human trials, and in at least two studies, it was found to increase the risk of death.

The Department of Veterans Affairs, which had promoted hydroxy’s use, is also “ratcheting down” use of the drug, VA Secretary Robert Wilkie told a congressional hearing on Thursday.

--Trump tweets:

“ ‘Regulate Twitter if they are going to start regulating free speech.’  @JudgeJeanine @foxandfriends Well, as they have just proven conclusively, that’s what they are doing. Repeal Section 230!!!”

“ ‘The President has been targeted by Twitter.’ @MariaBartiromo What about all of the lies and fraudulent statements made by Adam Schiff, and so many others, on the Russian Witch Hunt Plus, Plus, Plus? What about China’s propaganda? WHO’s mistakes? No flags? @foxandfriends”

“Twitter is doing nothing about all of the lies & propaganda being put out by China or the Radical Left Democrat Party.  They have targeted Republicans, Conservatives & the President of the United States. Section 230 should be revoked by Congress.  Until then, it will be regulated!”

“MAIL-IN VOTING WILL LEAD TO MASSIVE FRAUD AND ABUSE. IT WILL ALSO LEAD TO THE END OF OUR GREAT REPUBLICAN PARTY. WE CAN NEVER LET THIS TRAGEDY BEFALL OUR NATION. BIG MAIL-IN VICTORY IN TEXAS COURT TODAY. CONGRATS!”

“There is NO WAY (ZERO!) that Mail-In Ballots will be anything less than substantially fraudulent. Mail boxes will be robbed, ballots will be forged & even illegally printed out & fraudulently signed. The Governor of California is sending Ballots to millions of people, anyone…

“…living in the state, no matter who they are or how they got there, will get one.  That will be followed up with professionals telling all of these people, many of whom have never even thought of voting before, how, and for whom, to vote.  This will be a Rigged Election. No way!”

“I can’t stand back & watch this happen to a great American City, Minneapolis.  A total lack of leadership. Either the very weak Radical Left Mayor, Jacob Frey, get his act together and bring the City under control, or I will send in the National Guard & get the job done right….

“….These THUGS are dishonoring the memory of George Floyd, and I won’t let that happen. Just spoke to Governor Tim Walz and told him that the Military is with him all the way.  Any difficulty and we will assume control but, when the looting starts, the shooting starts. Thank you!”

[The president pathetically walked the above back this afternoon, blaming the “haters” for misinterpreting him.]

“The Radical Left Lamestream Media, together with their partner, the Do Nothing Democrats, are trying to spread a new narrative that President Trump was slow in reacting to Covid 19. Wrong, I was very fast, even doing the Ban on China long before anybody thought necessary!”

“Psycho Joe Scarborough is rattled, not only by his bad ratings but all of the things and facts that are coming out on the internet about opening a Cold Case.  He knows what is happening!”

“OBAMAGATE MAKES WATERGATE LOOK LIKE SMALL POTATOES!”

“Joe Biden’s handling of the H1N1 Swine Flu was a complete and total disaster.  Even polls on the matter were terrible!”

Oh puh-leeze.

Wall Street

According to the Atlanta Fed’s GDPNow barometer for the second quarter, growth is expected to crater -51.2%.  Minus-51.2%. Most analysts peg the number more in the 40% ballpark.  This week we had the first revision of first-quarter growth and it ticked down from an initial -4.8% to -5.0%.

April personal income was up 10.5% when a big decline was expected, but this reflected a sharp rise in government payments through federal rescue programs, like the $1,200 stimulus checks and enhanced unemployment benefits.

Personal consumption was down a record 13.6%, the largest on record since record-keeping began in 1959, eclipsing March’s record 6.9% fall.

Core personal consumption expenditures, the Fed’s key inflation barometer, fell to 1.0% year-on-year, the smallest increase since Dec. 2010.  The Fed’s inflation target is 2.0%.

On the housing front, new-home sales in April rose at a stronger than expected annualized rate of 623,000, but April pending home sales fell a record 21.8%, after a 20.8% decline in March.

With nearly all states under stay-at-home orders in April, this shouldn’t be surprising.

However, Lawrence Yun, chief economist with the National Association of Realtors, said “the real estate industry is ‘hot’ in affordable price points with the wide prevalence of bidding wars for the limited inventory.  In the coming months, buying activity will rise as states reopen and more consumers feel comfortable about homebuying in the midst of the social distancing measures.”

April durable goods plunged 17.2%, after a 16.2% drop in March, record figures.

And, finally, the Chicago PMI for May was just 32.3 (50 the dividing line between growth and contraction), after a 35.4 reading in April.  Not good.

Next week we’ll get the national ISM PMI data for both manufacturing and the service sector.

Europe and Asia

Nothing of import on the eurozone data front, save for a flash estimate of May inflation which came in at just 0.1% annualized vs. 1.2% a year before.  Ex-food and energy, inflation was 1.1%.

But next week we get a slew of PMI data from around the world, including the euro area.

Meanwhile, the European Union set out a $2 trillion coronavirus response plan, including a massive pooling of national financial resources that, if approved by all 27 member states, would deepen the bloc’s economic union in a way that even the eurozone debt crisis failed to achieve.

Wednesday’s proposal was composed of a 750bn euro ($824 billion) recovery plan and another $1.2 billion budget over the next seven years, the goal to lift the region from its deep slide.

This is a big deal, as the proposal, led by France and Germany, would establish significant new transfers of wealth among members, funded by commonly issued debt.

“This is Europe’s moment,” said European Commission President Ursula von der Leyen.  “Our willingness to act must live up to the challenges we are all facing.”

But the EU is a club of sovereign states, many of which oppose sharing financial burdens, i.e., the battle between the North and South of the continent I have written so often of.

The EU aims to provide a massive fiscal injection for the bloc’s hardest-hit countries without increasing the already soaring debt levels of southern nations including Italy, Spain and Greece.

Wealthier northern countries, including the Netherlands, Denmark and Sweden, have questioned the plan.  They want to avoid the political risk of putting their taxpayers on the hook to repay EU debt issued to fund major spending elsewhere.

So there needs to be some negotiating between the parties.

Brexit: The European Union and Britain are likely to have to engage in accelerated Brexit talks over the summer because no one expects a breakthrough at the next round of talks, an adviser to the EU’s chief negotiator Michel Barnier said on Friday. “I’m not optimistic about Round 4, hopefully we make some progress, it won’t be a breakthrough,” Stefaan de Rynck told an online event. “Let’s assume there is no extension or transition, which is what the UK government’s position is, then we come to July 1… we will have to negotiate over the summer.  It will have to happen at an accelerated pace.”  He added that both sides should work at all costs to prevent Britain leaving without a future trade deal.

But British Prime Minister Boris Johnson is facing a revolt from his cabinet over his backing of senior adviser Dominic Cummings, who faced calls from within the Conservative Party to resign for driving 250 miles during the coronavirus lockdown.

Cummings happens to be the mastermind of Brexit, often described as Britain’s Rasputin or Johnson’s “brain.”  Johnson is nothing without him, thus the reason for keeping him on even as 66% of the public believes Cummings should quit.

*If you haven’t seen it, watch HBO’s “Brexit.”  Cummings is played by Benedict Cumberbatch.  It is very well done…and historically accurate.  Just one giant lie…Brexit was.

Turning to Asia…Chinese President Xi Jinping said China’s annual economic growth target could have been set around 6% had the coronavirus pandemic not happened.  But last weekend, the government omitted a GDP target for 2020 in its yearly work report unveiled at the start of the annual meeting of parliament, the National People’s Congress.

In Japan, factory output slid faster-than-expected in April, 9.1% over March, according to the government, though economists expect output to pickup from June onwards, assuming there is no second wave of infections.  Auto production fell by a third from the previous month.

Retail sales plunged 13.7% vs. a year ago, the fastest pace since March 1998 as the nationwide state of emergency led service-sector businesses such as restaurants to close.

Street Bytes

Stocks had a second straight strong week, as did markets around the globe on hopes for a solid recovery as countries reopen in Europe, the United States and parts of Asia, as well as a perceived easing of U.S.-China trade tensions, at least for now.

The Dow Jones rose 3.8% to 25383 and is down just 11% on the year, while the S&P 500 gained 3.0% and Nasdaq another 1.8%.  The S&P is up 36% off its March 23 low.  This is frankly absurd, though there are more than a few legitimate pandemic winners in the corporate world, and the Federal Reserve keeps doing its thing.

For the month of May, the Dow was up 3.9%, the S&P 4.5% and Nasdaq 6.8%.

--U.S. Treasury Yields

6-mo. 0.15%  2-yr. 0.16%  10-yr. 0.65%  30-yr. 1.42%

Basically unchanged on the week, though the Euro bond market continued to rally because of a virtual pledge by the ECB, and now EU, to do what it takes.  The yield on the Italian 10-year has fallen from 1.86% to 1.47% in two weeks.  Greece’s 10-year from 2.13% to 1.47% in three weeks.

--According to the International Energy Agency, investment in the U.S. shale sector will drop by half this year, further pain for producers.  The Paris-based organization expects global investment in oil and gas to decrease by one-third and the financing of all energy projects to decline by 20%.

“We see a historic fall in global energy investment, but the biggest hit is to the shale industry,” said the agency’s executive director, Fatih Birol.  “It has always been under pressure, but now access to capital and investment confidence is drying up.”

The pandemic has prompted the largest drop in global energy investment in history, the IEA said in its report.

With oil prices long trading below the cost of production for shale producers, several companies have been forced to file for bankruptcy in recent months, while U.S. major oil companies have slashed capital spending.

The IEA said Wednesday that average daily U.S. crude production during the week ended May 15 was 11.5 million barrels, down 12% from a record 13.1 million in March.

But in terms of price, Dallas Federal Reserve Bank President Robert Kaplan said on Thursday that the global oil glut will likely last well into 2021, and longer, if the economic recovery is weaker than expected.

The price on West Texas Intermediate, however, closed at $35.32 today, the highest weekly close since March 6, as crude rallied big in the afternoon when President Trump didn’t come down hard on China.

At the same time, the U.S. oil rig count slumped by 15 to 222 during the week, declining for the 11th straight week to its lowest level since June 2009, according to data compiled by Baker Hughes.

--So in line with the above, Chevron Corp. expects a 10% to 15% reduction in positions across the company as part of a restructuring at the second-largest U.S. oil producer, according to an internal memo first seen by Reuters.  Chevron said most of the reductions will take place this year.

In March, Chevron began offering severance payments to its U.S. oil exploration and production employees if they chose to leave the company.

As of Dec. 31, Chevron had 48,200 employees, with about 53% based in the United States.

--The Energy Information Administration said the U.S. consumed more renewable energy than coal last year for the first time since 1885, reflecting a steep drop in the use of coal as a source of electricity, as well as steady growth in wind and solar power.

Coal consumption fell 15% in 2019 and will continue to slide in the future as utilities commit to ambitious goals to address climate change.

--Boeing is cutting more than 12,000 jobs through layoffs and buyouts as the pandemic seizes the travel industry, and more cuts are coming.

One of the nation’s largest manufacturers will lay off 6,770 U.S. employees this week, and another 5,520 workers are taking buyout offers to leave voluntarily in the coming weeks.

Air travel within the U.S. tumbled 96% by mid-April, to fewer than 100,000 people on some days.  It has recovered slightly to about 12% of 2019 levels, if you look at TSA checkpoint data as of Thursday.

Boeing said it would cut 10% of a workforce that numbers around 160,000.

The layoffs are expected to be concentrated in the Seattle area, home to Boeing’s commercial-airplanes business.  The defense and space divisions are stable.

Boeing has said additional job cuts will be made in international locations.

But the company did announce it was resuming production of its best-selling 737 MAX, though at a “low-rate.”  The planes have been grounded since January.

--American Airlines Group Inc. is cutting its management and administrative staff by 30% as the airline prepares to shrink, with demand decimated.

The modest gains in reservations American is seeing aren’t enough to save thousands of industry jobs.

“We must plan for operating a smaller airline for the foreseeable future,” Elise Eberwein, American’s executive vice president of people and global engagement, wrote in a letter to employees Wednesday.

The reduction amounts to more than 5,000 of American’s roughly 17,000 management and support workers.  The airline said it would accept volunteers to take buyouts through June 10 and make forced cuts if there aren’t enough.

The magnitude of the coming job losses in the aviation industry is just starting to take shape.  You have Boeing above.  United Airlines announced it plans to cut management ranks by 30% this month.

The airlines agreed to keep their workforces intact through the end of September as a condition for receiving billions of dollars in government aid, with no layoffs, furloughs or reductions in pay rates allowed until then.

American, like the others, is determining how many pilots, flight attendants, and other unionized workers it will need once the restrictions of the federal funding expire and whether it will have to let more people go.

--EasyJet is to cut up to 30% of its workforce as it struggles to cope with the collapse in demand.  The airline did not say exactly how many jobs would go, but it employed 15,000 people at the start of 2020.

EasyJet is set to restart flights on June 15.  However, it said that levels of market demand seen in 2019 were not likely to be reached again until 2023.

--German airline Lufthansa rejected conditions imposed by Brussels on a proposed government bailout, casting doubt on the $9.9 billion rescue. The board, which had been expected to sign off on the aid, instead refused EU demands that Lufthansa permanently give up take-off and landing slots at Frankfurt and Munich airports, where it commands a two-thirds market share.

The bailout plan nevertheless remains “the only viable alternative” to insolvency, Lufthansa said, and negotiations will continue over EU demands that would “lead to a weakening” of its airport hubs as well as its ability to repay loans.  The German government will take a 20% stake in the company and appoint two supervisory board seats.

The Lufthansa group employs around 138,000 people.

Meanwhile, other airlines, such as Ryanair, challenge the bailout package, with CEO Michael O’Leary saying it would “massively distort competition” in the German market for the next five years.

“It is deeply ironic that the German government, which lectures all other EU countries about respecting EU rules, has no difficulty breaking the State Aid rules when it comes to Lufthansa.”

--Amtrak is preparing to cut up to 20% of its workforce in the next fiscal year as the national passenger railroad continues to suffer from a huge decline in ridership due to the coronavirus.

Ridership and ticket revenue at the company have fallen by 95% since the pandemic began, CEO Bill Flynn told Amtrak workers in an internal memo on Tuesday.

Amtrak is planning to slowly restart some service halted during the lockdown – including the Washington-to-Boston Acela express service on June 1 – but the company projects ridership in 2021 will rebound to just half of what it was before the crisis.

“This may sound easy, but the climb back will be hard,” Mr. Flynn wrote.  To return to even half of the railroad’s past ridership will require “substantial growth over the next 16 months, and it will have to be achieved against a backdrop of stunning unemployment, socio-economic dislocation and a potential recession,” he wrote.

Amtrak employs more than 18,000 people nationwide.  It plans to make the job cuts by October.

Needless to say the finances of the railroad have been devastated.  The company received more than $1 billion as part of the CARES Act to cover an operating shortfall in the current fiscal year, and executives acknowledged that the railroad will need additional financial help to cover shortfalls.

--French carmaker Renault will eliminate about 14,600 jobs worldwide and lower production capacity by almost a fifth as part of cost reductions aimed at outlasting the downturn that has rocked the auto industry.

--Nissan Motor Co. outlined a new plan on Thursday to become a smaller, more efficient carmaker after the pandemic exacerbated a slide in profitability that culminated in its first annual loss in 11 years, $6.2 billion in its latest fiscal year, one of the worst in its history.

Under the new four-year plan, the Japanese manufacturer will slash its production capacity and model range by about a fifth to help cut $2.8 billion off its fixed costs.  It will shut plants in Spain and Indonesia, leave the South Korean market and pull its Datsun brand name from Russia.

Nissan CEO Makoto Uchida said, “We must admit failures and take corrective actions.”

Sales in its key North American market fell 15% as Nissan struggles to recover in the U.S., where aggressive discounting has clobbered margins and tarnished its brand image.  “I don’t want my brand, I don’t want Nissan, to be considered cheap,” Uchida told Reuters.

For its part, Spain said it will do everything in its power to keep Nissan’s Barcelona plant, which employs 3,000 but is now slated to close in December.

--British supercar maker McLaren Group said on Tuesday it would cut 1,200 jobs under a proposed restructuring program as it deals with the impact of the coronavirus.  McLaren has a workforce of just over 4,000.

--Walt Disney Co. said it plans to begin reopening its Disney World theme park at reduced capacity in mid-July.

The Orlando, Fla., park’s Magic Kingdom and Animal Kingdom areas are to reopen on July 11. Epcot and Disney Hollywood Studios areas are to follow on July 15.

Customers and staff will be required to wear masks and complete temperature checks before entering the park.

CEO Bob Chapek said, “We have unbelievable demand.”

Disney World is going to be one of the higher-profile examples of whether or not such facilities can reopen safely and keep both customers and employees safe from the spread of Covid-19.

No one expects revenue for Disney’s theme parks to return to prepandemic levels soon.

Separately, SeaWorld and Universal are reopening  in June, a month earlier, with in the case of Universal, the general public by June 5.

--As part of Hertz Global Holdings Inc.’s bankruptcy filing (last Friday night after I went to post), we’ve learned the company has roughly 700,000 rental cars, which as the Wall Street Journal points out, are rapidly losing value, presenting a challenge to the company’s chances of weathering the pandemic.

Hertz leases mostly from banks and bondholders.  The glut of used cars at depressed prices could force the company to hold a fire sale that would generate little for creditors.

Hertz is also saddled with an enormous debt load of $19 billion.  It did not reach a deal with creditors before entering Chapter 11, heightening the risk of a full liquidation of the fleet.

--General Electric is selling its lighting business to Savant Systems Inc., a seller of home-automation technology.  GE has been looking to sell the business for several years.

For nearly a century, GE’s lightbulb business, as well its refrigerators and microwaves, defined the company, but the conglomerate exited the latter two and now lightbulbs as part of a yearslong restructuring.  It has shifted its focus to making heavy equipment, like power turbines, aircraft engines and hospital machines.

GE Lighting will remain based in Cleveland and its 700 employees will transfer to Savant.

--Shares in Moderna Inc. hit $87 on May 18, as the biotech announced promising coronavirus vaccine results, but they have been plunging since (until a late week rally took it back to $58 today) as concerns grow about the prospects of the experimental products that are still in early stages of development.  Investors question the widely accepted timeline of 12 to 18 months for developing any vaccine and are also worried, in the case of Moderna, about a lack of real data.

Former FDA commissioner Scott Gottlieb, on the topic of vaccines in general, said, “We will certainly have doses (of Covid-19 vaccines) by the end of the year, I just don’t think we will have data to support widespread inoculation by then,” he told CNBC.

Separately, it does not look good that two Moderna executives reaped more than $29 million in gains from selling shares in the company in the two days following the announcement it had encouraging results from a vaccine trial.

There’s nothing necessarily illegal about the stock sales, and according to the company and the executives’ government-mandated disclosures, the transactions were all done in accordance with automatic stock sale arrangements aimed at inoculating corporate executives from accusations of insider trading (10b5-1 sales).

But the optics look horrible, and as the Los Angeles Times’ Michael Hiltzik points out, “There was nothing automated about Moderna’s vaccine announcement, which preceded by hours or days the executives’ scheduled stock deals.  The timing of the vaccine announcement was entirely under the control of Moderna.”

--Homebuilder Toll Brothers reported quarterly earnings and revenue that fell over year ago levels, the latter from $1.72 billion to $1.55 billion, but this was better than expected and the shares rallied strongly.

In a press release, the company also said contracts were up 43% through the six weeks ending March 15 compared with the same time in 2019, “fueled by strong demand, a healthy economy, low mortgage rates, and a limited supply of new and existing homes nationwide.”  But from March 16 through April 30, the company’s net signed contracts fell 64% year over year.

“Fortunately, government restrictions have eased and sales and construction operations have resumed in almost all of our markets,” CEO Douglas Yearly, Jr. said.

Recent trends observed by Toll Brothers could “suggest the housing market may be more resilient than anticipated just two months ago,” the company said.

--Papa John’s said Wednesday that its May same-store sales in North America soared an estimated 33.5%, setting the record for the best sales period in its history.  In April, the company’s preliminary North American same-store sales spiked 26.9%.

The company said that the urban areas hardest hit by the pandemic have been its strongest markets, while Papa John’s locations near college campuses have seen sales drop.

--Meanwhile, the largest pizza company in the world based on global retail sales, Domino’s, announced preliminary information for the first eight weeks of the second quarter, saying U.S. sales “accelerated materially over weeks five through eight of the second quarter when compared to weeks one through four.”

U.S. same-store sales were up 14% in the first eight weeks.

International results “continue to be choppy, and may be for the foreseeable future.”

--Dollar General reported fiscal first-quarter sales that surged year-on-year as the discount retailer said the pandemic drove demand in stores.

Sales in the three months through May 1 climbed about 28% to $8.44 billion, while same-store sales surged almost 22%, with the Street’s estimates at $7.66 billion and 12%.

The company said since May 1, strong demand continued with “some moderation in recent days.”

Dollar General withdrew its guidance issued in March due to “significant uncertainty” around the impact of the coronavirus.

--DG rival Dollar Tree also reported revenue and comp-store growth better than expected, with net sales for its fiscal first-quarter ended May 2 at $6.29 billion, with same-store sales rising 7%.

DLTR also announced it was extending its $2-per-hour premium to its hourly-paid employees for all the hours they have worked during the pandemic.

--Shares in Salesforce.com Inc. fell 3.5% after the company cut its full-year earnings outlook, owing in part to providing payment relief to some customers while making new investments in the face of the health crisis.

The provider of subscription-based business software said first-quarter sales did rise 30% from a year earlier to a record $4.87 billion.

--Dell Technologies Inc. beat analysts’ estimates for quarterly revenue on Thursday, boosted by demand for its workstations from companies moving more employees to work from home due to the coronavirus outbreak.  Revenue from its client solutions group rose 2% to $11.1 billion in its fiscal first quarter.

“In Q1, we saw orders with banking and financial services, government, healthcare and life sciences customers up 15% to 20%,” COO Jeff Clarke said in a statement.

--Brazil’s economy contracted 1.5% in the first quarter over the prior quarter, but it is expected to fall a record 12.7% in the second, according to a Reuters survey, Brazil heading for a record annual drop in the neighborhood of 6%, potentially far greater than that.

--Canada’s GDP fell a record 11% in April from March, according to Statistics Canada.  GDP in March fell by 7.2% from February.

Statscan said GDP sank 8.2% in the first quarter, the worst since an 8.7% drop in the first quarter of 2009.

--CBS News announced it laid off 75 staff members on Wednesday, including some staff on flagship show “60 Minutes.”

CBS News President Susan Zirinsky wrote in a memo: “None could have foreseen the economic fallout from the pandemic coming on top of the cost savings initiative already underway from the merger of CBS and Viacom… We are not alone; media companies and businesses all over the country are re-organizing and developing new operating models.”

--We note the passing of Macau gambling king Stanley Ho, who built a business empire from scratch in the former Portuguese colony and became one of Asia’s richest men.  He was 98.

The flamboyant tycoon, who advised his nearest and dearest to shun gambling, headed one of the world’s most lucrative gaming businesses through his flagship firm, SJM Holdings Ltd., valued at about $6 billion.

He oversaw the transformation of once-sleepy Macau into the world’s biggest casino center, outpacing the Las Vegas strip, and held a monopoly until 2002 when the enclave licensed five other operators to run casinos.

I’ve been to Macau twice and had one of the best meals of my life at one of Mr. Ho’s exclusive restaurants in one of his casinos.  Somewhere on my site I describe the repast.

But the casinos themselves were kind of disgusting because every single patron smoked.

Foreign Affairs

China/Hong Kong/Taiwan: As noted above, China’s ceremonial legislature, the National People’s Congress, approved a decision by the ruling Communist Party to impose national security laws on Hong Kong.

The body’s standing committee, a smaller group with decision-making power, is charged with developing the specific laws against secession, subversion, terrorism and foreign interference in Hong Kong’s affairs.  No timetable has been announced, but they could be enacted at one of its next meetings in June or August, probably the latter, is my guess.  The standing committee will be under pressure to get each word right.  As in to me the Chinese Communist Party recognizes it needs to present the image it is indeed going after a small minority in order to keep business open…but we all know reality will be far different.

Hong Kong leader Carrie Lam, who has come under fire for her handling of the protests, said the decision was welcome because of the difficulty her government faces in passing national security legislation on its own.  The city’s constitution requires it to enact such a law, but successive governments have been unwilling to because of the opposition.

Lam said in a statement that new laws would “sanction an extremely small minority of criminals who threaten national security” and “not affect the legitimate rights and freedoms enjoyed by Hong Kong residents.”

Bulls---.

In a joint statement, top diplomats from the United States, UK, Canada and Australia reiterated their “deep concern” regarding Beijing’s decision.

Such a decision “would curtail the Hong Kong people’s liberties, and in doing so, dramatically erode Hong Kong’s autonomy and the system that made it so prosperous,” the statement said.

One of the signatories, Secretary of State Mike Pompeo, had notified Congress on Wednesday that the Trump administration no longer regards Hong Kong as autonomous from mainland China, setting the stage for the possible withdrawal of preferential trade and financial treatment that the U.S. has long given the former British colony.

Japan joined in the criticism of Beijing’s move.

Germany’s Foreign Minister Heiko Maas said the European Union was in agreement that Hong Kong’s “high degree of autonomy cannot be undermined.”

“Hong Kong’s citizens enjoy freedoms and rights that are guaranteed through the Basic Law and the ‘one country, two systems’ principle,” Maas said in a statement.  “We expect these legal principles to be respected.”

Pro-Beijing lawmakers said Hong Kong would retain its high degree of autonomy under the ‘one country, two systems’ framework that has governed the territory since Britain returned it to China in 1997.

“We truly believe that this decision made by the National People’s Congress would not harm the rights and freedom that Hong Kong people enjoy,” pro-Beijing lawmaker Martin Liao said.  “It could solve the issue of violence and riot and let citizens return to a peaceful and stable life.”

Beijing’s Ministry of Public Security said it would “guide and support” Hong Kong police, which is supposed to be independent from China.

Tuesday, People’s Liberation Army Maj. Gen. Chen Daoxiang said in an interview with state broadcaster China Central Television that the garrison in Hong Kong stood ready to “act with firm resolve to implement the central government’s decision and plans.”

Wednesday, police arrested 180 people for taking part in an illegal assembly.

Separately, Hong Kong’s legislature was taking up another bill that would criminalize insulting or abusing the Chinese national anthem, but as far as I can tell, pro-democracy lawmakers had found various ways to block it thus far.

The U.S. State Department said it could “no longer certify that Hong Kong continues to warrant (differential) treatment” from Beijing.

Trump’s top economic adviser Larry Kudlow warned that Hong Kong, which has enjoyed special privileges under U.S. law based on its high degree of autonomy from Beijing, may now need to be treated like China on trade and other financial matters.

Chinese authorities and Hong Kong’s Beijing-backed government say there is no threat to the city’s high degree of autonomy and the interests of foreign investors could be preserved.

Hong Kong told the United States to keep out of the internal debate over the national security laws and warned that withdrawal of the financial hub’s special status under U.S. law could backfire on the U.S. economy.

“Any sanctions are a double-edged sword that will not only harm the interests of Hong Kong but also significantly those of the U.S.,” Hong Kong’s government said late on Thursday.

It added that from 2009 to 2018, the U.S. trade surplus of $297 billion with Hong Kong was the biggest among all Washington’s trading partners, and 1,300 U.S. firms were based in the city.

Today, the head of China’s Taiwan Affairs Office said that “one country, two systems” and “peaceful reunification” is the best way to bring China and Taiwan together. Outside attempts by foreign forces to interfere in “reunification” will fail, Liu Jieyi told an event at the Great Hall of the People marking 15 years since China signed into law its Anti-Secession Law.  Beijing passed the law in 2005 which authorizes the use of force against Taiwan if China judges it to have seceded.

Li Zuocheng, chief of the Joint Staff Department and member of the Central Military Commission, left the door open to using force.

“If the possibility for peaceful reunification is lost, the people’s armed forces will, with the whole nation, including the people of Taiwan, take all necessary steps to resolutely smash any separatist plots or action,” Li said.

“We do not promise to abandon the use of force, and reserve the option to take all necessary measures, to stabilize and control the situation in the Taiwan Strait,” he added.

It is rare for a top, serving military officer to so explicitly make the threat in a public setting.

“Taiwan’s people will never choose dictatorship nor bow to violence,” Taiwan’s Mainland Affairs Council said.  “Force and unilateral decisions are not the way to resolve problems.”

Lastly, a Canadian court ruling that could permit the extradition of a senior Huawei Technologies Co. executive to the United States leaves Canada vulnerable to further retaliation from Beijing, analysts said.  Huawei CFO Meng Wanzhou on Wednesday lost a challenge to a U.S. bid to extradite her to face bank fraud charges, a decision the Chinese embassy in Ottawa strongly denounced.

Beijing is holding two Canadian citizens and Xi Jinping could announce a trial date for the two as well as take more punitive trade measures.

North Korea: After another weekslong absence, Kim Jong-un convened the country’s top military-governing body, outlining “new policies for further increasing” its nuclear capabilities and promoting top weapons officials, the state-run media said on Sunday.

“Set forth at the meeting were new policies for further increasing the nuclear war deterrence of the country and putting the strategic armed forces on a high alert operation,” the official Korean Central News Agency reported on Sunday.  “Taken at the meeting were crucial measures for considerably increasing the firepower strike ability of the artillery pieces of the Korean People’s Army.”

Israel: Palestinian officials said on Wednesday they are planning to step up their efforts to thwart Israel’s intention to apply sovereignty to parts of the West Bank, now that the Palestinians have “successfully” prevented the spread of the coronavirus.

Some officials expressed hope massive international pressure would force Israel to backtrack on its “unilateral” move.

“There’s room for optimism,” a senior Palestinian official is Ramallah told the Jerusalem Post.  “There’s a feeling that most of the world stands with us on the issue of annexation.”

As for Israeli Prime Minister Benjamin Netanyahu, he is the first sitting prime minister to be put on trial, the proceedings starting last Sunday. 

The nation is divided over the trial, Netanyahu facing corruption charges including allegedly accepting gifts.  The prime minister has accused the Israeli police, the attorney general’s office and the nation’s media of trying to force him from office, as he aims to politicize the trial and obscure the charges and evidence against him.

Opposition lawmakers warned of the political dangers of undermining faith in Israel’s democratic institutions and rule of law.

Meanwhile, Hezbollah’s Secretary-General Hassan Nasrallah warned Israel of “the great war that will open all fronts at once,” saying that it would be “the end of Israel.”  The Hezbollah leader stressed, however, that there are “no indications that Israel intends to launch a war against Lebanon.”

Nasrallah made his statements during an interview broadcast by the Hezbollah-affiliated al-Manar TV Channel

Nasrallah warned that any Israeli air strike on Lebanon would “not pass without a response,” adding that the terror group has “military capabilities that did not exist before 2006” and would respond if any Hezbollah terrorist was killed anywhere.

Nasrallah’s comments came after a series of airstrikes in recent years on Iranian and Hezbollah targets in Syria which were blamed on Israel.

India: As if the nation didn’t already have enough issues, an invasion by swarms of desert locusts has devastated crops in India’s heartland, threatening an already vulnerable region that is struggling with the economic cost of coronavirus lockdown.

The situation has been particularly grim in central India’s Rajasthan, where millions of locusts have been attacking crops since April.  The insects are now appearing in locations where they had not been previously sighted, nibbling their way across large swathes of farmlands in Punjab and other states.

Authorities estimate the insects have engulfed more than 123,500 acres of agricultural land in seven of India’s heartland states.

Random Musings

--Presidential tracking polls….

Gallup: 49% approve of President Trump’s job performance, 48% disapprove; 92% of Republicans, 46% of independents (May 1-13).
Rasmussen: 46% approve, 53% disapprove (May 29)

--Former Vice President Joe Biden made his first campaign trip outside his Delaware home since quarantining himself due to the pandemic 10 weeks ago, visiting a nearby veteran’s memorial to mark the Memorial Day holiday.

Biden appeared with his wife, Jill, both wearing masks.  “It feels good to be out of my house,” said Biden.

President Trump played golf both Saturday and Sunday.  I have zero problem with him finally getting out the first day, but it was kind of ironic to have him golfing Sunday morning, rather than going to church after he pounded the table on reopening houses of worship two days before.

--I meant to include a CNBC/Change Research poll last time that I want to get in for the archives.  As published May 20, CNBC looked at the key battleground states of Arizona, Florida, Michigan, North Carolina, Pennsylvania and Wisconsin, and President Trump holds a 48% to 46% lead over Biden, among all battleground voters surveyed (5,408 in all), including a significant 41% to 32% edge among independents.

--According to a new Reuters/Ipsos poll released Thursday, Republicans are much more skeptical than Democrats their ballots will count if cast by mail and less confident they will be able to vote in November’s election if their state switches to all-mail voting.

In a sign of the deep partisan divide sparked by Donald Trump’s relentless criticism of voting by mail during the pandemic, the poll found nearly twice as many Democrats as Republicans support efforts to expand mail balloting options.

President Trump has repeatedly slammed the method as prone to fraud, but there is little evidence of that, and Trump himself has not offered any.

Overall, 59% of Americans believe their state should expand mail-in voting, according to the poll.  By party that broke down to 43% of Republicans and 83% of Democrats.  Only 25% of Republicans polled said voting by mail would result in more fair voting, compared to 66% of Democrats.

--In an exclusive USA TODAY/Ipsos poll, 1 in 5 teachers say they are unlikely to go back to school if their classrooms reopen in the fall, a potential massive wave of resignations.  While most teachers report working more than usual, nearly two-thirds say they haven’t been able to properly do their jobs in an educational system upended by the coronavirus.

--Mitch Daniels, president of Purdue University and a former governor of Indiana, in a Washington Post op-ed.

“On Feb. 1, watching the outbreak of a new virus in China, our university suspended travel to that country.  On Feb. 26, we extended that ban to visiting other countries reporting the infection.  On March 10, we decided to close the Purdue University campus for the spring semester and move to remote instruction.  On March 17, we canceled our traditional commencement.

“At the point when the campus was shut down, if we had needed to decide on our plans for the fall, we would have felt compelled to resume with remote instruction and keep the campus closed. For all we knew, Covid-19 posed a danger across all lines of age and health status, and a place as densely populated as our campus would be defenseless against it – operations couldn’t be responsibly restarted.

“We have all learned a lot since then.  What would have been a reckless and scientifically unjustified decision in late March is now plainly the best option from both a scientific and a stewardship standpoint, at least for our particular institution.  (We’re not alone: Two-thirds of the more than 700 colleges surveyed by the Chronicle of Higher Education have now come to the same conclusion and will reopen with in-person instruction in the fall.)

“The most salient discovery the world has made during these terrible two months is that Covid-19 is a very dangerous disease, specifically for the elderly and the infirm, particularly those with diabetes, hypertension, other cardiovascular illnesses or the obesity that so frequently leads to these disorders.

“The companion discovery is that this bug, so risky in one segment of the population, poses a near-zero risk to young people.  Among Covid-19 deaths, 99.9 percent have occurred outside the 15-to-24 age group; the survival rate in the 20-to-29 age bracket is 99.99 percent.  Even assuming the United States eventually reaches 150,000 total fatalities, Covid-19 as a risk to the young will rank way below accidents, cancer, heart disease and suicide.  In fact, it won’t even make the top 10.

“This is fundamental information for institutions with radically skewed demographic compositions.  If you’re running a nursing home, it means one thing.  New York unintentionally ended hundreds of lives prematurely by ordering Covid-19 patients into such homes, the worst possible places for them.

“But if you’re running a university, the science is telling you something diametrically different.  Our campus, including the surrounding community, has a median age of 20.5.  More than 80 percent of the campus population is 35 and under.  We may have the population density of New York City, but we have the age distribution of Uganda.  The challenge for Purdue is to devise maximum protection for the unusually small minority who could be at genuinely serious risk in order to serve the young people who are our reason for existing at all.

“Here’s something else we’ve learned.  Our students (and, one suspects, their trapped-at-home parents) overwhelmingly are eager to continue their educations, in person and on campus. We know it is not the case everywhere, but at Purdue, tuition deposits by incoming freshmen have shattered last year’s record, and re-enrollments of upper-class students are at normal levels….

“On arrival in August, each Boilermaker will receive a kit including face masks and a thermometer for daily temperature-taking as well as the Protect Purdue Pledge asking for a commitment to at least a semester of inconvenience, not primarily for the student’s own protection but for the safety of those who teach and otherwise serve them.  I will urge students to demonstrate their altruism by complying, but also challenge them to refute the cynics who say that today’s young people are too selfish or self-indulgent to help us make this work….

“(Given) what we have learned, with 45,000 students waiting and the financial wherewithal to do what’s necessary, failure to take on the job of reopening would be not only anti-scientific but also an unacceptable breach of duty.”

--According to a new Kaiser Family Foundation survey, most Americans expect the coronavirus to upend summer vacation plans with few saying it is likely they will be staying in a hotel (32%), going on an airplane (23%), or going to a concert or sporting event (19%) in the next 3 months.  Yet, majorities including most Republicans and independents, expect to be getting back to some usual activities in the coming months such as going to the doctor, going to a barber or salon, attending larger gatherings, or eating in a restaurant.

Separately, four in ten Republican voters say the economy is their top voting issue while one-third of Democratic voters (32%) choose health care as the most important issue in their voting decision.

But the public does not seem to be punishing President Trump for the decline in the nation’s economy as a result of the coronavirus outbreak.  A majority of the public (57%) and the crucial block of undecided voters known as “swing voters” (59%) continue to approve of President Trump’s handling of the nation’s economy.

Democrats are almost twice as likely as Republicans (70% v. 37%) to say they wear a mask “every time” they leave their house and while most people (72%) think President Trump should wear a mask when meeting with other people, only about half of Republicans (48%) agree.

In the above mentioned CNBC/Change Research survey, while 92% of Democrats said they had somewhat or very favorable views of people who wear face masks in public, while only about 1 in 4 Republicans said the same thing.  More than 3 in 10 Republicans said they have somewhat or very unfavorable views of people who wear masks in public, compared with 1% of Democrats.

Among independents, 50% expressed somewhat or very favorable views of mask-wearers, and 21% had unfavorable views.

--Democratic Senator Dianne Feinstein and GOP Senators Kelly Loeffler and James Inhofe have been notified that the Justice Department is no longer looking into their family stock sales after a private briefing early in the coronavirus crisis.

Republican Sen. Richard Burr of North Carolina is still the subject of a related investigation, Dow Jones reported earlier.

--Minneapolis Mayor Jacob Frey on Wednesday called on prosecutors to file criminal charges against a white police officer caught on video pressing his knee into the neck of African-American George Floyd, 46, killing him right on the spot.

The officer, along with three other officers on the scene, were all fired from the police force, but that was far from enough and you saw the rioting the last three nights.

The case is reminiscent of the 2014 killing of Eric Garner, an unarmed black man in New York City, who died after being put in a police chokehold and telling the officers, “I can’t breathe.”

The Garner case was one of a series of killings of black men by police officers that fueled the “Black Lives Matter” movement.

CNN political commentator Van Jones said he hasn’t seen “black people this upset in 20 years, maybe longer.”

“If you are white and you are watching this, look in your own life,” Jones said on CNN Thursday.  “How are you choking off black dignity?  Choking off black opportunity?  Choking off black people from having an opportunity to thrive?  Because it’s not just that officer.  This is a much deeper problem.  How are all of us complicit in this?  And how are all of us allowing this to happen?”

“I don’t have an answer to that,” Jones continued.  “I have not seen black people this upset in 20 years, maybe longer.  And I’m looking forward to hearing this press conference.  I don’t know what we’re going to do.”  That was Thursday.

Minnesota Democratic Sen. Amy Klobuchar, a leading contender to be Joe Biden’s running mate, is taking heat in some circles for failure to prosecute police during her time as a Hennepin County Attorney in Minnesota in the wake of George Floyd’s death.  Derek Chauvin, the cop who had his knee pressed into Floyd’s neck, was one of six cops who shot and killed Wayne Reyes in Oct. 2006 following a car chase.  All officers involved said that Reyes had pulled a shotgun after stabbing two people prior to the case.

Klobuchar was Hennepin County Attorney from 1999-2007, when she entered the Senate.  The investigation that ended with no charges against Chauvin concluded after Klobuchar had left the prosecutor post for the Senate.

As I alluded to in my opening, the scenes out of Minneapolis, a terrific city, were more than depressing.  It was also pathetic that early Friday morning, the Minnesota State Patrol arrested a CNN reporter reporting live on television for no apparent reason, and the reporter, Omar Jimenez, who was released hours later, said he still hadn’t been given an explanation.

Governor Tim Walz apologized this afternoon.

LZ Granderson / Los Angeles Times

“I didn’t feel well Tuesday.  My body was tense, my stomach unsettled, the headache I was trying to push past kept pushing back.  On most days I choose to be numb. Tuesday, I decided to feel.  I recognize for some the video of George Floyd’s fatal encounter with four Minneapolis police officers is shocking.  For me, it was not.  I may not always choose to feel, but I am always aware. I learned early on that I didn’t have the luxury of not being aware.

“I was 12 when an officer placed his gun to the back of my head while his knee rested in the center of my back.  I had been sent to the store to buy a gallon of milk.  I came home with trauma.  As the officer placed me in handcuffs, he said I looked like a burglary suspect he was searching for.

“I was told something similar in my 20s, a full-time reporter fresh out of graduate school, after I was pulled over and placed in handcuffs.  The officer asked what I was doing in the neighborhood.  When I told him I lived in it, he asked what I did to be able to afford to live there.

“In my 30s, shortly after moving in with my now-husband, Steve, in his predominantly white Michigan suburb, I was pulled over and placed in handcuffs.  Another officer telling me he thought I ‘looked like someone.’

“Six years ago, now in my 40s and on assignment for CNN during the Ferguson uprising outside St. Louis, I was pulled over yet again for looking like someone.

“And those are just a fraction of the times I’ve been pulled over for looking like someone.

“So, yeah, on most days I choose to be numb just to survive….

“For those of you who are tired of reading about racism, trust me when I say this – I’m tired of writing about it.

“I’m tired of our humanity slowly being bled out from micro-aggressive encounters slicing at our collective psyche.  Social media may give the impression that incidents like the Central Park encounter between avid birdwatcher Christian Cooper and Amy Cooper…are recent developments, but they are not.  It’s just that 14-year-old Emmett Till didn’t have a smartphone back in 1955, when he was lynched after Carolyn Bryant falsely claimed he made a pass at her….

“For those of you who are tired of reading about racism, I’m tired of black and brown bodies being killed by it.  I’m tired of watching some white people be more upset by those who are protesting racism as opposed to the racism itself.  Being numb is characterizing what happened to Floyd, Cooper, Ahmaud Arbery (who was hunted, shot and killed by two white men while jogging), as unfortunate, disconnected anomalies.  Feeling is understanding they are not disconnected at all but, rather, the reason why James Baldwin once said ‘to be a Negro in this country and to be relatively conscious is to be in a rage almost all the time.’

“Sometimes you just want to drive down the street and not tense up when you see a police car.  Sometimes you wonder what it’s like to fail up as opposed to work twice as hard to be considered half as good. Sometimes you don’t want to have to choose between being numb and feeling.

“Sometimes you just want to be.”

Derek Chauvin was placed into custody Friday afternoon and charged with third-degree murder and manslaughter.

--A white Central Park dog-walker, Amy Cooper, was accused of launching a racist tirade against a black man, after she was captured on video calling the cops on Christian Cooper, a bird-watcher, when he dared to tell her to put a leash on her dog, as is required in the park.

She snarled at Christian, “I’m going to tell them there’s an African American man threatening my life” – sparking widespread outrage from critics.

Christian had just asked her to leash her pooch.

Once when I was running in a park where it is required dogs be leashed, I see this man approaching with a large dog without its leash on.  My antenna went up.  As soon as I passed them, the dog attacked me from behind, almost knocking me down but it didn’t bite me.  I’m surprised I didn’t die of a heart attack.

I turn around, the guy was calling for his dog to return to him, the dog did, and I unleashed a tirade against the man unlike anything I have ever done to a human. Every expletive I could think of.  The dog was required to be leashed.  I kept going back to the park and never saw the guy, who apologized, again.

I bring this up because if I was Christian Cooper, I would have done the exact same thing. Cooper was actually going to offer the dog a treat he always has with him for such incidents, once the woman refused to leash the dog, and for Amy Cooper not to just apologize and move on, and instead threaten Cooper?!  Are you kidding me?!

So I was very happy to see her employer, Franklin Templeton, immediately dismiss her.  I would never feel sorry for Ms. Cooper.  And it’s coming out this isn’t the first time she has exhibited similar behavior.

Mr. Cooper, by the way, is a Harvard grad, former Marvel Comics editor, and a current member of the board of directors for the New York City chapter of the Audubon Society.  I wish him a great future and peace.

--According to the United Food and Commercial Workers International Union, the country’s largest meatpacking union, more than 3,000 meatpacking workers have tested positive for Covid-19 and at least 44 workers have died.

--Hopefully Saturday’s launch of the first U.S.-hosted crewed mission in nearly a decade goes off after Wednesday’s weather-related postponement, though there is also a window on Sunday afternoon.

NASA Administrator Jim Bridenstine told reporters prior to Wednesday’s last-minute decision, “Our country has been through a lot. This is a unique moment where all of America can take a moment and look at our country do something stunning again.”

After what we’ve witnessed the last few days, I’m guessing many Americans will just shrug.

---

Pray for the men and women of our armed forces….and all the fallen.

Special thanks to our healthcare workers and first responders.

God bless America.

---

Gold $1743
Oil $35.32

Returns for the week 5/25-5/29

Dow Jones +3.8%  [25383]
S&P 500  +3.0%  [3044]
S&P MidCap  +4.1%
Russell 2000  +2.8%
Nasdaq  +1.8%  [9489]

Returns for the period 1/1/20-5/29/20

Dow Jones  -11.1%
S&P 500  -5.8%
S&P MidCap  -14.5%
Russell 2000  -16.5%
Nasdaq  +5.8%

Bulls 50.5
Bears 23.8

Hang in there.  Wash your hands.

Brian Trumbore



AddThis Feed Button

-05/30/2020-      
Web Epoch NJ Web Design  |  (c) Copyright 2016 StocksandNews.com, LLC.

Week in Review

05/30/2020

For the week 5/25-5/29

[Posted 10:00 PM ET, Friday]

Note: StocksandNews has significant ongoing costs and your support is greatly appreciated.  Please click on the gofundme link or send a check to PO Box 990, New Providence, NJ 07974.

Edition 1,102

America Is Crying

It was already a depressing week for America after we hit 100,000 deaths on the coronavirus front, and then we had the lynching of George Floyd in Minneapolis and the ensuing violence around the country.  I have a lot on the topic near the end of the column.

But there is so much more I want to say, only time does not permit it today.  That said, I’m the ‘wait 24 hours’ guy and I want to see how this all plays out in the coming days.

For now I’ll just say this.  I’ve been around the globe a bit.  I’ve experienced a lot.  I’ve seen many different cultures.

I’ve also said more than once in this space that America is overrated.  Oh, don’t worry.  After I’m overseas, I still love landing in the USA.  But we must do better. 

I’ll address the race relations issue head on next WIR.  But tonight I’m thinking of my friend in Newark, Mary, whose son I helped for years before he died senselessly in a Newark hospital.  I’m thinking of some of the relationships I had at Wake Forest.  I had two ‘little brothers’ in my fraternity who were black, though neither ended up going through the full pledge process for different reasons, but two real good guys.  [Nonetheless, two more of my failures…my “Book of Failures” is up to six volumes, by the way, kind of like Edward Gibbon’s “Decline and Fall of the Roman Empire”… Amazingly, President Trump has never failed…once!  Can you believe that?]

In the meantime, be sure to read LZ Granderson’s column down below.

Covid-19 Death Tolls

World 366,418
United States 104,542
UK 38,161
Italy 33,229
France 28,714
Brazil 27,944
Spain 27,121

Japan 874
South Korea 269
Taiwan 7

The number who’ve lost their lives in the U.S. is greater than the number of U.S. servicemen and women killed in Korea, Vietnam, Iraq and Afghanistan – over an aggregate 44 years of fighting.

All President Trump could do in marking our grim milestone was muster up a tweet Thursday morning:

“We have just reached a very sad milestone with the coronavirus pandemic deaths reaching 100,000.  To all of the families & friends of those who have passed, I want to extend my heartfelt sympathy & love for everything that these great people stood for & represent.  God be with you!”

Earlier in the week, Trump tweeted:

“For all of the political hacks out there, if I hadn’t done my job well, & early, we would have lost 1 ½ to 2 Million People, as opposed to the 100,000 plus that looks like will be the number.  That’s 15 to 20 times more than we will lose.  I shut down entry from China very early!”

The U.S. had 25,000 new cases today.  We are seeing a spike in some Southern states.  Whether or not this has to do with reopening is too soon to tell.

But the world had its highest number of cases yet today!  Yes, this is far from over.

Covid Bytes

--Cases have been spiking in not just Brazil and Mexico, but also Argentina, Colombia, Chile and Peru.  And now Argentina defaulted on its sovereign debt for the ninth time in its history.

But cases are also now spiking in South Africa, India and Banglaesh, while the death toll rises in Russia, which had its biggest one-day tally today, 232, which all are in agreement is nonetheless lower than reality.

In Russia, early in the week the official number of doctors who had died was 100, but a tally being kept by Russia’s physicians and nurses of their friends and associates was at 300!

The WHO’s Dr. Mike Ryan said, “Right now, we’re not in the second wave. We’re right in the middle of the first wave globally.

“We’re still very much in a phase where the disease is actually on the way up,” Ryan told reporters. 

The numbers bear that out.

President Trump initiated a travel ban on Brazil to help prevent the spread of the virus, though it’s largely too late.  As was the case with Europe before the travel ban there was initiated in March, in the case of Brazil, thousands and thousands have been arriving in the U.S. for weeks.

--Quebec nurses and orderlies are pleading for time off this summer, ahead of a possible second wave of infections in the fall, as Canada’s hardest-hit province from the virus wrestles with a staffing crunch.  Quebec Premier Francois Legault says the province is short 10,000 healthcare workers.

Quebec has more than 60% of Canada’s nearly 7,000 deaths.

--Spain said it would reopen its borders to tourists in July and its top soccer division will kick off again on June 8.  Foreign visitors contribute around an eighth of Spain’s economic output.  There have been growing calls for Prime Minister Pedro Sanchez to resign over his handling of the crisis, particularly the economic fallout.

--Japan on Monday fully lifted a state of emergency and declared success in checking the coronavirus.

“We’ve been able to bring down infections and deaths by a far greater degree than other Group of Seven and major developed countries relative to the size of population,” Mr. Abe said.  “We have showed the power of the Japanese model.”

Abe and the nation are praying they can still hold the Olympics next summer in Tokyo, but for that we’d need a widely available vaccine by early in the year at the latest, I’m guessing.

The U.S. Economy…Big Picture

Initial claims for unemployment insurance came in at the lowest level in 10 weeks, while continuing claims decreased for the first time since late February, offering a sign that the world’s biggest economy might be emerging from some of the worst damage inflicted by the pandemic.

Jobless claims reached more than 40 million in the past 10 weeks (2.12 million this past week, though down 323,000 from the week before).

Continuing claims, which trail the initial figure by a week, decreased by 3.86 million to 21.05 million through May 16.

The decline is judged to be related to people being called back to work in states that have lifted their lockdown orders and reopened, but we’ll see what the next few weeks brings on this front.

Next Friday we will receive the May jobs report and the unemployment rate is expected to hit 20% or more.  But this is most likely the bottom.

St. Louis Federal Reserve President James Bullard said on Fox Business that the economy should see a sharp rebound after suffering the worst economic growth ever in Q2, with the unemployment rate dropping below double digits by year-end, but a prolonged economic shut-down risks morphing “into a financial crisis and makes this so much worse.”

Bullard said “Very likely behind the worst quarter will be the best quarter of all time from a growth perspective, because logically, businesses will open back up.  This shock is very different from other ones we’ve seen.”

Bullard added that with regards to the expanded unemployment benefits, “You want to incentivize people” to work, so it would not be appropriate as the recovery takes hold to extend the extra $600 per week in unemployment, the additional benefit expiring at the end of July.

Indeed, some employers face restaffing difficulties from a labor pool containing many who will be better off unemployed, at least until the supplemental benefits expire.

Minneapolis Fed President Neel Kashkari and former Goldman Sachs CEO Lloyd Blankfein had a telling exchange on Twitter.

Kashkari asked how Blankfein would go about returning to normalcy himself, after Blankfein questioned whether the continued broad lockdowns are worth the economic pain.

Kashkari:

“Genuinely curious, Lloyd: are you going back out to movie theaters, restaurants and commercial planes?  Or are you sequestering until there’s a vax since you are in high risk age group? The people will determine the lockdown based on their own sense of safety.”

Blankfein:

“Hospitals are not overwhelmed; most of us will be exposed anyway since we can’t sequester until there’s a vax; and we know which groups need protection from worst outcomes.  Is the public health benefit from broad lockdowns at this point worth such extreme damage to livelihoods?”

And that’s today’s debate in a nutshell.

Daniel Henninger / Wall Street Journal

“How is it reasonable to stop people from resocializing given the reality of data where they live and their own experience with the virus?

“If the virus revives in the fall, will the relatively low mortality rates experienced in most states be worse than recorded so far, especially with hospital capacity renormalizing?  Is it worth rethinking the justification for the 6-foot social-distance barrier amid the bankrupting of tens of thousands of restaurants, cultural institutions, musicians with no source of income until performance spaces open, and store owners – even in Covid-conscious New York City?

“No decision maker advising or ordering the shutdowns – whether Donald Trump, Anthony Fauci, Deborah Birx or any governor – could have known in early March how this virus was going to behave among 328 million people living across the U.S.’s 3.5 million square miles.  But they do now.

“Public-health officials have performed well.  They need now to get past the blunt instrument of expecting compliance with protocols based on minimized social interaction, or risk the erosion of their credibility.”

Economist Nouriel Roubini, aka Dr. Doom for his gloomy predictions, having foresaw the financial crisis in 2008 before many others, does not see a rapid recovery.  The jobs lost, in both rich and poor countries “are going to come back only in part, with lower wages, no benefits, part-time,” he told the BBC Talking Asia program.  “There will be even more insecurity of jobs and income and wages for the average working person.”

As economies reopen, Roubini cautions: “You can open the stores but the question is whether they’re going to come back.  Most of the shopping centers in China are still empty.  Half of the flights aren’t there. German shops are open but who wants to go and shop?”

But there will be a greater split between the U.S. and China, and many Asian countries will be forced to choose between the two superpowers.

“Each one of them is going to say to the rest of the world, either you are with us or against us,” Roubini says.  “Either you use my AI systems, my 5G, my technologies, my robotics.  Or you are using the one of my rival’s.  Therefore there is going to be a more divided world.”

---

China officially ratified a plan Thursday to write a national security law for Hong Kong that exerts Beijing’s broader, new control over the semi-autonomous territory in a bid to prevent a return of the months of often-violent protests last year.

The Beijing-backed Hong Kong government sought to assure its citizens that the law would not infringe on their freedoms, while the pro-democracy opposition described the move as the end of the core values that set the former British colony apart from the rest of China.

“From now on, Hong Kong is nothing but just another mainland Chinese city,” pro-democracy lawmaker Claudia Mo said.

So President Trump said he’d announce new policies on China today, hurting sentiment on Wall Street yesterday and this morning, but then it proved to be a total nothing-burger.  The United States is terminating its relationship with the World Health Organization, something Trump has been threatening to do, he said he was directing his administration to begin the process of eliminating special treatment for Hong Kong, but the president then did not mention any action that could undermine the Phase One trade deal that Washington and Beijing struck early this year, a concern that had cast a cloud over the market.

Trump World

--In one of his tweets late last night, as I write in full down below, President Trump, referring to the violence in Minneapolis, said he was ready to send in the National Guard “& get the job done right.”  He added, “Any difficulty and we will assume control but, when the looting starts, the shooting starts.  Thank you!”

It was the culmination of a war on Twitter and social media.  All week he was ranting and raving.

Thursday, he signed an executive order that aims to curtail social media’s legal liability protections – two days after Twitter slapped fact check labels to a pair of his tweets about fraud in mail-in voting for the first time.

“@Twitter is now interfering in the 2020 in the 2020 Presidential Election,” Trump tweeted Tuesday, shortly after the company flagged his posts as misleading.

“They are saying my statement on Mail-In Ballots, which will lead to massive corruption and fraud, is incorrect, based on fact-checking by Fake News CNN and the Amazon Washington Post. Twitter is completely stifling FREE SPEECH, and I, as President, will not allow it to happen!”

“We’re here today to defend free speech from one of the greatest dangers it has faced in American history,” Trump said before signing the executive order in the Oval Office.

“A small handful of powerful social media monopolies,” Trump said, “had unchecked power to censure, restrict, edit, shape, hide, alter virtually any form of communication between private citizens or large public audiences.”

Trump declared, “We can’t let this continue to happen, it’s very, very unfair.”

Trump’s order directs federal agencies to look at whether they can place new regulations on the tech giants like Twitter, Facebook and Google, which owns YouTube.

The order also seeks to clarify regulations under Section 230 of the Communications Decency Act, a 1996 landmark federal law that largely exempts online platforms from legal liability for material posted by their users, allowing them to be treated more like publishers.

Rolling back those regulations would expose the tech companies to more civil liability through lawsuits.

Facebook CEO Mark Zuckerberg raced to a TV camera Thursday morning to say that Facebook would not fact-check Trump the way Twitter did.  Trump’s bullying seems likely to work.

Zuckerberg reasoned that the social media platforms shouldn’t be the “arbiters of truth.”

Patrick Tucker / Defense One

“A new presidential order targeting social media companies for perceived bias would hurt their ability to block bots and defuse disinformation, experts and lawmakers say.

“The order seeks to limit legal protections for companies that run online platforms, according to a draft revealed on Thursday. The order argues that a social-media company that labels factually inaccurate tweets as such, for example, forfeits its immunity from libel suits – a protection granted by section 230(c) of the Communications Decency Act, or CDA – because it is acting as a traditional editor and publisher, not a neutral platform.

“The order goes on to instruct the Federal Communications Commission, or FCC, to propose regulations to govern how social media companies can punish rule breakers, such as by suspending accounts for purging content. It instructs the FCC to make sure that such actions are taken ‘within good faith’ of the CDA.

“That could mean social media companies would have to try to notify users before taking action.  The order also gives the National Telecommunications and Information Administration, or NTIA, broad authority to propose further rules and regulations for social media companies ‘that the NTIA concludes may be appropriate to advance the policy described…’

“The order follows complaints from right-wing groups who have said that they are unfairly targeted for suspension and content removal by the platforms’ moderators.

“Tech policy experts who spoke to Defense One said that the order would limit the ability of social media networks to block efforts to use their platforms for manipulation and disinformation, since the companies would need to give each disinformation-spreading bot a sort of hearing before it purges them….

“Sen. Mark Warner, D-Va., who sits on the Senate Intelligence Committee and has made disinformation and online platforms a legislative focus, said that the order is an ‘effort to cow platforms into allowing Trump, dark money groups, and right-wing militias to continue to exploit their tools to sow disinformation, engage in targeted harassment, and suppress voter participation.’  He described the order as a ‘distraction from the legitimate efforts to establish common sense regulations for dominant social media platforms.’….

“Trump issued the new order after Twitter on Tuesday labeled a provably false tweet about mail-in ballots with a ‘fact check’ link.  That action could open them up to special scrutiny for editorializing, but exactly who is empowered to perform that scrutiny is legally unclear.  Twitter doesn’t take political campaign money and can’t really be considered a monopoly by any reasonable standard, so it’s hard to see how relevant regulations that govern politically-paid speech and monopolies might apply to them….

“(Daphne) Keller (fellow at Stanford’s Center for Internet and Society) said the (executive order) ‘reads like a stream-of-consciousness tweetstorm that some poor staffer had to turn into the form of an Executive Order. The underlying issues it raises are really important, of course: We need an informed public debate about the power of platforms over public discourse.  But that’s not what the EO is. It isn’t reasoned discussion, and for the most part, it isn’t even lawmaking.’”

--President Trump pressed the Democratic governor of North Carolina on Monday to “guarantee” that he will allow “full capacity” at this summer’s Republican National Convention.

“I love the Great State of North Carolina, so much so that I insisted on having the Republican National Convention in Charlotte at the end of August.  Unfortunately, Democrat Governor, @RoyCooperNC is still in Shutdown mood (sic) & unable to guarantee that by August we will be allowed full attendance in the Arena,” the president wrote on Twitter.

Trump said Republicans “must be immediately given an answer by the Governor as to whether or not the space will be allowed to be fully occupied.  If not, we will be reluctantly forced to find, with all of the jobs and economic development it brings, another Republican National Convention site.”

No you won’t.  You already have scores of contracts in Charlotte you can’t just break.

Just another distraction.

--U.S. hospitals said they have pulled way back on the use of hydroxychloroquine, the malaria drug touted by President Trump as a Covid-19 treatment, after several studies suggested it is not effective and may pose significant risks.  The drug’s efficacy has so far failed to pan out in human trials, and in at least two studies, it was found to increase the risk of death.

The Department of Veterans Affairs, which had promoted hydroxy’s use, is also “ratcheting down” use of the drug, VA Secretary Robert Wilkie told a congressional hearing on Thursday.

--Trump tweets:

“ ‘Regulate Twitter if they are going to start regulating free speech.’  @JudgeJeanine @foxandfriends Well, as they have just proven conclusively, that’s what they are doing. Repeal Section 230!!!”

“ ‘The President has been targeted by Twitter.’ @MariaBartiromo What about all of the lies and fraudulent statements made by Adam Schiff, and so many others, on the Russian Witch Hunt Plus, Plus, Plus? What about China’s propaganda? WHO’s mistakes? No flags? @foxandfriends”

“Twitter is doing nothing about all of the lies & propaganda being put out by China or the Radical Left Democrat Party.  They have targeted Republicans, Conservatives & the President of the United States. Section 230 should be revoked by Congress.  Until then, it will be regulated!”

“MAIL-IN VOTING WILL LEAD TO MASSIVE FRAUD AND ABUSE. IT WILL ALSO LEAD TO THE END OF OUR GREAT REPUBLICAN PARTY. WE CAN NEVER LET THIS TRAGEDY BEFALL OUR NATION. BIG MAIL-IN VICTORY IN TEXAS COURT TODAY. CONGRATS!”

“There is NO WAY (ZERO!) that Mail-In Ballots will be anything less than substantially fraudulent. Mail boxes will be robbed, ballots will be forged & even illegally printed out & fraudulently signed. The Governor of California is sending Ballots to millions of people, anyone…

“…living in the state, no matter who they are or how they got there, will get one.  That will be followed up with professionals telling all of these people, many of whom have never even thought of voting before, how, and for whom, to vote.  This will be a Rigged Election. No way!”

“I can’t stand back & watch this happen to a great American City, Minneapolis.  A total lack of leadership. Either the very weak Radical Left Mayor, Jacob Frey, get his act together and bring the City under control, or I will send in the National Guard & get the job done right….

“….These THUGS are dishonoring the memory of George Floyd, and I won’t let that happen. Just spoke to Governor Tim Walz and told him that the Military is with him all the way.  Any difficulty and we will assume control but, when the looting starts, the shooting starts. Thank you!”

[The president pathetically walked the above back this afternoon, blaming the “haters” for misinterpreting him.]

“The Radical Left Lamestream Media, together with their partner, the Do Nothing Democrats, are trying to spread a new narrative that President Trump was slow in reacting to Covid 19. Wrong, I was very fast, even doing the Ban on China long before anybody thought necessary!”

“Psycho Joe Scarborough is rattled, not only by his bad ratings but all of the things and facts that are coming out on the internet about opening a Cold Case.  He knows what is happening!”

“OBAMAGATE MAKES WATERGATE LOOK LIKE SMALL POTATOES!”

“Joe Biden’s handling of the H1N1 Swine Flu was a complete and total disaster.  Even polls on the matter were terrible!”

Oh puh-leeze.

Wall Street

According to the Atlanta Fed’s GDPNow barometer for the second quarter, growth is expected to crater -51.2%.  Minus-51.2%. Most analysts peg the number more in the 40% ballpark.  This week we had the first revision of first-quarter growth and it ticked down from an initial -4.8% to -5.0%.

April personal income was up 10.5% when a big decline was expected, but this reflected a sharp rise in government payments through federal rescue programs, like the $1,200 stimulus checks and enhanced unemployment benefits.

Personal consumption was down a record 13.6%, the largest on record since record-keeping began in 1959, eclipsing March’s record 6.9% fall.

Core personal consumption expenditures, the Fed’s key inflation barometer, fell to 1.0% year-on-year, the smallest increase since Dec. 2010.  The Fed’s inflation target is 2.0%.

On the housing front, new-home sales in April rose at a stronger than expected annualized rate of 623,000, but April pending home sales fell a record 21.8%, after a 20.8% decline in March.

With nearly all states under stay-at-home orders in April, this shouldn’t be surprising.

However, Lawrence Yun, chief economist with the National Association of Realtors, said “the real estate industry is ‘hot’ in affordable price points with the wide prevalence of bidding wars for the limited inventory.  In the coming months, buying activity will rise as states reopen and more consumers feel comfortable about homebuying in the midst of the social distancing measures.”

April durable goods plunged 17.2%, after a 16.2% drop in March, record figures.

And, finally, the Chicago PMI for May was just 32.3 (50 the dividing line between growth and contraction), after a 35.4 reading in April.  Not good.

Next week we’ll get the national ISM PMI data for both manufacturing and the service sector.

Europe and Asia

Nothing of import on the eurozone data front, save for a flash estimate of May inflation which came in at just 0.1% annualized vs. 1.2% a year before.  Ex-food and energy, inflation was 1.1%.

But next week we get a slew of PMI data from around the world, including the euro area.

Meanwhile, the European Union set out a $2 trillion coronavirus response plan, including a massive pooling of national financial resources that, if approved by all 27 member states, would deepen the bloc’s economic union in a way that even the eurozone debt crisis failed to achieve.

Wednesday’s proposal was composed of a 750bn euro ($824 billion) recovery plan and another $1.2 billion budget over the next seven years, the goal to lift the region from its deep slide.

This is a big deal, as the proposal, led by France and Germany, would establish significant new transfers of wealth among members, funded by commonly issued debt.

“This is Europe’s moment,” said European Commission President Ursula von der Leyen.  “Our willingness to act must live up to the challenges we are all facing.”

But the EU is a club of sovereign states, many of which oppose sharing financial burdens, i.e., the battle between the North and South of the continent I have written so often of.

The EU aims to provide a massive fiscal injection for the bloc’s hardest-hit countries without increasing the already soaring debt levels of southern nations including Italy, Spain and Greece.

Wealthier northern countries, including the Netherlands, Denmark and Sweden, have questioned the plan.  They want to avoid the political risk of putting their taxpayers on the hook to repay EU debt issued to fund major spending elsewhere.

So there needs to be some negotiating between the parties.

Brexit: The European Union and Britain are likely to have to engage in accelerated Brexit talks over the summer because no one expects a breakthrough at the next round of talks, an adviser to the EU’s chief negotiator Michel Barnier said on Friday. “I’m not optimistic about Round 4, hopefully we make some progress, it won’t be a breakthrough,” Stefaan de Rynck told an online event. “Let’s assume there is no extension or transition, which is what the UK government’s position is, then we come to July 1… we will have to negotiate over the summer.  It will have to happen at an accelerated pace.”  He added that both sides should work at all costs to prevent Britain leaving without a future trade deal.

But British Prime Minister Boris Johnson is facing a revolt from his cabinet over his backing of senior adviser Dominic Cummings, who faced calls from within the Conservative Party to resign for driving 250 miles during the coronavirus lockdown.

Cummings happens to be the mastermind of Brexit, often described as Britain’s Rasputin or Johnson’s “brain.”  Johnson is nothing without him, thus the reason for keeping him on even as 66% of the public believes Cummings should quit.

*If you haven’t seen it, watch HBO’s “Brexit.”  Cummings is played by Benedict Cumberbatch.  It is very well done…and historically accurate.  Just one giant lie…Brexit was.

Turning to Asia…Chinese President Xi Jinping said China’s annual economic growth target could have been set around 6% had the coronavirus pandemic not happened.  But last weekend, the government omitted a GDP target for 2020 in its yearly work report unveiled at the start of the annual meeting of parliament, the National People’s Congress.

In Japan, factory output slid faster-than-expected in April, 9.1% over March, according to the government, though economists expect output to pickup from June onwards, assuming there is no second wave of infections.  Auto production fell by a third from the previous month.

Retail sales plunged 13.7% vs. a year ago, the fastest pace since March 1998 as the nationwide state of emergency led service-sector businesses such as restaurants to close.

Street Bytes

Stocks had a second straight strong week, as did markets around the globe on hopes for a solid recovery as countries reopen in Europe, the United States and parts of Asia, as well as a perceived easing of U.S.-China trade tensions, at least for now.

The Dow Jones rose 3.8% to 25383 and is down just 11% on the year, while the S&P 500 gained 3.0% and Nasdaq another 1.8%.  The S&P is up 36% off its March 23 low.  This is frankly absurd, though there are more than a few legitimate pandemic winners in the corporate world, and the Federal Reserve keeps doing its thing.

For the month of May, the Dow was up 3.9%, the S&P 4.5% and Nasdaq 6.8%.

--U.S. Treasury Yields

6-mo. 0.15%  2-yr. 0.16%  10-yr. 0.65%  30-yr. 1.42%

Basically unchanged on the week, though the Euro bond market continued to rally because of a virtual pledge by the ECB, and now EU, to do what it takes.  The yield on the Italian 10-year has fallen from 1.86% to 1.47% in two weeks.  Greece’s 10-year from 2.13% to 1.47% in three weeks.

--According to the International Energy Agency, investment in the U.S. shale sector will drop by half this year, further pain for producers.  The Paris-based organization expects global investment in oil and gas to decrease by one-third and the financing of all energy projects to decline by 20%.

“We see a historic fall in global energy investment, but the biggest hit is to the shale industry,” said the agency’s executive director, Fatih Birol.  “It has always been under pressure, but now access to capital and investment confidence is drying up.”

The pandemic has prompted the largest drop in global energy investment in history, the IEA said in its report.

With oil prices long trading below the cost of production for shale producers, several companies have been forced to file for bankruptcy in recent months, while U.S. major oil companies have slashed capital spending.

The IEA said Wednesday that average daily U.S. crude production during the week ended May 15 was 11.5 million barrels, down 12% from a record 13.1 million in March.

But in terms of price, Dallas Federal Reserve Bank President Robert Kaplan said on Thursday that the global oil glut will likely last well into 2021, and longer, if the economic recovery is weaker than expected.

The price on West Texas Intermediate, however, closed at $35.32 today, the highest weekly close since March 6, as crude rallied big in the afternoon when President Trump didn’t come down hard on China.

At the same time, the U.S. oil rig count slumped by 15 to 222 during the week, declining for the 11th straight week to its lowest level since June 2009, according to data compiled by Baker Hughes.

--So in line with the above, Chevron Corp. expects a 10% to 15% reduction in positions across the company as part of a restructuring at the second-largest U.S. oil producer, according to an internal memo first seen by Reuters.  Chevron said most of the reductions will take place this year.

In March, Chevron began offering severance payments to its U.S. oil exploration and production employees if they chose to leave the company.

As of Dec. 31, Chevron had 48,200 employees, with about 53% based in the United States.

--The Energy Information Administration said the U.S. consumed more renewable energy than coal last year for the first time since 1885, reflecting a steep drop in the use of coal as a source of electricity, as well as steady growth in wind and solar power.

Coal consumption fell 15% in 2019 and will continue to slide in the future as utilities commit to ambitious goals to address climate change.

--Boeing is cutting more than 12,000 jobs through layoffs and buyouts as the pandemic seizes the travel industry, and more cuts are coming.

One of the nation’s largest manufacturers will lay off 6,770 U.S. employees this week, and another 5,520 workers are taking buyout offers to leave voluntarily in the coming weeks.

Air travel within the U.S. tumbled 96% by mid-April, to fewer than 100,000 people on some days.  It has recovered slightly to about 12% of 2019 levels, if you look at TSA checkpoint data as of Thursday.

Boeing said it would cut 10% of a workforce that numbers around 160,000.

The layoffs are expected to be concentrated in the Seattle area, home to Boeing’s commercial-airplanes business.  The defense and space divisions are stable.

Boeing has said additional job cuts will be made in international locations.

But the company did announce it was resuming production of its best-selling 737 MAX, though at a “low-rate.”  The planes have been grounded since January.

--American Airlines Group Inc. is cutting its management and administrative staff by 30% as the airline prepares to shrink, with demand decimated.

The modest gains in reservations American is seeing aren’t enough to save thousands of industry jobs.

“We must plan for operating a smaller airline for the foreseeable future,” Elise Eberwein, American’s executive vice president of people and global engagement, wrote in a letter to employees Wednesday.

The reduction amounts to more than 5,000 of American’s roughly 17,000 management and support workers.  The airline said it would accept volunteers to take buyouts through June 10 and make forced cuts if there aren’t enough.

The magnitude of the coming job losses in the aviation industry is just starting to take shape.  You have Boeing above.  United Airlines announced it plans to cut management ranks by 30% this month.

The airlines agreed to keep their workforces intact through the end of September as a condition for receiving billions of dollars in government aid, with no layoffs, furloughs or reductions in pay rates allowed until then.

American, like the others, is determining how many pilots, flight attendants, and other unionized workers it will need once the restrictions of the federal funding expire and whether it will have to let more people go.

--EasyJet is to cut up to 30% of its workforce as it struggles to cope with the collapse in demand.  The airline did not say exactly how many jobs would go, but it employed 15,000 people at the start of 2020.

EasyJet is set to restart flights on June 15.  However, it said that levels of market demand seen in 2019 were not likely to be reached again until 2023.

--German airline Lufthansa rejected conditions imposed by Brussels on a proposed government bailout, casting doubt on the $9.9 billion rescue. The board, which had been expected to sign off on the aid, instead refused EU demands that Lufthansa permanently give up take-off and landing slots at Frankfurt and Munich airports, where it commands a two-thirds market share.

The bailout plan nevertheless remains “the only viable alternative” to insolvency, Lufthansa said, and negotiations will continue over EU demands that would “lead to a weakening” of its airport hubs as well as its ability to repay loans.  The German government will take a 20% stake in the company and appoint two supervisory board seats.

The Lufthansa group employs around 138,000 people.

Meanwhile, other airlines, such as Ryanair, challenge the bailout package, with CEO Michael O’Leary saying it would “massively distort competition” in the German market for the next five years.

“It is deeply ironic that the German government, which lectures all other EU countries about respecting EU rules, has no difficulty breaking the State Aid rules when it comes to Lufthansa.”

--Amtrak is preparing to cut up to 20% of its workforce in the next fiscal year as the national passenger railroad continues to suffer from a huge decline in ridership due to the coronavirus.

Ridership and ticket revenue at the company have fallen by 95% since the pandemic began, CEO Bill Flynn told Amtrak workers in an internal memo on Tuesday.

Amtrak is planning to slowly restart some service halted during the lockdown – including the Washington-to-Boston Acela express service on June 1 – but the company projects ridership in 2021 will rebound to just half of what it was before the crisis.

“This may sound easy, but the climb back will be hard,” Mr. Flynn wrote.  To return to even half of the railroad’s past ridership will require “substantial growth over the next 16 months, and it will have to be achieved against a backdrop of stunning unemployment, socio-economic dislocation and a potential recession,” he wrote.

Amtrak employs more than 18,000 people nationwide.  It plans to make the job cuts by October.

Needless to say the finances of the railroad have been devastated.  The company received more than $1 billion as part of the CARES Act to cover an operating shortfall in the current fiscal year, and executives acknowledged that the railroad will need additional financial help to cover shortfalls.

--French carmaker Renault will eliminate about 14,600 jobs worldwide and lower production capacity by almost a fifth as part of cost reductions aimed at outlasting the downturn that has rocked the auto industry.

--Nissan Motor Co. outlined a new plan on Thursday to become a smaller, more efficient carmaker after the pandemic exacerbated a slide in profitability that culminated in its first annual loss in 11 years, $6.2 billion in its latest fiscal year, one of the worst in its history.

Under the new four-year plan, the Japanese manufacturer will slash its production capacity and model range by about a fifth to help cut $2.8 billion off its fixed costs.  It will shut plants in Spain and Indonesia, leave the South Korean market and pull its Datsun brand name from Russia.

Nissan CEO Makoto Uchida said, “We must admit failures and take corrective actions.”

Sales in its key North American market fell 15% as Nissan struggles to recover in the U.S., where aggressive discounting has clobbered margins and tarnished its brand image.  “I don’t want my brand, I don’t want Nissan, to be considered cheap,” Uchida told Reuters.

For its part, Spain said it will do everything in its power to keep Nissan’s Barcelona plant, which employs 3,000 but is now slated to close in December.

--British supercar maker McLaren Group said on Tuesday it would cut 1,200 jobs under a proposed restructuring program as it deals with the impact of the coronavirus.  McLaren has a workforce of just over 4,000.

--Walt Disney Co. said it plans to begin reopening its Disney World theme park at reduced capacity in mid-July.

The Orlando, Fla., park’s Magic Kingdom and Animal Kingdom areas are to reopen on July 11. Epcot and Disney Hollywood Studios areas are to follow on July 15.

Customers and staff will be required to wear masks and complete temperature checks before entering the park.

CEO Bob Chapek said, “We have unbelievable demand.”

Disney World is going to be one of the higher-profile examples of whether or not such facilities can reopen safely and keep both customers and employees safe from the spread of Covid-19.

No one expects revenue for Disney’s theme parks to return to prepandemic levels soon.

Separately, SeaWorld and Universal are reopening  in June, a month earlier, with in the case of Universal, the general public by June 5.

--As part of Hertz Global Holdings Inc.’s bankruptcy filing (last Friday night after I went to post), we’ve learned the company has roughly 700,000 rental cars, which as the Wall Street Journal points out, are rapidly losing value, presenting a challenge to the company’s chances of weathering the pandemic.

Hertz leases mostly from banks and bondholders.  The glut of used cars at depressed prices could force the company to hold a fire sale that would generate little for creditors.

Hertz is also saddled with an enormous debt load of $19 billion.  It did not reach a deal with creditors before entering Chapter 11, heightening the risk of a full liquidation of the fleet.

--General Electric is selling its lighting business to Savant Systems Inc., a seller of home-automation technology.  GE has been looking to sell the business for several years.

For nearly a century, GE’s lightbulb business, as well its refrigerators and microwaves, defined the company, but the conglomerate exited the latter two and now lightbulbs as part of a yearslong restructuring.  It has shifted its focus to making heavy equipment, like power turbines, aircraft engines and hospital machines.

GE Lighting will remain based in Cleveland and its 700 employees will transfer to Savant.

--Shares in Moderna Inc. hit $87 on May 18, as the biotech announced promising coronavirus vaccine results, but they have been plunging since (until a late week rally took it back to $58 today) as concerns grow about the prospects of the experimental products that are still in early stages of development.  Investors question the widely accepted timeline of 12 to 18 months for developing any vaccine and are also worried, in the case of Moderna, about a lack of real data.

Former FDA commissioner Scott Gottlieb, on the topic of vaccines in general, said, “We will certainly have doses (of Covid-19 vaccines) by the end of the year, I just don’t think we will have data to support widespread inoculation by then,” he told CNBC.

Separately, it does not look good that two Moderna executives reaped more than $29 million in gains from selling shares in the company in the two days following the announcement it had encouraging results from a vaccine trial.

There’s nothing necessarily illegal about the stock sales, and according to the company and the executives’ government-mandated disclosures, the transactions were all done in accordance with automatic stock sale arrangements aimed at inoculating corporate executives from accusations of insider trading (10b5-1 sales).

But the optics look horrible, and as the Los Angeles Times’ Michael Hiltzik points out, “There was nothing automated about Moderna’s vaccine announcement, which preceded by hours or days the executives’ scheduled stock deals.  The timing of the vaccine announcement was entirely under the control of Moderna.”

--Homebuilder Toll Brothers reported quarterly earnings and revenue that fell over year ago levels, the latter from $1.72 billion to $1.55 billion, but this was better than expected and the shares rallied strongly.

In a press release, the company also said contracts were up 43% through the six weeks ending March 15 compared with the same time in 2019, “fueled by strong demand, a healthy economy, low mortgage rates, and a limited supply of new and existing homes nationwide.”  But from March 16 through April 30, the company’s net signed contracts fell 64% year over year.

“Fortunately, government restrictions have eased and sales and construction operations have resumed in almost all of our markets,” CEO Douglas Yearly, Jr. said.

Recent trends observed by Toll Brothers could “suggest the housing market may be more resilient than anticipated just two months ago,” the company said.

--Papa John’s said Wednesday that its May same-store sales in North America soared an estimated 33.5%, setting the record for the best sales period in its history.  In April, the company’s preliminary North American same-store sales spiked 26.9%.

The company said that the urban areas hardest hit by the pandemic have been its strongest markets, while Papa John’s locations near college campuses have seen sales drop.

--Meanwhile, the largest pizza company in the world based on global retail sales, Domino’s, announced preliminary information for the first eight weeks of the second quarter, saying U.S. sales “accelerated materially over weeks five through eight of the second quarter when compared to weeks one through four.”

U.S. same-store sales were up 14% in the first eight weeks.

International results “continue to be choppy, and may be for the foreseeable future.”

--Dollar General reported fiscal first-quarter sales that surged year-on-year as the discount retailer said the pandemic drove demand in stores.

Sales in the three months through May 1 climbed about 28% to $8.44 billion, while same-store sales surged almost 22%, with the Street’s estimates at $7.66 billion and 12%.

The company said since May 1, strong demand continued with “some moderation in recent days.”

Dollar General withdrew its guidance issued in March due to “significant uncertainty” around the impact of the coronavirus.

--DG rival Dollar Tree also reported revenue and comp-store growth better than expected, with net sales for its fiscal first-quarter ended May 2 at $6.29 billion, with same-store sales rising 7%.

DLTR also announced it was extending its $2-per-hour premium to its hourly-paid employees for all the hours they have worked during the pandemic.

--Shares in Salesforce.com Inc. fell 3.5% after the company cut its full-year earnings outlook, owing in part to providing payment relief to some customers while making new investments in the face of the health crisis.

The provider of subscription-based business software said first-quarter sales did rise 30% from a year earlier to a record $4.87 billion.

--Dell Technologies Inc. beat analysts’ estimates for quarterly revenue on Thursday, boosted by demand for its workstations from companies moving more employees to work from home due to the coronavirus outbreak.  Revenue from its client solutions group rose 2% to $11.1 billion in its fiscal first quarter.

“In Q1, we saw orders with banking and financial services, government, healthcare and life sciences customers up 15% to 20%,” COO Jeff Clarke said in a statement.

--Brazil’s economy contracted 1.5% in the first quarter over the prior quarter, but it is expected to fall a record 12.7% in the second, according to a Reuters survey, Brazil heading for a record annual drop in the neighborhood of 6%, potentially far greater than that.

--Canada’s GDP fell a record 11% in April from March, according to Statistics Canada.  GDP in March fell by 7.2% from February.

Statscan said GDP sank 8.2% in the first quarter, the worst since an 8.7% drop in the first quarter of 2009.

--CBS News announced it laid off 75 staff members on Wednesday, including some staff on flagship show “60 Minutes.”

CBS News President Susan Zirinsky wrote in a memo: “None could have foreseen the economic fallout from the pandemic coming on top of the cost savings initiative already underway from the merger of CBS and Viacom… We are not alone; media companies and businesses all over the country are re-organizing and developing new operating models.”

--We note the passing of Macau gambling king Stanley Ho, who built a business empire from scratch in the former Portuguese colony and became one of Asia’s richest men.  He was 98.

The flamboyant tycoon, who advised his nearest and dearest to shun gambling, headed one of the world’s most lucrative gaming businesses through his flagship firm, SJM Holdings Ltd., valued at about $6 billion.

He oversaw the transformation of once-sleepy Macau into the world’s biggest casino center, outpacing the Las Vegas strip, and held a monopoly until 2002 when the enclave licensed five other operators to run casinos.

I’ve been to Macau twice and had one of the best meals of my life at one of Mr. Ho’s exclusive restaurants in one of his casinos.  Somewhere on my site I describe the repast.

But the casinos themselves were kind of disgusting because every single patron smoked.

Foreign Affairs

China/Hong Kong/Taiwan: As noted above, China’s ceremonial legislature, the National People’s Congress, approved a decision by the ruling Communist Party to impose national security laws on Hong Kong.

The body’s standing committee, a smaller group with decision-making power, is charged with developing the specific laws against secession, subversion, terrorism and foreign interference in Hong Kong’s affairs.  No timetable has been announced, but they could be enacted at one of its next meetings in June or August, probably the latter, is my guess.  The standing committee will be under pressure to get each word right.  As in to me the Chinese Communist Party recognizes it needs to present the image it is indeed going after a small minority in order to keep business open…but we all know reality will be far different.

Hong Kong leader Carrie Lam, who has come under fire for her handling of the protests, said the decision was welcome because of the difficulty her government faces in passing national security legislation on its own.  The city’s constitution requires it to enact such a law, but successive governments have been unwilling to because of the opposition.

Lam said in a statement that new laws would “sanction an extremely small minority of criminals who threaten national security” and “not affect the legitimate rights and freedoms enjoyed by Hong Kong residents.”

Bulls---.

In a joint statement, top diplomats from the United States, UK, Canada and Australia reiterated their “deep concern” regarding Beijing’s decision.

Such a decision “would curtail the Hong Kong people’s liberties, and in doing so, dramatically erode Hong Kong’s autonomy and the system that made it so prosperous,” the statement said.

One of the signatories, Secretary of State Mike Pompeo, had notified Congress on Wednesday that the Trump administration no longer regards Hong Kong as autonomous from mainland China, setting the stage for the possible withdrawal of preferential trade and financial treatment that the U.S. has long given the former British colony.

Japan joined in the criticism of Beijing’s move.

Germany’s Foreign Minister Heiko Maas said the European Union was in agreement that Hong Kong’s “high degree of autonomy cannot be undermined.”

“Hong Kong’s citizens enjoy freedoms and rights that are guaranteed through the Basic Law and the ‘one country, two systems’ principle,” Maas said in a statement.  “We expect these legal principles to be respected.”

Pro-Beijing lawmakers said Hong Kong would retain its high degree of autonomy under the ‘one country, two systems’ framework that has governed the territory since Britain returned it to China in 1997.

“We truly believe that this decision made by the National People’s Congress would not harm the rights and freedom that Hong Kong people enjoy,” pro-Beijing lawmaker Martin Liao said.  “It could solve the issue of violence and riot and let citizens return to a peaceful and stable life.”

Beijing’s Ministry of Public Security said it would “guide and support” Hong Kong police, which is supposed to be independent from China.

Tuesday, People’s Liberation Army Maj. Gen. Chen Daoxiang said in an interview with state broadcaster China Central Television that the garrison in Hong Kong stood ready to “act with firm resolve to implement the central government’s decision and plans.”

Wednesday, police arrested 180 people for taking part in an illegal assembly.

Separately, Hong Kong’s legislature was taking up another bill that would criminalize insulting or abusing the Chinese national anthem, but as far as I can tell, pro-democracy lawmakers had found various ways to block it thus far.

The U.S. State Department said it could “no longer certify that Hong Kong continues to warrant (differential) treatment” from Beijing.

Trump’s top economic adviser Larry Kudlow warned that Hong Kong, which has enjoyed special privileges under U.S. law based on its high degree of autonomy from Beijing, may now need to be treated like China on trade and other financial matters.

Chinese authorities and Hong Kong’s Beijing-backed government say there is no threat to the city’s high degree of autonomy and the interests of foreign investors could be preserved.

Hong Kong told the United States to keep out of the internal debate over the national security laws and warned that withdrawal of the financial hub’s special status under U.S. law could backfire on the U.S. economy.

“Any sanctions are a double-edged sword that will not only harm the interests of Hong Kong but also significantly those of the U.S.,” Hong Kong’s government said late on Thursday.

It added that from 2009 to 2018, the U.S. trade surplus of $297 billion with Hong Kong was the biggest among all Washington’s trading partners, and 1,300 U.S. firms were based in the city.

Today, the head of China’s Taiwan Affairs Office said that “one country, two systems” and “peaceful reunification” is the best way to bring China and Taiwan together. Outside attempts by foreign forces to interfere in “reunification” will fail, Liu Jieyi told an event at the Great Hall of the People marking 15 years since China signed into law its Anti-Secession Law.  Beijing passed the law in 2005 which authorizes the use of force against Taiwan if China judges it to have seceded.

Li Zuocheng, chief of the Joint Staff Department and member of the Central Military Commission, left the door open to using force.

“If the possibility for peaceful reunification is lost, the people’s armed forces will, with the whole nation, including the people of Taiwan, take all necessary steps to resolutely smash any separatist plots or action,” Li said.

“We do not promise to abandon the use of force, and reserve the option to take all necessary measures, to stabilize and control the situation in the Taiwan Strait,” he added.

It is rare for a top, serving military officer to so explicitly make the threat in a public setting.

“Taiwan’s people will never choose dictatorship nor bow to violence,” Taiwan’s Mainland Affairs Council said.  “Force and unilateral decisions are not the way to resolve problems.”

Lastly, a Canadian court ruling that could permit the extradition of a senior Huawei Technologies Co. executive to the United States leaves Canada vulnerable to further retaliation from Beijing, analysts said.  Huawei CFO Meng Wanzhou on Wednesday lost a challenge to a U.S. bid to extradite her to face bank fraud charges, a decision the Chinese embassy in Ottawa strongly denounced.

Beijing is holding two Canadian citizens and Xi Jinping could announce a trial date for the two as well as take more punitive trade measures.

North Korea: After another weekslong absence, Kim Jong-un convened the country’s top military-governing body, outlining “new policies for further increasing” its nuclear capabilities and promoting top weapons officials, the state-run media said on Sunday.

“Set forth at the meeting were new policies for further increasing the nuclear war deterrence of the country and putting the strategic armed forces on a high alert operation,” the official Korean Central News Agency reported on Sunday.  “Taken at the meeting were crucial measures for considerably increasing the firepower strike ability of the artillery pieces of the Korean People’s Army.”

Israel: Palestinian officials said on Wednesday they are planning to step up their efforts to thwart Israel’s intention to apply sovereignty to parts of the West Bank, now that the Palestinians have “successfully” prevented the spread of the coronavirus.

Some officials expressed hope massive international pressure would force Israel to backtrack on its “unilateral” move.

“There’s room for optimism,” a senior Palestinian official is Ramallah told the Jerusalem Post.  “There’s a feeling that most of the world stands with us on the issue of annexation.”

As for Israeli Prime Minister Benjamin Netanyahu, he is the first sitting prime minister to be put on trial, the proceedings starting last Sunday. 

The nation is divided over the trial, Netanyahu facing corruption charges including allegedly accepting gifts.  The prime minister has accused the Israeli police, the attorney general’s office and the nation’s media of trying to force him from office, as he aims to politicize the trial and obscure the charges and evidence against him.

Opposition lawmakers warned of the political dangers of undermining faith in Israel’s democratic institutions and rule of law.

Meanwhile, Hezbollah’s Secretary-General Hassan Nasrallah warned Israel of “the great war that will open all fronts at once,” saying that it would be “the end of Israel.”  The Hezbollah leader stressed, however, that there are “no indications that Israel intends to launch a war against Lebanon.”

Nasrallah made his statements during an interview broadcast by the Hezbollah-affiliated al-Manar TV Channel

Nasrallah warned that any Israeli air strike on Lebanon would “not pass without a response,” adding that the terror group has “military capabilities that did not exist before 2006” and would respond if any Hezbollah terrorist was killed anywhere.

Nasrallah’s comments came after a series of airstrikes in recent years on Iranian and Hezbollah targets in Syria which were blamed on Israel.

India: As if the nation didn’t already have enough issues, an invasion by swarms of desert locusts has devastated crops in India’s heartland, threatening an already vulnerable region that is struggling with the economic cost of coronavirus lockdown.

The situation has been particularly grim in central India’s Rajasthan, where millions of locusts have been attacking crops since April.  The insects are now appearing in locations where they had not been previously sighted, nibbling their way across large swathes of farmlands in Punjab and other states.

Authorities estimate the insects have engulfed more than 123,500 acres of agricultural land in seven of India’s heartland states.

Random Musings

--Presidential tracking polls….

Gallup: 49% approve of President Trump’s job performance, 48% disapprove; 92% of Republicans, 46% of independents (May 1-13).
Rasmussen: 46% approve, 53% disapprove (May 29)

--Former Vice President Joe Biden made his first campaign trip outside his Delaware home since quarantining himself due to the pandemic 10 weeks ago, visiting a nearby veteran’s memorial to mark the Memorial Day holiday.

Biden appeared with his wife, Jill, both wearing masks.  “It feels good to be out of my house,” said Biden.

President Trump played golf both Saturday and Sunday.  I have zero problem with him finally getting out the first day, but it was kind of ironic to have him golfing Sunday morning, rather than going to church after he pounded the table on reopening houses of worship two days before.

--I meant to include a CNBC/Change Research poll last time that I want to get in for the archives.  As published May 20, CNBC looked at the key battleground states of Arizona, Florida, Michigan, North Carolina, Pennsylvania and Wisconsin, and President Trump holds a 48% to 46% lead over Biden, among all battleground voters surveyed (5,408 in all), including a significant 41% to 32% edge among independents.

--According to a new Reuters/Ipsos poll released Thursday, Republicans are much more skeptical than Democrats their ballots will count if cast by mail and less confident they will be able to vote in November’s election if their state switches to all-mail voting.

In a sign of the deep partisan divide sparked by Donald Trump’s relentless criticism of voting by mail during the pandemic, the poll found nearly twice as many Democrats as Republicans support efforts to expand mail balloting options.

President Trump has repeatedly slammed the method as prone to fraud, but there is little evidence of that, and Trump himself has not offered any.

Overall, 59% of Americans believe their state should expand mail-in voting, according to the poll.  By party that broke down to 43% of Republicans and 83% of Democrats.  Only 25% of Republicans polled said voting by mail would result in more fair voting, compared to 66% of Democrats.

--In an exclusive USA TODAY/Ipsos poll, 1 in 5 teachers say they are unlikely to go back to school if their classrooms reopen in the fall, a potential massive wave of resignations.  While most teachers report working more than usual, nearly two-thirds say they haven’t been able to properly do their jobs in an educational system upended by the coronavirus.

--Mitch Daniels, president of Purdue University and a former governor of Indiana, in a Washington Post op-ed.

“On Feb. 1, watching the outbreak of a new virus in China, our university suspended travel to that country.  On Feb. 26, we extended that ban to visiting other countries reporting the infection.  On March 10, we decided to close the Purdue University campus for the spring semester and move to remote instruction.  On March 17, we canceled our traditional commencement.

“At the point when the campus was shut down, if we had needed to decide on our plans for the fall, we would have felt compelled to resume with remote instruction and keep the campus closed. For all we knew, Covid-19 posed a danger across all lines of age and health status, and a place as densely populated as our campus would be defenseless against it – operations couldn’t be responsibly restarted.

“We have all learned a lot since then.  What would have been a reckless and scientifically unjustified decision in late March is now plainly the best option from both a scientific and a stewardship standpoint, at least for our particular institution.  (We’re not alone: Two-thirds of the more than 700 colleges surveyed by the Chronicle of Higher Education have now come to the same conclusion and will reopen with in-person instruction in the fall.)

“The most salient discovery the world has made during these terrible two months is that Covid-19 is a very dangerous disease, specifically for the elderly and the infirm, particularly those with diabetes, hypertension, other cardiovascular illnesses or the obesity that so frequently leads to these disorders.

“The companion discovery is that this bug, so risky in one segment of the population, poses a near-zero risk to young people.  Among Covid-19 deaths, 99.9 percent have occurred outside the 15-to-24 age group; the survival rate in the 20-to-29 age bracket is 99.99 percent.  Even assuming the United States eventually reaches 150,000 total fatalities, Covid-19 as a risk to the young will rank way below accidents, cancer, heart disease and suicide.  In fact, it won’t even make the top 10.

“This is fundamental information for institutions with radically skewed demographic compositions.  If you’re running a nursing home, it means one thing.  New York unintentionally ended hundreds of lives prematurely by ordering Covid-19 patients into such homes, the worst possible places for them.

“But if you’re running a university, the science is telling you something diametrically different.  Our campus, including the surrounding community, has a median age of 20.5.  More than 80 percent of the campus population is 35 and under.  We may have the population density of New York City, but we have the age distribution of Uganda.  The challenge for Purdue is to devise maximum protection for the unusually small minority who could be at genuinely serious risk in order to serve the young people who are our reason for existing at all.

“Here’s something else we’ve learned.  Our students (and, one suspects, their trapped-at-home parents) overwhelmingly are eager to continue their educations, in person and on campus. We know it is not the case everywhere, but at Purdue, tuition deposits by incoming freshmen have shattered last year’s record, and re-enrollments of upper-class students are at normal levels….

“On arrival in August, each Boilermaker will receive a kit including face masks and a thermometer for daily temperature-taking as well as the Protect Purdue Pledge asking for a commitment to at least a semester of inconvenience, not primarily for the student’s own protection but for the safety of those who teach and otherwise serve them.  I will urge students to demonstrate their altruism by complying, but also challenge them to refute the cynics who say that today’s young people are too selfish or self-indulgent to help us make this work….

“(Given) what we have learned, with 45,000 students waiting and the financial wherewithal to do what’s necessary, failure to take on the job of reopening would be not only anti-scientific but also an unacceptable breach of duty.”

--According to a new Kaiser Family Foundation survey, most Americans expect the coronavirus to upend summer vacation plans with few saying it is likely they will be staying in a hotel (32%), going on an airplane (23%), or going to a concert or sporting event (19%) in the next 3 months.  Yet, majorities including most Republicans and independents, expect to be getting back to some usual activities in the coming months such as going to the doctor, going to a barber or salon, attending larger gatherings, or eating in a restaurant.

Separately, four in ten Republican voters say the economy is their top voting issue while one-third of Democratic voters (32%) choose health care as the most important issue in their voting decision.

But the public does not seem to be punishing President Trump for the decline in the nation’s economy as a result of the coronavirus outbreak.  A majority of the public (57%) and the crucial block of undecided voters known as “swing voters” (59%) continue to approve of President Trump’s handling of the nation’s economy.

Democrats are almost twice as likely as Republicans (70% v. 37%) to say they wear a mask “every time” they leave their house and while most people (72%) think President Trump should wear a mask when meeting with other people, only about half of Republicans (48%) agree.

In the above mentioned CNBC/Change Research survey, while 92% of Democrats said they had somewhat or very favorable views of people who wear face masks in public, while only about 1 in 4 Republicans said the same thing.  More than 3 in 10 Republicans said they have somewhat or very unfavorable views of people who wear masks in public, compared with 1% of Democrats.

Among independents, 50% expressed somewhat or very favorable views of mask-wearers, and 21% had unfavorable views.

--Democratic Senator Dianne Feinstein and GOP Senators Kelly Loeffler and James Inhofe have been notified that the Justice Department is no longer looking into their family stock sales after a private briefing early in the coronavirus crisis.

Republican Sen. Richard Burr of North Carolina is still the subject of a related investigation, Dow Jones reported earlier.

--Minneapolis Mayor Jacob Frey on Wednesday called on prosecutors to file criminal charges against a white police officer caught on video pressing his knee into the neck of African-American George Floyd, 46, killing him right on the spot.

The officer, along with three other officers on the scene, were all fired from the police force, but that was far from enough and you saw the rioting the last three nights.

The case is reminiscent of the 2014 killing of Eric Garner, an unarmed black man in New York City, who died after being put in a police chokehold and telling the officers, “I can’t breathe.”

The Garner case was one of a series of killings of black men by police officers that fueled the “Black Lives Matter” movement.

CNN political commentator Van Jones said he hasn’t seen “black people this upset in 20 years, maybe longer.”

“If you are white and you are watching this, look in your own life,” Jones said on CNN Thursday.  “How are you choking off black dignity?  Choking off black opportunity?  Choking off black people from having an opportunity to thrive?  Because it’s not just that officer.  This is a much deeper problem.  How are all of us complicit in this?  And how are all of us allowing this to happen?”

“I don’t have an answer to that,” Jones continued.  “I have not seen black people this upset in 20 years, maybe longer.  And I’m looking forward to hearing this press conference.  I don’t know what we’re going to do.”  That was Thursday.

Minnesota Democratic Sen. Amy Klobuchar, a leading contender to be Joe Biden’s running mate, is taking heat in some circles for failure to prosecute police during her time as a Hennepin County Attorney in Minnesota in the wake of George Floyd’s death.  Derek Chauvin, the cop who had his knee pressed into Floyd’s neck, was one of six cops who shot and killed Wayne Reyes in Oct. 2006 following a car chase.  All officers involved said that Reyes had pulled a shotgun after stabbing two people prior to the case.

Klobuchar was Hennepin County Attorney from 1999-2007, when she entered the Senate.  The investigation that ended with no charges against Chauvin concluded after Klobuchar had left the prosecutor post for the Senate.

As I alluded to in my opening, the scenes out of Minneapolis, a terrific city, were more than depressing.  It was also pathetic that early Friday morning, the Minnesota State Patrol arrested a CNN reporter reporting live on television for no apparent reason, and the reporter, Omar Jimenez, who was released hours later, said he still hadn’t been given an explanation.

Governor Tim Walz apologized this afternoon.

LZ Granderson / Los Angeles Times

“I didn’t feel well Tuesday.  My body was tense, my stomach unsettled, the headache I was trying to push past kept pushing back.  On most days I choose to be numb. Tuesday, I decided to feel.  I recognize for some the video of George Floyd’s fatal encounter with four Minneapolis police officers is shocking.  For me, it was not.  I may not always choose to feel, but I am always aware. I learned early on that I didn’t have the luxury of not being aware.

“I was 12 when an officer placed his gun to the back of my head while his knee rested in the center of my back.  I had been sent to the store to buy a gallon of milk.  I came home with trauma.  As the officer placed me in handcuffs, he said I looked like a burglary suspect he was searching for.

“I was told something similar in my 20s, a full-time reporter fresh out of graduate school, after I was pulled over and placed in handcuffs.  The officer asked what I was doing in the neighborhood.  When I told him I lived in it, he asked what I did to be able to afford to live there.

“In my 30s, shortly after moving in with my now-husband, Steve, in his predominantly white Michigan suburb, I was pulled over and placed in handcuffs.  Another officer telling me he thought I ‘looked like someone.’

“Six years ago, now in my 40s and on assignment for CNN during the Ferguson uprising outside St. Louis, I was pulled over yet again for looking like someone.

“And those are just a fraction of the times I’ve been pulled over for looking like someone.

“So, yeah, on most days I choose to be numb just to survive….

“For those of you who are tired of reading about racism, trust me when I say this – I’m tired of writing about it.

“I’m tired of our humanity slowly being bled out from micro-aggressive encounters slicing at our collective psyche.  Social media may give the impression that incidents like the Central Park encounter between avid birdwatcher Christian Cooper and Amy Cooper…are recent developments, but they are not.  It’s just that 14-year-old Emmett Till didn’t have a smartphone back in 1955, when he was lynched after Carolyn Bryant falsely claimed he made a pass at her….

“For those of you who are tired of reading about racism, I’m tired of black and brown bodies being killed by it.  I’m tired of watching some white people be more upset by those who are protesting racism as opposed to the racism itself.  Being numb is characterizing what happened to Floyd, Cooper, Ahmaud Arbery (who was hunted, shot and killed by two white men while jogging), as unfortunate, disconnected anomalies.  Feeling is understanding they are not disconnected at all but, rather, the reason why James Baldwin once said ‘to be a Negro in this country and to be relatively conscious is to be in a rage almost all the time.’

“Sometimes you just want to drive down the street and not tense up when you see a police car.  Sometimes you wonder what it’s like to fail up as opposed to work twice as hard to be considered half as good. Sometimes you don’t want to have to choose between being numb and feeling.

“Sometimes you just want to be.”

Derek Chauvin was placed into custody Friday afternoon and charged with third-degree murder and manslaughter.

--A white Central Park dog-walker, Amy Cooper, was accused of launching a racist tirade against a black man, after she was captured on video calling the cops on Christian Cooper, a bird-watcher, when he dared to tell her to put a leash on her dog, as is required in the park.

She snarled at Christian, “I’m going to tell them there’s an African American man threatening my life” – sparking widespread outrage from critics.

Christian had just asked her to leash her pooch.

Once when I was running in a park where it is required dogs be leashed, I see this man approaching with a large dog without its leash on.  My antenna went up.  As soon as I passed them, the dog attacked me from behind, almost knocking me down but it didn’t bite me.  I’m surprised I didn’t die of a heart attack.

I turn around, the guy was calling for his dog to return to him, the dog did, and I unleashed a tirade against the man unlike anything I have ever done to a human. Every expletive I could think of.  The dog was required to be leashed.  I kept going back to the park and never saw the guy, who apologized, again.

I bring this up because if I was Christian Cooper, I would have done the exact same thing. Cooper was actually going to offer the dog a treat he always has with him for such incidents, once the woman refused to leash the dog, and for Amy Cooper not to just apologize and move on, and instead threaten Cooper?!  Are you kidding me?!

So I was very happy to see her employer, Franklin Templeton, immediately dismiss her.  I would never feel sorry for Ms. Cooper.  And it’s coming out this isn’t the first time she has exhibited similar behavior.

Mr. Cooper, by the way, is a Harvard grad, former Marvel Comics editor, and a current member of the board of directors for the New York City chapter of the Audubon Society.  I wish him a great future and peace.

--According to the United Food and Commercial Workers International Union, the country’s largest meatpacking union, more than 3,000 meatpacking workers have tested positive for Covid-19 and at least 44 workers have died.

--Hopefully Saturday’s launch of the first U.S.-hosted crewed mission in nearly a decade goes off after Wednesday’s weather-related postponement, though there is also a window on Sunday afternoon.

NASA Administrator Jim Bridenstine told reporters prior to Wednesday’s last-minute decision, “Our country has been through a lot. This is a unique moment where all of America can take a moment and look at our country do something stunning again.”

After what we’ve witnessed the last few days, I’m guessing many Americans will just shrug.

---

Pray for the men and women of our armed forces….and all the fallen.

Special thanks to our healthcare workers and first responders.

God bless America.

---

Gold $1743
Oil $35.32

Returns for the week 5/25-5/29

Dow Jones +3.8%  [25383]
S&P 500  +3.0%  [3044]
S&P MidCap  +4.1%
Russell 2000  +2.8%
Nasdaq  +1.8%  [9489]

Returns for the period 1/1/20-5/29/20

Dow Jones  -11.1%
S&P 500  -5.8%
S&P MidCap  -14.5%
Russell 2000  -16.5%
Nasdaq  +5.8%

Bulls 50.5
Bears 23.8

Hang in there.  Wash your hands.

Brian Trumbore