Equities declined, partially the result of rising Sino-American trade tensions.  Some were surprised the Senate overwhelming passed a bill that could bar some Chinese companies from listing on US exchanges.  There are heightened fears that China is prepared to pass national security measures in Hong Kong that can strengthen the Chinese grip around this former British province.  And then there is the direct criticism of Chairman Xi Jinping by President Trump.

Additionally, jobless claims rose by another 2.4 million.  Yes, claims were around expectations but shear enormity of jobs lost over the last eight weeks is incomprehensible…39 million.

Bloomberg writes the two-month total is roughly equivalent to all of the initial claims filed during the Great Recession.

Patience of the lock down is wearing thin.  Yesterday there was another full page (paid) letter in the WSJ to government imploring to permit a greater reopening, citing the incredible economic and societal damage the lockdown is causing, asking is the cost of the cure worse than the disease itself.

There is a growing minority of Bloomberg opinion pieces challenging the assumptions of the experts, stating the actual result are far different from the expected results.

Several times I have mentioned a WSJ article stating April deaths in the US are about 30% higher than years’ past, quoting “the pandemic’s mortality effects are emerging at a higher rate than the disease itself.”

Yesterday the US Census department partially quantified the above writing “more than 76 million American adults did not get medical care for conditions unrelated to Covid-19.”  The Census Department further writes “almost 94 million adults, or more than one third of adult population, delayed care during the pandemic, perhaps ushering in chronic health issues that can result in potentially higher death rates.”

The Census Department also found high rates of mental health problems.  About 116 million Americans reported being depressed or hopeless on some days of the week.  Moreover 147 million, or more than 40% of the US population, reported symptoms of severe anxiety.

Wow!  This data is more daunting the jobs data, albeit I will adamantly argue there is a direct correlation between the two.

Several times I have opined government has been perhaps too effective is scaring society into submission.

In my view we are entering into a new phase, a phase whose outcome is unquantified as such as never been experienced.  The potential outcomes are infinite.

What will happen today?

Last night the foreign markets were down.  London was down 0.76%, Paris down 0.17% and Frankfurt down 0.31%.  China was down 1.86%, Japan down 0.80% and Hang Sang down 5.56%.

The Dow should open nervously flat as tensions over Hong Kong are again flaring.   The 10-year is up 5/32 to yield 0.65%.


The views expressed herein are those of Kent Engelke and do not necessarily reflect those of Capitol Securities Management. The information contained herein has been compiled from sources believed to be reliable; however, there is no guarantee of its accuracy or completeness. Any opinions expressed are statements of judgment on this date and are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated or projected. Any future dividends, interest, yields and event dates listed may be subject to change. An investor cannot invest in an index, and its returns are not indicative of the performance of any specific investment. Past performance is not indicative of future results. The material provided in Daily Market Commentaries or on this website should be used for informational purposes only and in no way should be relied upon for financial advice. Please be sure to consult your own financial advisor when making decisions regarding your financial management. Members of FINRA and SIPC, Capitol Securities Management is a privately owned full-service retail brokerage and investment advisory firm headquartered in Richmond, Virginia. For nearly 30 years, we have been serving the needs of our investors. Today, more than 200 Capitol Securities Management investment professionals and support staff serve approximately 18,000 customer accounts from Southern Florida to the New England coast.