Thirsty Thursday – the day of the week where it’s okay to get drunk on a work-night. Unfortunately, I’ll just be sipping coffee tonight as I keep working toward building quality content for you all on here. Let’s get into the news!
Trump Signs Executive Order Targeting Social Media
Trump out here coming for Jack’s head – he just signed an executive order on Thursday seeking to limit the broad legal protection that federal law currently provides to social-media and other online platforms.
The order seeks to make it easier for federal regulators to hold companies (aka Twitter and Facebook) liable if they are deemed to be unfairly curbing users’ speech by suspending their accounts or deleting their posts. Trump said “We’re here today to defend free speech from one of the greatest dangers”.
Honestly, I’m not mad at this – I think it’s important for people to be able to exercise “free speech”, but I also respect the wishes of the “terms and conditions” you’re agreeing to when you sign up to use a platform. What’s your take?
Easing Unemployment Claims Show Slower Pace of Coronavirus-Related Layoffs
The number of workers receiving unemployment benefits fell for the first time since February and new weekly claims continued to ease – evidence that layoffs related to COVID-19 pandemic are slowing. This is good!!
The number of workers receiving jobless payments for the week ended May 16 was 21.1M, down 3.9M from the prior week. The level remains well above the record before this year, but it’s progress. Commerce Department data today suggested GDP fell -5% in Q1 of this year – corporate profits also fell -17.2%.
Fewer workers on unemployment rolls adds to evidence that while layoffs have been steep and are continuing, some Americans are getting back to work. It sounds like we’re hitting an inflection point – new layoffs are becoming offset by hiring and workers are being recalled to their old jobs.
U.S. Economy Contracted 5% in the First Quarter as Coronavirus Hit
Speaking of GDP falling -5% in Q1, let’s talk about it. GDP recorded the largest quarterly rate of declines since the last recession in 2008! Plus, most economists expect a bigger contraction in the second quarter, when the lockdowns continues for weeks before states started slowly reopening their economies in May.
Forecasting firm IHS Markit on Tuesday projected GDP would shrink at an annual rate of -39% in the second quarter. The Federal Reserve bank of Atlanta’s GDPNow model most recently predicted a -41.9% annual rate of decline. Personal-consumption expenditures fell at a -6.8% annual rate (derived from consumer spending, which accounts for more than two-thirds of total economic output).
Thursday’s report reinforced the view by many economists that the US economy slid toward near-certain recession in the first quarter. In my opinion, that will be entirely confirmed once Q2 reports are released.
Stocks Turn Lower on China Tensions
What a surprise, CHI-NUH is back in the news. Stocks today finished lower after President Trump said he would hold a press conference about China – this raised jitters about a fresh standoff between the world’s two largest economies.
Recent moves by Washington and Beijing have fueled concerns about a renewed US – China trade war. China forged ahead Thursday with a resolution to impose national-security laws on Hong Kong in a bid to crush anti-Beijing protests.
Honestly, I continue to believe China will become an absolute global powerhouse and will continue to grow from an economic perspective. Not sure how people think about consuming products and pharmaceuticals created in China (because of COVID-19), but that might be the only thing that could materially slow down their growth.
It’s Thursday, you just read the news, now give yourself a high five and go crush a Corona Extra. Cheers!