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Wall Street rallies on hopes for rapid economic recovery

A June rally roared on Wall Street on Wednesday as private employers reported that job losses stabilized in May, raising hopes among investors and in Washington that the recovery from the coronavirus shutdown could be faster and stronger than predicted. The Dow Jones Industrial Average gained 527 points, or 2%, to close at 26,269. That…

Wall Street rallies on hopes for rapid economic recovery

A June rally roared on Wall Street on Wednesday as private employers reported that job losses stabilized in May, raising hopes among investors and in Washington that the recovery from the coronavirus shutdown could be faster and stronger than predicted.

The Dow Jones Industrial Average gained 527 points, or 2%, to close at 26,269. That was more than 8,000 points above the index’s low point in March, when the COVID-19 pandemic was forcing businesses to close and throwing more than 40 million Americans out of work.

The Nasdaq Composite Index gained 0.7%, closing less than 1% below its record high on Feb. 19. The index has climbed more than 42% since its low point on March 23.

Investors were buoyed by optimism about states reopening from the shutdown and by a report from the payroll firm ADP estimating that U.S. private-sector jobs fell by about 2.8 million from April to May. That was significantly better than projections of about 9 million and well below the previous month’s record number of nearly 20 million.

President Trump pointed to the “booming” stock market rally as more proof that the economy will bounce back significantly before Election Day in November.

“I built this great economy, and I’m building it again,” Mr. Trump told Fox News radio host Brian Kilmeade. “By the time of the election, I believe the economy will be doing phenomenal numbers. Big job increases, big GDP increases, and that’ll be before the election.”

The transportation sector, which stands to benefit more than most others from the economy’s reopening, led the rally. Shares of American, Delta and United airlines all gained at least 5.9%.

White House senior adviser Kevin Hassett said the jobs report could mean the economy is recovering faster than expected after the coronavirus-related lockdowns.

“This ADP report is a real positive sign, and it’s such a positive sign that I really have to grab my pencil and go back to my desk and see what’s going on. … It’s way lower than I expected, in a good way,” Mr. Hassett said on Fox Business. “We’re getting close to the bottom, for sure. The number is so good — it’s such good news — that I really have to dig deep into it and see if there’s not something funny going on.”

More than 40 million unemployment claims have been filed since the pandemic took hold in March. Mr. Hassett said some projections have the gross domestic product contracting by 50% in the second quarter.

“If you look at the states that have been opening up, then you can see that they are really getting back to normal quickly,” he said. “I do think that we’re going to see bottom. I was expecting June, but this ADP number does suggest that you’re very, very close to a turning point.”

The Labor Department is due to release its unemployment figures for May on Friday morning.

Joel Naroff, president of Naroff Economic Advisers in Holland, Pennsylvania, cautioned that the May unemployment rate is likely to be about 20% and that some indicators point to more job losses this month.

“I am not sure that will be the peak [of unemployment],” Mr. Naroff said in his report Wednesday. “We can open up the economy all we want, but if there is double-digit unemployment for an extended period, consumer spending levels will not be able to come close to where they had been. Will investors recognize that? Got me.”

Consumer spending accounts for about two-thirds of economic activity.

A report Wednesday from the Institute for Supply Management showed service providers began to emerge from the shutdown in May. Its non-manufacturing index rose 3.6 points, the most in more than two years, to 45.4, but the reading below 50 showed that most service-related industries were still contracting.

ADP said the job losses in May hit small, medium and large businesses alike.

“The impact of the COVID-19 crisis continues to weigh on businesses of all sizes,” Ahu Yildirmaz, co-head of the ADP Research Institute, said in a statement. “While the labor market is still reeling from the effects of the pandemic, job loss likely peaked in April, as many states have begun a phased reopening of businesses.”

Conservative economist Stephen Moore, who advised the Trump campaign in 2016, said the stock market is engaging in “premature exuberance.” He said he is still predicting a “really bad summer” of business failures and a difficult job market.

“I’m just not as bullish about the economy as the investment markets are,” he said, adding that House Speaker Nancy Pelosi, California Democrat, isn’t likely to agree with Senate Republicans to “anything that helps the economy.”

The House has approved a $3 trillion economic relief package, including expanded unemployment benefits and hundreds of billions of dollars in aid for states and cities. Senate Majority Leader Mitch McConnell, Kentucky Republican, said last week that the Senate will consider another bill in about a month and it would be “narrowly crafted” compared with the House proposal.

Mr. Moore said any compromise on the House bill “is bad for the economy.” He said the employment benefit program approved in March, with a $600 weekly federal payment on top of state benefits, is giving people too much incentive to stay home.

“We’d be much better off just doing nothing,” Mr. Moore said. “The thing that needs to happen now is just go back to the old employment benefit program … and then the payroll tax cut. You do those two things, and you get some real juice in the economy. People really underestimate how much damage we’ve done to the economic infrastructure of the country, and I think it could take a long time to recover. I can’t see this [stock] market staying at this level.”

White House advisers note that unemployment rates were at historic lows for all groups before the pandemic hit the U.S., with a national jobless rate of 3.5% in February.

White House Domestic Policy Adviser Brooke Rollins said the U.S. was experiencing “unprecedented prosperity,” including the lowest jobless rates in a half century for blacks and Hispanics.

“To get all of that back is really a priority,” she said this week in a forum hosted by Politico.

She said the payroll tax cut is needed but the president isn’t necessarily opposed to another round of significant relief spending.

“He is not in the typical Republican ‘box,’” she said. “He will do what he believes is right for the country. The long-term health of the country is at the top of the president’s mind.”

Mr. Moore expects the unemployment rate to be around 10% by Election Day, but he said the president could benefit “if the direction is good.” He also sees two “silver linings” to the rioting that has roiled the nation for the past week that could help the president and hurt presumptive Democratic nominee Joseph R. Biden.

“The lockdown lockdown is over now,” Mr. Moore said. “And No. 2 is, it’s increased Trump’s odds of getting reelected because the left has exposed how radical they are. That’s good for markets because the markets obviously want Trump over Biden.”

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NASCAR rallies around Black driver as FBI investigates noose |NationalTribune.com

Authorities said on Monday that the FBI is investigating the discovery of a noose found in the Talladega Superspeedway garage stall of Bubba Wallace and the governor of Alabama condemned the act against NASCAR’s only Black full-time driver. Wallace two weeks ago successfully pushed NASCAR to ban the Confederate flag at its venues, though the…

NASCAR rallies around Black driver as FBI investigates noose |NationalTribune.com

Authorities said on Monday that the FBI is investigating the discovery of a noose found in the Talladega Superspeedway garage stall of Bubba Wallace and the governor of Alabama condemned the act against NASCAR’s only Black full-time driver. Wallace two weeks ago successfully pushed NASCAR to ban the Confederate flag at its venues, though the sanctioning body has not outlined plans on how it will enforce the restriction.
“Late this afternoon, NASCAR was made aware that a noose was found in the garage stall of the 43 team,” NASCAR said in a statement on Sunday. “We are angry and outraged, and cannot state strongly enough how seriously we take this heinous act.”
On Twitter, Wallace said: “The despicable act of racism and hatred leaves me incredibly saddened and serves as a painful reminder of how much further we have to go as a society and how persistent we must be in the fight against racism.”

pic.twitter.com/koL655AJB9
— Bubba Wallace (@BubbaWallace) June 22, 2020

As word of the incident spread through the NASCAR community, much of them rallied around Wallace on Monday. Champions Kyle Busch and Ryan Blaney pushed his vehicle on the track as he steered it to the front of pit road, and the entire 40-driver field and all their crew members followed.
After the car came to a stop, Wallace climbed out, sat on the window ledge and sobbed. Richard Petty, his Hall of Fame team owner, gently placed a hand on Wallace’s shoulder.
“The news has disturbed us all and of course we want justice and know who and why,” said seven-time NASCAR champion Jimmie Johnson. “And we want to stand with our friend.”
The 82-year-old Petty, at his first race since the coronavirus pandemic began and at Talladega on race day for the first time in more than 10 years, stood side by side with Wallace during the national anthem before Monday’s rain-postponed event. Everyone stood behind the car while Brad Keselowski held the American flag at the front of the display of solidarity.
One by one, they hugged Wallace, who then had a long embrace with his owner. And then he went racing.
Flag ban
Earlier this month, NASCAR banned the Confederate flag from all races as the sport moved to distance itself from a checkered past on race amid global protests against the death of George Floyd while in Minneapolis police custody.
The noose was discovered on the same day NASCAR’s fledgeling flag ban faced its biggest challenge. The ban took effect before last week’s race near Miami, but there were only about 1,000 military members admitted into that race.
At the Talladega, Alabama Superspeedway, in the heart of the South, as many as 5,000 fans were allowed in, even though rain postponed the race until Monday and visitors were barred from the infield.
No flags were spotted inside the race venue on Sunday, but cars and pick-up trucks driving along nearby roads were flying the flag and parading past the entrance to the superspeedway over the weekend.

While no Confederate flags were allowed inside the race venue, demonstrators flew them outside the track [Marvin Gentry/USA Today Sports via Reuters]

A small plane flew over the track on Sunday pulling a banner with the flag and the words: “Defund NASCAR.”
Wallace’s 2013 victory in a Truck Series race was only the second in a NASCAR national series by a Black driver (the first being Wendell Scott in 1963) and helped push him into the Cup Series, where he drives the number 43 for Hall of Famer Richard Petty and is forced to scramble for sponsorship dollars.
Wallace, a 26-year-old Alabama native, said he has found support among fellow drivers for his stance on the flag. He noted that in his tweet after the noose announcement.
“Over the last several weeks, I have been overwhelmed by the support from people across the NASCAR industry including other drivers and team members in the garage,” he said. “Together, our sport has made a commitment to driving real change and championing a community that is accepting and welcoming of everyone. Nothing is more important and we will not be deterred by the reprehensible actions of those who seek to spread hate.”
Alabama Governor Kay Ivey said she was “shocked and appalled” by the “vile act” against Wallace, an Alabama native.

NASCAR has spent years trying to distance itself from the Confederate flag, long a part of its moonshine-running roots from its founding more than 70 years ago. Five years ago, former Chairman Brian France tried to ban flying the flags at tracks, a proposal that was not enforced and largely ignored.
This year was different and it was Wallace who led the charge. Over the past month, as the nation has been roiled by social unrest largely tied to Floyd’s death, Wallace wore a black T-shirt with the words “I Can’t Breathe” at one race and had a #BlackLivesMatter paint scheme at another.
Wallace, whose father is white, was not always outspoken about racism; even after Floyd was killed last month, he was not the first driver to speak out for racial equality.
He said he began to find his public voice on racism after watching the video in May of Ahmaud Arbery’s fatal shooting in Georgia. He said he now recognises he must not let his platform as a prominent driver go to waste.
NBA star LeBron James tweeted his support to Wallace, calling the noose: “Sickening!”

Sickening! @BubbaWallace my brother! Know you don’t stand alone! I’m right here with you as well as every other athlete. I just want to continue to say how proud I am of you for continuing to take a stand for change here in America and sports! @NASCAR I salute you as well! 🙏🏾✊🏾👑 https://t.co/1TwkjVHai5
— LeBron James (@KingJames) June 22, 2020

“Know you don’t stand alone! I’m right here with you as well as every other athlete,” James wrote. “I just want to continue to say how proud I am of you for continuing to take a stand for change here in America and sports!”
Talladega is one of the more raucous stops on the NASCAR schedule, but the coronavirus pandemic prompted the series, like all sports, to ban or sharply limit fans for months. The scene this weekend was a dramatic departure from the Talladega norm with plenty of room for social distancing and fans being asked to wear masks.
Some NASCAR fans claim the flag is about heritage and not hate, though most African Americans disagree.
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