57 Extravagant Ways to Blow Your COVID Check

Good evening everyone. Stocks fell today. The S&P 500 dropped 2.2% and we are now back into the red for the week – but just barely.

We’ve had one hell of a rally and maybe today was just some profit taking. Many out there are mocking this rally like, “how could we rally with the world ending.” 

In hindsight it might seem obvious and maybe stocks will crash to their excruciating death but the market is a fickle mistress and has this tendency to surprise and inflict. Place your bets…

Economic conditions are sucking wind big time. We all know it yet still this was made vivid by two data sets released earlier in the day. Retail sales numbers have fallen off a cliff and the Beige Book has smashed into a wall. These are stark and real portrayals of the severity of the economic contraction. See more on both below.

Financials and Energy were 2 of the 3 worst sectors again today but they underperform almost everyday so why are we even mentioning it. Oh yeah – we mention it because this is epic freaking price behavior on both fronts and we are watching history daily (See more on both below). 

Hey, here’s one for ya – The Bank to S&P 500 ratio fell below the global financial crisis low. WTAF!?!? (ht Chris Kimble for this gem) We’ll have the chart later this week…

Oh, and we are just kidding about tonight’s Rip Headline. We do have some advice below and of course we take a more responsible tack.

Here are the closing prices in the major indices:

S&P 5002,783-2.20%
Nasdaq8,393-1.44%
Russell 20001,183-4.31%
Dow Jones23,504-1.86%

Hey, Remember Peak Oil?

Hate to kick a commodity when it’s down but we really can’t resist. It’s oil anyway so fork it…

During the first decade of this century, the Aughts, Peak Oil was this huge theme. The gist is that Earth was running out of oil and we were all screwed. In 2008, oil traded over $140/barrel and it sure seemed like there was something to this dire theory. Fast forward to today and we’re off 80% plus from those levels while huffing exhaust fumes. 

This is quite the fall from grace for the energy source that powered the 20th century.

Here’s a gem from that era that was all the rage – Twilight in the Dessert. We kid but this should be humbling to everyone – things change and the future is unpredictable.

More Bad Bank Earnings

Bank of America, Citi, and Goldman Sachs reported earnings this morning. The numbers weren’t great, $GS closed positive while $BAC and $C fell 6.5% and 5% respectively.

3 Things To Do With Your COVID Stimulus Check

People are starting to get their stimulus checks from the US Government. To those who haven’t seen their check, here’s the IRS with the status of your free money. And if you did get your check, here’s some ideas on how to spend that cash.

1. Pay ya’ damn bills. Look, if you owe rent or have a credit card that’s working you for 18% interest. Pay this off first. No exceptions

2.  Buy a low fee broad market ETF and hold it until you are old. Maybe The Wall Street Journal will write an article about you called, “This Guy Turned a COVID-19 Stimulus Check into a Bajillion Dollars.”

3. If you are good on 1&2 above, then get your 2020/21 ski pass early. It’s always cheaper in the Spring.

Apple’s New iPhone

Apple unveiled a new, smaller iPhone. This one features a home button. Here’s Apple with the details.

Beige Book Hits a Wall

The global economy hit a giant wall. We all know it.

Still, seeing these descriptions in writing hit us right in the throat.

The Beige Book, out today, is published 8 times annually by the Fed and provides updates from field research on economic activity in key locations across the US.

Usually, and we’re not gonna lie, we concern ourselves much more with price behavior than broad economic anecdotes gathered by the Federal Reserve but this one’s worth a read.

Here’s a quote from the New York Fed Summary:

The regional economy deteriorated sharply since the last report, with many companies implementing partial temporary shutdowns and widespread staff reductions, and some reducing wages. Selling prices were flat to down modestly. The leisure & hospitality and retail sectors were particularly hard hit, while the wholesale trade and information sectors showed more resilience. Financial firms reported weaker activity.

Here’s the full text from the April 15, 2020 Beige Book.

Retail Spending 📉

Here’s a chart from the US Census Bureau showing retail sales falling off a cliff in March. If things get any worse FRED will need to adjust the Y-axis. Again. 🤮

Earnings Tomorrow…

Be sure to know when your stocks are reporting. Here’s the full earnings calendar.

Links that Don’t Suck

Inside Kanye West’s Vision for the Future

Get Your Financial Fitness Together with Shannon McLay

Is the Average American Better off than 4 Decades Ago

Panic with Friends – Samantha LaDuc

Bank of America Wants to Be the Good Guy in This Crisis

How Coronavirus Is Eroding Privacy