Bull Market officially over!! Year heading negative.

[Omega10]

As @Benggaul 's numbers continue to alarm and concern, other numbers increase as well.

Initial jobless claims rose this week, from about 700k to about 850k. This is only one week of significant reversal and could be a spike, but, there hasn't been a relief bill and we still have zero federal leadership -- in fact, Team Trump is still pretty vehemently for re-opening in a surge while not wearing masks, as evidenced by pretty much any Trump rally, holiday party, lawyer or the funerals that follow them.

Your post from a week ago pretty much still holds.

https://finance.yahoo.com/news/initi...171303207.html

Title: Jobless claims: Another 885,000 Americans filed new unemployment claims last week

The Department of Labor released its weekly report on new jobless claims Thursday morning at 8:30 a.m. ET. Here were the main results in the report, compared to consensus estimates compiled by Bloomberg:

Initial jobless claims, week ended Dec. 12: 885,000 vs. 818,000 expected and a revised 862,000 during the prior week

Continuing claims, week ended Dec. 5: 5.508 million vs. 5.7 million expected and a revised 5.781 million during the prior week

Over the past month, record new COVID-19 case counts and hospitalizations gave way to new mobility restrictions across the country, weighing on employment. Some officials have warned of even more restrictions following the holiday season, as regions look to stem the unabated spread of COVID-19 with widespread vaccine distribution still months away.

And this is on top of structural issues that are hiding not far below the surface.

https://finance.yahoo.com/news/ameri...110000761.html

Title: America’s Zombie Companies Rack Up $2 Trillion of Debt

Excerpts:

They were once America’s corporate titans. Beloved household names. Case studies in success.

But now, they’re increasingly looking like something else -- zombies. And their numbers are swelling.

From Boeing Co., Carnival Corp. and Delta Air Lines Inc. to Exxon Mobil Corp. and Macy’s Inc., many of the nation’s most iconic companies aren’t earning enough to cover their interest expenses (a key criterion, as most market experts define it, for zombie status).

More than 200 corporations have joined the ranks of so-called zombie firms since the onset of the pandemic, according to a Bloomberg analysis of financial data from 3,000 of the country’s largest publicly-traded companies. In fact, zombies now account for nearly a quarter of those firms. Even more stark, they’ve added almost $1 trillion of debt to their balance sheets in the span, bringing total obligations to $1.98 trillion. That’s more than the roughly $1.58 trillion zombie companies owed at the peak of the financial crisis.

There is a lot of debt to cover. The bad news? Even if most of it gets covered, it's not all that great. Zombie companies tend to be a drag on national economies.

Zombie companies get their nickname because of their tendency to limp along, unable to earn enough to dig out from under their obligations, but still with sufficient access to credit to roll over their debts. They’re a drag on the economy because they keep assets tied up in companies that can’t afford to invest and build their businesses.

“Zombie firms have been building due to lax markets that provided staying power for seemingly insolvent companies. The pandemic exacerbated this perennial issue. From an economic theory standpoint, zombies lower long-term growth as you have mis-allocation of capital and companies commanding market share but without the ability to invest in growth. Nearer term, because zombie firms exhaust value, credit-recovery assumptions should go lower, which arguably should send spreads higher to compensate.”

Specific industries have been hit hard.

Among new entrants, all four major U.S. airlines, with a combined $128 billion of debt, have become zombies in 2020. And entertainment companies on the list grew from 6 last year to 12, accounting for about $13 billion of additional debt.

The good news? Zombie companies have lost so much value that they are not that large of the economy anymore. So their continuing problems won't drag down the rest of the economy TOO much.

Some say the concern over the spread of zombie companies is being over-hyped.

While they accounted for 41% of U.S. firms in a UBS Group AG analysis based on their interest-coverage ratios as of the second quarter, weighted by assets the percentage declined dramatically, to just 10%. And when using the bank’s preferred methodology, which looks at debt to enterprise value, the share fell to just 6%, close to average levels since the late 1990s.

“The zombie problem is fairly benign in the U.S.,” said Matthew Mish, a strategist at UBS. “I don’t think the problem looks any worse than the last two recessions.”

Of course, "I don't think the problem looks any worse than the last two recessions." is hardly a ringing endorsement.

[Breccia]

Jobless claims: Another 885,000 Americans filed new unemployment claims last week

I wonder if we'll be able to tell the difference between more jobs lost from the, sigh, increasingly dismal death count because y'all won't wear a mask and the end of the holiday season. I know BLS says things like "seasonally adjusted" and stuff but these are not normal times.

[Rasulis]

Your post from a week ago pretty much still holds.

https://finance.yahoo.com/news/initi...171303207.html

Title: Jobless claims: Another 885,000 Americans filed new unemployment claims last week



And this is on top of structural issues that are hiding not far below the surface.

https://finance.yahoo.com/news/ameri...110000761.html

Title: America’s Zombie Companies Rack Up $2 Trillion of Debt

Excerpts:



There is a lot of debt to cover. The bad news? Even if most of it gets covered, it's not all that great. Zombie companies tend to be a drag on national economies.





Specific industries have been hit hard.



The good news? Zombie companies have lost so much value that they are not that large of the economy anymore. So their continuing problems won't drag down the rest of the economy TOO much.



Of course, "I don't think the problem looks any worse than the last two recessions." is hardly a ringing endorsement.

I think they are referring to the fact that although the amount of outstanding debt is larger that what it was during the last two recessions, the cumulative market value of the current ghost companies is a fraction of the market/economy as a whole. In 2000 and 2008, the the values were much higher. Dot com companies were over 50% of the market value in 2000 and financial companies were 40% of the market value in 2008. What is the impact of 2 trillion dollars of bad debt on the market/economy? Dunno. I guess we'll find out. Personally, I think the market can absorb 2 trillion of bad debt without too much upheaval.

[Breccia]

Trump breaks another record.

Poverty is rising at the fastest rate in America in the history of ever ever.

Add eight million people since this summer.

Eight. As in "start with the population of Indiana, then add enough people to fill every NFL stadium all at once"

[Omega10]

I think they are referring to the fact that although the amount of outstanding debt is larger that what it was during the last two recessions, the cumulative market value of the current ghost companies is a fraction of the market/economy as a whole. In 2000 and 2008, the the values were much higher. Dot com companies were over 50% of the market value in 2000 and financial companies were 40% of the market value in 2008. What is the impact of 2 trillion dollars of bad debt on the market/economy? Dunno. I guess we'll find out. Personally, I think the market can absorb 2 trillion of bad debt without too much upheaval.

We WILL find out in about ... hmmm 6 months maybe?

The article did a pretty good job of detailing the risks and mitigations of major corporations having this much bad debt, and there are economists on both sides of the issue. Of course, no one talks about "irresponsible corporations" for taking on so much debt that they are having trouble paying even the interest.

Like this post:

Trump breaks another record.

Poverty is rising at the fastest rate in America in the history of ever ever.

Add eight million people since this summer.

Eight. As in "start with the population of Indiana, then add enough people to fill every NFL stadium all at once"

, there are many features of our current economy that are kind of hiding just beneath the surface but will really slow down any economic recovery that might happen sometime late next year. And these could also become explosive land mines that change a recession to a deep recession, or a deep recession to a depression.

After all, a sizable downturn in the number of Americans flying around hurts Boeing, and the airline companies, and lots of companies that provide support for these companies. Ripple effects can be worse than the original problems sometimes.

[Vash The Stampede]

I wonder if we'll be able to tell the difference between more jobs lost from the, sigh, increasingly dismal death count because y'all won't wear a mask and the end of the holiday season. I know BLS says things like "seasonally adjusted" and stuff but these are not normal times.

To be honest the mask does nothing. Unless you're wearing a hazmat suit, they don't do much. For the most part they act as a placebo that gets people out and about. They might help reduce the chance of infection but if you can smell someone's BO then you can inhale the virus through a mask.

The proper thing to do would be to shut down the country entirely. Only essential workers, and I mean essential workers should be out and about. If we did this from the start then we wouldn't have thousands dying a day. The problem is the economy doesn't have a pause button, and for that reason a lot of people have to continue to work and have to survive because nobody is handing them any money while we stay at home. Well... nobody in America anyway.

This is one of the many reasons we needed a UBI because if we had such a system in place then people could stay home and avoid transmitting a deadly virus. That would have been our pause button. Instead we either kill our citizens with a virus or starve them to death. They didn't have a choice. When and if this corona business is over, we'll have to deal with a lot of homeless as well because it's not like they didn't have to pay rent or a mortgage.

[shimerra]

To be honest the mask does nothing. Unless you're wearing a hazmat suit, they don't do much. For the most part they act as a placebo that gets people out and about. They might help reduce the chance of infection but if you can smell someone's BO then you can inhale the virus through a mask.

The proper thing to do would be to shut down the country entirely. Only essential workers, and I mean essential workers should be out and about. If we did this from the start then we wouldn't have thousands dying a day. The problem is the economy doesn't have a pause button, and for that reason a lot of people have to continue to work and have to survive because nobody is handing them any money while we stay at home. Well... nobody in America anyway.

This is one of the many reasons we needed a UBI because if we had such a system in place then people could stay home and avoid transmitting a deadly virus. That would have been our pause button. Instead we either kill our citizens with a virus or starve them to death. They didn't have a choice. When and if this corona business is over, we'll have to deal with a lot of homeless as well because it's not like they didn't have to pay rent or a mortgage.

CDC and almost every major health organization says you are wrong. https://www.cdc.gov/coronavirus/2019...sars-cov2.html . I'll can link more. There's even one on the CDC site that shows the probability of reducing infection if the infected person only wears a mask, the non-infected person only wears a mask, both wear a mask, and neither. All situations where literally anyone is wearing a mask is helpful and it's not an insignificant amount and it's vastly more effective when everyone does it.

The issues are people like you trying to convince people otherwise, people wearing it improperly either out of ignorance or in an attempt to skirt the mask rules like not covering their nose, or just flat out refusing to mask in general.


Saying otherwise is basically lieing at this point. And while you're right in the sense that there are more effective methods masks are an important part of the process. Here's another https://www.cdc.gov/library/covid19/...ovidupdate.htm

Not only do masks help reduce the probability of getting sick or infecting others but because they can reduce viral load they can even reduce the severity of infection if you do get sick. Here's a clip

Key findings:

Increasing distance between spreader and receiver decreased the number of infectious particles inhaled. (Figure 1).

Cloth and surgical mask-wearing (respectively) at a distance of 50 cm (1.6 feet) resulted in (Figure 2):
57%–58% and 73%–76% decrease in viral load and infectious virus titer, respectively, received when the spreader was masked.
37%–50% and 17%–47% decrease in viral load and infectious virus titer, respectively, received when the receiver was masked.
60%–71% and 68%–76% decrease in viral load and infectious virus titer, respectively, received when both the spreader and the receiver were masked.

Methods: Laboratory experiment using nebulized mist containing SARS-CoV-2 and human head models, one as spreader unit to simulate mild cough and one as receiver unit to simulate inhalation. Units were situated various distances apart and wore masks of different types in various combinations. Virus “inhaled” into the receiver unit was quantified by plaque assay (live virus) and qRT-PCR (viral RNA). Limitations: Limited number of conditions tested; mask fitting to head forms does not completely replicate fitting of masks to a human face.

Implications: Mask wearing by both those who are potentially transmitting infection and by those uninfected appears to provide the most protection from SARS-CoV-2, with surgical masks providing slightly better protection than cotton masks.

While you're right about the other steps we need to take now to get it under control especially pre-full vaccination masks are an important and effective methods to help slow the spread while we are open and would be absolutely necessary even if we followed your plan to the letter after we eventually reopened unless your plan is to stay shut down until we have full vaccination. About the only sense you're right is that masks can give it a false sense of security. But if everyone uses them and wearing them right? They absolutely help and it's by a not insignificant amount.

[Felya]

To be honest the mask does nothing.

Can you say that, while linking GOP pundits complaining that it seems like more conservatives get covid than liberals? I never see those two arguments form anti maskers at the same time... so I am interested in first hand information...

[Vash The Stampede]

CDC and almost every major health organization says you are wrong. https://www.cdc.gov/coronavirus/2019...sars-cov2.html .

Good for them. They're wrong.

I'll can link more.

And they'd all be wrong.

There's even one on the CDC site that shows the probability of reducing infection if the infected person only wears a mask, the non-infected person only wears a mask, both wear a mask, and neither. All situations where literally anyone is wearing a mask is helpful and it's not an insignificant amount and it's vastly more effective when everyone does it.

I imagine most people wear a mask and so far we're having record breaking deaths. It's an excuse to not shut down a country to truly save people's lives. The reason they tell you this is because the rich people don't like being less rich. The masks that can block out the virus are expensive, compared to the cloth that I see some people wearing. You also have your eyes and ears where the virus can also enter. The country needed to be shut down and the wealthy know who would be on the hook for paying for it.

The issues are people like you trying to convince people otherwise, people wearing it improperly either out of ignorance or in an attempt to skirt the mask rules like not covering their nose, or just flat out refusing to mask in general.

I'm not saying not to wear a mask, I'm just telling you that it doesn't work. The problem with the mask is that it gives people the illusion of safety, which can make the situation worse. What we really need is this, but who's going to pay for it?

This is all happening because nobody wants to pay for this. Not the government who has been broke even before this started. Not the wealthy who aren't eager to pay taxes. Assuming that the vaccine works and the virus didn't mutant sufficiently to avoid it, we still gotta restart the economy and that'll need money again. Considering how things have been so far, the economy is totally screwed. Joe Biden who is definitely not a socialist, needs Medicare for All and a UBI. I would go so far as to do a massive debt forgiveness because nobody is going to pay the mortgages and rent they've not been paying. Someone has to have the burden of this crisis and it can't be the poor and the middle class this time. That was the mistake of 2008 where Obama and Biden put the burden of the recession on the poor and middle class by giving them debt.

- - - Updated - - -

Can you say that, while linking GOP pundits complaining that it seems like more conservatives get covid than liberals? I never see those two arguments form anti maskers at the same time... so I am interested in first hand information...

Not an anti-masker, I'm just being scientifically correct. I'm not part of the GOP or whatever god fearing organization you believe in. You need this mask not this stupid mask. I believe most people are wearing a mask and I believe that's why we've had over 4000 deaths a day in America. It's cold, people are staying in doors and breathing in recirculated air. Those particular masks won't protect you, or protect others from you.

[Felya]

Not an anti-masker, I'm just being scientifically correct. I'm not part of the GOP or whatever god fearing organization you believe in. You need this mask not this stupid mask. I believe most people are wearing a mask and I believe that's why we've had over 4000 deaths a day in America. It's cold, people are staying in doors and breathing in recirculated air. Those particular masks won't protect you, or protect others from you.

What does recirculated air, have to do with masks? Masks, regardless which ones, provide even the smallest of protection. Your repeated self referencing doesn’t help your point.

[Vash The Stampede]

What does recirculated air, have to do with masks? Masks, regardless which ones, provide even the smallest of protection. Your repeated self referencing doesn’t help your point.

Think of it like drinking diet soda and rewarding yourself with cake. Sure you save on calories by drinking diet soda, but you now gain far more by eating cake. A lot of people are wearing masks believing that they can go about life as normal, when in reality they need to stay home. The ineffective masks are actually making the situation worse, not better. Wearing a mask is not a reason to go out and hang out with your friends. Wearing a mask isn't a reason to go out and buy a PS5. Wearing a mask doesn't mean you can do your job at Mc Donalds. You need to stay your ass home. We'll have Walmart's driverless vehicles bring you food.

[Felya]

Think of it like drinking diet soda and rewarding yourself with cake. Sure you save on calories by drinking diet soda, but you now gain far more by eating cake. A lot of people are wearing masks believing that they can go about life as normal, when in reality they need to stay home. The ineffective masks are actually making the situation worse, not better. Wearing a mask is not a reason to go out and hang out with your friends. Wearing a mask isn't a reason to go out and buy a PS5. Wearing a mask doesn't mean you can do your job at Mc Donalds. You need to stay your ass home. We'll have Walmart's driver less vehicles bring you food.

Think of it as 100s of particles flying into your nose and mouth, with a barrier in front of them. As the distance between the strands of the barriers get closer, the less of said particle are getting caught on the barrier. Regardless of the barrier, the amount of particles getting through will very, but it will be some and there will be a chance that it’s the one that makes you sick. This is where you measure the difficulty of the task, wearing any mask, vs the outcome, blocking a small percentage. Since both the action of wearing a mask and the resulting outcome of blocking the virus, are negligible... isn’t it on par?

[Rozz]

Off-topic, especially when there is a covid thread.

[Rasulis]

It is the end of the year. I just sent out my last report for 2020. It is a good time to look back at the stock market in 2020.

S&P 500 gained 15.6% YTD. Pretty good year over all.

IT sector (which includes Apple and Microsoft) up 42.6% YTD. All the subsectors under IT, software to semiconductor, did very well. The best performing subsector is Technology Hardware, Storage & Peripherals up 79% YTD. Companies in this subsector include Apple, HP, NetApp, Seagate, WD and Xerox. Apple pretty much carried this entire subsector with a gain of 86.19% YTD and 2.27T market cap. Surprisingly, Home Entertainment Software subsector (gaming) is pretty flat at 0.3% YTD.

Second best performing sector is Consumer Discretionary which is up 31.4%. This is the sector with Amazon, Tesla (brand new entry), Ulta Beauty, Hilton, etc. This is actually a mixed bag sector. Luxury goods and Casino & Gaming are still down 12% YTD. Department stores down 53.5% YTD. The big driver was Internet Retail & Direct Marketing up 69.2% YTD. :::cough::: Amazon :::cough:::

Third is Communication Services which includes FB and Alphabet, Blizzard & EA (don’t ask), Netflix, AT&T, etc. No major surprises. These are the stuffs that made staying at home semi bearable. The sector gained 22.1% YTD.

Fourth best is Materials Sector & Industry which gained 16.3% YTD. Is it gold? Is it gold? Well, gold did very well at 37.7% YTD. However, the biggest driver of this sector is copper which gained a whopping 87.7% YTD.

Considering the amount of funding that went into it in 2020, the Healthcare sector performance is pretty anemic at 9.7% YTD gain. Biotech only gained 3.5% YTD. The best performing subsector was Healthcare Equipment and Managed Health Care at 14.9% and 12.7% YTD gains.

I am going to skip the rest and jump to the worst performing sector - Energy at -37.4% YTD. The only sector with every single subsectors in the negative territory. Oil & Gas Equipment & Services -38.5%, Oil & Gas Exploration & Production -38.3%, Integrated Oil & Gas -37.1%, Oil & Gas Refining & Marketing -37.8%, Oil & Gas Drilling -58.9%, and Oil & Gas Storage & Transportation -33.8%. All YTD.

Happy New Year.

[Breccia]

S&P 500 gained 15.6% YTD. Pretty good year over all.

Yeah...had a rough patch in the beginning, but turned out okay. 2021 could be even better.

[Breccia]

Stocks rise on first day of Biden presidency

I cannot think of a more fitting end to this thread.

[gondrin]

Stocks rise on first day of Biden presidency

I cannot think of a more fitting end to this thread.

Don't the markets usually sink for the first few days of a presidency due to the fact of uncertainty? Not sure if that is Myth or reality but that is what I heard.

[Breccia]

Don't the markets usually sink for the first few days of a presidency due to the fact of uncertainty?

Eh...honestly, the way the market works, it should sink before the election. We knew Biden would be President since Election D...um...since about 3-12 days after Election Day depending on how cautious you were.

- - - Updated - - -

Oh, I guess I should add: despite Trump bragging about the stock market -- even saying it looks good during its biggest crash in...ever?...Trump was beaten by Obama and Clinton.

From Trump's inauguration day, the Dow Jones Industrial Average rose from 19,827 to 30,930 on Tuesday, a 56 percent increase.

That increase is below the 71.7 percent rise the Dow saw in Obama's first term, or the 111 percent increase under Clinton's first term.

Oh, and I guess this thread will see some mild life when 2020 GDP results come out. People are already talking about how good 2021 will be, but 2020 is forecast to contract about 3.5 percent. Which follows Trump in a full-court press to get businesses open at the cost of hundreds of thousands of American lives and the bigliest yugest national debt in the history of ever ever ever. (not %GDP or inflation adjusted, but since Trump talks about nominal values, so can I to refute him)

It's also the only time he beat three percent. Trump will leave office with a roughly four percent growth for his entire term. Not per year. Per term.

He really did run the country like one of his businesses. A fraud and a failure.

[gondrin]

Eh...honestly, the way the market works, it should sink before the election. We knew Biden would be President since Election D...um...since about 3-12 days after Election Day depending on how cautious you were.

- - - Updated - - -

Oh, I guess I should add: despite Trump bragging about the stock market -- even saying it looks good during its biggest crash in...ever?...Trump was beaten by Obama and Clinton.



Oh, and I guess this thread will see some mild life when 2020 GDP results come out. People are already talking about how good 2021 will be, but 2020 is forecast to contract about 3.5 percent. Which follows Trump in a full-court press to get businesses open at the cost of hundreds of thousands of American lives and the bigliest yugest national debt in the history of ever ever ever. (not %GDP or inflation adjusted, but since Trump talks about nominal values, so can I to refute him)

It's also the only time he beat three percent. Trump will leave office with a roughly four percent growth for his entire term. Not per year. Per term.

He really did run the country like one of his businesses. A fraud and a failure.

And ran away when confronted about it too.

[Zan15]

Stocks rise on first day of Biden presidency

I cannot think of a more fitting end to this thread.

https://www.marketwatch.com/story/bi...on-11611097621

Biden aims for best stock-market rally in 92 years ahead of inauguration
- more than double Trumps bump when he was elected.

https://www.marketwatch.com/story/st...on-11611161401

The Dow Jones Industrial Average DJIA, 0.86%, the more popularly known blue-chip gauge, saw an annualized return of nearly 11.8% under Trump, versus 12.1% for Obama and 15.9% for Clinton.

Based on annualized returns for the S&P 500 SPX, 1.44%, the U.S. benchmark, Trump (+13.7%) saw the third-best performance of the 15 presidents who have served since 1929, according to Dow Jones Market Data. Trump, however, slightly trailed his immediate predecessor, Barack Obama (+13.8%). Bill Clinton (+15.2%) claims the top spot.


He did however win the Nasdaq Wars, but you might as well pick each sector and compare performance since at this point this is a TECH index.
Trump can claim some bragging rights when it comes to the tech-heavy Nasdaq Composite, which made its debut in the early 1970s. A 24.2% annualized rise is top of the list, with Jimmy Carter coming in second with a 19.6% gain.

SP500 is really the best of the 3 to compare performance


NOWWWWWWWWWWWWWW.
Here's the thing, if trump and magaheads all considered Obama the worst president ever and worst president for the economy and stock market, then where does that place Trump??

Trump did not even beat Obama's GDP or hit 3% which he considered the benchmark for performance on the economy.

- - - Updated - - -

Don't the markets usually sink for the first few days of a presidency due to the fact of uncertainty? Not sure if that is Myth or reality but that is what I heard.

Nah. It all depends on what is going on in the economy and country.

Obama saw a decrease because we were in the mist of the 2008-2009 crash.
Bush saw an increase but only to end up leading to the crash.


Also Biden's first 100 day actions are quite an open book so its been easy for the markets to not be worried about uncertainty from the WH for the first time in 4 years.