Trump Tests Positive

 On October 1st, it became public that Donald Tump had tested positive for COVID-19. These tests results sent an immediate shock on the stock market and the financial sector. The S&P 500 went down 96 bps and the Dow Jones declined by 48 bps. This was most likely due to the uncertainty of his condition. Historically, a nation's leader can impact the stock market by words, actions, or falling ill. What do you think the long-lasting impacts will be if Trump has permanent ailments or even succumbs to this virus like 209 thousand other Americans? 

https://www.nytimes.com/2020/10/02/business/trump-covid-stock-market.html

Stimulus Round 2

 Donald Trump voiced his support Saturday about the passage of a second stimulus package. The Republican party has been vocal about not being for the second round of stimulus. Currently both Democrats and Republicans are in favor of giving monetary payments to households, small businesses loans and bailing out the airline industry. The main argument remaining is whether the subsidies for households should be $600 or $400 weekly and for how long. A large reason for the Republican push is President Trump's recent COVID diagnosis. His stance on the virus as been very defensive so far, so it will be interesting how the onset of this diagnosis will change his views on American's needs.

https://www.cnbc.com/2020/10/03/coronavirus-stimulus-update-trump-urges-congress-to-pass-relief-bill.html 

'Massively concerning’ jobs report sends a signal that the economic recovery could be fading

 The job reports in September fell short of Wall Street expectation, which raised concerns about the economic recovery from COVID. In September there was an increase of 661,000 non-farm payrolls. While in normal times this would have been considered to be very good it did not meet Wall Streets expectation of 800,000. Along with this unemployment rates fell to 7.9%, however, a large part of this was due to people leaving the labor force. Nick Bunker, an economic research director at Indeed, says "This report is an illusion of progress at a time when we needed accelerating gains in the labor market."

International Trade Shows Signs of Recovery

 https://www.pymnts.com/economy/2020/international-trade-shows-signs-recovery/

After initial claims that international trade may be permanently scarred from the COVID-19 pandemic, there has been a solid comeback. Data is showing that we are recovering much faster from this economic downturn than that of 2008. It also shows that the international trade has not fully recovered, but we are on pace to recover substantially faster than in past recessions. This data comes from many of the major economies such as China and the UK. Although, these countries do not encompass the entire international economy, they are good indicators for how we are doing as a whole. 

Why do you think we have been able to recover at a substantially faster pace from this recession/pandemic than those others in the past?

UK economy nears 'perilous turning point' on Covid-19

COVID cases are rapidly increasing in the UK as a second wave hits the country. The country has implemented more heavy restrictions. “The government’s chief scientific and medical advisers have warned that new daily cases of Covid-19 could accelerate to 50,000 by mid-October, with 200 deaths a day by the following month. In the UK as of 29 September, 446,156 cases of coronavirus have been confirmed and 42,072 deaths.” Along with the more heavy restrictions and uncertainties, the stock markets have taken a hit as seen with other markets around the world. The restrictions could significantly hurt the UK’s economic recovery. The government’s budget deficit will continue to widen as they are trying to support businesses, workers, and households. The government had an “eat out to help out” scheme which some experts are saying has led to the rapid increase in cases, although it did reduce inflation. “The consumer price index (CPI) measure of inflation fell to 0.2% from 1% a month earlier.” The experts are saying that was the result of pent-up demand, but the economy was losing momentum even before more restrictions were being speculated.

Partington, Richard. “UK Economy Nears 'Perilous Turning Point' on Covid-19.” The Guardian, Guardian News and Media, 29 Sept. 2020, www.theguardian.com/business/2020/sep/29/uk-economy-nears-perilous-turning-point-on-covid-19. 

Record low GDP decrease in Q2

 The United States posted a 31.4% decrease in GDP for the second quarter, the largest decrease in our history and surpassed the original holder by 10% in 1958. Now, this is to be expected considering the country was almost entirely locked down for much of the second quarter. Businesses are still not completely open and I am sure will be less than average for the next quarter. Despite that, the next quarter is expected to have a big rebound. I feel a little hesitant to jump on board and believe a record breaking projected increase next quarter considering businesses are still half of what they were. This tied in with political uncertainty such as the election puts me on edge. My question is, do you believe we will see this record increase, or could we be missing something such as a potential second lockdown? How much of an impact will the winner of the election have on this potential increase?

https://www.cnbc.com/2020/09/30/us-gdp-q2-2020.html

State Tax Revenues Hit Hard by COVID-19

     In the past for months some states have seen growth in taxes and a majority has seen decrease in tax revenue. Overall in the past four months, states have seen a decrease in state tax revenue by 7.5 percent. This is thanks to the impact of the pandemic disrupting so much economic activity. Seven states actually reported growth such as Colorado, Georgia, Idaho, Nebraska, North Dakota, South Dakota, and Vermont. Another data showed that  half of the states saw a decrease in impersonal income tax revenue. 10 states reported growth in this department. This trend of some states seeing increases and decreases can be attributed to the actions that the states policies and federal policy has had on each state with some having better process and behavior then others. This leads to them seeing growth instead of loss. With the nation seeing more and more unemployment benefits expiring and a second round of stimulus on its way, some states will need to manage their spreading thanks to a decrease in tax revenue. Hopefully another round of stimulus checks can help the states combat the increased spending they have to do.

https://www.usnews.com/news/best-states/articles/2020-09-17/coronavirus-slams-state-tax-revenues-and-more-pain-is-on-the-way

Age of Electric Cars

 Electric vehicles have long been touted as the replacement for internal combustion engine (ICE) vehicles. This is as a result of electric vehicles’ ability to be almost 100%  efficient when converting energy from batteries to power to the wheels. ICE vehicles on the other hand are only between 20- 40% efficient. 

Presently though, electric vehicles are thousands of dollars more expensive than ICE vehicles. It is only with grants and subsidies from governments that help to bridge the price gap and incentivize buyers. These subsidies also help companies to push more electric vehicles into the market, hence making way for more innovations to bring down the prices of electric vehicles.

Electric vehicles are more expensive presently mostly because of the cost of the batteries. Companies are trying harder to make more energy-dense batteries so they can bring down the prices of these cars. Tesla is leading the way in battery technology and seeks to bring down its vehicle prices as low as $25,000. This would be groundbreaking and could push more people to buy electric vehicles. 

It isn't just about the batteries only. The whole technology involved in electric vehicles is what would pull more buyers. From semi-autonomous cars to almost full self-driving cars and a myriad of safety features, can draw families to these types of vehicles.

https://www.nytimes.com/2020/09/20/business/electric-cars-batteries-tesla-elon-musk.html

Pandemic Imperils Promotions for Women in Academia

 Pandemic Imperils Promotions for Women in Academia

This pandemic has been extremely brutal for working mothers, especially those with jobs with little to no leverage. Experts are saying that it is even worse for mothers who are in "up-or-out" fields where workers face a single high-stakes promotion decision (i.e. tenure in academia). The pandemic has led to months or more of productivity lost due to additional child care responsibilities which falls more heavily on women. This can reverberate throughout their careers. This has been especially evident on some college campuses which tend to exhibit more more activism than other "up-or-out" workplaces.

At Northwestern, hundreds of female faculty members have been pushing the university to reduce the disruption of the pandemic but with little success since "[t]he present is unsustainable" according to Susan Pearson, a tenured Northwestern history professor. She states that, "parenthood was too often seen in academic settings 'as a personal choice' rather than as a societal obligation — 'like if you choose to live two hours away from work and you have a long commute, the university shouldn’t have to do anything about it.'"

Northwestern, like other universities, responded to the pandemic initially by pausing tenure decisions for junior faculty to give them an extra year to publish academic work to aid with earning the promotion. However, according to research, it is deemed an imperfect policy. According to a study, "men were substantially more likely to receive tenure at their first job after the university allowed an extension for new parents of either sex, while women were substantially less likely to receive tenure than they were before the policy change." An economist at the University of California, Davis and co-author of the paper, Jenna Stearns, states that the reason behind this finding is that men spend more of their time on research while women are spending more of their time managing more of their parental obligations. There is evidence that the pandemic is producing a similar effect, skewing more male with gender divides.

For example, Dr. Marion Suiseeya is currently writing a book that is critical to her tenure prospects. She estimates that she was two months away from completing the manuscript in March and was working about three or four hours a day on it. However, after the pandemic hit, she believes the book will now take her four months or more to complete due to only getting no more than two non-productive hours a day to work on it. Her daughter thinks she is working more than usual, but she's actually working quite a bit less. Delaying her book would just continue the stress it has put on her family, so she is trying to finish it by the original deadline although she is unsure it will be ready. She would like to have "additional child care subsidies and a more nuanced evaluation process with less weight on whether her book has been published" rather than an extension. Hopefully, a solution can be found to help these women keep their careers while helping with the additional stressful childcare.

Food Industry Prepares for the Worst This Winter

 With many experts forecasting another spike of the coronavirus this winter, many grocery giants and food companies are beginning their stockpiling now. This past spring when the world initially lockdowned, food and sanitation supplies saw unexpected and unprepared for shortages. This time around though the companies do not plan to get caught off guard. Companies are amassing extreme inventory numbers in their warehouses so that when people hunker down this winter, they will not run out of vital food and sanitation products. Many executives, however, do not believe the demand will be as high this winter as it was in March, citing that mass panic led to panic buying. 

The biggest issue many of these food and retail companies face is the possibility of their supply chain workers getting infected. This issue devastated the meat industry earlier in the year as large factories were shut down due to infections. Their hope is with extra inventory and preparation, they can weather the storm once again. Due to the virus and this fear of coming up short in goods, many companies are planning to move from in-time inventory management that has dominated the industry for decades. Instead, it is more favorable for them to be overprepared, especially in the time of crisis. I wonder if this change in inventory build-up will stick with the industry for years to come, or if it is simply a temporary solution to a (hopefully) temporary problem.

https://www.wsj.com/articles/grocers-stockpile-build-pandemic-pallets-ahead-of-winter-11601199000?mod=searchresults&page=1&pos=3

What the Nomination of The Ninth Supreme Court Justice Could Mean for Businesses

   With the passing of supreme court justice and women's rights leader Ruth Bader Ginsburg (notorious RBG), one of the nine supreme court seats is up for grabs. This means a lot given the approaching presidential election in November which could determine so many things politically, socially and economically.  Also, this opened vacancy (if filled by President Trump's conservative nominee Amy Coney Barrett) has the potential of upsetting the partisan balance of power in the court by turning it into a conservative supermajority of 6 out of 9 justices if passed by Senate Republicans. Before her passing, RBG expressed her last wish: "my most fervent wish is that I not be replaced until a new president is installed". Justice Ginsburg had inquired for her successor not to be picked until a new president is elected.  

With President Trump securing the confirmation of his pick for the Supreme Court this past Saturday (September 26), "the institution would become a font of business-friendly decisions for years to come, many corporate and public interest lawyers alike say." Conservatives tend to hold views that are inclined towards de-regulation, a small government (very little to no involvement), lowering of taxes and free market capitalism. Those views would obviously be reflected in court decisions giving space to a dynamic that would most likely 'promote' corporatism, and side with businesses and their interests. This raise a lot of concerns and questions, especially when it comes to business ethics and economic equality/equity. So far, these are assumptions and statements, only the future decisions of political elites will confirm what the prospect for businesses is looking like. 

https://www.washingtonpost.com/politics/2020/09/24/finance-202-big-business-eyes-more-wins-with-padded-conservative-majority-supreme-court/

As virus rages, US economy struggles to sustain a recovery

As the economy recovers from the pandemic, home sales are booming, stocks are setting record highs yet the US economy is nowhere close to what it was pre-pandemic with high unemployment, low consumer confidence and less consumer spending. The virus outbreak is still raging and the Congress is deadlocked over providing more relief to the US citizens. 
According to the article, roughly 1 million new Americans are applying for unemployment benefits every week. Economists say that as many businesses have reopened and consumers have begun shopping and spending more, the picture is beginning to brighten, if only fitfully. Most say the economy is growing again. Yet scars are sure to remain from the catastrophic April-June quarter, when, according to the government, the economy collapsed at a 31.7% annual rate.
Some industries, notably those involving travel and hotels and restaurants, could struggle for years. And while the number of confirmed viral infections has been declining, the threat of a major resurgence remains, especially as students increasingly return to schools and colleges.
In a survey released last week by the National Association for Business Economics, two-thirds of the economists said that they thought the U.S. economy remains in recession. Nearly half said they didn’t expect it to return to pre-pandemic levels until mid-2022. Eighty percent put the likelihood that any recovery will give way to a “double-dip” recession at 25% or more.
Do you think we are still recession or recovering out of it? How long will it take for the US economy to recover?
https://www.nbcnews.com/business/economy/virus-rages-us-economy-struggles-sustain-recovery-n1238693