Donald Trump’s USA continues devoting all necessary monetary and fiscal measures to help the economy fight the coronavirus-led economic
slowdown. The Federal Reserve (Fed) announced to expand its Main Street Lending Program yesterday so that more small and medium sized
businesses could access affordable credit. Meanwhile House Speaker Nancy Pelosi announced that the next fiscal aid package could be near
$1 trillion.
Major US indices closed their best month in three decades on a negative note, although the announcement of more monetary and
fiscal stimuli helped reversing a part of the earlier decline. Nasdaq recorded timid losses only, before Amazon and Apple reported
earnings.
As widely expected, both Amazon and Apple benefited from the coronavirus lockdown. Apple’s revenue surprised to the
upside despite 7% fall in iPhone sales. Its revenue from services rose by 17%, higher than analyst expectations. Meanwhile, Amazon sales
soared as locked-in consumers rushed to online stores creating a weeks-long Black Friday environment, which sure caused significant
delays in deliveries, but Amazon made the equivalent of $33 million per hour.
Both Apple and Amazon shares fell in the after-hours
trading, as investors considered having hit their targets following a six-week rally. The US futures fell. As we have mentioned in our
earlier reports, the US tech giants have been skewing the S&P500 to the upside. Souring mood in these stocks could renew the selling
pressure across the US stocks, where most companies have not been as lucky as FAANG to shine during our century’s worst economic slowdown.
Alas,
the economic data brings investors back on earth. Things are not as rosy as suggest the FAANG first quarter results. In contrary.
The
personal spending in the US tumbled 7.5% in March, the highest decline on record, as households’ income fell 2%, the most in more than 7 years.
Staying home has clearly hammered American businesses; there is no doubt that these figures will get well uglier before they start looking
better. The jobless claims rose by another 3.8 million last week, more than 3.5 million penciled in by analysts. Over the past six weeks, the
US jobless claims jumped by more than 30 million, a terrible number. Although we have started seeing a declining pattern in new claims,
millions of Americans will continue filing for jobless benefits as a result of a complete shutdown in most economic activities across the
country.
By Ipek Ozkardeskaya