Economy Losing Steam, Markets Down, Global Tensions Up

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After hitting one record high after another in previous weeks, the stock market fell sharply this week. The coronavirus rescue bill from the Senate failed to pass. The number of new COVID-19 cases and deaths dropped a bit from previous weeks, though it is still horrendous.

Stocks corrected from all time highs as some of the frothy technology shares like Apple and Facebook and trendy shares such as Tesla and Zoom Video got hit by profit-taking. Investors are worried that increasing trade tensions between America and China may slow worldwide economic growth.

Investors were also disappointed when the Senate Republican effort to pass a “skinny” coronavirus relief bill for $300 billion failed. The House Democrats want to spend over $2 trillion and it seems unlikely that both sides can compromise enough to get any rescue package passed before Election Day. That means that all the money that had been provided by the CARES Act to small businesses, the unemployed and cities and states which ran out at the end of July is not going to be renewed. That is one of the reasons that the economy has been losing steam in recent weeks and will likely continue to do so.

The number of initial jobless claims remained steady at 884,000. While that is somewhat better than the many weeks of over a million claims, it is far above the 200,000 weekly claims before the virus broke out. Another sign of weakness is that oil prices fell to $36 from $42 as demand fell and OPEC increased production.

There were about 34,000 new cases of COVID-19 a day in America, which is down from over 60,000 a few weeks ago. There have been a total of 6.4 million cases in America and 192,000 deaths. Worldwide there have been 28 million cases and about 900,000 deaths. Some countries like Brazil and India are seeing a sharp rise in new cases and deaths.

Two assets that have soared this year are gold and cryptocurrencies. Bitcoin has shot up from $4800 in March to over $10,300 now. This is because of fear that paper currencies are being devalued as the Federal Reserve prints trillions of dollars. If you are a novice and would like to find out more about how to trade in Bitcoin, visit my affiliate eToro which shows you how to do it with simple charts and tools that are now used by over 10 million investors.

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