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Home / Business / Apple and Amazon dominate an economy “without mouth or nose”, but 10% of jobs will never be able to return, says strategist

Apple and Amazon dominate an economy “without mouth or nose”, but 10% of jobs will never be able to return, says strategist



This was a performance for the tech giants of America.

GOOG Parent Alphabet from Google,
+ 0.62%
it exceeded revenue and revenue expectations, although the search giant’s year-on-year revenue declined.

What benefits all four is that their products and services can be used from home, and increasingly in the absence of shopping and leisure competitions around the world.

It is also an economy without a “mouth or nose”, according to Dhaval Joshi, head of European investment strategy at BCA Research. That is, physical distancing and the increasingly mandatory requirements to wear masks restrict any activity that requires the use of the mouth and nose in close proximity to others.

According to the US, hospitality, retail and transportation account for 1

2% of economic activity. It assumes that physical distancing and the use of facial masks force them to operate at two-thirds capacity and the economy will lose 4% of tolerable activity. However, those labor-intensive sectors occupy 25% of all workers, so that with two-thirds capacity, more than 8% of all jobs are destroyed, or 10% in a less favorable scenario.

According to governments that tire of providing lifelines to employers, permanent unemployment will continue to rise, which should maintain mandatory 30-year yields, Joshi says. Given the close relationship between bond yields and bank stock prices, bank stocks should fall.

The winners, he says, are not European, which is why U.S. profits have held up better. Amazon, Apple, Microsoft MSFT,
-0.07%
and Netflix NFLX,
+ 0.27%
by itself, it accounts for more than half of the lower performance of the Stoxx Europe 600 SXXP,
+ 0.55%
to the S&P 500 SPX,
-0.37%
this year.

Joshi rejects the argument that Robinhood Day traders are creating a speculative frenzy in growth advocates, saying all recent price changes can be explained by both resilient profits and bond yields.

While there is always the possibility that the brutality of the pandemic will end, it is not expected that, by belief, a vaccine will not be available until next year. “This will depress the TMUBMUSD30Y ultralong link,
1.196%
it produces even more results and maintains overweight support for growth advocates, at least in relation to other parts of the stock market, ”he says.

The buzz

In addition to technology gains, Thursday night also included well-received revenue from automaker Ford F,
-2.60%
and video game maker Electronic Arts EA,
+ 1.95%,
while the Expedia EXPE travel service,
-0.45%
disappointed after a worse-than-expected loss.

White House Chief of Staff Mark Meadows said the Trump administration would support a one-week extension of an additional $ 600 to the unemployment benefit, which will end on Friday.

France, Italy and Spain recorded a double-digit decline in gross domestic product in the second quarter. The U.S. Economy Calendar features publications on personal income, employment cost index, Chicago Purchasing Managers Index, and University of Michigan Consumer Sentiment Index.

The market

Nasdaq-100 futures NQ00,
+ 1.13%
increased after the results of banner technology, while S&P 500 ES00,
+ 0.26%
futures increased.

GC00 gold,
+ 2.78%
and SI00 payment,
+ 4.80%
Futures increased both futures.

The GBPUSD pound,
+ 0.44%
traded more than $ 1.31 and has advanced more than 5% in the last month.

The graph

The permanent portfolio, which has an equal weight of stocks, bonds, gold and cash, has just had its best run in 40 years, notes Michael Batnick, research director at Ritholtz Wealth Management and author of the blog Irrelevant Investor. While this portfolio exceeds stocks for long periods, it is also more stable, suffering a monthly performance of only 5% in the most recent bear market and less than 15% in the 2008-09 global financial crisis. “With the bonds giving you 1-2% and 0 cash, I wouldn’t expect much above that from here. The good news is that if history is a guide, you shouldn’t expect either. very disadvantageous, ”Batnick says.

Random readings

The National Basketball Association season resumed with an ugly, hard-fought Los Angeles Lakers victory over the Los Angeles Clippers.

Now it’s a nap: sleeping microbes wake up after 100 million years buried by the sea.

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