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Robots, Not Jobs, are Being Created Mr. President

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One of Donald Trump’s ongoing promises has been jobs. And lots of them. Specifically in manufacturing. However, he’s also pushing for innovation, especially here in the U.S. during “Made in America Week”. There’s one little problem, though. The jobs Trump wants to push are directly at odds with his message of innovation. And that’s becoming obvious as more and more companies turn to technology to compete with online retailers

What “Jobs” does the President Actually Make?

The economy is doing just fine under President Trump. Nowhere is that more evident than in the stock market, which has soared to record high after record high after record high. Unemployment is steady, hovering around 4.5 percent. And the dollar has gotten so strong that the president has had to speak against it to weaken our currency before the economy suffered as a result. Yet, Trump is still talking about job creation. But here’s the thing, companies aren’t looking to create more jobs, they’re looking to create more efficiency, and that comes through technology.

Case in point, Wal-Mart.

While the robots we think of from movies are still years away, more basic robots are already replacing human labor in restaurants such as McDonalds, and retailers like Wal-Mart, especially as a result of a growing cry for a $15 minimum wage. These bots are replacing thousands of jobs across the country, many of which will hit Trump’s main voter base. Wal-Mart, for example, is installing Cash360 machines in almost all their 4,700 U.S. stores.

The Cash360 machine counts money exponentially faster than a human, which is a specific job Wal-Mart has always hired for. Now, instead of paying $13/hr for a money counter, the machine does the same work significantly more efficiently, making those jobs obsolete. While the company claims those employees will be moved to new positions, the fact is most of them can’t do any other jobs and are forced to leave the company.

That’s just one example.

The more routine a job is, the more likely it is to be replaced. Ordering a burger at McDonalds through a digital touch screen. Self checkout lanes at the grocery store. Toll takers. Even autonomous vehicles, which will replace delivery drivers in a few years.

 

Can Trump’s policies drive manufacturing jobs back to America? Watch this news clip from Fox Business:

And the biggest group who have routine jobs? Trump’s supporters. Especially in the manufacturing jobs he keeps promising. Innovation and job creation are currently at odds with each other — as long as we’re looking at the same jobs. Moving forward, we need more innovative jobs, not just innovation within existing jobs.

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Business

Stocks Soar Again, Yet Doubt Remains That This Rally is Real

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Stocks Soar Again, Yet Doubt Remains That This Rally is Real

Stocks climbed across the board on Monday, at least temporarily reversing the losses the market experienced last week.

The Dow Jones Industrial Average gained 1,627 points to close 7% higher, following a 7% gain for the S&P 500 and a 7.3% gain for the Nasdaq.

Coming off a week that saw the Dow lose ground for the third time in a month, Monday’s market rally was due to positive news in the fight to contain the coronavirus pandemic.

Stocks and Coronavirus Peak

Newly reported cases fell to 28,200 on Sunday. This reversed a trend that saw 30,000 new cases on Thursday, 32,100 on Friday and 33,260 on Saturday according to the latest data from Johns Hopkins.

While it is far too early to tell if the number of new cases has peaked, the market took the decline in new cases on Sunday as an indication that things could get back to normal much sooner than even the most optimistic predictions.

New York State reported the first daily decline in coronavirus-related deaths, with 594 new coronavirus deaths on Sunday after a reported 630 on Saturday.

“Incoming data suggests NY state might peak sooner than (Governor) Cuomo’s optimistic case,” said Tom Lee, head of research at Fundstrat. “With better visibility on the healthcare crisis in the US, particularly, on a potential to model a national peak, we believe buyers are now taking control.”

Billionaire Bill Ackman, who famously bet the coronavirus outbreak would tank the stock market and turned $27 million into $2.6 billion, has now turned bullish on stocks.

“I am beginning to get optimistic,” said Pershing Square’s Bill Ackman in a tweet on Sunday. “Cases appear to be peaking in NY. Almost the entire country is in shutdown.”

Peter Boockvar, chief investment officer at Bleakley Advisory Group added “It seems that each day that passes we seem to be getting to a better place on containment. It’s still a long road ahead, but some of the more dangerous places seem to be getting some control of it.”

Doubt Still Remains

Despite the growing optimism, many investors believe there’s still plenty of trouble to come for the markets.

Citigroup’s chief global equity strategist Robert Buckland says corporate earnings could fall by 50% in 2020 due to the coronavirus pandemic. He also mentioned that stock prices should drop an equal amount to reflect the expected decrease in profits.

“Typically, stock markets fall the same as EPS in a recession, but with a lead/lag relationship. With global equities currently down around 30%, we are not convinced they are pricing in the likely EPS collapse.”

Matt Maley, chief market strategist at Miller Tabak, believes another significant drawdown is in the cards.

“This is more a bear market trap. I just think we’ve had a first period of liquidation. But I think we could have more of it,” he told Yahoo Finance.

“We’re in a de-risking process and now we have to have the companies, which have loaded up to the gills in terms of debt over the last 12 years. As they de-risk and deleverage themselves, that is going to keep the economy from picking back up the way it did following the 2018 deep correction” he added.

For investors who do not worry about another significant decline, Maley does have some advice.

“With the market already down as much as it is, you can start dipping your toe back in. You just want to be able to go into the the high-quality companies with great management … that have great balance sheets.”

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Oil Prices Drop As Doubts Grow Over Oil Deal

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Oil Prices Drop As Doubts Grow Over Oil Deal

Oil prices dropped sharply yesterday after a meeting to discuss output cuts between the Organisation of the Pe­troleum Exporting Countries (OPEC) and its allies was delayed, dimming hopes of swift action to support coro­navirus-ravaged energy markets.

US benchmark West Texas In­termediate plunged eight percent at the open in Asia, but clawed back some ground and was trading 5.7 percent lower, at $26.72 a barrel.

International benchmark Brent crude was down 4.3 per­cent to trade at $32.64 per barrel.

Oil prices have tumbled to levels not seen for years due to the corona­virus pandemic and a price war be­tween Russia and Saudi Arabia, the kingpin of exporting group OPEC.

Business shutdowns, travel restrictions and other measures put in place to contain the virus out­break have battered demand.

Prices had bounced back from 18-year lows last week after US President Donald Trump said that Riyadh and Moscow would draw a line under their dispute and agree to major output cuts.

Analysts had been skeptical about a quick resolution, and doubts only grew when the meet­ing between OPEC and its allies, including Russia, was delayed.

They had been expected to meet via video conference to discuss oil production cuts on Monday, but the meeting has been postponed to Thurs­day, the government of energy-rich Azerbaijan said at the weekend.

Trump surprised investors last week by tweeting: “I expect & hope” Riyadh and Moscow will be cutting back “approximately 10 Million Bar­rels, and maybe substantially more”.

On Friday, Moscow said it was pre­pared to discuss a reduction in the vol­ume of about 10 million barrels a day.

But Stephen Innes, chief global markets strategist at AxiCorp, said that “traders remain extremely sceptical a deal will be forthcoming, and if one does occur, it will be woefully insuffi­cient to stem the oil supply gushers.”

(c) 2020 Daily Independent. All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

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Investors Are Bullish Right Now, and That’s a Bad Sign for the Market

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Investors Are Bullish Right Now, And That’s a Bad Sign for the Market

A recent survey by Royal Bank of Canada showed that 58% of institutional investors are “bullish” or “very bullish” on the market right now. This could spell bad news for those hoping the worst of the drawdown is behind us.

The survey, conducted between March 25 and 31, shows that even after last month’s tumultuous ride, investors are more bullish today than they were back in December when everything was sailing along smoothly.

Even more concerning, 57% of investors say stock valuations are “attractive” or “very attractive” today. This is a new record for RBC’s survey.

“I’m concerned that we have not seen the lows yet,” said Lori Calvasina, RBC’s head of U.S. equity strategy.

“This surprisingly high level of bullishness supports our own view that we haven’t yet seen investor capitulation, echoing what we’ve seen in other data sets. We view capitulation as a necessary, though not sufficient condition for stock market bottoms in major drawdowns” she added in a note to clients last week.

These bullish investors believe that the Federal Reserve will continue supporting the economy with its zero-interest-rate policy and the $700 billion quantitative easing plan. They also believe that the economic impact of the coronavirus pandemic will be “manageable.”

The 58% “bullish” or “very bullish” reading is the highest the RBC U.S. Equity Investor Survey has had since it debuted in early 2018.

Perhaps the most surprising data from the survey shows that despite the record-level of bullish optimism, a significant number of respondents believe there’s still plenty of pain to be doled out by the market.

Possible Outlooks

Only 19% of those surveyed believe the market hit bottom in the first quarter. Meanwhile, 57% believe that we are going to see the market head lower and reach a new bottom this quarter. Additionally, 15% don’t anticipate stock bottoming until Q3 2020. The 9% of those surveyed believe we won’t see the bottom until Q4 2020 or later.

And despite all the chatter in the news about a quick economic recovery once new cases of coronavirus plateau, the RBC survey shows that investors aren’t quite as optimistic as some may hope.

Only 19% of respondents believe we will get a “V”-shaped recovery. 41% believe that we will see a ‘W’-shaped recovery and 35% see the country going through a slower “U”-shaped recovery.

Some banks on Wall Street are expecting massive GDP contracting as high as 30% during the second quarter. Those responding to the survey, however, weren’t quite so bearish.

Most believe that the country’s GDP won’t contract by more than 20% in any quarter. They also think that if we do get a recession, it will end in the fourth quarter.

It could be more bad news for the market if those numbers end up worse than predicted.

“If evidence that the most negative GDP quarter will be worse than 20% and that the contraction will last beyond 3Q emerges, it is likely to destabilize the market,” the RBC strategists wrote. “If evidence emerges that the impact will be less severe, it can help the stock market stabilize and move higher” they added.

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