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Apple and Amazon dominate the “no mouth or nose” economy, but 10% of jobs may never return, says strategist



It was quite a performance for the American technology giants.

Google Parental Alphabet USA: GOOG
beat profits and revenue expectations, although annual revenue from the search giant fell.

What all four benefit from is that their products and services can be used from home, and increasingly in the absence of real competition for shopping and leisure.

It’s also a mouthless or noseless economy, according to Dhaval Joshi, chief European investment strategist at BCA Research. That is, physical distancing and the increasingly mandatory requirements for wearing masks limit any activity that requires the use of your mouth and nose near others.

In the United States, hotels, retail and transportation account for 1

2% of economic activity, he said. Assuming that physical distancing and the use of face masks force them to work at two-thirds capacity, then the economy will lose the allowable 4% of activity. However, 25% of all workers work in these labor-intensive sectors – so that in two thirds of the capacity over 8% of all jobs are deleted or 10% in a less favorable scenario.

As governments tire of providing bailouts to employers, persistent unemployment will continue to rise, which should continue to lower yields on 30-year bonds, Joshi said. Given the close link between bond yields and bank share prices, bank shares must fall.

The winners, he said, were not European, making US profits better. Amazon, Apple, Microsoft US: MSFT
and Netflix US: NFLX
alone represent more than half of the lower performance of Stoxx Europe 600 XX: SXXP
compared to S&P 500 US: SPX
this year.

Joshi rejects the argument that slavery Day traders are creating speculative fury in growth safeguards, saying all recent price movements can be explained by both sustainable gains and falling bond yields.

Although there is always the possibility of a sudden end to the pandemic, he does not expect this, believing that a reliable vaccine will not be available until next year. “This will depress the ultra-debt bond BX: TMUBMUSD30Y
give even more and continue to maintain excess weight to protect growth, at least compared to other parts of the stock market, “he said.

The buzzing

In addition to technology profits, Thursday night included well-earned revenue from carmaker Ford US: F
and video game maker Electronic Arts US: EA,,
while the travel service Expedia US: EXPE
disappointed after a loss worse than the forecast

White House chief Mark Meadows said the Trump administration would support a one-week extension of an additional $ 600 a week in unemployment benefits, due to expire on Friday.

France, Italy and Spain reported double-digit declines in gross domestic product in the second quarter. The US economy calendar contains messages on personal income, the employment cost index, the Chicago Purchasing Management Index, and the University of Michigan Consumer Sentiment Index.

The market

Nasdaq-100 Futures USA: NQ00
rose after the technological results of the banner, while the S&P 500 US: ES00
futures edge higher.

Gold USA: GC00
and US silver: SI00
futures were gathering on Friday.

The US pound: GBPUSD
traded above $ 1.31 and advanced more than 5% in the last month.

The diagram

The ongoing portfolio, which represents the same weighting of stocks, bonds, gold and money, has just been the best in 40 years, said Michael Batnik, director of research at Ritholtz Wealth Management and author of the Irrelevant Investor blog. Although this portfolio is lower than long-term stocks, it is also more stable, declining annually by only 5% in the newest bear market and less than 15% in the global financial crisis of 2008. 2009 “As bonds give you 1-2% and cash give you 0, I wouldn’t expect much up here. The good news is that if history is a guide, you shouldn’t expect many flaws, “Batnik said.

Random readings

The National Basketball Zone season resumed with an ugly but narrowly defeated victory by the Los Angeles Lakers over the Los Angeles Clippers.

Now it’s a nap – dormant microbes wake up after 100 million years buried under the seabed.

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