MARKETS
COVID-19
Permanent Job Losses Loom with Increasing U.S. Cases
As the United States approaches a new threshold of 6 million coronavirus cases, several companies are forced to continue drastic layoffs and furloughs as they wait for their industries to heal. MGM Resorts announced plans to let go of 18,000 already furloughed workers in the wake of slow recovery in the casino and entertainment industries. American Airlines also suggested the need to furlough roughly 17,500 employees by the end of fall unless they can receive additional federal funding. They are joined by United Airlines and Delta Air Lines, who are also pushing for more government aid. New weekly unemployment claims have stayed relatively stable around 1 million per week throughout the summer but fall layoffs may provoke a rise in claims. Economists and executives alike are bracing for many of these employment alterations to be permanent, with little expected growth in travel industries until at least 2021.
Tech
Neuralink Unveils New Developments
On Friday, Elon Musk gave a presentation about the progress of his neuroscience company, Neuralink, in order to recruit more people to work with him. The presentation involved a breakdown of their new surgical robot, which, when finished, should be able to complete surgeries in under an hour. Musk also unveiled a new design of the “Link”, the actual device implanted into the brain. It is much smaller and externally invisible, with other features such as an all-day battery life and a farther wireless connection range. Finally, a demonstration with a live big boasting the new Link implanted, which read neural signals from the pig’s snout live for the audience. Another pig which had a Link implanted, and then safely removed, was also brought out to showcase its wellbeing. Musk announced that the company has been designated as a Breakthrough Device by the FDA, meaning they can move onto human trials soon, following further safety testing.
Source: TechCrunch
Politics
GOP Concludes Conventions and Gears Up for Election
The Republican National Convention concluded on Thursday with President Trump accepting his re-nomination by the GOP. The Trump campaign now is setting its main focus on the presidential debates with Joe Biden, which will begin at the end of September. These debates will prove to be much more important than the conventions, according to historians, due to their capacity for unscripted conversation between the two candidates. The spread of COVID-19 has impeded on President Trump’s ability to host his signature large rallies, but his campaign team intends to continue their efforts in valuable swing states with much smaller events, beginning on Friday in New Hampshire.
Economy
Federal Reserve Makes A Big Change
Federal Reserve Chair Jerome Powell announced a significant new policy in his address at the Jackson Hole Economic Policy Symposium on Thursday. The federal reserve will now be targeting a 2% inflation rate average over time, as opposed to the previous standard of a strict goal of 2%. This is because Powell believes that the U.S. can work toward low unemployment again without seeing a dramatic increase in inflation. This new tolerance for inflation above 2%, combined with rising unemployment across the country, implies an extended period of low interest rates to look forward to. These low interest rates will most likely provide short-term benefits to both equity and commodity markets.
Retail
Amazon Makes Substantial Hiring Push
Amazon announced last week its intent to hire around 3500 employees across various cities such as New York, Dallas, Detroit, Denver, Phoenix, and San Diego. These new corporate hires will be grouped into departments such as Fashion, Advertising, and Grocery. While Amazon’s fashion and apparel sales took a heavy hit in March, they have been showing surprisingly good growth through the summer, riding an increase in consumer spending through the summer. Additional workforce in these departments may help amazon keep growing through the pandemic and shutdowns.
Written By: Peter Dauenhauer
Works Cited
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Baum, Colleen, et al. “Perspectives for North America's Fashion Industry in a Time of Crisis.” McKinsey & Company, McKinsey & Company, 7 May 2020, www.mckinsey.com/industries/retail/our-insights/perspectives-for-north-americas-fashion-industry-in-a-time-of-crisis.
DeCambre, Mark. “The Fed's New Policy May Have Just Ushered in a New Era of Uncertainty on Wall Street.” MarketWatch, MarketWatch, 29 Aug. 2020, www.marketwatch.com/story/the-feds-new-policy-may-have-just-ushered-in-a-new-era-of-uncertainty-on-wall-street-11598722889.
Etherington, Darrell. “Elon Musk Demonstrates Neuralink's Tech Live Using Pigs with Surgically Implanted Brain-Monitoring Devices.” TechCrunch, TechCrunch, 28 Aug. 2020, rb.gy/bfj8ri.
Fraser, Kristopher. “Amazon to Hire 3500 Employees.” Fashionunited, Fashionunited, 29 Aug. 2020, fashionunited.com/news/business/amazon-to-hire-3500-employees/2020082135053.
Lucey, Catherine. “With Virtual Conventions Over, Unconventional Campaign Revs Up.” The Wall Street Journal, Dow Jones & Company, 28 Aug. 2020, www.wsj.com/articles/with-virtual-conventions-over-unconventional-campaign-revs-up-11598607002?mod=politics_lead_pos7.
Thomas, Patrick, et al. “New Covid-19 Layoffs Make Job Reductions Permanent.” The Wall Street Journal, Dow Jones & Company, 28 Aug. 2020, www.wsj.com/articles/new-covid-19-layoffs-make-job-reductions-permanent-11598654257?mod=hp_lead_pos1.