It’s Cinco de Mayo this Tuesday and unfortunately it’s a bad time to joke about getting a case of Corona. In the last Nightcap, we discussed the measures governments were taking to calm the economic storm caused by Covid-19. Since then, U.S. jobless claims rose to just under 30 million. Companies like J.Crew and Gold’s Gym have filed for bankruptcy, and investor confidence in the EU is is at a level not seen since the 2008 financial crisis.
It’s very hard to focus and sift through the noise to produce realistic forecasts of the future in pandemic conditions. The truth is we don’t know what can happen. In recent news, the markets have managed to bounce back after geopolitical tensions rose between China and the US. Some have related these events to the next depression based on market conditions. However, if this is history repeating itself, the market has much further to go.
The volatility has managed to calm itself but it looks though as if a poor earnings season will haunt the markets. Mix bad earnings, weak economic data, and a slow moving global economy, and voilà we have a recipe for market failure.
Speaking for recipes, this Nightcap is brought to you by the Classic Margarita. From my experience I suggest these ingredients: tequila, orange liqueur, fresh lime juice, sugar syrup, salt, and sliced limes for garnish. Prep the salt rimmed glasses, add the mix to a shaker and serve cold.
Some Closing Bell Activity
Beyond Meat released its quarterly earnings report today and revealed interesting insights. The business has ‘shifted into retail and away from restaurants amid the economic lockdown. Most of the sales channels are now through grocery shopping. In March, Beyond Meat saw retail sales rise 12%, and since the company hasn’t seen much disruption to their supply chain its business as usual. The stock rose 8.6% in late trading on Tuesday.
Disney reported an increased engagement on its newly-launched streaming service, Disney+. The pandemic did its damage to to disrupt the theme parks and cruise business. Somewhere in the region of $1 billion was lost in operating income due to revenue lost because of closures. The company has announced a dividend suspension for the first half of the fiscal year.
I almost forgot what day it is, and as corny as it may sound you definitely cannot forget.
Stay Home, Save Lives