While we anxiously await the vaccine that a great percentage say they won’t take — the market reached all-time highs last week. The preventative stay at home economy, with one in four (25%) workers engaged, has supercharged the gig economy and the Amazon Prime membership. This has come at the expense of local communities and businesses, regarded as less essential and less able to reach customers through the web.

Forced isolation to mitigate the virus’ spread has been a boom for shareholders of the recognizable giants: Amazon’s profits have doubled, followed by Walmart and Target increasing 80%, Lowe’s 74%. Following suit, those stocks have reached record highs along with booming tech and cloud services.

Largely operated on a month to month basis, small business has suffered unsustainable revenue declines of ~30% (vs. 20% in 2008) leading to 20%+ closures. Yelp expects fewer than half of restaurateurs to survive 2020.

The letter ‘K’ has been drafted to symbolize our economic condition, indicating a sharp separation of winners and losers, a sharp contrast to the stock market’s snap-back 50% ‘V’ shaped recovery. Blue collar labor, whose wage gains led during the recent economic uptick (Feb. 2020) now lags, while white collar, with its home office survival option, has held up.

California’s July unemployment rate came in at 13.3%, comparing unfavorably to the ~10% national average. August registered at an improving 8.4% with state numbers due out shortly. Keep in mind these figures don’t reflect the self-employed themselves, only for their employees for which they contribute to the state insurance fund.

Social themes: Exodus from urban to rural. Folks  escaping cities and their burdensome taxes and regulations. With the add of crime/covid accelerants, vacancies are skyrocketing. Expanding high speed broadband has enabled Zoom-casts to become ubiquitous in our daily lives. The spare bedroom has replaced office towers, with spatially limiting elevators, in seamless fashion. Some say productivity has also increased, yet the social/psychological downside must also be acknowledged.

Going forward, Covid will wane while the November election will keep stocks on edge. The market run-up has pushed valuations to extreme. Support as ‘buyer of last resort’ from the Fed last March restored confidence, but nonetheless remains only a band-aid on our economic wound. Give it a year or two to get everyone back on board…and the markets to dodge and weave accordingly.

2020 will not end soon enough.

Of personal note:
Back to the ‘ole laundry building, where my dad had draped a towel over the wounded pipe (see previous e-blast).  Property had been vacant, until recently, when word had it that a woman was seeking space to re-start her dance studio. A deal was struck, with dear mother collecting rent, enabling the industrious owner to create an ‘out-of-home’ activity for both kid’s and parent’s sake, and a bit of profit to boot.  Win-win-win!!  But, state/county says – ‘no can do – outdoor activity only.’  One could argue fifteen kids confined to a 3,000 sq ft. open air building …is NOT indoors.

The blanket application of government agency – is served unfairly.