by Shane Ormond
On May 21, 2020
Target reported that online sales on an average day in April exceeded last year’s Cyber-Monday sale, because if you’re not going to buy a Cuisinart Perfectemp 14 Cup Programmable Coffee Maker at the end of the world, when are you gunna buy one?
- Digital Payments Soar, Test the Limits of Online Infrastructure
- Trump Admin Uses Defense Production Act
- There’s Whiskey in the Hand Sanitizer
- Here Comes the Bounce
Digital Payments Soar, Test the Limits of Online Infrastructure
Digital payments are soaring worldwide as I ain’t touching your nasty coronavirus-carrying dollar bills right now. (Unless it’s a couple of Franklins. Benny was way too smart to get to ‘rona.)
Housebound consumers, bored out of their freaking minds, are increasingly ordering, well, just about everything online.
Online sales of prescriptions, groceries, audiobooks, movies (and probably a whole bunch of weird sex stuff) are going through the roof.
The surge is so significant, e-payment providers have had to fall back on their Black Friday emergency plans to deal with the excess demand.
An industry analyst told the Working from Home Journal (formally the Wall Street Journal) companies are making up the shortfall by “tapping additional on-demand capacity in the cloud.”
(Though it’s worth noting that “I dunno, cloud stuff” is industry analysts’ stock answer when they don’t really know what’s going on.)
In Italy – where the death toll surpassed 6,000 overnight – digital payments have soared 81% since the end of February, according to McKinsey Co.
We should expect to see a similar rise in numbers now that everyone is at home, baking sourdough, and playing Animal Crossing.
“The surge is already happening,” Aaron Press, research director for worldwide payment strategies at International Data Corp., told the WSJ.
Press added that merchants at home are starting to deal with challenges in handling the sheer volume of digital payments.
It’s becoming clear that everybody staying at home and sitting on their butts are going to test the limits of our modern internet infrastructure (which until now has mostly been used for porn).
Nobody’s quite sure if it’s up to the task.
Already we’vee seen weaknesses in Europe, where Netflix has agreed to reduce video-streaming quality to stop gobbling up the continent’s broadband. (At least the euros won’t have to see ads for Netflix’s Beastars in HD.)
Trump Admin Uses Defense Production Act
The Trump administration will use the Defense Production Act to procure vital healthcare equipment caused by… you know… the thing.
The Defense Against the Dark Arts Act is a Korean War-era law that gives the president the power to order business to make products key to national defense and control the distribution of those products.
The president officially invoked the act last week but has resisted using it, fearing it would lead to the nationalization of American business.
“We’re a country not based on nationalizing our business,” President Trump said Sunday. “The concept of nationalizing our businesses is not a good concept.”
But I guess we can have a little socialism as a treat.
This morning, FEMA Deputy Administrator Peter Gaynor said that the administration has decided to use the Defense Production Act to make and procure coronavirus test kits immediately. (Because right now, we ain’t got jack.)
“We’re actually going to use the DPA for the first time today. There are some test kits we need to get our hands on,” Gaynor told CNN in an interview this morning, adding that DP language would be inserted into an existing contract for 500 million masks.
“So we’re going to use it. We’re going to use it when we need it. And we’re going to use it today.”
There’s Whiskey in the Hand Sanitizer
Distillers are turning their surplus supplies of whiskey and gin into hand sanitizer and I think I need to go sit down for a moment…
I’ll be ok. I just… We don’t really do the sentimental thing here at One Last Thing. But I think we should make an exception today and take a moment of silence for all the little whiskeys and gins that will never touch human lips.
[Bagpipes play in the distance.]
IT’S NOT FAIR!!!! PLEASE GOD TURN ME INTO HAND SANITIZER INSTEAD.
Okay, I’m done.
Demand for hand sanitizer has outpaced supply as idiots fill up their trucks with every bottle they can get their hands on to sell at a 700% markup.
Distilleries, sweet angels that they are, have come to the rescue, producing alcohol-based hand sanitizers from alcohol.
“We have the processing equipment, and we know the skill sets, and we have the people,” Chad Butters, chief executive of Eight Oaks Farm Distillery, told the WSJ. “Let’s get to work making this. We are just going to push it out.”
Look, if I was any good at photoshop I wouldn’t be writing this e-letter.
Normally, you need to get authorization from the FDA to produce alcohol-based hand sanitizers (like One Last Thing’s new Advanced-Formula Liquid Hand Blaster. Blast Those Hands, Citizen!). But the Alcohol and Tobacco Tax and Trade Bureau is making an exception for spirits companies on the grounds that we all live in a 90s disaster movie.
In Other News
ONE LAST THING
Here Comes the Bounce
The S&P 500 has lost 30% of its value in the last 22 days, making it the fastest market pull back in history.
It’s tough to stay optimistic right now, despite the fact that we know every market ever has recovered with enough time. But according to our macroeconomic expert Graham Summers, we may be in for the crash’s first real bounce.
[Note: In this article, Graham reiterates that he’s not a healthcare professional. Neither am I, but an old lady in a snake cult with a black-and-white printer made me a Reverend Doctor in 2016 so you should definitely listen to me.]
Are Stocks Getting Ready for Their First REAL Bounce?
By Graham Summers
Disclaimer: I am not a scientist nor am I a healthcare official. I am not downplaying the COVID-19 situation. I am simply looking at what the markets are saying about the pandemic.
A very strange thing is happening in the markets.
While the news continues to tell us that there is a global pandemic and that soon millions of people will be dead… the stock markets have begun bottoming.
The question now is: Are stocks getting ready for their first REAL bounce? Let’s take a look at five charts to gain some clarity.
Two Must-See Global Charts
The stock market in Italy, which is supposed to be completely imploding from COVID-19, bottomed on March 16. It failed to make a new low and has yet to roll over again.
Germany, which is now experiencing its own COVID-19 issues, looks like it bottomed on October 18. It is still touch and go here, but we have yet to see new lows.
Here in the U.S., multiple economic bellwethers are showing us something similar.
U.S. Market Indicators Are Also Offering Perspective
Caterpillar (CAT) is the largest producer of large machinery in the world. If the world was entering a depression and things were worsening, CAT’s stock would still be plummeting. Instead, it bottomed on March 12and is now putting in a higher low.
Similarly, Freeport-McMoRan (FCX) is the largest copper producer in the U.S. Copper is a commodity that is closely linked to economic growth. And FCX’s share price looks like it bottomed last week on March 19. Despite yesterday’s early morning bloodbath, FCX shares never broke to new lows.
Taken together, these charts are suggesting that the market is in the process of bottoming. The one area of concern that has yet to give us the “all clear” is the credit markets.
Credit Needs to Rally for Stocks to Explode
High yield credit spreads DID put in a new low yesterday. They are now attempting to bounce. But unless credit bottoms, any rally in stocks will be short-lived.
Put another way, if that last chart begins to rally in a significant way, stocks
could EXPLODE higher.
More to come…
Closing Data for Today
|S&P Index 500||2,421.38||↑ 9.19%|
- It took the S&P 500 22 days to lose 30% of its value, the market’s fastest 30% pullback in history.
- Big retailers in staple goods and delivery (including Walmart, Amazon, and CVS) are hiring over 600,000 workers to meet demand.
- WeWork is beginning to offer its workers $100-a-day bonuses to come to its locations amid the pandemic.
Editor, One Last Thing