Sep 16, 2020
More Than Half Of Business Closures Caused By Economic Lockdowns Are Permanent, Yelp Data Show
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There’s been a 23% increase in the number of business closures since mid-July, with the number of permanent closures reaching 96,966, representing 60% of closed businesses that will not be reopening, the data show.
The closures came after government officials began instituting stay at home orders in March to slow the pandemic, which originated in China before spreading to the U.S.
“Overall, Yelp’s data shows that business closures have continued to rise with a 34% increase in permanent closures since our last report in mid-July,” Justin Norman, Yelp’s vice president of data science, told CNBC on Wednesday. (RELATED: Biden Says He Would ‘Shut’ The Country ‘Down’ If Scientists Recommend New Lockdown Measures To Fight Coronavirus)
A “COVID-19 Supply Tent” is seen on Move In Day 2020 – North and West Campus, at Cornell University, Ithaca, New York in this undated handout photo. Jason Koski/Cornell University/Handout via REUTERS
Restaurants, bars, and other establishments that have physical locations have been hit the hardest throughout the past six months, data show.
Cities where closures are higher are struggling, relative to smaller metro areas, according to the data. Los Angeles has experienced 15,000 closures, half of which are permanent, while New York has seen more than 11,000 closures, 63% of which are reported as permanent, Yelp’s data show.
The numbers come after former Vice President Joe Biden suggested in late August that he would be willing to shut down the entire country if scientists recommend the measure to curb the virus, which has reportedly killed nearly 196,000 people, according to data from John Hopkins University. The lockdowns resulted in mass layoffs and an increase in unemployment rates.
More than 5.25 million Americans filed jobless claims in April, less than a month after the initial lockdowns began, data released in April from the Department of Labor showed. The total coronavirus unemployment claims surpassed the number of claims during the entire 2008 Great Recession within weeks of the lockdowns, data from the Department of Labor show.
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Stock Market Today: Stocks Cant Shake Fed Hangover
Trump rails against the liberal indoctrination of Americas youth in latest culture war salvo Sonic puts its cherished ice up for auction, gets bids above $300 Stock Market Today: Stocks Cant Shake Fed Hangover
Wall Street's weakness at the end of Wednesday's session extended into Thursday as investors continued to digest the Federal Reserve's dour commentary. More discouraging economic data delivered fresh on Thursday morning didn't help.© Provided by Kiplinger
The Labor Department said initial unemployment claims for last week came in at 860,000 – a lower total than most estimates but a still-sluggish number that prompted Allianz chief economic advisor Mohamed El-Erian to call the recovery pace "below what's both needed and possible." Backing that up was a Philadelphia-region manufacturing reading that dropped from 17.2 in August to 15.0 in September, indicating slower expansion.
- SEE MORE Best Bond Funds for Every Need
And then there's the Fed, which signaled it would keep its benchmark interest rate low for years, but also urged Washington to provide fiscal assistance to back the economy.
"The Fed is out of tools and stock investors are finally realizing this," says Greg Swenson, founding partner of London-based investment bank Brigg Macadam. "With rates this low and quantitative easing ramped up, there is little the Fed can do to help the economy rebound or limit the fallout from any unexpected economic weakness in the near-term."
The Dow Jones Industrial Average slid 0.5% to 27,901, snapping a four-day winning streak.
Other action in the stock market today:
- The Nasdaq Composite lost 1.3% to 10,910.
- The S&P 500 declined 0.8% to 3,357.
- The Russell 2000 slipped 0.7% to 1,541.
- Snowflake (SNOW), the cloud firm that pulled off a sensational IPO yesterday that more than doubled from its listing price, declined 10.3%.
- Sumo Logic (SUMO), another cloud company that specializes in data analytics, priced at $22 per share, above its $17-$21 expected range. The stock closed 22.2% higher to $26.88 per share.
Investors, strap yourself in – this market is looking more and more like it could provide the roller-coaster ride it typically does in September.
- SEE MORE 20 Best Stocks to Invest In During This Recession
"As we have noted in prior reports, any significant changes to central bank policy will likely trigger equity market volatility," says Dan Wantrobski, technical strategist at Janney Montgomery Scott, "but yesterday's (and this morning's) reaction to effectively no change shows how sensitive and vulnerable equities are right now."
Looking for protection for your portfolio? You could do worse than many of the market's blue-chip stocks, which not only are among the best-capitalized against economic shocks but also are positioned to at least tread water if not thrive in a recessionary environment.
They're certainly good enough for hedge funds, which have poured hundreds of billions of dollars into Wall Street's steadiest large-caps.
Yes, occasionally the "smart money" likes to make a splash with speculative picks, just like Warren Buffett recently did with Snowflake's initial public offering. But typically, hedge funds prefer the mix of growth potential, stability and dividends that well-heeled blue-chip companies tend to offer.
Read on as we look at the 25 blue chips that are most popular with the hedge-fund crowd, including several growth picks that are really coming into their own.
- SEE MORE Kip ETF 20: The Best Cheap ETFs You Can Buy
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