Category: TRENDS ON THE U.S. ECONOMIC FRONT

Municipal bonds, usually among the safest places to store money, may no longer be so secure. The months-long economic lockdown has robbed city and county coffers of expected income, leaving them without funds to meet many of their obligations, perhaps including bond payments. Since March, cities’ revenue fell 21 percent from the same period in...

The oil and gas industry will lead others in corporate defaults in 2021 and is likely to fail to make $15 to $18 billion in bond payments this year, ratings agency Fitch has predicted. The amount is more than twice as many companies in health care and manufacturing are expected to miss; those sectors are...

The new fiscal stimulus passed by Congress in the final days of 2020 likely will strengthen an economic rebound that will occur during the second half of this year. The program sends a $600 cash stipend to most U.S. adults and adds $300 to weekly unemployment payments for 11 weeks. The plan also extends other...

U.S. corporations borrowed a record $2.5 trillion in bonded debt in 2020, sending the American business sector’s debt-to-earnings ratio to another record high, surpassing the one set last year, Bank of America has reported. However, corporations show signs of being increasingly unable to repay those loans. One measure: the growing number of so-called “zombie companies,”...

U.S. consumer spending weakened by 0.4 percent in November, the first decline since April, as household incomes shrank 1.1 percent and new weekly claims for unemployment benefits remained near or above 800,000. Spending on goods dropped 1 percent, spending on services 0.2 percent. Big-ticket items fared worst. Auto sales were off 3.6 percent, and major...

Again, despite the travel and tourism industry stocks rising on stimulus/vaccine news, the rebound will be long and slow. In November, revenue per available room – a key measure of the hotel industry’s financial well-being – was half of what it was a year earlier, according to S&P Global Ratings. In 2021, the number will...

The $900-billion economic aid bill President Trump signed helped push stock markets to record highs as 2020 came to an end. Travel stocks perked up, trading at what some investors saw as bargain prices ahead of a summer economic recovery they believe will restart pleasure travel. In the new stimulus round, U.S. airlines will share...

After standing strong as a haven of value amid the unfolding economic crisis last spring, the U.S. dollar has lost about 12 percent of its value against a benchmark collection of other currencies. A key reason: U.S. interest rates were around 2 percent before the current economic crisis, placing them comfortably above those of most...

CHEAP DEBT FUNDS NEW PRIVATE EQUITY DEALS. In 2020, almost 800 corporate buyouts valued at $559 billion were fueled by low-interest rates set and enforced by the world’s central banks. The number of deals surpasses the 1980’s record and is 20 percent more than in 2019, according to data firm Refinitiv. The deals’ collective value...

IRRATIONAL EXUBERANCE GRIPS EQUITY MARKETS. Despite suffering through the worst economic shock since the Great Depression, the Dow and S&P ended the year by setting new records. The S&P 500 spiked 68 percent from its March lows, and the Dow closed the year at 30,606, hitting a record high. The NASDAQ rose 43.6 percent in...