Weekly Market Update: Friday, June 4th
Illustration by The New York Times; Photograph by Bryan Denton For The New York Times
“America Rages As Stock Market Soars”
It feels like this is a repeat headline. The first half of 2020 has been rocky, to say the least. However, despite all the troubles recently, the stock market is chugging along on its way to reclaim most of the losses its suffered in Q1. As we’re now at the midway point of the year, let’s recap a little:
1. Back in January, Donald Trump got acquitted from his impeachment trial.
2. Kobe Bryant passed away tragically.
3. The coronavirus spread throughout the globe.
4. The U.S. incurred a stock market slump and economic shutdown that we’re still experiencing.
5. Riots erupted in all 50 states over the murder of George Floyd.
If the phrase “it can only go up from here” holds any truth then hopefully we see a pleasant turnaround during the second half of the year.
Let’s take a closer look at some of the biggest updates from this past week.
Riots For George Floyd
Protests have sprung up across the country as people rushed to call for justice for George Floyd, who was murdered at the hands of police officers. George Floyd is just one of a long list of names to have been killed at the hands of a police officer. Other recent names include Breonna Taylor and Ahmaud Arbery. These incidents are nothing new unfortunately but this seems to be the straw that broke the camel’s back. Protests have sprung up in:
1. All 50 United States
Despite some violence earlier in the week, the action seems to have transitioned into more peaceful protests. These demonstrations are likely to continue.
Twitter Flags The President
In an unprecedented move, Twitter has fact-checked some of Donald Trump’s tweets as well as flagging one for glorifying violence.
● The tweet that twitter fact-checked was Trump’s claim that mail-in voting is ripe with fraud.
● The tweet that Twitter hid for glorifying violence was one where Trump used the phrase “When the looting starts, the shooting starts”. This quote was used in regards to the protests for George Floyd and it’s hard to see this any other way than the president threatening to gun down U.S. citizens. Hence, why Twitter flagged it.
This is certainly a unique situation as arguments can be made for both sides of the issue and social media platforms disagree on how to handle it.
Donald Trump is quick to argue that Twitter is stifling his freedom of speech as well as giving its users a biased view of news events. For example, he has long claimed that Twitter stifles conservative voices on their platform.
On the other hand, Twitter is a publicly-traded company, not a public forum. They’ve made moves to ban other types of hate speech from their platform in the past and there is really no reason why the government should have any input over what they allow people to post. Twitter’s move was made in an effort to protect its uses from misinformation.
Trump then signed an executive order against social media companies in an effort to get more control over their platforms.
It should also be noted that Facebook has gone the opposite route of Twitter. Mark Zuckerberg has stuck to his claim that it’s not Facebook’s role to be the arbiter of truth and that they will not be fact-checking any politicians. Australian news site The Chaser was quick to satirize the situation by posting the headline:
“‘Social media should not fact-check posts,’ says child-molester Mark Zuckerberg”.
Rivals No More
Two major players in the sneaker industry announced an interesting collaboration this week. Allbirds and Adidas are teaming up to head down the path of creating the lowest carbon footprint performance shoe ever, with the ultimate goal of a net-zero product. It’s rare to hear of two major competitors teaming up which is why this is pretty big news. They’ll both get lots of good PR on the road to reduce their carbon footprint. In addition to that,
● Adidas will get to expand its reputation for sustainability (which is Allbirds strength).
● Allbirds will get to expand its reputation for performance (which is Adidas strength).
Even though these two companies directly compete, they will both be getting a boost in terms of brand affinity that they’re looking for.
The AMC News Roller Coaster
If you haven’t been keeping up with America’s biggest movie theater, let’s catch up with some of their recent updates:
1. In April, AMC claimed that they had plenty of cash to survive the quarantine until Thanksgiving. Movie theaters are obviously a nonessential business so they will be one of the last to get the green light to open back up.
2. Then, they banned all Universal movies from their theaters after some drama involving the release of Trolls 2.
3. In May, there was lots of talk that Amazon was considering acquiring them (on Amazon’s quest to get into every industry known to man).
4. Now, AMC is saying that there is “substantial doubt” that they can stay in business.
Quite an exciting few months for them.
That’s it for this week -- Join us next week for another market update.
Securities and investment advisory services offered through NEXT Financial Group Inc. Member FINRA/SIPC. Sierra Ridge Wealth Management is not an affiliate of NEXT Financial Group Inc.
This material is not intended as an offer or solicitation for the purchase or sale of a security or an other financial instrument. Past performance does not guarantee future performance.
All the views expressed are those of Chris Simpson and not those of Sierra Ridge Wealth Management or NEXT Financial Group Inc. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks.