(Houston)

Is the oil market a leading indicator of what is to come in the economy? Do we have way more supply and infrastructure to deliver it than there is demand to gobble it up? Oil was at $11 a barrel this morning, a mind boggling price. Stocks, on the other hand, have rallied hugely, to the point where it sometimes seems like investors have forgotten the country is shut down. Oil is obviously an idiosyncratic market, but if you really take a look at the situation, it is falling because of a big plunge in demand.

FINSUM: Is the oil market just smarter than equities right now? It does seem entirely possible that given the inevitable contraction in consumer spending, we may have more infrastructure to produce and delivery goods and services than we do demand, which means stocks could be in for a very rough patch.

(San Francisco)

The market has seen some very healthy (or perhaps not) gains in the last few weeks, but many are still worried about a plunge to come as the full impact of the COVID lockdown reverberates through the economy. Tech stocks have been big beneficiaries of the rally, with the big companies adding $250 bn to their market caps recently. Those gains look more sustainable than elsewhere too. Fund managers have been seeking refuge in the shares, and their business models look more defensible than most.

FINSUM: We are very bullish on big tech stocks. This whole lockdown is going to shift habits more towards ecommerce (and not just online retail, but food ordering etc), which means Google and Facebook are going to be able to collect their digital advertising tax on a bigger pot than ever.

(New York)

Dividends and buybacks have been looking very weak. Many buyback programs have been suspended and are likely to be under political pressure, while dividends are looking very at-risk because of likely poor earnings. So where to get some stable dividends? Barron’s ran a piece picking 40 of the safest dividends in the market. Here is a sampling: Nike, McDonald’s, Target, Home Depot, Coca-Cola, Caterpillar, Honeywell International.

FINSUM: This seems like a sound list. The only argument we might have is that Nike might not be able to maintain the hefty price increases consumers have stomached over the last five years.

One of the big questions in the small business world right now is “where is my PPP loan”. The SBA announced last week that the program had run out of money. Yet, the large majority of small business report that they have not received funds, even those that have been “approved”.

COVID Loan Tracker was founded for exactly this purpose—to find out when money from the PPP program actually starts flowing. The SBA says around 1.7m loans were approved, accounting for only 6.6% of the 30,000,000 small businesses in the country. Yet of the $349 bn “approved”, only about 7% of companies say they have received any funds.

PLEASE HELP SMALL BUSINESS OWNERS BY FILLING OUT THE FORM

As of 7:00 am this morning here is our data on actual disbursements:

Total Applied: 13,428 companies
Total received money: 941 companies
Percent receiving money: 6.97%
Total Dollars received: $320,000,000
Median Employees per successful applicant: 15
Median Loan size: $320,000
Median Length to receive loan: 9 days

COVID Loan Tracker was started by small business owners Duncan and Rita MacDonald-Korth to help their fellow small business owners understand when PPP and EIDL advance money starts flowing. The site works by crowdsourcing knowledge on applications and loan disbursements. Our goal is to help the small business community and empower journalists with the data they need to keep the government accountable.

HELP US KEEP THE DATA FLOWING

PLEASE HELP SMALL BUSINESS OWNERS BY FILLING OUT THE SURVEY

COVID Loan Tracker was started by small business owners Duncan and Rita MacDonald-Korth to help their fellow small business owners understand when and where PPP and EIDL advance money starts flowing. The site works by crowdsourcing knowledge on applications and loan disbursements. Our goal is to help the small business community and empower journalists with the data they need to keep the government accountable.

Retail is one of the largest sectors of the US economy. Tens of millions of workers earn their living in the sector and millions of small business owners employ them. However, this group—at once the most visible and vulnerable victims of the lockdown—are being left out in the cold by the PPP initiative. It has already been well established that “large” small businesses have fared much better in the Paycheck Protection Program, but retail small business owners may have even more to lose.

The common practice in commercial leasing to small businesses in the US is that landlords require tenants to put up personal guarantees in order to execute a lease. That means that if a business is unable to afford the rent, their own personal assets are the on hook to pay the landlord. Small business owners usually have no choice but to accept the terms—if they do not, they cannot lease the space. Since almost all landlords require this, small business owners are left with a stark choice: commit to a personal guarantee, or don’t open a business.

While it is clear at this point that smaller small business owners have not been helped by this program, that is doubly true for retail owners, for whom payroll is usually a minority expense compared to rent, utilities, and inventory. Accordingly, the small shop owners of America—hardware stores, clothing boutiques, nail salons, dry cleaners, cobblers, bar owners etc are at grave risk of losing not just their business, but their own assets, such as savings, houses, future income. They stand to lose everything.