Fox Business/Frank Miles
Discover CEO sounds warnings on white collar job loss
Discover Financial Services Chief Executive Officer Roger Hochschild is sounding the alarm about the growing loss of white collar jobs.
“I’m really worried about unemployment,” Hochschild said in an interview with Bloomberg Television. “I do feel like it’s spreading more toward white-collared jobs. A lot of companies are reacting to the environment and cutting back.”
He manages one of the union’s financial services covering checking and savings accounts, personal loans, home equity loans, student loans and credit cards.
The highest number of Americans filed for unemployment since August last week — about 898,000. In June, the Federal Reserve reported that only 13% of white collar workers — usually seen as household incomes above $100,000 — had experienced job loss. However, those figures are likely to change given the recent massive layoff announcements by the likes of Ford, United Airlines and Wells Fargo.
The grim figures on layoffs, furloughs and salary cuts point to a U.S. economy that is tumbling into what appears to be a calamitous recession, the worst in decades.
The record-setting flood of layoffs unleashed by the viral outbreak is extending beyond the services industries that bore the initial brunt and are still suffering most. White collar employees, ranging from software programmers and legal assistants to sales associates and some health care workers, are absorbing layoffs or salary cuts. So are workers in other occupations, like construction and real estate.
Yahoo Finance/Emily McCormick
Wall Street buckles on stimulus, jobless claims and coronavirus infections
Stocks fell Thursday for a third straight session, as investors considered fast-dimming prospects for fiscal stimulus before the U.S. election and a host of new virus-related restrictions in Europe.
A disappointing print on new jobless claims also contributed to the risk-off mood. New unemployment insurance claims unexpectedly rose last week, hitting the highest level since mid-August, in yet another sign of the labor market’s sputtering recovery.
Traders also continued to fixate on whether a stimulus deal of any size will transpire within the next three weeks, even as recent comments from lawmakers have overwhelmingly dampened hopes. President Donald Trump said Thursday he was willing to go above his current offer of $1.8 trillion – versus House Democrats’ $2.2 trillion proposal – while adding that he believed “Nancy Pelosi doesn’t want to give anything,” according to a Fox Business interview Thursday.
Treasury Secretary Steven Mnuchin, speaking at the Milken Institute Global Conference on Wednesday, said that “getting something done before the election and executing on that would be difficult, just given where we are in the level of details,” referring to talks with Democratic lawmakers. He and House Speaker Nancy Pelosi were set to speak again on Thursday to discuss stimulus measures, after having spoken Wednesday morning.
Overseas, countries and major cities across Europe imposed stricter orders to try and rein in a jump in new coronavirus cases. In London starting this weekend, individuals will be restricted from mixing with other households indoors, and in France, residents of Paris and eight other cities will be subject to nighttime curfews beginning Saturday.
Bank of America shares dip as the lender, pressured by low rates, misses on third-quarter revenue
Bank of America shares fell Wednesday after the lender posted third-quarter results that missed on revenue.
The bank said it generated $20.45 billion in total revenue, missing the $20.8 billion estimate of analysts surveyed by Refinitv. Profit in the quarter slumped 16% to $4.9 billion, or 51 cents a share, edging out the 49 cent estimate.
Shares of the firm dropped 5.3%.
Analysts have long considered Bank of America, with its vast deposit base, as the big bank most sensitive to swings in interest rates. The industry has been under pressure after the Federal Reserve said it will maintain a zero-rate policy for years in response to the coronavirus pandemic. That squeezes the spread that banks earn by taking in deposits and making loans.
The bank’s net interest income fell by 17% in the quarter from a year earlier to $10.2 billion. CEO Brian Moynihan has said that the key figure will likely bottom in the third quarter. The firm also missed on net interest margin, a related metric, which was 1.72%, 10 basis points below the estimate.
‘Young and dumb’ traders have created a ‘total nightmare’ in the stock market, fund manager warns
‘The buying that went on in August and September is a 10-year phenomenon the likes of which we have never seen, among millennials and in the risk-taking among people that don’t want to own bonds and want to own overpriced U.S. quality businesses, it is of record proportions.’
That’s Cole Smead, president of Smead Capital Management, explaining in a CNBC interview on Thursday how “young, dumb” investors have created a “total nightmare” in the current climate.
Smead went on to say that these nosebleed valuation levels are an example of a “stock market failure” at the hands of these inexperienced millennials who have gotten lured in to taking oversized risks in equities for the first time in their lives.
“They are buying bullish call options that expire inside two weeks. There was ($500 billion) of bullish call options bought in a four-week stretch by small retail traders,” Smead said. “In ’99 it was $100 billion, in ’07, it was $100 billion.”
In other words, we’ve reached next-level buying fever in U.S. stocks. When it turns, it could get ugly, according to Smead, who said that despite the accommodative monetary policy, the Federal Reserve ultimately “can’t save a stock market” – especially one that’s this top heavy.