It’s been years since investors have been this fearful of a stock market crash, Nobel-winning economist warns
‘No one knows the future, but given the general lack of investor confidence amid a pandemic and political polarization, there is a chance that a negative, self-fulfilling prophecy will flourish. This highlights the importance of being well diversified in asset classes — including Treasury securities, which are safe — and not overexposed to U.S. equities now.’
That’s Robert Shiller, a Nobel Prize-winning economist and Yale professor, urging a cautious approach to investing in the top-heavy stock market in an op-ed for the New York Times.
“The coronavirus crisis and the November election have driven fears of a major market crash to the highest levels in many years,” Shiller wrote. “At the same time, stocks are trading at very high levels. That volatile combination doesn’t mean that a crash will occur, but it suggests that the risk of one is relatively high. This is a time to be careful.”
He said he reached this conclusion based on what he’s seeing in several stock-market confidence indexes that he began to develop decades ago. Specifically, his Crash Confidence Index is sounding the alarm bells. Shiller said he asks investors this question: “What do you think is the probability of a catastrophic stock market crash in the U.S., like that of Oct. 28, 1929, or Oct. 19, 1987, in the next six months, including the case that a crash occurred in the other countries and spreads to the U. S.?”
CNBC/Yun Li and Fred Imbert
The Dow is set to open 300 points lower amid record daily U.S. Covid cases
Futures tied to major U.S. equity benchmarks fell on Monday as coronavirus infections jumped and negotiations for a fiscal stimulus package before the election came down to the wire.
Dow Jones Industrial Average futures fell 294 points, or 1.1%. The move implied an opening drop of more more than 300 points. S&P 500 futures lost 1%. Nasdaq 100 futures fell 0.8%.
The decline in futures came amid a record surge in new coronavirus cases in the U.S. The country saw more than 83,000 new infections on both Friday and Saturday after outbreaks in Sun Belt states, surpassing a previous record of roughly 77,300 cases set in July, according to data from Johns Hopkins University. The data also showed the country has reported an average of 68,767 cases per day over the past seven days, a record.
White House chief of staff Mark Meadows said Sunday that the U.S. will not get control of the pandemic amid the surge in new cases.
1.3 Million American Households Could Owe $7.2 Billion In Unpaid Rent By End Of This Year
As the clock ticks closer to the end of the national eviction moratorium, which bars landlords from evicting residents through December 31, 1.3 million renter households will owe $7.2 billion in unpaid rent by December, translating to about $5,400 each, according to a new 28-page report from the Federal Reserve Bank of Philadelphia that quantifies the immense financial strain that American renters who have lost their jobs due to the pandemic are under.
The staggering rent debt is in spite of government initiatives to supplement lost income for unemployed Americans–including the supplementary $600 per week benefit provided by the CARES Act from April through July 31, and the $1,200 stimulus checks sent to households in April–all of which the study finds were “very effective,” except that even many people who needed the relief weren’t eligible for it or couldn’t access it, the Fed notes.
The findings also show how disproportionately affected communities of color have been by the pandemic: Although households of color make up less than half of all renter households, they account for 58% of households projected to have rent debt by the end of December and 59% of all rental debt accrued by that time, the study says. The study concludes that many renter households likely will need additional support in order to avoid eviction once the national moratorium expires.
Fox Business/Jonathan Garber
Big Oil warns of ‘deep depression’ under Biden energy plan
The oil and gas industry is mounting a vigorous counter-attack against Democratic presidential candidate Joe Biden’s plan to lead a transition away from fossil fuels if he defeats President Trump.
“Six-dollar gas is coming if Trump isn’t re-elected,” Continental Resources founder Harold Hamm told FOX Business on Friday after the former vice president outlined his approach to energy policy at Thursday night’s debate in Nashville, Tenn.
“If Biden is elected and his plan on energy is adopted, he will send America into a deep depression and millions of jobs will be lost in Texas, Pennsylvania, Ohio, Michigan, Oklahoma, North Dakota and we will once again be beholden to foreign rogue regimes for our energy,” Hamm argued.
The U.S. oil and gas industry supports 10.3 million jobs, which pay an average salary of $101,181, according to a study released by PricewaterhouseCoopers and the American Petroleum Institute in 2015, the most recent report available. The industry contributed $1.3 trillion to the U.S. economy that year.