S&P Chief Economist Says $2.1 Trillion More Spending Ought to Do The Trick
When is there ever too much government spending? According to S&P chief economist Beth Ann Bovino, it looks like never, because she wants $2.1 trillion more in government spending, despite multitrillion dollar deficits already that only look set to get worse. She wants this mammoth spending on infrastructure, claiming that somehow there is a return of 2.7, meaning that for each dollar borrowed, the US economy would get $2.70 back. Which raises the question, why not spend $21 trillion and get even more back? That would only double the national debt, which doesn’t seem so crazy in the current context. She claims that 64% of highways and 25% of bridges need upgrades, and that upgrading them would save the economy, similar to Roosevelt’s public works projects in the middle of the Great Depression while people were hungry for actual food, rather than newly paved roads.
Trump, Unhappy With China’s Sanctioning Hong Kong, Sanctions Hong Kong
China is upset with the US for attempting to harm Chinese interests, in Beijing’s words, criticizing President Trump’s decision to begin ending special treatment for Hong Kong in terms of visa requirements and extradition arrangements and other perquisites of being part of a former British colony. If these arrangements are brought to an end, it could harm business connections between the US and Hong Kong, as executives would not be as easily able to fly back and forth without restrictions. “The announced measures severely interfere with China’s internal affairs, damage U.S.-China relations, and will harm both sides. China is firmly opposed to this,” saod Chinese foreign ministry spokesman Zhao Lijian. “Any words or actions by the U.S. that harm China’s interests will meet with China’s firm counterattack.” Hong Kong stocks don’t seem to mind too much yet, the Hong Kong ETF (NYSEARCA:EWH) up close to 1% in premarket trade.
Internet Usage Bursting At Seams
What with the riots and the lockdowns, which are pretty much exact opposite things, global internet usage is reaching new records. On the one hand are people at home afraid of the virus watching news about the virus and shopping online. On the other hand are people afraid of the riots, watching news about the riots and shopping online. Back in April overall internet traffic had already grown by more than 40 percent from February. Video streaming accounts for nearly 60 percent of all internet traffic these days, social networks 11% and general web browsing 8%. Google’s (NASDAQ:GOOGL) YouTube is the winner of the coronavirus era so far, nearly doubling its share of total internet traffic from 9% last year to 16% this year so far. Gaming traffic has also doubled.
In this environment, internet marketing has become even more competitive and expensive, and important, with prices for things like SEO web design and affiliate marketing campaigns swelling to new records for share of total marketing budgets.
Food Prices Soar Across the United States
The cost of meat, eggs, and potatoes are up across the United States. Month to month food prices have skyrocketed by the most in 46 years, and meat prices in particular are expected to remain high due to the ongoing closure of slaughterhouses of food conglomerates like Tyson Foods. (NYSE:TSN). Prices spikes for eggs and flour have eased slightly, but carrots, potatoes and other vegetables are volatile due to transportation issues according to the AP. Prices are expected to remain elevated, and if the current riots across urban America continue, they could rise even further. Shortages are being reported, which means prices have yet to reach market clearing levels. Food prices in April jumped 2.6%, with most of the increase in meats, poultry, fish and eggs. A nearly 3% rise in baked goods is the largest ever recorded by the Labor Department.
China Halts US Soybean Purchases
Speaking of food prices, they’re about to go up in China again. That tremendous order of United States agricultural products as part of a Phase I Trade Deal by China that President Trump used as a call to get farmers to buy more equipment, may be backfiring as the Trump Administration seeks to place the equivalent of sanctions against Hong Kong. Hong Kong’s wrongdoing that triggered this is its being subject against its will to Beijing’s National Security Law, which gives Beijing more power to interfere there and quell protests. As the attacks on Hong Kong continue from both sides, China has now halted some US farm imports, as state-run companies have paused purchases of soybeans and pork products. China’s food inflation is at its highest levels since prior to the 2008 financial crisis. Caterpillar (NYSE:CAT), which should be negatively affected by a cancellation like this, is trading higher anyway in the premarket.
