Retail's Comeback, "Zombie" Companies and the Fed Just Keeps Buying
CFA | SVP, Chief Investment Officer
1 Retail sales in May explode!
U.S. retail sales made the biggest jump on record in May and double what was forecast, regaining more ground than expected after unprecedented drops in the prior two months as states allowed more merchants to reopen.
2 Perpetually low interest rates are giving rise to “zombie” companies
One consequence of aggressive Fed support to credit markets and long periods of low interest rates is that these actions interfere with the process of creative destruction and keeps companies alive that would otherwise have gone out of business.
3 US Census survey – how has this pandemic affected American workers?
Half of US households have experienced loss of income because of COVID-19. But the extent to which US households have lost income varies greatly from state to state.
4 Is the Fed buying corporate bonds a good thing?
After the Fed announced their intentions to support liquidity in corporate bond markets, we’ve seen nearly $42 billion flow into corporate bond ETFs.
Your investments in securities, annuities and insurance are not insured by the FDIC or any other federal government agency and may lose value. They are not a deposit or other obligation of, or guaranteed by any bank or bank affiliate and are subject to investment risks, including possible loss of the principal amount invested. Past performance does not guarantee future results.
First Citizens Wealth Management is a registered trademark of First Citizens BancShares, Inc. First Citizens Wealth Management products and services are offered by First-Citizens Bank & Trust Company, Member FDIC; First Citizens Investor Services, Inc., Member FINRA and SIPC, an SEC-registered broker-dealer and investment advisor; and First Citizens Asset Management, Inc., an SEC-registered investment advisor.
Brokerage and investment advisory services are offered through First Citizens Investor Services, Inc., Member FINRA and SIPC. First Citizens Asset Management, Inc. provides investment advisory services.
Bank deposit products are offered by First Citizens Bank, Member FDIC.