US stocks finish the day in the red

Well, it was fun while it lasted. US stocks ended the day in the red and neither the S&P 500 nor the Nasdaq Composite reached new record highs.

The Federal Reserve’s July meeting minutes reminded the market that the recovery remains fragile and that its path will depend on how well we deal with the virus in the future. That put a damper on things.

Boeing found a buyer for the troubled 737 Max for the first time in nine months, a period during which it had more than 400 orders for the plane canceled.

Boeing announced that it received two firm orders and options to buy two additional 737 Max 8 jets from Enter Air, a Polish airline.

“Despite the current crisis, it is important to think about the future,” said Grzegorz Polaniecki, general director of Enter. “Following the rigorous checks that the 737 Max is undergoing, I am convinced it will be the best aircraft in the world for many years to come.”

The plane has been grounded since March of 2019 following two fatal crashes that killed 346 people. Since then, Boeing only received firm orders for 30 of the jets last November at the Dubai air show.

With the downturn in global air travel and airlines scrambling to preserve cash, Boeing’s customers have been canceling or delaying orders for all manner of jets, chief among them the 737 Max.

Still, even with the canceled orders and the near halt in new 737 Max orders, Boeing has a backlog of more than 3,500 orders for the troubled jet.

The Federal Reserve published the minutes of last month’s monetary policy meeting, and the main message is clear: Unless we get a handle on Covid-19, the economic recovery won’t be a cake walk.

Members of the Federal Open Market Committee “generally agreed that prospects for further substantial improvement of the labor market would depend on a broad and sustained reopening of businesses. In turn, such a reopening would depend in large part on the efficacy of health measures taken to limit the spread of the virus.”

In short: the jobs market won’t improve until businesses are fully reopened, but that won’t happen until we have the virus under control (be that in form of effective treatment of a vaccine).

The central bankers also reiterated that the government needed to do more, and that additional aid to support vulnerable families and thereby the economy as a whole was still necessary going forward.

The federal booster to regular unemployment benefits of $600 a week ran out at the end of July and Congress hasn’t been able to agree on a path going forward, leaving millions of Americans struggling to make ends meet.

Thursday’s jobless claims report is expected to continue what economists hope is a new trend: Fewer than a million Americans claiming unemployment benefits for the first-time.

Last week’s Department of Labor report cited 963,000 applications for unemployment benefits. It was the first time they had been below a million since March. Economists expect the same will hold true tomorrow, with 925,000 initial applications in the week ending August 15.

Continued claims filed for at least two-weeks in a row are expected at 15 million, roughly half a million fewer than in the previous week.

After months of looking at economic data from the pandemic, these numbers might not seem as shocking anymore as they really are. But even though the unemployment situation is improving, we must remember that there is a lot of work left to be done to get America’s labor market back on its feet.

Also worth bearing in mind: people who are filing for unemployment aid now are no longer receiving the $600 weekly boost Washington put in place as part of the CARES Act. Instead, benefits have dwindled to their regular amount, which is commonly less than workers made on their salaries.

Valaris, the world’s largest offshore rig owner, filed for bankruptcy Wednesday – the latest evidence of the deep slump in the oil-and-gas industry.

Formerly known as Ensco Rowan, Valaris (VAL) sported a market value north of $4 billion in late 2018. But the crash in oil prices during the pandemic caused drilling activity to dry up around the world.

Valaris’s market valuation dwindled to just $66 million before trading was halted Wednesday. The stock is down 95% this year alone.

“The substantial downturn in the energy sector, exacerbated by the COVID-19 pandemic, requires that we take this step to create a stronger company able to adapt to the prolonged contraction in the industry,” Valaris CEO Tom Burke said in a statement.

Valaris reached a deal with creditors to slash its debt by more than $6.5 billion and receive $500 million in financing to keep the company in operation.

After a trip through bankruptcy court, Valaris said it will have “one of the best balance sheets” in the offshore drilling industry.

The bankruptcy follows filings in recent months by fracking pioneer Chesapeake Energy (CHK), former shale star Whiting Petroleum (WLL) and offshore rig contractor Diamond Offshore (DO).

The S&P 500 and the Nasdaq Composite are both on track for another all-time closing high today, exceeding the records they set Tuesday.

But to some, this rally is worrying.

“Right now it’s the disconnect between the fundamentals of the economy and the market prices,” said Phil Bak, founder and CEO of SecLenX.

“We’ve seen the Fed run the stock market up to levels that it’s going to take years for the economy – even in a very positive recovery – to catch up to where the market is trading,” Bak told CNN’s Alison Kosik.

So, either the market will have to go down to where the economy is or investors will have to wait until the economy catches up to the market.

The stock rally came on the coattails of unprecedented fiscal and monetary stimulus in response to Covid. Interest rates were slashed to near zero in March and they will likely stay there for a long time.

Given all this, it’s a good time to be in alternatives, Bak said.

“Low-correlated investments, strategies and asset classes” are looking attractive, including “previous metals, land and lifestock and diversifying outside the United States.”

The pandemic has changed how people exercise and turned many people into runners.

“At first we didn’t know how [Covid] was going to affect participation,” said Jim Weber, CEO of Brooks Running, a subsidiary of Berkshire Hathaway (BRKA).

Although the competitive sport of running has shut down, the type of runner who goes for a jog for their own physical and mental health benefits as increased “probably by 50% from where it was a year ago,” Weber told Alison Kosik on the CNN Business digital live show Markets Now.

The company’s sales have increased because “people are getting up and setting one foot in front of the other,” Weber said.

Even though 92% of its 2019 revenues was through traditional retailers, the industry as adjusted with curb-side pickups. In the long run, “we’re actually bullish on the retail experience when it comes to running,” Weber said, as local stores continuing to be important.

The pandemic has forced entrepreneurs to rethink their businesses – and their paths going forward.

Some even put off raising capital until 2021 on the back of the pandemic, said Anu Duggal, founding partner of the Female Founders Fund, on CNN Business’ digital live show Markets Now.

“We’re hoping that 2020 doesn’t prove to be a year that really sets us back,” she said.

That said, some sectors have also outperformed their targets.

“Certain sectors like beauty and consumer good were actually performing better than expected,” Duggal said.

US Treasury bonds are a favorite investment around the world because they are highly liquid. Private investors buy them, and so do foreign countries. But in June, foreign flows into American bonds slowed.

While the private sector continued to buy, the official sector — meaning foreign countries — didn’t, according to preliminary numbers from the Treasury Department. (Private purchases of long-term securities totaled $39.3 billion, while official sales were $13 billion)

According to estimates from Goldman Sachs (GS), France was the biggest net buyer of US Treasuries in June, while the United Kingdom was the biggest net seller.

As a region, Asia was a buyer, but China resumed net sales, the bank said Tuesday.

It only took Apple (AAPL) about two years to go from being the first American company to top the $1 trillion market valuation mark to becoming America’s first $2 trillion giant.

Apple surpassed the $2 trillion market cap mark Wednesday morning, continuing an iMazing run for the stock – which has now gained nearly 60% this year.

The iPhone maker passed Saudi Aramco, which was briefly worth $2 trillion late last year, to become the most valuable company on the planet last month.

Apple could soon have some more company in the $2 trillion club though. Microsoft (MSFT) and Amazon (AMZN) are approaching the magical milestone too.

Read more about Apple’s historic day