Jun 14, 2020
CAT sales collapsed by 27% in April as the global economy plunged into recession as orders dried up, The May sales is where everything really began to spiral out of control causing new sales to plummet 36% this was the largest collapse since the great recession. The thing about Catapillar is it traditionally has been view as a bellwether for the greater economy and a collapse in sales signifies the recovery may be further out of reach that what is being sold. The next subject is a very large mall operator named CBL which recently has become a real retail favorite since it shares began to fall. The thing is not everything that is cheap is actually a good deal and investors should not be so quick to assume this is the same economy we had before everything began to collapse. CBL has already missed a debt payment meaning it’s closer to bankruptcy and after the mall owner only collected 27% of rents in April so it’s between a rock and a hard place right now. The craziest part is since mid-March retail investors have dogpiled into this stock and have more than doubled their position. Retail investment, in general, has soared since everyone lost their jobs as investment accounts have increased more than 300% at a time the US has entered a severe recession. The difference this time is the economy has entered a recession and typically the stock market doesn’t rise during a recession it’s likely the retail investors have helped propel stock prices higher on hopes of a V-shaped recovery.