• Market Crumbs

Americans Are Worried About Their Finances

Image via Ali Yahya on Unsplash

With the outbreak of COVID-19 causing the economy to come to a standstill, causing the stock market to sell off and job losses to spike, it shouldn't come as a surprise that many Americans are worried about their financial situation.

Thanks to the results of Gallup's annual Economy and Personal Finance poll which were released yesterday, we can quantify exactly how worried Americans are.

Despite already having a pessimistic view of their personal finances, 50% of Americans say their financial situation is getting worse, the highest reading since the survey began two decades ago. In April 2008, leading up to the Great Recession, Americans also viewed their personal finances as getting worse.

49% of respondents describe their financial situation as either "excellent" or "good," down from 56% last year. 15% of respondents describe their financial situation as "poor," the same percentage as last year. However, the percentage of respondents who view their financial situation as positive is still higher than it was during and immediately after the Great Recession.

18- to 29-year-olds are overwhelmingly the least optimistic on their financial situation and their outlook on the future. 38% of 18- to 29-year-olds rate their financial situation as either "excellent" or "good," down from 51% last year. Only 46% of 18- to 29-year-olds believe their financial situation is getting better, down from 79% a year ago.

With job losses spiking as a result of the coronavirus, 12% of respondents cited unemployment or job loss as the largest financial problem they face, up from just 3% of respondents last year. The 12% figure is the highest in the history of the survey. 25% of respondents believe it is likely they will lose their job within the next 12 months, up from just 8% last year.

Americans are increasingly becoming worried about their ability to meet their financial obligations. The number of respondents who said they are worried about paying their rent or mortgage costs jumped 9% from last year to 39%. The number of respondents who worry about not having enough money to pay their monthly bills jumped 7% over the same period to 43%. The largest concern is not having enough money for retirement, as 59% of respondents cited this as a concern.

As mentioned earlier, none of this data should be too surprising given what is currently happening. Either way, it's interesting to see what the majority of people are thinking about their financial situation as this unprecedented crisis continues to unfold.

Leftover Crumbs

  • Home sales tank. Sales of existing homes fell 8.5% in March compared with February to an annualized pace of 5.27 million units, according to the National Association of Realtors' seasonally adjusted index. "The first half of March held on reasonably well, but it was the second half of March where we saw a measurable decline in sales activity," chief economist for the NAR Lawrence Yun said. Yun believes home sales could fall between 30% and 40% in the coming months.

  • Coca-Cola sees demand plunge. Despite starting the year with "solid momentum," Coca-Cola said global sales volumes have dropped 25% this month as a result of COVID-19. Despite seeing consumers stockpile its products, Coca-Cola cited closures of businesses such as movie theaters, restaurants and stadiums for causing the drop. "The ultimate impact on the second quarter and full year 2020 is unknown at this time, as it will depend heavily on the duration of social distancing and shelter-in-place mandates, as well as the substance and pace of macroeconomic recovery," Coca-Cola said.

  • Who took the money? A list of the publicly traded companies that have taken funds from the Paycheck Protection Program has been released. At least 75 publicly traded companies took a combined $300 million in loans from the program. According to Morgan Stanley, at least $243.4 million of the total $349 billion available has been allocated to publicly traded companies. At least 15 of the companies that have taken funds from the program intended for small businesses have a market capitalization exceeding $100 million.

  • Comcast trims Peloton stake. Comcast's NBCUniversal has dumped about half of its stake in Peloton for about $178 million. NBCUniversal converted 10.3 million Class B shares into Class A shares and subsequently sold them. NBCUniversal still holds more than 5 million shares in Peloton. NBCUniversal was an early investor in Peloton, participating in private funding rounds in 2017 and 2018. Last year, Comcast reported that it had $184 million in unrealized gains in its Peloton stake.

  • Beyond Meat heads to China. Starbucks will begin selling Beyond Meat products at its locations in China, marking the first entry into the Chinese market for the company. Starbucks will offer three dishes using Beyond Meat's plant-based meat alternative. "Today we mark an important milestone as Beyond Meat launches in China, advancing our goal of increasing accessibility to plant-based protein globally," Beyond Meat CEO Ethan Brown said.