31 May 2019

1) Cattle producers are now using DNA testing to develop higher prime herds that produce a higher quality of beef. DNA testing allows predicting which bulls and cows have the characteristics that will improve herds to produce higher quality meat products. Where once there was only the ‘practiced eye’ of the stockman to judge which cattle would produce the product with breeding, the DNA techniques has vastly accelerated the process, with the expectation that the vast majority of U.S. herds will become high quality beef in just a few years.

2) The nation wide bus coach service Greyhound is up for sale. The holding company FirstGroup is facing demands for strategic changes by investors for a return on their investment. Greyhound is the only remaining nation wide intercity bus carrier, which carries about seventeen million passengers a year.

3) An executive order being issued by President Trump will require greater price transparency in the health-care industry, is encountering stiff industry opposition. One point of contention is a provision to slow the consolidation of medical facilities thereby maintaining competition resulting in lower cost. Health insurers and hospitals don’t want to publicly share the rates they have agree to amongst themselves.

4) 30 MAY 19 Stock market closings:

Dow           25,169.88    up    43.47
Nasdaq        7,567.72    up    20.41
S&P 500       2,788.86    up      5.84

10 Year Yield:    down   at    2.23%

Oil:    down   at    $56.51

30 May 2019

1) Presidential hopeful Bernie Sanders is pushing for measures to give workers a greater ownership in companies, thus transferring power and influence. This would be accomplished by requiring companies to periodically transfer stocks to a fund controlled by employees, giving workers a vote in managing the company while also receiving dividends. Nothing has been said on how to prevent companies from simply moving off shore, as has happened in the past.

2) Tesla, the manufacturer of electric automobiles, is gearing up for production of the Model Y, a crossover SUV with a simpler interior and longer range batteries with a reported 400 mile range. Tesla stock fell more than 10% last week over concerns of demand, profitability and the China-U.S. trade war.

3) Reportedly, China will use rare earths to retaliate against the U.S. in the trade war. This is a group of 17 chemical elements used in a wide range of products, from consumer electronics to military equipment. Chinese newspapers are filled with rhetoric asserting that the U.S. will have no option but to acquiescent to China’s economic policies. Eighty percent of U.S. rare earth imports come from China. However, this strategy by China may accelerate mining of rare earths in California and Australia.

4) 29 MAY 19 Stock market closings: Markets down over concerns of slowing economic growth.

Dow              25,126.41    down    221.36
Nasdaq           7,547.31    down      60.04
S&P 500          2,783.02    down      19.37

10 Year Yield:     down   at    2.24%

Oil:     up   at    $59.21

29 May 2019

1) Reports continue of a General Motors and Ford merger in the near future, both are in deep financial trouble. The proposed merger would make the new company the third largest in the world, behind Toyota and Volkswagen. Car sales have flattened in the U.S. and are dropping in China, which are the two largest car markets in the world. There are also questions of how successful Ford can enter the electric and hybrid car markets.

2) Amazon, the worlds largest retailer, is starting to purge many of its small vendors, and concentrate on large major brands like Lego, Procter & Gamble and Sony to better compete with the large traditional retailers such as Target and Walmart. This will be one of the biggest shifts in Amazon’s strategy since it started using independent sellers, and is scaring the daylights out of many smaller companies.

3) The prices for homes is rising at its slowest pace in six years, down 2.7% from last year’s 3%. Price gains in hot cities like San Francisco have cooled, which is causing sellers to pull in their price increases. The home and auto segments of the economy constitute one half of the U.S. economy.

4) 28 MAY 19 Stock market closings:

Dow              25,347.77    down    237.92
Nasdaq           7,607.35    down      29.66
S&P 500          2,802.39     down     23.67

10 Year Yield:    down   at    2.27%

Oil:    down   at    $59.06

28 May 2019

1) Some young people with outstanding student debts are moving abroad where cost of living is much lower and debt collectors have little to no powers. One former student has moved to a concrete house in India and now lives on $50 a month, while hoping to never again set foot in a Walmart. The strategy of abandoning America to avoid student loans is spreading via social media and the internet.

2) The crypto-currency Bitcoin nears $9,000 dollars as it breaks it highest level this year, but is still a long way from its 2017 high of $19,000 dollars. Other crypto-currencies are also up sharply , and with the renewed interest in the past few weeks, their prices are up over 140% this year. Other companies, including Facebook, are reportedly coming out with new crypto-currencies to offer consumers.

3) Democratic candidate Bernie Sanders, the 2020 party nomination for president, is proposing a plan to raise $2 trillion dollars by taxing Wall Street trading. The senator has introduced a bill that would tax trading of stocks, bonds and derivatives to raise between $776 billion and $2.4 trillion dollars over the next ten years. He would use this money to pay for his Medicare for all and free public college, which is the centerpiece for his presidential bid.

4) 27 MAY 19 Stock market closings:

Dow                25,585.69    up    95.22   
Nasdaq              7,637.01    up      8.73
S&P 500             2,826.06    up      3.82

10 Year Yield:    up   at    2.32%

Oil:    up   at    $59.24

27 May 2019

1) A second major newspaper, the Reading Eagle of Pennsylvania, has been bought out and all of its 221 employees laid off, less than a month after the same thing happened to the New Orleans Times-Picayune. It is reported that within the next five years all the major newspapers will fold up, displaced by technology, because the print media is unable to compete with newer news distribution technologies.

2) Sears, after waves of closing its traditional stores, has embarked on a new marketing strategy with the opening of its first ‘Home & Life’ stores, smaller format stores selling mainly mattresses, appliances and connected home products. Sears is pinning its future on this marketing strategy to reclaim ground from the lost of their old department stores, at a time when thousands of traditional box stores are being closed across the county.

3) The motorcycle manufacture Harley-Davidson is taking a new but risky strategy to rejuvenate its sales, by using loans to reach new riders. Their revenues had been coming from the more affluent baby boomers who are better able to purchase their product. In addition to coming out with new models, including an electric bike that target the younger generation, the company will use in-house financing to make it easier for young people to purchase their product.

4) 24 MAY 19 Stock market closings:

Dow                     25,585.69    up    95.22
Nasdaq                  7,637.01    up      8.73
S&P 500                 2,826.06    up      3.82

10 Year Yield:     up   at    2.32%

Oil:    up   at    $59.02

24 May 2019

1) Oil prices dropped liked a brick in its worst day of trading in 2019, the result of jitters over trade with China. The price of oil serves as a barometer to the world economic outlook, with a slowing of the world economy translating into a lesser demand for oil and therefore lower oil prices. The situation is aggravated by a surprise jump in American crude stockpile, with inventories up by 4.7 million barrels. The stock market reflected the world economic situation by massive drops too.

2) Panasonic electronics is joining a growing list of firms distancing themselves from Huawei, by stopping their supplying of some electronic parts to Huawei. Companies are declining to do business with Huawei because of warnings from U.S. intelligence that Huawei presences a security risk with their new 5G technology, which will allow the Chinese military to use smart phones to gather foreign intelligence.

3) President Trump announced $16 billion dollars in farm aid to offset the losses by farmers in the ten month long trade war. Distribution of aid payments will be based on where they farm rather than what crops they till. Farmers were a key constituency that help bring victory to President Trump, and they have been the hardest hit from the trade wars with China. China used to import 60% of U.S. soy bean production.

4) 23 May 19 Stock market closings: Dow tumbles 400 points as trade war worries continue.

Dow            25,490.47     down    286.14
Nasdaq         7,628.28     down    122.56
S&P 500        2,822.24     down      34.03

10 Year Yield:    down   at    2.30%

Oil:    up   at    $58.19

23 May 2019

1) British Steel, Britain’s second biggest steel maker, collapsed on Wednesday. This leaves 5,000 jobs directly at risk, while also threatening another 20,000 at suppliers. The company had been seeking a $95 million dollar loan to cover losses suffered because of European orders lost from the uncertainty of Brexit. European steel manufactures have been under pressure from Chinese steel manufactures, with Europe taking antidumping measures against China.

2) The collapse of airline Wow Air is having a detrimental effect on Iceland’s economy. The airline had turn tourism into Iceland’s major economic boom which pulled Iceland out of its financial collapse over a decade ago. In addition, Iceland has suffered a disastrous fishing season. With Wow Air out of business, tourism is expected to drop dramatically.

3) The Dollar General store chain is making its millions of profit via catering to those in the lower economic strata. About 57% of Dollar General’s customers come from households of less than $49,000 yearly income, with 30% less than $25,000. The company has been able to sidestep the recent meltdown of retailing that has ravaged other big retailers, despite having a minimum of e-commerce.

4) 22 MAY 19 Stock market closings:

Dow             25,776.61    down    100.72
Nasdaq         7,750.84     down      34.88
S&P 500        2,856.27     down        8.09

10 Year Yield:    down   at    2.39%

Oil:     down   at    $61.32

21 May 2019

1 ) Ford Motor Company announces a 10% reduction in its work force by eliminating 7,000 jobs world wide. These jobs are salaried white-collar jobs, which are part of a major restructuring to eliminate bureaucracy and increase the number of workers reporting to each manager. Technologies allow large corporations to streamline their management staff and thereby reduce their staff.

2) The U.S. home sales fell unexpectedly in April with persistent weakness in lower-priced housing market. This market segment had been experiencing an acute shortage of properties. Economist had been forecasting a 2.7% rise in home sales, but the existing home sales dropped 4.4% from last year, making this the 14th straight year-on-year decrease in home sales. Existing home sales make up about 90% of U.S. home sales.

3) The United States Postal Service has started a two week test of commercialized autonomous vehicle technology to carry the mail cross country via robot driven semi-trucks. The test run is between Phoenix and Dallas with five round trips, each 2,100 long. Each test truck will have a safety driver on guard and an engineer. The test vehicles will travel the interstates through Arizona, New Mexico and Texas. To drive the same route would require multiple human truck drivers.

4) 21 MAY 19 Stock market closings:

Dow              25,877.33    up    197.43
Nasdaq          7,785.72    up       83.35
S&P 500         2,864.36    up       24.13

10 Year Yield:     up   at    2.43%

Oil:    down   at    $62.97

THE FUTURE IS NOW: SELF DRIVING FREIGHT BEING USED BY USPS

By: Economic & Finance Report

USPS has entered the autonomous freight hauling industry. For some who may not know what I am referring to? What I am stating is that the United States Parcel Service will be testing driver less freight trucks, for hauling their parcels. They will be entering a market that technology giants such as Google, Tesla, Uber, Lyft and other transportation manufacturers have also ventured into, such as Ford, General Motors, Chrysler, to name a few.

USPS has indicated these “self driving freight” vehicles are essential in delivering packages in a timely fashion, saving time in delivering parcels and also being cost effective at the same time.

The United States Parcel Service will be utilizing the service of TruSimple (a San Francisco based tech startup) in customization and evaluating the presence the free wheeling driver-less freight vehicles, particuraly to enhance production and safety developments. Here is to fearless driving. -SB