1 August 2019

1) General Electric suffered a loss last quarter despite two previous profitable quarters, a result of the restructuring cost of its electric power division and the grounding of Boeing’s 737 MAX. GE provides the jet engines used on the 737, which Boeing has reduced production of. The grounding of Boeing has drained off more cash than expected, but General Electric forecast a profitable year for 2019.

2) President Trump has fulfilled his campaign promise to lower drug prices by creating a pathway to allow Americans to legally and safely import lower cost prescription drugs from Canada. This reverses the opposition from federal health authorities, despite the public outcry over high prices for drugs in America. It’s uncertain when imports can start as the plan has to go through the time consuming regulatory approval and possible court challenges from drug makers. The opening of the door for cheaper drugs and keeping it open still faces an up hill battle with the political organizations of the pharmaceutical industry.

3) In an effort to keep the American economy on track, the Federal Reserve has reduced the benchmark interest rate by a quarter point to about 2.25%. This is a modest and widely expected move intended to keep the economy healthy in face of the trade war with China and the slowing economic growth overseas. In addition, the feds signaled that the cental bank is ready to make more cuts to stimulate the economy if necessary. A higher interest rate makes for a stronger dollar, a disadvantage for international trade. Wall Street anticipates as many as three more cuts this year, while in addition to the rate reduction, the feds will stop selling off assets this August, two months earlier than expected.

4) Stock market closings for – 31 JUL 19:

Dow             26,864.27    down    333.75
Nasdaq           8,175.42    down      98.19
S&P 500          2,980.38    down      32.80

10 Year Yield:    down   at    2.02%

Oil:    down   at    $57.90