21 January 2020

1) As Boeing’s 737 MAX crisis continues, Boeing is talking with banks to borrow $10 billion dollars or more to finance the rising cost from its 737 MAX woes. So far, the company has borrowed $6 billion dollars to cover its cash-sapped operations after having suspended production of the planes this month. The crisis which grounded the 737 MAX is now entering its eleventh month.

2) The global auto industry continues its downward slide into deeper recession with sales down 4%. Automakers are struggling to find buyers in China and India, with the downward trend expected to continue this year. The number of vehicles sold dropped from 94.4 million down to 90.3 million last year, with the record high in 2017 of 95.2 million. The IMF says new autos account for 5.7% of economic output and 8% of the goods exported. Autos are the second largest consumer of steel and aluminum.

3) Because of unrest in Iraq and Libya, oil rose to its highest in more than a week. Oil prices have always been heavily influenced by geopolitical instability, especially those countries heavily involved with oil exports. Lybia has Africa’s largest oil reserves, with their Sharara oil field being Lybia’s largest by pumping 300,000 barrels a day.

4) Stock market closings for – 20 JAN 20:

Dow              29,348.10    up    50.46
Nasdaq          9,388.94    up     31.81
S&P 500         3,329.62    up    12.81

10 Year Yield:    up   at    1.84%

Oil:    down   at    $58.70