26 February 2021

1) The pandemic has been especially hard on small business, who don’t have the cash reserves of large corporations. They face a number of challenges they need to meet in order to survive. Here is a brief list of challenges they face- 1) The Ability to Transition to a Digital First World 2) Lack of In-Person Networking Events 3) Forward Planning is Difficult 4) Leaving Brick and Mortar Stores. 5) Lacking Work Life Balance 6) Increased Shipping Costs 7) Lacking Creativity 8) Blips in Production 9) Pressure to Perform 10) Long Term vs. Short Term Content

2) More than 4 million barrels of daily oil output, which is almost 40% of the nation’s crude production, is now offline because of the deep freeze weather. One of the world’s biggest oil refining centers has seen its output drastically cut back. Experts say the market is underestimating the amount of oil production lost in Texas due to the bad weather. Crude oil briefly surged above $65 a barrel, a level not seen since last January. Supply tightness has also soared, where just ten months ago, the price slumped below $16 because of a demand shock caused by Covid-19. Estimates for how long the outages may last have gotten progressively longer as analysts try to figure out the time span involved in thawing out infrastructure, especially in those areas where freezing weather isn’t the norm. That means ever more barrels are being removed from the global market, resulting in a surge in price of crude in other parts of the world.

3) Another long time retailer chain has filed for bankruptcy, as the Covid-19 pandemic makes the retail industry the site of regular closures and financial woes. Now, regional department store Belk, the nation’s largest privately owned department store, can be added to the ‘dead’ list, with the closing of all its stores. The bankruptcy filing for the 133 year old retailer comes about half a decade after the founding Belk family sold the company to its current owners for $3 billion dollars. The pandemic directly resulted in the drastic declines in the retailer’s sales, revenue, and liquidity. Unfortunately, Belk is far from the only shopping mainstay to struggle under the pressures of the pandemic. The company’s bankruptcy plan was filed in a Houston courtroom on Feb. 23, which relieves Belk of $450 million worth of debt and create an infusion of capital for the business.

4) Stock market closings for – 25 FEB 21:

Dow 31,402.01 down by 559.85
Nasdaq 13,119.43 down by 478.53
S&P 500 3,829.34 down by 96.09

10 Year Yield: up at 1.52%

Oil: down at $63.31

25 February 2021

1) Nikola Corp. announced that its long-range fuel-cell semi truck gets as much as 900 miles on a tank of hydrogen gas, and is due to come out in 2024. The Nikola Two fuel-cell vehicle would go at least 750 miles on a tank of hydrogen, while its Tre shorter-range fuel-cell truck, can run 500 miles, and remains on schedule to start production in the second half of 2023. Nikola said that their first Tre FCEV prototypes are scheduled to begin assembly in Arizona and Ulm, Germany, in the second quarter of this year and that testing and validation would continue into 2022. The Nikola 900-mile truck will have a sleeping cabin for drivers and a new chassis designed for North American highways.

2) From California to Indiana, aerospace to appliance manufacturers, American factories are struggling to procure cold-rolled steel. Manufactures are getting hit by a fresh round of disruption in the U.S. steel industry. Steel is in short supply and prices are surging. Unfilled orders for steel in the last quarter were at the highest level in five years, while inventories were near a 3-1/2-year low. The benchmark price for hot-rolled steel hit $1,176 per ton this month, its highest level in at least 13 years. Domestic steel prices have risen more than 160% since last August, leaving steel consumers in a quandary whether to absorb or pass along the increased cost. U.S. steel prices are 68% higher than the global market price and almost double China’s, even with prices in both China and Europe up over 80% from their pandemic-induced lows. But the price gap is so wide that even with a 25% tariff, it would be cheaper to import than buy from domestic mills. The United States imported 18% of its steel needs last year.

3) The global semiconductor shortage will slash earnings of General Motors and Ford Motor Co. by about one-third this year, as supply constraints hamper production and profits. The chip shortage will materially erode margins and could lower expected earnings before interest and taxes by as much as $2 billion for GM and $2.5 billion for Ford. GM’s EBITA margin could fall to 3.4%, while Ford’s could dip as low as 1.8%. Rising demand for the chips needed to build technologically advanced and connected vehicles has introduced a new set of challenges for the North American auto industry, with shortages triggering production cuts and temporary plant closures. Demand from consumer-electronic companies exacerbated the supply shortages amid the coronavirus pandemic.

4) Stock market closings for – 24 FEB 21:

Dow 31,961.86 up by 424.51
Nasdaq 13,597.97 up by 132.77
S&P 500 3,925.43 up by 44.06

10 Year Yield: up at 1.39%

Oil: up at $63.36

#THECASTPODCAST ep. #18 feat. LiBand: Louisiana Bandman

24 February 2021

1) The employees at Boeing Commercial Airplanes headquarters have been told to clear out their belongings as the coronavirus pandemic has increased the viability of working remotely. The aerospace giant has its Commercial Airplanes headquarters there and has hinted it could sell the facility as a cost cutting measure, although the company hasn’t unveiled its plans publicly. Boeing continually assesses the company’s entire portfolio of real estate property assets and adjusts the company’s footprint as the business environment evolves. Boeing Commercial Airplanes leadership will remain in the Puget Sound region. As Boeing adapt to new market realities and position for the future, they are taking action across the company in five key categories: infrastructure; overhead and organizational structure; portfolio and investment mix; supply chain health; and operational excellence. That involves a look at the costs of maintaining some office space. Boeing can offer more flexibility for their teammates with a combination of virtual and on-site workspace, while also ensuring that leaders and teams are closer to where the work is being done to support customers.

2) In late December, the activist investment firm Engine No. 1 announced that it had the support of the California State Teachers’ Retirement System for the firm’s slate of four candidates for election to the board of directors of Exxon Mobil Corp. Engine No. 1’s stake is less than 0.02%. Like many other oil producers, Exxon cites the role of carbon capture in reducing carbon emissions by the end of the century. Exxon’s stated goal of an 11% to 13% reduction in emissions by 2025 is misleading, according to the firm. That goal does not include what are called Scope 3 emissions, the carbon emitted from burning the oil and gas products a company sells. The investment firm claims that Scope 3 emissions account for about 83% of Exxon’s total emissions.

3) American made solar panels cannot compete with Chinese prices as the demand for green energy increases under the Biden administration. American companies must compete on quality, so must make sure that everything done here is up to a higher standard than anywhere else. Two thirds of all of the world’s solar panels are produced in China, with only a few companies that manufactures panels in the U.S. As it stands now, with America attempts to be self sufficient with energy, we are dependent on to China to supply the bulk of solar panels.

4) Stock market closings for – 23 FEB 21:

Dow 31,537.35 up by 15.66
Nasdaq 13,465.20 down by 67.85
S&P 500 3,881.37 up by 4.87

10 Year Yield: down at 1.36%

Oil: up at $61.32

23 February 2021

1) IBM and Delta have expanded a multi-year services agreement to migrate the airline’s applications to the cloud. Delta will move to a hybrid cloud architecture built on Red Hat OpenShift, and has been retooling during the COVID-19 pandemic with the aim of rebounding in 2021 and 2022 as travel picks up. Like other businesses, Delta has had to accelerate its digital transformation plans, by utilizing IBM’s services, hybrid cloud architecture and roadmaps to migrate its applications. In addition, Delta will also leverage IBM software such as CloudPaks and co-create applications.

2) The relentless rise in lumber prices shows no signs of subsiding as the pandemic keeps people at home, thereby spurring a home renovation boom. Prices have climbed almost 40% this year, fueling concerns for home builders. Surge in lumber prices is adding thousands of dollars to the cost of a new home and causing some builders to abruptly halt projects at a time when inventories are down. This demand has handicapped producers’ abilities to restock inventories quickly, further pushing prices up. There are fears that the rise in lumber will spark inflation bleeding into the home-buying market.

3) It appears that robots will soon have a big role in the construction industry, but until these machines can automatically prioritize tasks, project managers will still need to manually assess and appraise how the project is progressing. The construction industry’s productivity has trailed that of other economic sectors for decades, and there is a $1.6 trillion dollar opportunity to close the gap. AI and deep learning can make robotics useful across the construction industry. Now, AI startup Buildots has been taking its first steps to make this happen. Buildots attaches 360-degree cameras onto project managers’ hardhats to collect footage inside the construction site and analyze the image-data. On a typical site, there are tens of thousands of different construction activities. Tasks can be as small as installing a door handle, or as big as laying a brick wall. The Buildots platform automatically captures data using the cameras, and compares it to the designs and project schedule. It analyzes every electrical outlet, wall, or window, separately to determine its exact state relative to that expected on the plans. Deep learning models and algorithms such as the AI-based image stabilization engine, person data removal which removes people, phone/tablet screens, and paper notes and status classification can transform the visual data into insights. The AI system is able to assess if each item is completed or behind schedule and notify managers of what needs to be done.

4) Stock market closings for – 22 FEB 21:

Dow 31,521.69 up by 27.37
Nasdaq 13,533.05 down by 341.41
S&P 500 3,876.50 down by 30.21

10 Year Yield: up at 1.37%

Oil: up at $62.19

22 February 2021

1) There have been many reports about the crumbling weakness of American infrastructure, something that became apparent to many people with the recent hard freeze across the country. Example- in two hours Texas’s electric grid almost came crashing down. Electric demand for heat was soaring, then three coal plants followed quickly by a gas plant dropped out. If insufficient power came in, the grid wouldn’t be able to support the energy demand from customers and the other power plants that supply them, causing a cycle of dysfunction. As many as 5 million homes and businesses were abruptly thrust into frigid darkness for nearly four straight days as the crisis continued, ensnaring more than a dozen other states as far as away as California. Wind power was the first to go, as dense fog settled over turbine fleets, freezing on contact. Their blades iced over, so wind farms completely ceased. Then gas generation began declining. As the cold deepened, demand climbed sharply, hitting and then exceeding the state’s all-time winter peak. Gas well shut-ins in West Texas caused gas supplies to dip, reducing pressure at gas plants and forcing them offline, so virtually all of the generation falling off the grid came from coal or gas plants. In the span of 30 minutes, 2.6 gigawatts of capacity had disappeared from Texas’s power grid, enough to power half a million homes. Demand kept climbing, and plants kept falling offline. To stem the plunge, operators started shedding load. Operators removed 10 gigawatts of demand, essentially cutting power to 2 million homes in one fell swoop. As blackouts spread across the state, power was cut not only to homes and businesses but to the compressor stations that drive natural gas pipelines further cutting off the flow of gas supplies to power plants.

2) Now Maersk , the world’s largest shipping line, is taking a historic step toward not using fossil fuels for propulsion. About half of Maersk’s 200 biggest customers have set science-based or zero-carbon targets for their supply chains, or are in the process of doing so. The firm wants to have net-zero emissions from its operations by 2050, and helped found a research center focused on decarbonizing the industry. Getting hold of enough carbon-neutral fuel will be Maersk’s biggest challenge, given the current lack of availability.

3) Some experts are predicting that because of the rare convergence of three economic triggers, we are about to see a massive buying frenzy into the technology sector of the stock market. No details were shared.

4) Stock market closings for – 19 FEB 21:

Dow 31,494.32 up by 0.98
Nasdaq 13,874.46 up by 9.11
S&P 500 3,906.71 down by 7.26

10 Year Yield: up at 1.34%

Oil: down at $59.01

19 February 2021

1) U.S. retail sales surged in January, the most in seven months, beating all estimates. This suggests fresh stimulus checks helped spur a rebound in household demand following a weak fourth quarter. The value of overall sales increased 5.3% from the prior month after a 1% decline in December, and was the first monthly gain since September with all major categories showing sharp advances. The jump in retail sales could further embolden Republican opposition to President Biden’s $1.9 trillion stimulus plan, which the GOP considers too big. Even so, the Democrats can most likely pass the package without Republican votes, while the data might be evidence of how critical relief payments are to the economy and jobs.

2) The IRS has sent out all $600 stimulus payments, delivering more than 147 million second round stimulus checks, worth over $142 billion dollars. Some payments may still be in the mail, but otherwise, eligible Americans who did not receive the first or second payment can claim a Recovery Rebate Credit on their 2020 tax returns, which will be on line 30 of the 2020 Form 1040 or 1040-SR. The agency also noted that its ‘Get My Payment’ tool, which updated taxpayers on the status of their stimulus checks or deposits, was updated in January and will not be refreshed again for the second check.

3) The automaker Kia seems to be in quite a predicament. The automaker’s online services appear to have been severed from the outside world, with customers unable to start their cars remotely via Kia’s apps or even log into the company’s financing website to pay their bills. All signs pointed to a potential cyber attack against Kia, a ransom ware attack most likely, which is exactly what a new report is claiming. A report by information security news site Bleeping Computer seems to solidify that theory, as the publication shared a screenshot of an alleged ransom note asking Kia for the hefty tune of $20,000,000 to decrypt its files. The infection is believed to be the work of a group called DoppelPaymer by Crowdstrike researchers in 2019. Such threat actors routinely hunt big game for large pay outs, according to a security bulletin released by the FBI late last year. The note left behind mentions that the malware not only encrypted live data, but also the company’s backups, which more sophisticated attacks of this sort often prevent an easy restoration.

4) Stock market closings for – 18 FEB 21:

Dow 31,493.34 down by 119.68
Nasdaq 13,865.36 down by 100.14
S&P 500 3,913.97 down by 17.36

10 Year Yield: down at 1.29%

Oil: down at $59.79

18 February 2021

1) Demand for natural gas is currently at an unprecedented level according to Atmos Energy, because of freezing rain, snow, ice and dangerous travel conditions. Atmos Energy is asking all of its customers and businesses to conserve as much energy as possible. The Dallas-based natural-gas-only company is one of the nation’s largest distributors, serving about three million customers in more than 1,400 communities in nine states. This request comes after a new Winter Storm Warning was issued for all of North Texas while millions in the state remain without power. Atmos Energy has offered their customers a number of suggestions on how they can limit their energy usage.

2) Texas produces more energy than any other state, yet in the midst of the arctic freeze gripping the central U.S., Texas is faced with insufficient energy for its citizens. The arctic freeze gripping the central U.S. is raising the specter of power outages in Texas. The deep freeze this week in the Lone Star state, is causing power demand to skyrocket. The people of Texas relies on electricity to heat many homes, while at the same time, natural gas, coal, wind and nuclear facilities in Texas have been knocked offline by the unthinkably low temperatures. This situation could have wide-reaching implications as the US power industry attempts to slash carbon emissions in response to the climate crisis and move away from fossil fuels. Texas has been hit with life-threatening blackouts. More than 4 million people in the state were without power early Tuesday. Authorities defended the controlled outages, called rolling blackouts, which kept the grid from collapsing. The situation raises the question that if a state like Texas is now having trouble meeting its energy requirements, then how will the other states fare as America moves to a green energy environment.

3) Motorola Solutions has consolidated its video security and AI video analytics production into a newly renovated manufacturing facility in Richardson Texas, with plans to expand staffing in the coming year. The new facility opened in January housing 250 employees, with plans to expand by at least another 50 this year. Motorola acquired the camera and analytics company Avigilon, for a reported $1 billion in February 2018 and the Fort Worth based license plate recognition camera and software maker Vigilant Solutions in January for $445 million. In March 2019, it bought voice-over IP dispatch console maker Avtec, then Watchguard, which designs and sells in-car video systems and police body cameras to law enforcement agencies. Two additional California-based companies Pelco and Scotland-based IndigoVision were also added to Motorola’s growing security abilities.

4) Stock market closings for – 17 FEB 21:

Dow 31,613.02 up by 90.27
Nasdaq 13,965.50 down by 82.00
S&P 500 3,931.33 down by 1.26

10 Year Yield: unchanged at 1.30%

Oil: up at $61.66

17 February 2021

1) General Motors boldly announced plans to make only battery-powered vehicles by 2035, breaking from more than a century of internal combustion engines. However, the future for 50,000 GM workers, whose jobs could become obsolete far sooner than they realize, was not considered. The manufacturing of electric cars is simpler than conventional cars, which means fewer man-hours to make and therefore fewer jobs. Ford and Volkswagen executives estimate that EVs will reduce labor hours per vehicle by 30%. Electric vehicles contain 30% to 40% fewer moving parts than petroleum-run vehicles, which also translates into fewer failures, and in turn that also will mean fewer jobs for auto mechanics. Most vulnerable in the transition will be roughly 100,000 workers at plants that make transmissions and engines for gas and diesel vehicles.

2) Apple Inc is increasingly serious about entering the auto market because even though the smartphone is large, it is dwarfed by the opportunities in transportation. The smartphone market is worth about $450 billion dollars, while analyst estimates the global market for new vehicles, including cars, light trucks, commercial vehicles, and semi-trucks to be about $2.8 trillion dollars. There are three criteria that must be met for Apple to enter a market: vertical integration ability, a massive market, and a profitable market. While the vertical integration and massive market conditions are met, profitability is uncertain as the automotive industry has thin operating margins, indeed they’re in the mid-single digits. The electric car maker Tesla Inc is suppose to have margins in the 20% range, but with so many other companies getting into the market, competition will most likely narrow those margins.

3) With the big push to electric vehicles, with their exotic batteries having a finite useful life, new businesses are emerging to deal with salvaging used batteries. Li-Cycle Corp is one of those recyclers who is going public through a merger with the blank-check acquisition company Peridot Acquisition Corp in a deal valued at $1.67 billion dollars. This is a bet on the growing need to recycle used batteries as well increasing demand for lithium-ion power sources for emerging products like electric vehicles. Li-Cycle plans to use $615 million in additional funding to build more facilities to recycle and repurpose batteries. About 1.2 million tons of batteries are expected to end their life cycle in 2025, followed by 3.5 million tons in 2030. Investors are showing increasing interests in companies involved with lithium-ion technology, especially in recycling components which are harmful to the environment.

4) Stock market closings for – 16 FEB 21:

Dow 31,522.75 up by 64.35
Nasdaq 14,047.50 down by 47.98
S&P 500 3,932.59 down by 2.24

10 Year Yield: up at 1.30%

Oil: down at $59.76

16 February 2021

1) General Motors is the latest automaker to report that a global chip shortage is affecting its production. Other automakers include Stellantis, Volkswagen, Ford, Nissan, Subaru, Renault, Honda, Toyota, and Mazda. Chipmakers in Asia are rushing to boost production but say the supply gap will take many months to plug. The chip shortage is expected to cut global output in the first quarter by more than 670,000 vehicles and last into the third quarter, for an estimated total production lost this year reaching 1 million vehicles. When there is a shortage of semiconductors that impacts production, GM intends to build vehicles without certain modules and will complete them as soon as possible. This will help us quickly meet strong customer demand as more semiconductors become available. The shortage is affecting production of automaker’s most profitable cars: the Chevy Equinox, Colorado, GMC Canyon, and Terrain, Ford’s F-150, and Toyota’s Camry and Tundra.

2) The Pentagon has awarded contracts to Lockheed Martin, Northrop Grumman and General Atomics to develop an air-launch, missile-packed drone. The U.S. Defense Advanced Research Projects Agency (DARPA) handed out the contracts for Phase I design work on the LongShot unmanned air vehicle (UAV). The program is designed to use UAVs to deploy multiple air-to-air weapons. LongShot is part of the effort to allow crewed planes to launch drones from a standoff range away from enemy threats and allow the drones to close the gap and take more effective missile shots. Both the Air Force and the Navy consider that UAVs are the future in attempting to broaden their crewless arsenal both to save U.S. service person lives, and to cut costs. LongShot is likely to be designed in such a way that it can be deployed under the wing of a fighter or from the weapons bay of a bomber, which would extend its range well past whatever amount of fuel the drone is able to carry.

3) SpaceX has just crashed another test rocket, the Starship, which is designed to be 100% reusable, thus drastically dropping the cost of entering space. The Starship flew 10 kilometers up into the air, turned sideways, fell 10 kilometers back down, pivoted again to attempt a vertical landing, but failed to stick the landing. Descending too fast, it touched down more diagonal than vertical, exploding in a ball of flame on impact. However, SpaceX already has a clear solution to the problem by firing three engines in the landing burn instead of two.

4) Stock market closings for – 15 FEB 21:

Dow 31,458.40 up by 27.70
Nasdaq 14,095.47 up by 69.70
S&P 500 3,934.83 up by 18.45

10 Year Yield: up at 1.20%

Oil: up at $60.19