1) The decay of the worlds airline industry is reaching out past the airline companies themselves, with jet engine maker Rolls-Royce announcing a $7 billion dollar lost for the first half of 2020. Rolls-Royce gets paid by the hours their engines are flown on airliners, and with the massive drop in air travel from the pandemic, the company’s revenues have drastically dropped leaving its survival in doubt. The company is being forced to sell assets to meet its cash needs, so they are reducing eleven of their locations to just 6, with the loss of 9,000 jobs. Stock dropped 9% on the news of reorganization which was already down 66% since the start of the virus crisis.
2) Not all of the retail industry is bleak news, with Abercombie & Fitch outperforming expectations in the second quarter. While the apparel company did lose ground in the last quarter, it performed better than analyst expected, with sales down by 17%, nevertheless their earnings per share made remarkable gains over last year. This is a result of aggressive costs reductions earlier in the quarter when the company slashed expenses by $200 million dollars by reducing salary expenditures and skipping dividends. Success in their e-commerce operations has also pushed up the revenues and promises to add more as people go to online for more of their shopping.
3) Another small indication that manufacturing is returning to America is Roche Holding AG plans to move its glucose testing strips manufacturing plant from Pueto Rico, where it has operated for about 40 years. The company is streamlining its operations by combining the plant with its other existing facilities. The move will cost 200 jobs in Peuto Rico, which has a number of other drug and medical device manufacturing plants.
4) Stock market closings for – 27 AUG 20:
Dow 8,492.27 up 160.35
Nasdaq 11,625.34 down 39.72
S&P 500 3,484.55 up 5.82
10 Year Yield: up at 0.75%
Oil: down at $42.96