31 October 2019

1) The Federal Reserve has cut interest rates for the third time this year to ensure the U.S. economy weathers a global trade war without a recession. While the feds signaled the rate cut cycle might be at a pause, there is signs for a future rate cut if need be. The markets have shown little response to the cut because the action was widely expected. While unemployment is near a 50 year low, inflation is moderate while gross domestic product grew at 1.9% in the third quarter, parts of the economy like manufacturing having slowed as well as the global economy.

2) A new kind of consumer debt is gaining popularity, called the Online Installment Loan. It is a longer maturity loan unlike the payday loans, but also comes with the triple digit interest rates. Unlike the payday loans aimed at the nation’s poor, these loans are targeting the working class who have amassed debt over years. The installments generate much greater revenue for loan companies than the payday loans, with loan amounts much larger.

3) While the U.S. economy continues growing, with unemployment at a half century low, factory activity has contracted for two consecutive months. Manufactures of consumer goods are still stronger, while those manufactures engaged in global markets are feeling the effects of trade wars and profound uncertainly of the future. Thousands of factory workers have been laid off in the mid-west with factory wages being higher than average, as well as higher benefits than other jobs not requiring a college degree..

4) Stock market closings for – 30 OCT 19:

Dow                  27,186.69    up    115.27
Nasdaq               8,303.98    up      27.12
S&P 500              3,046.77    up         9.88

10 Year Yield:    down   at    1.80%

Oil:    down   at    $54.90

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