1) For the sixth straight month of a gold buying spree, China continues to add to it’s gold reserves under the protracted trade war. China added 58 tons of gold to its reserves in the five months to April, then added 15.86 tons in May. At this rate China could buy as much as 150 tons of gold in 2019, as they diversify away from the U.S. dollar.
2) The retailer giant Amazon has opened a second cashier-free store in New York, which makes the thirteenth ‘Amazon Go’ store to open in America. The convenience robot store is about 1,700 square feet with Amazon announcing its fourteenth store will open in San Francisco. By 2021, Amazon may open as many as 3,000 of these robot retailing stores which threaten other retailers like 7-Eleven shops, CVS and Walgreens.
3) Ten state attorney generals plan to jointly file a lawsuit to stop the merger of Sprint and T-Mobile. The $26 billion dollar merger will reduce the number of nationwide wireless carriers to three. So far, the deal has won the backing of the majority of the FCC, which makes the Federal Government in favor of the move.
4) Stock market closings for 11 JUN 19:
Dow 26,048.51 down 14.17 Nasdaq 7,822.57 down 0.60 S&P 500 2,885.72 down 1.01
1) The trade war continues to escalate as China takes action against American companies operating in China proper. China is levying fines on Ford’s joint venture for antitrust violations. Changan Ford Automobile Co. will be fined $23.6 million dollars for restricting retailers sale prices. Fed-Ex has recently come under Chinese scrutiny for ‘wrongful’ deliveries. China has threaten to blacklist foreign firms which damage domestic companies’ interests. Chinese citizens are being warned against travel to America, thereby restricting income from tourism and business reaching America.
2) The video game retailer GameStop, with over 5,700 retail outlets, is in decline, and was the place to go to buy video games and virtual reality products. But their sales have been in significant decline, with attempts to use e-commerce to counter the downward slide being of no help. Their forecast for next year show little improvement to its deteriorating business as their business migrates over to Amazon.
3) Bernie Sanders has made good his promise to take his fight for the common worker to Walmart’s annual stockholders meeting, to demand that Walmart workers be given a place on their board of directors. He introduced a shareholder proposal which would make roughly 1.5 million hourly workers eligible for board nominations. Sanders’ consider this move a way to separate himself and his policies from the democratic presidential nomination pack. Walmart is one of the huge American retailers pushing for new robotic technology to use in their stores.
4) Stock market closings for 5 JUN 19:
Dow 25,539.57 up 207.39 Nasdaq 7,575.48 up 48.36 S&P 500 2,826.15 up 22.88
1) The rife between China and America stands to grow deeper with less chance of resolving relationships, with China threatening a hit list of ‘unreliable’ foreign firms. These are individuals and groups who they consider harm the interest of Chinese companies. The threat is retaliatory tariffs on U.S. goods imported into China. These last two weeks have been a war of words as the nations exchange economic threats.
2) Chicago based nursing home chain collapses leaving the federal government on the hook for millions of dollars. First sign was when the owners stop making mortgage payments in 2014. Reportedly, money meant for the thirteen nursing homes were diverted to prop up another investment. This failure is revealing the problems that HUD is having in helping obtain facilities for the elderly by providing affordable loans.
3) Trade wars may expand again with threats by President Trump to impost a 5% tariff on goods imported from Mexico, if Mexico doesn’t do more to stop the flow of illegal immigrates. Tariffs are due to start on 10 June, and will increase in 5% increments until the flow halts. This is coming at a time when more Mexican immigrates are returning to Mexico than are coming, highlighting that the immigration is from other South American countries.
4) 31 MAY 19 Stock market closings: Oil prices sink toward worst May in 7 years from trade war fears.
Dow 24,815.04 down 354.84 Nasdaq 7,453.15 down 114.57 S&P 500 2,752.06 down 36.80
1) Presidential hopeful Bernie Sanders is pushing for measures to give workers a greater ownership in companies, thus transferring power and influence. This would be accomplished by requiring companies to periodically transfer stocks to a fund controlled by employees, giving workers a vote in managing the company while also receiving dividends. Nothing has been said on how to prevent companies from simply moving off shore, as has happened in the past.
2) Tesla, the manufacturer of electric automobiles, is gearing up for production of the Model Y, a crossover SUV with a simpler interior and longer range batteries with a reported 400 mile range. Tesla stock fell more than 10% last week over concerns of demand, profitability and the China-U.S. trade war.
3) Reportedly, China will use rare earths to retaliate against the U.S. in the trade war. This is a group of 17 chemical elements used in a wide range of products, from consumer electronics to military equipment. Chinese newspapers are filled with rhetoric asserting that the U.S. will have no option but to acquiescent to China’s economic policies. Eighty percent of U.S. rare earth imports come from China. However, this strategy by China may accelerate mining of rare earths in California and Australia.
4) 29 MAY 19 Stock market closings: Markets down over concerns of slowing economic growth.
Dow 25,126.41 down 221.36 Nasdaq 7,547.31 down 60.04 S&P 500 2,783.02 down 19.37
1) Reports continue of a General Motors and Ford merger in the near future, both are in deep financial trouble. The proposed merger would make the new company the third largest in the world, behind Toyota and Volkswagen. Car sales have flattened in the U.S. and are dropping in China, which are the two largest car markets in the world. There are also questions of how successful Ford can enter the electric and hybrid car markets.
2) Amazon, the worlds largest retailer, is starting to purge many of its small vendors, and concentrate on large major brands like Lego, Procter & Gamble and Sony to better compete with the large traditional retailers such as Target and Walmart. This will be one of the biggest shifts in Amazon’s strategy since it started using independent sellers, and is scaring the daylights out of many smaller companies.
3) The prices for homes is rising at its slowest pace in six years, down 2.7% from last year’s 3%. Price gains in hot cities like San Francisco have cooled, which is causing sellers to pull in their price increases. The home and auto segments of the economy constitute one half of the U.S. economy.
4) 28 MAY 19 Stock market closings:
Dow 25,347.77 down 237.92 Nasdaq 7,607.35 down 29.66 S&P 500 2,802.39 down 23.67
1) Some young people with outstanding student debts are moving abroad where cost of living is much lower and debt collectors have little to no powers. One former student has moved to a concrete house in India and now lives on $50 a month, while hoping to never again set foot in a Walmart. The strategy of abandoning America to avoid student loans is spreading via social media and the internet.
2) The crypto-currency Bitcoin nears $9,000 dollars as it breaks it highest level this year, but is still a long way from its 2017 high of $19,000 dollars. Other crypto-currencies are also up sharply , and with the renewed interest in the past few weeks, their prices are up over 140% this year. Other companies, including Facebook, are reportedly coming out with new crypto-currencies to offer consumers.
3) Democratic candidate Bernie Sanders, the 2020 party nomination for president, is proposing a plan to raise $2 trillion dollars by taxing Wall Street trading. The senator has introduced a bill that would tax trading of stocks, bonds and derivatives to raise between $776 billion and $2.4 trillion dollars over the next ten years. He would use this money to pay for his Medicare for all and free public college, which is the centerpiece for his presidential bid.
4) 27 MAY 19 Stock market closings:
Dow 25,585.69 up 95.22 Nasdaq 7,637.01 up 8.73 S&P 500 2,826.06 up 3.82
1) Oil prices dropped liked a brick in its worst day of trading in 2019, the result of jitters over trade with China. The price of oil serves as a barometer to the world economic outlook, with a slowing of the world economy translating into a lesser demand for oil and therefore lower oil prices. The situation is aggravated by a surprise jump in American crude stockpile, with inventories up by 4.7 million barrels. The stock market reflected the world economic situation by massive drops too.
2) Panasonic electronics is joining a growing list of firms distancing themselves from Huawei, by stopping their supplying of some electronic parts to Huawei. Companies are declining to do business with Huawei because of warnings from U.S. intelligence that Huawei presences a security risk with their new 5G technology, which will allow the Chinese military to use smart phones to gather foreign intelligence.
3) President Trump announced $16 billion dollars in farm aid to offset the losses by farmers in the ten month long trade war. Distribution of aid payments will be based on where they farm rather than what crops they till. Farmers were a key constituency that help bring victory to President Trump, and they have been the hardest hit from the trade wars with China. China used to import 60% of U.S. soy bean production.
4) 23 May 19 Stock market closings: Dow tumbles 400 points as trade war worries continue.
Dow 25,490.47 down 286.14 Nasdaq 7,628.28 down 122.56 S&P 500 2,822.24 down 34.03
1) British Steel, Britain’s second biggest steel maker, collapsed on Wednesday. This leaves 5,000 jobs directly at risk, while also threatening another 20,000 at suppliers. The company had been seeking a $95 million dollar loan to cover losses suffered because of European orders lost from the uncertainty of Brexit. European steel manufactures have been under pressure from Chinese steel manufactures, with Europe taking antidumping measures against China.
2) The collapse of airline Wow Air is having a detrimental effect on Iceland’s economy. The airline had turn tourism into Iceland’s major economic boom which pulled Iceland out of its financial collapse over a decade ago. In addition, Iceland has suffered a disastrous fishing season. With Wow Air out of business, tourism is expected to drop dramatically.
3) The Dollar General store chain is making its millions of profit via catering to those in the lower economic strata. About 57% of Dollar General’s customers come from households of less than $49,000 yearly income, with 30% less than $25,000. The company has been able to sidestep the recent meltdown of retailing that has ravaged other big retailers, despite having a minimum of e-commerce.
4) 22 MAY 19 Stock market closings:
Dow 25,776.61 down 100.72 Nasdaq 7,750.84 down 34.88 S&P 500 2,856.27 down 8.09
1 ) Ford Motor Company announces a 10% reduction in its work force by eliminating 7,000 jobs world wide. These jobs are salaried white-collar jobs, which are part of a major restructuring to eliminate bureaucracy and increase the number of workers reporting to each manager. Technologies allow large corporations to streamline their management staff and thereby reduce their staff.
2) The U.S. home sales fell unexpectedly in April with persistent weakness in lower-priced housing market. This market segment had been experiencing an acute shortage of properties. Economist had been forecasting a 2.7% rise in home sales, but the existing home sales dropped 4.4% from last year, making this the 14th straight year-on-year decrease in home sales. Existing home sales make up about 90% of U.S. home sales.
3) The United States Postal Service has started a two week test of commercialized autonomous vehicle technology to carry the mail cross country via robot driven semi-trucks. The test run is between Phoenix and Dallas with five round trips, each 2,100 long. Each test truck will have a safety driver on guard and an engineer. The test vehicles will travel the interstates through Arizona, New Mexico and Texas. To drive the same route would require multiple human truck drivers.
4) 21 MAY 19 Stock market closings:
Dow 25,877.33 up 197.43 Nasdaq 7,785.72 up 83.35 S&P 500 2,864.36 up 24.13