11 September 2020

1) The new jobless numbers indicate the U.S. job losses persist with claims higher than was forecasts. Jobless claims were unchanged at 884,000 for last week, with the total number of people on unemployment rising by 93,000 to a total of 13.4 million people. Prior to the pandemic, new claims were about 212,000 a week with 1.7 million people on unemployment. What is concerning is the pace of layoffs has not slowed with the economy opening up, adding to fears of a second round of Convid-19 outbreaks. It appears that millions of Americans are heading for long term unemployment with most running out of unemployment benefits after 26 weeks.

2) Quantafuel AS, a Norwegian company established in 2014, who makes diesel fuel from plastic waste, is a success having tripled its value, which is now at $1 billion dollars. This is a time when the world is struggling over what to do with the monumental qualitites of plastic waste that continues to grow at an alarming rate. Even more welcomed is Quantafuel addressing the demand for fuel oils. Their process is more environmentally friendly than incineration of plastic. The company is increasing the production of its present plant and has plans to build additional plants with the goal of boosting production 100 fold in the next decade. No doubt, the Chinese will be showing great interest in this process because of their very limited oil resources.

3) One side effect of the coronavirus pandemic is limiting efforts to root out slavery across the world, because companies and investors are unable to visit factory floors in many countries. Even before the pandemic started, there was an estimated 40 million people working in slave like conditions, with the economic shock of the virus making people more vulnerable to exploitation. Companies are facing increasing legal obligations to ensure their supply chain doesn’t include slave labor.

4) Stock market closings for – 10 SEP 20:

Dow 27,534.58 down 405.89
Nasdaq 10,919.59 down 221.97
S&P 500 3,339.19 down 59.77

10 Year Yield: down at 0.68%

Oil: down at $37.00

9 September 2020

1) It’s not just American businesses who are feeling the effects of the Covid-19 crisis from reduced sales, American charities are also suffering a major drop in revenues for the same reason. With the recession straining household budgets, people are less able to contribute resulting in charities losing billions of dollars since this spring. Furthermore, traditional money raising methods such a concerts, festivals and galas have been canceled or scaled back to a fraction of their previous size. Many charities are now working to make the holiday season productive to make up shortfalls in revenue.

2) The repressiveness of the Hong Kong police was further exposed when police chased down and tackled a 12 year old girl in a shopping mall. Video footage of several police officers pinning the hapless girl down on the floor went viral worldwide with a public outcry over the excess use of force against political dissenters. The incident touched off angry shouts from onlookers. The police tactics are being criticized as an indiscriminate treatment of children who are not taking part in protest. The girl complained she felt targeted because of her age, that being young has become a crime in Hong Kong, further increasing concerns that the regime is targeting their young for repression.

3) The markets continue their decline after a five week winning streak as investors begin to worry about stretched valuations. The decline is being lead by the technology stocks, which has met a heavy decline for the tech-heavy Nasdaq. Remarks by President Donald Trump to decouple the U.S. economy from China further added to the market’s jitters. The high flying technology company Tesla has suffered it worst one day loss since March with an 18% drop in the price of its stock.

4) Stock market closings for – 8 SEP 20:

Dow 27,500.89 down 632.42
Nasdaq 10,847.69 down 465.44
S&P 500 3,331.84 down 95.12

10 Year Yield: down at 0.68%

Oil: oil down $36.62

SPECULATION:CHINA MAY DUMP U.S. TREASURIES BECAUSE OF CURRENT TENSIONS WITH U.S.

By: Economic & Finance Report

It is speculated that China may dump more of its U.S. treasuries because of the current tensions between China and the United States. China currently holds $1.07 trillion dollars worth of U.S. treasuries.

China has been unloading some of their treasuries throughout the 2020 year, but that does not necessarily mean that they will unload their “whole deck of cards”. If China were to use the “nuclear option” in unloading their treasuries; the global markets would react haphazardly to such a scenario. -SB

Image Credit: Sott.net

1 September 2020

1) In its quest to deliver packages to customers, Amazon has received FAA (Federal Aviation Administration) approval for its Amazon’s Prime Air, an aerial package delivery system using drones. This allows Amazon to operate unmanned aerial drones in the US on a trial basis. This means the aerial robots can deliver packages outside the operator’s visual line of sight. Amazon announced it’s aerial drone plans in 2013, but hardware and safety issues have been major challenges for the company, with the first successful drone delivery in 2016. The robot aircraft are helicopter like machines that can hover and fly forward powered by electricity with a range of 15 miles. They can deliver packages weighing under five pounds in 30 minutes or less.

2) United Airlines is abandoning its domestic flight change fees forever, so if you have to change your plans and need to change your flights, it no longer will cost you. Previously, a change fee cost the consumer $200 for all economy and premium cabin tickets within the U.S. Furthermore, there’s no limit on how many times you can adjust your flight for free. Additionally, customers can get same day standby for free, which had cost $75, starting on January 2021.

3) As trade relations with China worsen, large companies are pulling out of Red China. These are big name companies known to virtually everyone such as Hasbro, Nike, Apple, Google/Alphabet, Dell, HP, Samsung, LG Electronics, Stanley Black & Decker, Zoom, Intel, Old Navy/Gap, Sharp, Adidas, Puma, Kia Motors, Sony, Nintendo and Hyundia Motors as well as lesser know companies. Reasons cited are the disrupted supply chains, the ongoing US-China trade war with little resolution in the near future, tariffs on Chinese exports so companies are moving to other Asian countries to export from there under a different country name. Also fears of inadvertently using slave labor (political reeducation inmates) leaving a company embroiled in political controversy domestically, with adverse effects on their sales.

4) Stock market closings for – 31 AUG 20:

Dow 28,430.05 down 223.82
Nasdaq 11,775.46 up 79.82
S&P 500 3,500.31 down 7.70

10 Year Yield: down at 0.69%

Oil: down at $42.82

20 August 2020

1) Boeing Aircraft has received its first 737 MAX orders since 2019, from Enter Air, a Polish charter airline that exclusively uses only Boeing airplanes. They have ordered two 737 MAX with an option to order two more. With the option, this would bring its MAX fleet to ten aircraft. Frzegorz Polaniecki, the general director and board member of Enter Air, said he’s convinced the 737 MAX will be the best aircraft in the world for many years to come. This order for two aircraft pales in comparison to Boeing’s July net negative order of 836 aircraft, but it’s a start in the right direction. Cancellation of Boeing aircraft sales have far outpaced new orders this year because of the pandemic. The last six months, Boeing has faced a combination of problems specific to Boeing and the pandemic.

2) The Federal Reserve is lowering their estimate for economic growth over the second half of the year. The Reserve presents its forecast at the central bank’s eight interest rate committee meetings in a year. The reduced forecast is because they expect the rate of recovery in the Gross Domestic Product and the rate for reducing unemployment to be slower than previously expected. Reduction of the unemployment depends on the reopening of businesses, which in turn is depended on the pandemic.

3) According to Bank of America, moving manufacturing out of China could cost U.S. and European companies $1 trillion dollars over five years. Companies in over 80% of global sectors have experienced supply chain disruptions during the pandemic, so many are widening the scope of their reshoring plans. The shift to return manufacturing back to home countries has been spurred on by the Convid-19 crisis. Supporting companies will also benefit with the increase of economic activity by having manufacturing return.

4) Stock market closings for – 19 AUG 20:

Dow 27,692.88 down 85.19
Nasdaq 11,146.46 down 64.38
S&P 500 3,374.85 down 14.93

10 Year Yield: up at 0.68%

Oil: up at $42.79

17 August 2020

1) Across America, schools are struggling over if and how they should open and operate amidst the Covid-19 crisis while knowing students are infected in growing numbers. Schools are opening their doors only to have to quickly backtrack as soon as infections pop up. Debates rage over using ‘remote learning’ verse ‘in class’, with a mirid of problems with either strategy. Add to this is fears of teachers and bus drivers being exposed to potentially life threatening infections. The main problem is schools just aren’t designed for social distancing, either in the classroom or hallways. There isn’t any federal standards to guide local schools in the opening and operating of schools in the shadow of the pandemic.

2) First class mail volume had declined significantly in America, especially since the pandemic, so the USPS (United States Postal Service) is removing mailboxes in parts of Oregon. The USPS has seen a significant decline in revenue, a decline that has been on going for many years as electronic billing/payment and email has become increasingly popular. This could be portends of things to come in the near future, as the USPS struggles with money to operate.

3) With China’s announcement of its latest combat drills near Taiwan, the democratic island is increasing its defense spending. China’s aggressiveness, both military and economic, in the pacific area is raising fears of surrounding countries about their safety. Japan is also concerned over what China might do with her fast growing military power. Taiwan is increasing their military budget by 10.2%. Since the early days of the cold war, Taiwan has been threatened by China, including direct military attacks, so Taiwan knows that China has to be taken seriously. The island nation is discussing acquiring sea mines to deter amphibious landings as well as cruise missiles for coastal defense. Last year the State Department approved $10 billion dollars in arms sales. Additionally, Taiwan is beginning free trade talks with the U.S., a move that would bring the two countries closer together.

4) Stock market closings for – 14 AUG 20:

Dow 27,931.02 up 34.30
Nasdaq 11,019.30 up 23.20
S&P 500 3,372.85 up 0.58

10 Year Yield: down at 0.71%

Oil: down at $42.23

11 August 2020

1) Both Japan and China are building up their military forces for possible future contest over Pacific islands. This is another sign of China’s increasing contentious relations with neighbors, in particular Japan over disputes of several islands in the East China Sea. This is necessitating the buildup of military forces to approach, capture and defend islands. So this means a build up of Marine forces, which both countries are in the process of doing. This includes amphibious armored vehicles and self propelled artillery. U.S. intelligence consider the Chinese Marines to be fully amphibious and able to use combined arms tactics and multiple avenues of approach. This includes building a blue water navy with well over 300 vessels. In response, Japan is starting up its first Marine unit since World War II, modeled after the U.S. Marine Corps, to defend its southern islands. This buildup means massive expansions which neither country’s economies are able to tolerate with the worsening world economy.

2) Boeing aircraft manufacture’s troubles continue to get worst with the loss 737 MAX orders now over 400 and stymied shipments of its 787 Dreamliner because of the world pandemic. Last month, Boeing delivered just four jetliners while also booking zero new orders. Their total stockpile of orders was 4,496 aircraft at the end of July, which is down 1.2% from June. There is the risk that Boeing will have to halt 787 production to preserve cash. Most airline companies have grounded a significant portion of their fleets and are operating only a fraction of their pre-pandemic schedules.

3) Instacart, the young food delivery service, is partnering with Walmart, Amazon’s biggest competitor, to bring Walmart one day delivery service. This will make thousands of items, from groceries to home decor and improvement, personal care and electronics go from Walmart stores to customers’ doors as fast as an hour. This is another ratchetting up of the retail business, when many big name retailers are floundering and some going under. A fundamental change in the way Americans are buying things for their everyday lives is occurring.

4) Stock market closings for – 11 AUG 20:

Dow 27,686.91 down 104.53
Nasdaq 10,782.82 down 185.53
S&P 500 3,333.69 down 26.78

10 Year Yield: up at 0.66%

Oil: down at $41.66

MICROSOFT TALK HEATS UP IN PURCHASING TIK TOK APP!!!!!!!!!!!!

By: Economic & Finance Report

Say it ain’t so….. Well there is a lot of chit chat and jibber jabber that Mr. or Ms. Internet Explorer (however you want to look at it); Microsoft Inc is exploring acquiring the famous social media app Tik Tok from China based ByteDance.

Talks began as the White House and President Trump are seriously considering banning the mega app, for US national security protocols and reasons. Analysts have indicated that Microsoft buying Tik Tok would be beneficial to the software conglomerate; allowing it to enter the social media space which Microsoft has dabbled in the past.

Experts have indicated that Tik Tok’s valuation seems to be exploding toward the upside and the purchase of Tik Tok by Microsoft or another tech company would make a lot of $en$e and $cent$. -SB

Image Source: News18.com

22 July 2020

1) China, with the second largest economy in the world, is steadily developing into a technological powerhouse that could upend the status quo. China’s ten year plan called “Made in China 2025”, has a principle goal for China to catchup, then surpass the West in various technological fields. Some consider this not only threatens the U.S. economy, but the world economy too. China has already declared they intend to be the dominate power in the world by 2050, and having the high ground in technology development is a key milestone in that quest.

2) Some consider that the stock market will likely head upwards to a new high, fueled by borrowing and money printing. With another stimulus package in the near future, it is ‘out of fashion’ to consider how the borrowed money will be paid back. The central banks, who are not elected, stand ready to print as much money as is wanted, no matter that historically this is how inflation is created and fuel. Example is the Weimar Republic (Germany) who induced their great wave of hyper inflation by printing massive amounts of money in the 1920’s, that lead the way for the Nazi’s to ascend to power. Other problems stemming from printing too much money is currency depreciation, difficulties borrowing, higher interest rates and social unrest. With other investments limited, the excess of money goes to the stock market, thus pushing the market up, and possibly into a bubble just waiting to pop!

3) The Congress remains busy crafting a second stimulus package with lots of debates what should and shouldn’t go in it, intending on having a deal worked out by the end of next week. However, this could go into August before a bill is ready to sign. A major point of contention is checks vs taxes. Should stimulus be checks like the $1,200 checks given out a few months?. If checks, then who gets them this time and how much? The other strategy is reducing payroll taxes, but this only helps those who are working. The Republicans are proposing a $1 trillion dollar relief strategy, while the Democrats propose a sweeping $3.5 trillion dollar plan. This would add to the $2.9 trillion dollar package already implemented early this year. As usual, everything is being done will little to no real analysis, instead relying on gut feelings of lawmakers in making the future of America.

4) Stock market closings for – 21 JUL 20:

Dow 26,840.40 up 159.53
Nasdaq 10,680.36 down 86.73
S&P 500 3,257.30 up 5.46

10 Year Yield: down at 0.61%

Oil: up at $41.58

14 July 2020

The restaurant chains were in trouble before the pandemic struck, which is now driving many out of business. Big well known names such as Steak ‘n Shake, which has closed 50 of its restaurants permanently and is trying to sell off the remaining 300 as franchises. Fuddruckers, a subsidiary of Luby’s, is closing 17 restaurants to leave 40, while Red Robin is closing up. The wine and burger Sinburger is closing 18 to leave just 8 restaurants. Wendy’s 400 franchises are in trouble, as well as 1,200 Pizza Huts, both icons of eating out. Although not as well know, Roy Rogers is closing.

2) Wall Street is bracing for some bad numbers from the big banks this week, from huge drops in their profits. The mass unemployment, waves of bankruptcies and the pandemic crisis coupled with near zero interest rates is leaving banks like JP Morgan Chase, Bank of America, Wells Fargo and Citigroup with an expected drop in profits of 50%. The banks are expecting significant loans to go bust and so are setting aside cash to weather the eventuality. Banks around the world could ultimately suffer a credit loss of trillions of dollars. Banks make money off the spread between interest charged on loans and that paid on deposits, but with the near zero interest rate, that spread is very narrow leaving less profits.

3) The tech giant Google intends to invest $10 billion dollars in India over the next five to seven years to grow the company’s business in a fast growing market. Google plans to partner up with other companies in India, as well as investing in its infrastructure, operation and ecosystem and startup scene. The company will focus on artificial intelligence in health, education and agriculture. They will open digital services for locals so they can use their own languages such as Hindi, Tamil and Punjabi. India has a population of more than 1 billion people, with half of them not yet online. The more people on the internet, the more customers Google has for its services.

4) Stock market closings for – 13 JUL 20:

Dow 26,085.80 up 10.50
Nasdaq 10,390.84 down 226.60
S&P 500 3,155.22 down 29.82

10 Year Yield: up at 0.64%

Oil: down at $39.25