1) American businesses have suffered stress that is breaking many, including some in the grocery chains. Like some popular restaurant chains, some grocery chains were filing for bankruptcy before the pandemic, but the virus crisis forced others over the brink. Five specialty and health forward chains have been forced to file for chapter 11. They are Earth Fare, Lucky’s Market, Fairway Market, Kings Food Markets and Balducci’s. The niche marketeers are finding it very difficult to survive in these changing economic hard times.
2) The U.S. guided missile destroyer USS Stout has set a new record for consecutive days at sea when it reached 208 days at sea on the 26th of September. The previous record was 207 days, held by the USS Eisenhower and USS San Jacinto, both records set this year too. The Covid-19 pandemic has forced the Navy to cancel port visits to prevent sailors from being exposed to the virus while ashore. More than 1,000 sailors were infected with the virus on the aircraft carrier USS Theodore Roosevelt at the start of the pandemic, with one sailor dying. Furthermore, the carrier was off line for weeks anchored in Guam until the virus ran its course. While the elimination of port calls and longer sea deployments has arrested the virus, it has put more stress on the crew members.
3) The ‘indoor food grower’ AppHarvest is going public by joining with Novus Capital Corp. (NOVS) and will soon be traded on the Nasdaq exchange. AppHarvest is developing large scale, efficient indoor farming technology, and their first farm is a 60 acre controlled environment in Kentucky. This facility is within a days drive of 70% of the American population and is now producing tomatoes. Right now, 60% of all fresh tomatoes in American are imported. Controlled environment agriculture facilities use far fewer resources to grow far more produce, however this method of agriculture requires far more capital, where conventional farms are themselves capital intensive enterprises.
4) Stock market closings for – 29 SEP 20:
Dow 27,452.66 down 131.40
Nasdaq 11,085.25 down 32.28
S&P 500 3,335.47 down 16.13
10 Year Yield: down at 0.64%
Oil: down at $39.16
1) A railroad link between Alaska and Canada has been a dream for generations, because such a rail link would reduce Alaska’s costs for goods and services. It would also give Canada’s land locked oil-sands access to ports in Alaska, therefore making for more domestic oil reserves, but such a railroad line faces numerous steep challenges. President Donald Trump has endorsed such a proposal, but several regulatory agencies in both America and Canada must first approve such an undertaking before the first shovel full of dirt can be moved, and this is expected to take years to get permits. The Alaska-Alberta railway Development Corporation (A2A Rail) project would be privately funded costing about $17 billion dollars and would run about 1,600 miles.
2) The plague of wild fires continues in California with several new fires in Northen California consuming thousands of acres a day. The fires are consuming vineyards and destroying the wine business, including grape vineyards that have produced for over a hundred years. The heat wave continues to bring dry air into the conflagration, thus drying out vegetation to make ideal fuel for fires, while strong winds are fanning and spreading the flames. Fires are around the San Francisco area, the Napa-Sonoma wine region and Shasta County which are consuming land at a prodigious rate. Two major fires are the Zogg Fire, which has burned through 15,000 acres and the Glass Fire burning through 11,000 acres. The damage is being created so fast that estimates of dollar losses can not be reliably made.
3) The Congress continues to struggle with a second stimulus bill, the Democrats looking to score at the polls if passed before the election. The big question and holdup is the personal stimulus check to individuals and how much it will be this time. It now appears that $1,200 will be the maximum for individuals, but this time there will be restrictions which will lower the amount for many people based on how much their income is. After nearly two months of relative inactivity, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have agreed to resume negotiations.
4) Stock market closings for – 28 SEP 20:
Dow 27,584.06 up 410.10
Nasdaq 11,117.52 up 203.96
S&P 500 3,351.60 up 53.14 %
10 Year Yield: unchanged at 0.66%
Oil: up at $40.57
1) Another round of protest against the police was spurred by the grand jury in Kentucky deciding to indict only one of the three officers in the case of the 26 year old medical technician. The case of Breonna Taylor, who was fatally shot by police inside her apartment during a no-knock drug raid on 13 March 2020, is a closely watched case across the nation. The protests which started almost four months ago, seem to be getting more violent with one policemen in Seattle attacked by a protester and struck from behind with a metal baseball bat that cracked the policeman’s helmet. The officer sustained only minor injuries and was checked at the scene by the Seattle Fire Department. A video of the incident instantly went viral.
2) The U.S. Navy is considering expanding the naval force to a maximum of 534 ships by the year 2045, with many of the ships unmanned designs. Currently, the fleet has 355 ships, so this would mean a major construction undertaking that in turn would be a stimulus to the economy for years to come. The plan is to build a new fleet of lightly manned ships that over time can be unmanned. The goal for the unmanned ships is to allow the independently operated robot navigation systems to provide ammunition reloads to attacking vessels. Right now, the Navy is researching and developing the means to deploy the automated systems.
3) Florida is reopening from the coronavirus with Governor Ron DeSantis lifting restrictions on capacity of restaurants and other businesses, vowing not to turn back. This is despite the state reporting hundreds of Covid-19 deaths a week. Furthermore, the Governor is making it harder for local governments to institute their own restrictions that go above and beyond the state’s rules. There is still uncertainty about the consequences of schools reopening and other more relaxed measures. Presently, Florida is experiencing about 700 Covid-19 deaths a week.
4) Stock market closings for – 25 SEP 20:
Dow 27,173.96 up 358.52
Nasdaq 10,913.56 up 241.30
S&P 500 3,298.46 up 51.87
10 Year Yield: down at 0.66%
Oil: down at $40.04
1) After Amazon’s Prime Day was postponed by the virus in July, it was tentatively reset for the fourth quarter. Amazon didn’t want their Prime Day to overlap with Black Friday, which set an upper limit to the date, so now the company is planning for the 13th and 14th of October. Prime Day is a very big retail day for Amazon, with their 2019 Prime Day grossing about $6 billion dollars in sales.
2) Another round of stimulus still remains on the burner and with the fall elections now closing in, both sides are saying they want a new stimulus bill with a second direct payment to the people. But the bill remains in limbo with no agreement on the details of the bill. The question on everyone’s minds is the direct payment checks to the people and how much they will be. No settlement on that question, but the rumors are this one will be based on each person’s income instead of the single lump sum of last time, with an upper limit of $1,200 per individuals. Only time will tell how much, or even if there is a personal payment, because if not passed before the elections, the possibility of passing will rapidly decrease.
3) The coronavirus has been a big stimulus for e-commerce from the stay at home shopping it stimulated, but surprisingly the home shopping boom has also been a boom for the shipping industry. Those huge ocean going ships stacked high with intermodal containers, their transpacific sea freight shipping rates have been sent to the highest on record, helping the container shipping industry in Asia. Household appliances imports have jumped 51% in August from last year, climbing for a third consecutive month. Shipments of computers, notebooks and other associated electronic gadgets has soared 169%. This increase consumer demand has shipping rates almost triple from this year’s low in March, when the pandemic led to border closures and a near halt in economic activity. With much of the world’s people housebound, the demand for electronic goods and do-it-yourself items has skyrocketed. There is also the coming Christmas holidays and therefore the stocking up in anticipation of sales.
4) Stock market closings for – 22 SEP 20:
Dow 27,288.18 up 140.48
Nasdaq 10,963.64 up 184.84
S&P 500 3,315.57 up 34.51
10 Year Yield: down at 0.66%
Oil: down at $39.55
1) Michael Farr of CNBC claims the problem with the U.S. economy is there are too many poor people, that the poor and middle class don’t have enough money. His contention is that until employment and wages increase, the U.S. economy will remain bogged down or worst . . . digging a deeper hole. The American economy is the world’s largest with nearly 70% driven by consumer spending. With the vast majority of consumers in the lower middle class and poor, it stands to reason that with more money in their hands, it would make for a more viable economy. He contends that until their lot is improved by having more money, the economy will remain sluggish. But as is often the case, he ignores the ‘obsolete people’ problem of machines with technology displacing those workers. The pay of people reflects the value of people to society, and as technology continues to lower their real value it makes it hard to increase their wages.
2) Wayfair, the giant on-line home furnishings retailer, has announced they are launching two new credit cards while retiring their Comenity Bank card. There will now be the Wayfair Mastercard and the new Wayfair Credit Card. These cards will have no annual fee and offer the choice of earning rewards on spending or receiving no-interest financing for up to 24 months. Wayfair is partnering with Citi Retail Services for the two credit cards.
3) Facebook, the social media giant, is searching for a director of remote work as part of its plan for a more permanent shift of working from home. The company has been making a major shift towards permanent remote work and now needs management dedicated to permanently establishing this method of work in the corporate structure. Facebook is expecting as much as half of its 48,000 workforce to be working at home in the next ten years. Several other large companies are exploring the work-at-home strategy as a way of reducing cost of labor as well as allowing a larger pool of workers to draw upon, since home workers can be thousands of miles away from the home office. There are many consequences to the economy from a large work force working at home, the first is reducing spending on automobiles and service, plus sales of clothing.
4) Stock market closings for – 18 SEP 20:
Dow 27,657.42 down 244.56
Nasdaq 10,793.28 down 117.00
S&P 500 3,319.47 down 37.54
10 Year Yield: up at 0.69%
Oil: up at $40.98
By Economic & Finance Report
US Supreme Court Justice Ruth Bader Ginsburg died on Friday, Sept. 18, 2020. She spent much of her legal career advocating for gender equality and equitable rights for all.
Her lengthy legal and judicial career will have an impact on many young girls, boys, women and gentleman; growing up fighting for fairer, more equitable future for themselves and for others. -SB
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