1) The IMF (International Monetary Fund) has made another cut to its 2019 global growth forecast, the fifth in a row. The reason given is a broad deceleration of the world’s largest economies with trade tensions undermining the expansion. Their projections of world economic growth has gone from a high of 3.9%, down to 3.5%, then to 3.4%, to 3.2% and finally to 3%.
2) The low mortgage rates has caused an epic housing shortage. The average mortgage rate for 30 year fixed was over 5% last November and stayed above 4.5%, but now is around 3.5%. Inventory trends in the mid-market indicate lower levels of inventory in early 2020. Housing starts have been moving up slowly, but mostly in the higher end homes, leaving the ‘starter home’ market depleted.
3) The production and delivery of Harley-Davidson’s new LiveWire electric motorcycle has been halted with the discovery of a problem with its charging mechanism. There was a non-standard condition in the final quality check, which halted deliveries of LiveWire bikes, however customers can continue riding their LiveWare motor cycles. Additional testing and analysis is progressing well.
4) Stock market closings for – 15 OCT 19:
Dow 27,024.80 up 237.44 Nasdaq 8,148.71 up 100.06 S&P 500 2,995.68 up 29.53
1) There are fears that the manufacturing segment is in trouble and may contract for the third straight month. This in turn could drag down the U.S. GDP (Gross Domestic Product) in the third and fourth quarters. Three factors are causing this down turn- the trade war with China, the GM (General Motors) strike and Boeing’s 737 MAX problems stopping deliveries and slowing production.
2) In the recent past, the online retailer giant Amazon has been unable to compete with traditional retailers when selling single items costing less than a few dollars, because the shipping cost is more than the single item cost such as toothpaste, deodorant or a simple brush. Customers had to buy these items as add-ons to make the $25 minimum for free shipping. But these items are now available for free shipping with Amazon’s Prime shipping. This could make for a significant challenge to other retailers such as Walmart, Target and CVS.
3) GM is attempting to end the month long strike of the UAW (United Auto Workers) by making direct appeal to the workers. The company has lost more than a $1 billion dollars so far, and is making several promises to the workers trying to circumvent the union’s leadership. The UAW has increased strike pay from $250 to $275 per week with union members allowed to hold other jobs as long as it doesn’t interfere with their picket duty.
4) Stock market closings for – 14 OCT 19:
Dow 26,787.36 down 29.23 Nasdaq 8,048.65 down 8.39 S&P 500 2,966.15 down 4.12
1) China has announced they are ending caps to foreign financial ownership, allowing foreign firms to have full ownership of financial services companies. Starting in 2020, overseas institutions can apply for total control of onshore ventures. China has been opening its financial sector at an unprecedented pace to lure financial giants such as Goldman Sachs, JP Morgan Chase and Morgan Stanley into greater participation in China’s economy.
2) Investors are retracting the fastest since the collapse of Lehman Brothers. In the past six months, money market funds have attracted billions of dollars of inflows, the largest flight to safe assets since the second half of 2008, with investors raising their cash holdings despite falling interest rates. This is being driven by unresolved issues of the trade war, Brexit and the domestic political turmoil mixed with fears of a recession.
3) The U.S. and China have reached a partial agreement Friday which would broker a truce in the trade war. This will lay the groundwork for a broader deal later with Presidents Trump and Xi Jinping. News to the agreement cause the markets to shoot up over 300 points. Part of the agreement is for China to make agricultural concessions and the U.S. provide some tariff relief.
4) Stock market closings for – 11 OCT 19:
Dow 26,816.59 up 319.92
Nasdaq 8,057.04 up 106.26
S&P 500 2,970.27 up 32.14
1) Social Security recipients will receive a 1.6% cost of living increase in 2020, up from the average of 1.4%. This is less than the pervious two years, 2.8% for 2019 and 2.0% for 2018, but still it’s better than the zero increases of 2010, 2011 and 2016.
2) Because of a pig killing disease in China, the U.S. could see tightening supplies of pork products this next year. With China’s supply of pork decreasing, the Chinese may be forced to import significant pork supplies from the U.S. because pork is a major source of protein in the Chinese diet. This is despite the high tariffs China has imposed on U.S. pork imports. American pork exports to China will see about a 12% increase for 2019 and 13% for 2020.
3) Democratic presidential candidate Elizabeth Warren is causing concerns among businessmen with her promises to remake capitalism from the ground up. Now in the front ranks of Democratic contenders, her plans are now viewed with more concern. Warren would drastically cut back on the amount and influence of big business, push private companies from parts of the economy altogether and shift power to government and labor. The presidential contender has blamed big business for a wide range of social problems.
4) Stock market closings for – 10 OCT 19:
Dow 26,496.67 up 150.66 Nasdaq 7,950.78 up 47.04 S&P 500 2,938.13 up 18.73
1) PG&E (Pacific Gas & Electric), the massive power supplier of California, has announced they are planning power outages for Northen and Central California which will effect an expected 800,000 customers in 31 counties to reduce the risk of wildfires in windy conditions. The Paradise fire and the 2017 Wind Country fires were ignited when wind blown power lines sparked. It is unknown what the economic impact will be from such a massive loss of electrical power that may last for days on end.
2) The prices for many popular drugs is rising far faster than inflation, more than twice the medical consumer price index since 2017. Prices may not be justified by clinical improvements to the drugs themselves. This is especially important for people with limited income, in particularly the elderly on fixed incomes who are the major consumer of drugs in America. This is at a time when President Trump is vowing to attack high drug prices in America.
3) American Airlines announced extensions of 737 MAX cancellations of flights through January 15, despite Boeing’s promises that the grounded jets would be flying again before year’s end. American said full year profit would be reduced by about $400 million dollars if the jet remained grounded through the second of November, and is likely to spill over into 2020.
4) Stock market closings for – 9 OCT 19:
Dow 26,346.01 up 181.97 Nasdaq 7,903.74 up 79.96 S&P 500 2,919.40 up 26.34
1) The pizza giant Domino’s had been the darling of Wall Street, with its soaring sales, but its growth has gone stale. The company’s reported revenue and profit missed Wall Street’s forecast with its stock sagging. The same-store sales grew just 2.4% compared with last years 6.3%. Domino’s operates in 85 countries with 10,000 stores outside of the U.S., which generate half of its revenues.
2) Boeing aircraft has got its first 737 MAX order since the crashes forced grounding of all 737 MAX aircraft. Boeing’s net order tally, including cancellations, was a negative 84 for the first nine months of 2019. In addition, Southwest Airlines’ pilots union has filed a law suit against Boeing for damages caused by the prolonged grounding of its 737 MAX, claiming loss of pay to its pilot from canceled flights and seeing $115 million dollars in compensation.
3) Duke University professor Campbell Harvey, the father of the yield curve and pioneer of the economic forecasting model, says to prepare for a recession. He based his prediction on inverted curves, which happen when short term Treasury yields are higher than those with longer duration, which his research indicates the coming of a recession.
4) Stock market closings for – 8 OCT 19:
Dow 26,164.04 down 313.98 Nasdaq 7,823.78 down 132.52 S&P 500 2,893.06 down 45.73
1) GE (General Electric) announced they will freeze pensions for about 20,000 salaried U.S. employees in order to help the ailing conglomerate cut debt and reduce its retirement fund by $8 billion dollars. Presently, the company has $105.8 billion dollar debt. Their pension plans are among it biggest liabilities and is underfunded by about $27 billion dollars. This move will not effect present retirees who are collecting their pensions.
2) Twenty-one days into the strike, the UAW (United Auto Workers) and GM (General Motors) contract talks have taken a turn for the worse. The snag is product commitments for U.S. factories for new vehicles, engines, transmissions and other items represented by the union. GM is losing $80 million dollars a day, while striking workers are earning about one fifth their regular pay as $260 a month strike benefits.
3) The U.S. railroads slump is getting worse from the slowdown as manufacturing threatens U.S. economy. Trucking is also feeling a slowdown with less than truckload cargos decreasing, although long haul trucking seems to be holding up. Truck rates have dropped, which is pulling some freight business away from trains.
4) Stock market closings for – 7 OCT 19:
Dow 26,478.02 down 95.70 Nasdaq 7,956.29 down 26.18 S&P 500 2,938.79 down 13.22
1) As part of its restructuring plan, HP announced they will cut about 7,000 to 9,000 jobs, resulting in an estimated savings of about $1 billion dollars. While HP expects to incur labor and non-labor cost of about $1 billion dollars, they expect to generate at lease $3 billion dollars of free cash flow. As of 31 October 2018, HP had world wide employment of about 55,000 workers.
2) Consumer spending has been the bright spot in an economy showing signs of weakening on multiple fronts, in particular manufacturing. Economists worry if consumer spending will continue to prop up the economy, saying that the up coming Christmas season will be a test. Issues such as trade, interest rates, global risk factors and political rhetoric are where confidence can be eroded by deterioration of these items.
3) The new Costco in Shanghai China reports membership of more than 200,000 as compared to an American average of 68,000 per store. Costco will open a second Shanghai location in early 2021. The first day opening, the store was so swamped with customers, that the doors had to be closed for four hours to limit the number of people inside to safe limits.
4) Stock market closings for – 4 OCT 19:
Dow 26,573.72 up 372.68 Nasdaq 7,982.47 up 110.21 S&P 500 2,952.01 up 41.38
#EFRPod we are back @ it once more, Sammy BE @ecofiretv, James Lyman @obsoletepeople & on the boards Magic Jon Don Sterling @thedramablock . We are the EFR Podcast show live and direct in your area.
This episode #EFRPod, we had the dubious pleasure to interview an an established entrepreneur business consultant, author, and motivational speaker, who happens to write for business/entrepreneur publication, INC. Magazine and he has lectured on the TED Talks lecture series; his name is Mr. Damon Brown @BrownDamon .
Damon came on to discuss entrepreneur development, generational entrepreneurial leadership, future business leadership models, what it takes to be a leader in business and in life, and his life successes and failures, and how he was able to evolve in his business mentorship role, and help others to achieve their goals and life long dreams.
1) MGM Resorts has reached agreement with families of victims who were killed in the October 2017 mass shooting in Las Vegas. The settlement for the 2,500 family victims will be almost $800 million dollars with the agreement that all pending litigation against MGM will be dismissed. The shooting left 58 dead while wounding hundreds of others.
2) Soon to be implemented, tariffs will make imports more expensive for Americans, such as Scotch and Irish whiskies, Parmesan cheese and French wine. The tariffs will be on $7.5 billion dollars of European imports. Further tariffs are threaten over aircraft subsidies by the European Union, coming at a time when economies have been hurt by the US-China trade war. The World Trade Organization has ruled America can impose tariffs because the European Union has failed to abide by earlier ruling of Airbus subsidies.
3) The service-sector activity in the U.S. slowed to its weakest pace in three years this September. This is another sign that the U.S. economy may be weakening where the services sector accounts for more than two thirds of economic activity. The non-manufacturing index fell to 52.6 last month, which was the lowest reading since August 2016 and far below the 55.3 expectations.
4) Stock market closings for – 3 OCT 19:
Dow 26,201.04 up 122.42 Nasdaq 7,872.26 up 87.02 S&P 500 2,910.63 up 23.02