8 August 2019

1) Disney, the owner of the Star Wars franchise rights, is finding that today’s kids are not as interested in Star Wars as previous generations have been. While the last of the trilogies have turned a profit, they have not met the success of previous movies. Purchased from Lucasfilm Ltd in 2012 for $4.05 billion dollars, Disney is worried about the long term profitability of the franchise. It’s newly opened attraction Star Wars theme-park hasn’t meet expectations, indicated the young are not entranced by the intergalactic saga.

2) Gold continues to increase in value as more jittery investors flee traditional havens for money, to the supposed safety of gold ownership. With gold now at $1,500 per ounce, it is outperforming stocks this year. Concerns over the world economy from uncertainty of the U.S. and China trade war, China’s currency, oil and repercussions from political hot spots across the world have all combined to form a economic climate of fear and uncertainty. All foretell of a global slow down in growth, and as always the case, gold provides safety better than money in economic hard times.

3) A federal judge has ordered litigation over defective General Motors ignition switches to be narrowed in claims by owners. Owners claimed they lost value in their vehicles because of the defect, but the judge ruled the owners have failed to show the value of their vehicles has declined as a result of the defect. Instead, damages could only be measured by costs to repair defective vehicles, which is zero if GM paid for repairs. This defect is linked to 124 deaths.

4) Stock market closings for – 7 AUG 19:

Dow             26,007.07    down    22.45
Nasdaq           7,862.83          up    29.56
S&P 500          2,883.98          up       2.21

10 Year Yield:    down   at    1.68%

Oil:    up   at    $52.29

MERGER OF TWO OF THE LARGEST U.S. NEWSPAPERS CHAINS, WILL CHANGE THE NEW MEDIA LANDSCAPE…..

By: Economic & Finance Report

Two of the country’s largest newspaper companies will be merging and creating one huge newspaper media conglomerate. New Media Investment Group (NYSE: NEWM) will buyout Gannett Co. (NYSE: GSI) for $1.38 billion dollars, in cash and stock options.

The closing of the deal is supposedly going to be complete at the end of 2019. New Media and its satellite company GateHouse Media will operate under Gannett Co. and also be headquartered in Virginia, where Gannett is also located. -SB

7 August 2019

1) There are fears that the deepening China and American trade war may severely effect the fragile oil market. The tariffs increases has already send oil prices spiraling down over concerns of a sever global economic slowdown or recession. But China could use oil as an economic weapon by purchasing vast quantities of oil from Iran thus driving oil prices down from $60 to as low as $40 while also undermining President Trump’s foreign policy.

2) Gold, always a panic investment from economic fears, is again attracting investors with its prices pushing upward. With the devaluation of the Chinese money and threats that the U.S. might follow suit, investors are worried about the value of other monies sliding down. Fears of what will happen to the Euro and British Pound with a ‘no deal’ exit, coupled with European government bonds rates that are so low, is further attracting investors to gold. Hence, investors are migrating to the traditional safe heaven of gold.

3) In an attempt to further push into the Nordic markets, payment processor Mastercard Inc will buy the majority of the corporate services businesses of Scandinavian payments group Nets. The financial technology sector is consolidating fast as more people switch from cash to digital payments, both on line and on the street. The $3.19 billion dollar deal gives Mastercard further clearing and instant payment services plus e-billing solutions.

4) Stock market closings for – 6 AUG 19:

Dow             26,029.52    up    311.78
Nasdaq           7,833.26    up    107.23 
S&P 500          2,881.77    up      37.03

10 Year Yield:    up   at    1.74%

Oil:    down   at    $53.46

6 August 2019

1) Stock markets fell sharply over new trade war moves with the Dow dropping over 700 points and the S&P and Nasdaq also sharply dropping too. Troubles renewed with China devaluating its currency, opening at seven yuan to the U.S. dollar. In return President Trump accused China of manipulating its currency which suggests the Chinese have abandoned all hopes of resolving the trade war with America, and instead are moving in another direction for the future. Reports are that China has asked state owned companies to suspend U.S. agriculture imports. A weaker Chinese currency gives them an unfair export advantage, and so can be used as a potent weapon in the trade war.

2) Fears continue to increase over a near future recession, with bond yields giving the highest alert since 2007. The 10-year notes sank on Monday to 1.74% with fears of it sinking to a low of 1.5%. This is further pressure for the feds to further cut interest rates to starve off a recession. There are further concerns about the trade war with China that America will move to let the dollar weaken to counter China’s devaluation. Wall Street’s VIX volatility index, also know as their ‘fear gage’ rose to 21.48, its highest level since May 9, with Asian markets also plummeting.

3) Huawei, China’s manufacture of smart phones, might release a phone running the HongMeng OS by the end of the year. HongMeng OS is a competitor to Google’s Android OS, which would free Huawie paying licensing fees for other’s operating systems, allowing Huawei to undercut competition in the low end smart phone market. This is a response to President Trump’s executive order banning Google and Qualcomm from Huawei over security risks. The HongMeng OS is considered part of a long term strategy.

4) Stock market closings for – 5 AUG 19:

Dow             25,717.74    down    767.27
Nasdaq           7,726.04    down    278.03
S&P 500          2,844.74    down       87.31

10 Year Yield:     down   at    1.74%

Oil:    up   at    $55.01

5 August 2019

1) Even though U.S. employers slowed their hiring in July, there was 164,000 jobs added to the economy. The unemployment rate remained at 3.7% for a second month with average hourly earnings rising 3.2% which was up from June. The unemployment is near a half century low, and with the U.S. economy on a firm footing, the GDP (Gross Domestic Product) is growing 2.1%.

2) The price of oil declined the most in over four years with President Trump’s latest tariff threat. Oil plunged 8%, for the steepest one day drop, from concerns of a global slowdown. A slowdown results in less consumption of oil, and therefore less demand. For months, the stalled China-U.S. trade negotiations is fueling concerns for the future of world economies.

3) Online delivery of prepared food is surging with people able to order a full restaurant meal from home using smart phones, and have them delivered much as a pizza is. By 2020, it’s forecast that more than half of restaurant spending will be off premise from deliveries, drive-thoughs and takeaway meals. More than 80% of the restaurants industry growth will be off premise sales, with Americans spending more on restaurants than at grocery stores.

4) Stock market closings for – 2 AUG 19:

Dow            26,485.01    down     98.41
Nasdaq        8,004.07    down   107.05
S&P 500       2,932.05    down     21.51

10 Year Yield:    down   at    1.86%

Oil:    down   at    $55.19

2ND QUARTER EARNINGS: CASH APP MAKES $125 MILLION BECAUSE OF BITCOIN………

By: Economic & Finance Report

Square Cash App scored a huge win, with their 2nd quarter earnings. The majority of their $125 million earnings came from Bitcoin revenue.

Bitcoin revenues gave Square Cash App, two extra million in gross profits. There has been speculation that the extra revenue is from the trading of Bitcoin, which is able to be used on the Square Cash App platform.

Square revenues have been steadily increasing over the past year, so it is no surprise that because of Bitcoin, Cash App profits have amassed greatly. -SB

Who is Saving the Future for our Youth?

What is Congress and the Senate doing so the Millenniums and Generation-Z will have a future in America? Nothing!

James Lyman BSAE, BSEE, MSSM

Every evening I watch the news, only to see a ‘Jane Goodall documentary’ being played out. Congressmen and Senators, both Republican and Democrats . . . liberals, conservatives, moderates and radicals- all are busy monkey fighting seemingly 24/7. Fighting and squabbling with gay abandonment, not a care, in the world, not a worry or concern for the troubles of their constituents. And apparently doing very little else, such as addressing the multitude of problems facing John Doe and Jane Plain of America who are struggling each day to keep their nose above the water.

Paramount of these problems is their continual displacement by technology, their replacement by machines that are more and more able to perform the critical parts of their jobs, thereby allowing people with lesser skills and abilities to replace them at significantly lower wages . . . if not completely replace some hapless human.

However, the abandonment of decorum and civility has laid bare the true essence of their core being, their true intellectual, analytical and problem solving skills for all to see. The eye of the TV camera shows what’s really at the heart of those we’ve elected to govern us. Naked and bare before the world, for all to see exactly what they are and what they have, lacking even the horse and long flowing blond hair of Lady Godiva for some small mediocrum of shielding. We are left with the question, ‘Why all the monkey fighting? Why can’t they do anything about all the real problems we have?’.

Maybe it’s because they lack the ability to do anything else!

As Speaker Tip O’Neill forecast years ago, what he called the ‘sound biters’, have come to dominate the federal government. People who have little skills beyond using the mass media and mass marketing technologies to get and stay elected. People skilled only in creating and maintaining images . . . and images don’t solve real world problems. Therefore, the answers to those questions is ‘It’s because they don’t know how to do anything else but monkey fight!’. So critical problems go unanswered, with candidates parroting what the polls say their focus groups want to hear. They know they’ll never have to actually do anything, they’ll just ply more media imaginary, and continue their monkey fighting which makes the American political process look like some cheap UFC entertainment event.

So nothing gets done, and people lives are slowly subverted by technology displacement.

Add to this . . . a large portion of the representatives are lawyers or political science majors. Reading the law is the education of the sixteenth, seventeenth and eighteenth century. It’s the education of the likes of John Adams, Abraham Lincoln and Thomas Jefferson. An education that gives you little real understanding of the twenty-first century world. These are not people who know and understand the world Americans are trying to living in, trying to survive and thrive in. These are not people who can lead you and your family into the twenty-first century!

The next questions is ‘How to reform the government and make it into something that’s a real help and benefit to the man on the street?’. The widespread application of the mass media and mass marketing technologies to our political system has resulted in the delicate system of checks and balances, so essential for a modern government to function, being thrown out of skew. This unbalance is what must be restored to create an environment conducive for attracting the caliber of people necessary to address our problems. The real ‘Draining of the Swamp!’, and getting the money out of the election process. To accomplish this, four things (constitutional amendments) must be acquired- 1) Line item veto 2) Term limiting 3) Forbid participation in elections not qualified to vote in 4) Power of Congress to dismiss Federal employees with cause.

Such changes in the structure of the government would create an environment less inviting to the ‘sound biters’, having substantially less monies for re-elections and not getting the long terms in office to amass personal fortunes. And with an environment where only those individuals who can qualify to vote can make contributions in coin or kind, the special interest groups and corporations are barred from buying influence. Emptying the sound biters out of the system opens the way for qualified people to come and serve their country, and in the process address those real problems that will shape the economic future of the Millenniums and Generation-Z.

One thing is for sure . . . both houses should be throughly ashamed of themselves.

Monkey fighting! Americans deserved better- much better than that!

2 August 2019

1) Goldman Sachs, the investment bank, is starting a three year, $100 million dollar plan to overhaul its stock trading platform. The project, which is named Atlas, is aimed at the world’s largest quant hedge funds with the intent of shaving milliseconds off trades. The quantitative hedge fund investment has become a cutthroat business as other firms have been winning a larger share of a shrinking pie, and Goldman Sachs realizes they have been falling behind the technology race. They must make a strong effort to push forward the technology of electronic trading to maintain their market position.

2) As trade talks continue in Shanghai between China and America, President Trump has imposed an additional 10% tariff on $300 billion dollars worth of Chinese imports. These imports are due to start on the first of September. This does not include the $250 billion dollars already tariffed at 25%. The President blames the Chinese for imposing the tariff, saying China is not following through their promise to buy more American agricultural products and not doing more to stem sales of synthetic opioid fentanyl.

3) Lowe’s, the home improvement retailer, has told thousands of its workers that their jobs are being eliminated. The company will out source the jobs of maintenance and assembly workers to third party companies. These workers assembly products such as wheelbarrows and grills, claiming this will allow store associates to spend more time on the sales floor serving customers. Lowe’s employs 190,000 full time and 110,000 part time workers.

4) Stock market closings for – 1 AUG 19:

Dow           26,583.42    down    280.85
Nasdaq         8,111.12    down      64.30
S&P 500        2,953.56    down      26.82

10 Year Yield:    down   at    1.89%

Oil:    up   at    $54.49

1 August 2019

1) General Electric suffered a loss last quarter despite two previous profitable quarters, a result of the restructuring cost of its electric power division and the grounding of Boeing’s 737 MAX. GE provides the jet engines used on the 737, which Boeing has reduced production of. The grounding of Boeing has drained off more cash than expected, but General Electric forecast a profitable year for 2019.

2) President Trump has fulfilled his campaign promise to lower drug prices by creating a pathway to allow Americans to legally and safely import lower cost prescription drugs from Canada. This reverses the opposition from federal health authorities, despite the public outcry over high prices for drugs in America. It’s uncertain when imports can start as the plan has to go through the time consuming regulatory approval and possible court challenges from drug makers. The opening of the door for cheaper drugs and keeping it open still faces an up hill battle with the political organizations of the pharmaceutical industry.

3) In an effort to keep the American economy on track, the Federal Reserve has reduced the benchmark interest rate by a quarter point to about 2.25%. This is a modest and widely expected move intended to keep the economy healthy in face of the trade war with China and the slowing economic growth overseas. In addition, the feds signaled that the cental bank is ready to make more cuts to stimulate the economy if necessary. A higher interest rate makes for a stronger dollar, a disadvantage for international trade. Wall Street anticipates as many as three more cuts this year, while in addition to the rate reduction, the feds will stop selling off assets this August, two months earlier than expected.

4) Stock market closings for – 31 JUL 19:

Dow             26,864.27    down    333.75
Nasdaq           8,175.42    down      98.19
S&P 500          2,980.38    down      32.80

10 Year Yield:    down   at    2.02%

Oil:    down   at    $57.90

31 July 2019

1) One of the nations largest credit card companies Capital One announced a massive data breach which affects tens of millions of customers. This news has sent its stock down 7%. Most of the data lost to hackers was personal information such as names, addresses, phone numbers and income of consumers and small businesses from 2005 to 2019. About 140,000 Social Security numbers of customers was comprised with 80,000 bank links. This breach is one of the largest yet.

2) China and America have resumed trade talks in Shanghai after a three month suspension. President Trump has criticized China for it’s reluctance to buy U.S. agricultural products, the Chinese using this as a pressure point on Trump with many farmers having previously supported Trump. There are low expectations for a breakthrough in trade talks because the two sides are further apart now than three months ago.

3) American consumer confidence is at the highest level since November negating its June drop. The index rose from June’s 124.3 to 135.7. The index measures consumers’ assessment of the current economic conditions and their expectations for the next six months. Consumers have little concern for trade tensions with China or a slowing economy. This should translate into robust spending in the near future.

4) Stock market closings for – 30 JUL 19:

Dow               ,198.02    down    23.33
Nasdaq       8,273.61    down    19.72
S&P 500      3,013.18    down      7.79

10 Year Yield:    up   at    2.06%

Oil:    up   at    $58.34