5 June 2019

1) The tech giants Apple, Google, Facebook and Amazon are facing antitrust troubles. The government is stepping up scrutiny of these big four with possible new rules, regulations and law suits. The investigative efforts will be split between the Justice Department and Federal Trade Commission driven by mounting criticism over political bias, disinformation and privacy breaches. This could spell years of troubles and law suits and possible breakup of the companies.

2) The threat of tariffs on Mexican imports has American oil refiners worried, since Mexico is the number two source of foreign oil to the United States. American produced oil is a light oil which is a poor match for Gulf Coast refining facilities, while the Mexican oil is a heavy oil that when blended with the America optimizes the refinery’s output.

3) The Medicaid system is still suffering from the Great recession, so there are fears than another recession could be devastating for the system. This is at a time when state spending on Medicaid is still high with no signs of subsiding. In a recession, payrolls decrease from people unemployed or underemployed, so contributions are down. This means less buildup of reserve funds needed for the future, and a second recession so soon, could seriously deplete those reserves quicker, leaving the future of the system in doubt.

4) Stock market closings for 4 June 2019: Jump in Dow comes from Fed signals flexibility on rates.

Dow               25,332.18    up    512.40
Nasdaq             7,527.12    up    194.10
S&P 500            2,803.27    up      58.82

10 Year Yield:    up   at    2.12%

Oil:    down   at    $52.95

4 June 2019

1) The electric car manufacturer Tesla has been getting significant revenues by selling credits to other car makers who need to offset sales of polluting vehicles. General Motors and Fiat-Chrysler disclosed that they have reached agreements to buy federal greenhouse gas credits from Tesla. These companies want to bank their green credits for use later when emission rules get tougher, especially if democrats regain the White House.

2) Bond yields are dropping at the fastest rate since th 2008 global financial crisis, in anticipation that the Federal reserve will cut interest rates to counter the fallout from the trade tensions. The two year Treasury yield has fallen for five straight days. This is likely to have damaging effects on business confidence as businesses become more concerned with future growth.

3) The U.S. Manufacturing Purchasing Managers’ Index fell by more than 2 points in May, the lowest level since September 2009, 6 points over the last year. This index reflects a drop in new orders or postponement of orders due to the uncertainty of the economic future. Manufactures are having to hold selling prices lower because of diminished sales, which in turn is squeezing profits.

4) 3 JUN 19 Stock market closings:

Dow             24,819.78   up            4.74
Nasdaq          7,333.02   down   120.13
S&P 500         2,744.45   down        7.61

10 Year Yield:    down   at    2.08%

Oil:    down   at    $52.85

3 June 2019

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

10 Year Yield:    down   at    2.14%

Oil:    down   at    $53.36

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31 May 2019

1) Cattle producers are now using DNA testing to develop higher prime herds that produce a higher quality of beef. DNA testing allows predicting which bulls and cows have the characteristics that will improve herds to produce higher quality meat products. Where once there was only the ‘practiced eye’ of the stockman to judge which cattle would produce the product with breeding, the DNA techniques has vastly accelerated the process, with the expectation that the vast majority of U.S. herds will become high quality beef in just a few years.

2) The nation wide bus coach service Greyhound is up for sale. The holding company FirstGroup is facing demands for strategic changes by investors for a return on their investment. Greyhound is the only remaining nation wide intercity bus carrier, which carries about seventeen million passengers a year.

3) An executive order being issued by President Trump will require greater price transparency in the health-care industry, is encountering stiff industry opposition. One point of contention is a provision to slow the consolidation of medical facilities thereby maintaining competition resulting in lower cost. Health insurers and hospitals don’t want to publicly share the rates they have agree to amongst themselves.

4) 30 MAY 19 Stock market closings:

Dow           25,169.88    up    43.47
Nasdaq        7,567.72    up    20.41
S&P 500       2,788.86    up      5.84

10 Year Yield:    down   at    2.23%

Oil:    down   at    $56.51

30 May 2019

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

10 Year Yield:     down   at    2.24%

Oil:     up   at    $59.21

29 May 2019

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

10 Year Yield:    down   at    2.27%

Oil:    down   at    $59.06

28 May 2019

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

10 Year Yield:    up   at    2.32%

Oil:    up   at    $59.24

27 May 2019

1) A second major newspaper, the Reading Eagle of Pennsylvania, has been bought out and all of its 221 employees laid off, less than a month after the same thing happened to the New Orleans Times-Picayune. It is reported that within the next five years all the major newspapers will fold up, displaced by technology, because the print media is unable to compete with newer news distribution technologies.

2) Sears, after waves of closing its traditional stores, has embarked on a new marketing strategy with the opening of its first ‘Home & Life’ stores, smaller format stores selling mainly mattresses, appliances and connected home products. Sears is pinning its future on this marketing strategy to reclaim ground from the lost of their old department stores, at a time when thousands of traditional box stores are being closed across the county.

3) The motorcycle manufacture Harley-Davidson is taking a new but risky strategy to rejuvenate its sales, by using loans to reach new riders. Their revenues had been coming from the more affluent baby boomers who are better able to purchase their product. In addition to coming out with new models, including an electric bike that target the younger generation, the company will use in-house financing to make it easier for young people to purchase their product.

4) 24 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

10 Year Yield:     up   at    2.32%

Oil:    up   at    $59.02