4 October 2019

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

10 Year Yield:    down   at    1.54%

Oil:    down   at    $52.34

3 October 2019

1) Despite positive last quarters, both General Motors and Ford Motor company’s are concerned about the U.S. auto market taking a turn for the worse. Shares for the two automakers, as well as Fiat Chrysler, fell because of smaller figures for the quarter, although smaller than market analysis projected. There are also concerns of the overall impact from a slowing U.S. and international economies with the impact it would have on new car sales.

2) For the second day, the stock markets nose dived with the Dow losing more than 800 points these last two days. Fears of an economic recession cause the Dow to lose 490 points on Wednesday, with indications that manufacturing is slowing down, and even though manufacturing accounts for only 10% of the economy, investors see this as an indication that the economy is contracting soon with a possible recession in the near future.

3) With the markets in decline, there is a lot riding on the up coming job numbers this Friday. Fears of a coming recession could be reinforced with poor job numbers signaling that a recession is nearing. So far, there is little evidence of layoffs on the rise despite scattered reports that more companies are cutting jobs.

4) Stock market closings for – 2 OCT 19:

Dow           26,078.62    down    494.42
Nasdaq        7,785.25    down   123.44
S&P 500       2,887.61    down     52.64

10 Year Yield:    down   at    1.60%

Oil:    down   at    $52.47

ZERO COMMISSION ONLINE EQUITY TRADES HAVE ARRIVED!!!!!!!!!!!!!!!!!

Image Credit: Imagebros.com

By: Economic & Finance Report

Online stock brokers TD Ameritrade, E*Trade & Charles Schwab have officially cut their online broker commissions to zero. Charles Schwab was the first brokerage, Interactive Brokers followed suit in cutting their commission rates, then came along TD Ameritrade and E*Trade.

Many online brokers are cutting their commissions to nil (0 zero), because of the climate that brokerages such as Robin Hood has had on the industry, allowing free trades of equities to their clients.

Since then other brokers have also cut their commissions to incur more of fairer playing field for their investors, traders and account holders. Many have speculated this was bound to happen at some point. Well, it looks like it has finally arrived. -SB

2 October 2019

1) The retailer giant Amazon is expanding into the grocery business by leasing retail space across the Los Angeles area, signing leases for more than twelve locations. This is the first step of plans to open grocery stories across the nation. Amazon job postings are looking for people to work in retail concepts for a multiple customer experiences under one roof. Stores are reportedly to be about 35,000 square feet and intended to compete with big box stores such as Walmart, Target and Kroger.

2) The Institute for Supply Management says its manufacturing index dropped to 47.8 last month, the lowest since June 2009, below the forecast 49.1. Indexes below 50 indicate a contraction in manufacturing. Manufacturing accounts for 12% of the GDP (Gross Domestic Product), so a slowdown could effect other parts of the economy. Other indicators have shown output increased over last month.

3) Oil prices record its weakest quarter since late last year as fears over a global economic slowdown overshadowed the attacks on Saudi Arabia’s oil production facilities. Brent futures are down 8.7% since the end of June, despite the peak after the attacks. The price of oil is considered an economic indicator, since demand goes down as economies slow down, making more oil available, thus causing oil prices to decline.

4) Stock market closings for – 1 OCT 19:

Dow               26,573.04    down    343.79
Nasdaq            7,908.68    down      90.65
S&P 500           2,940.25    down      36.49

10 Year Yield:    down   at    1.64%

Oil:    down   at    $53.98

1 October 2019

1) The crown prince of Saudi Arabia, Prince Mohammed bin Salman, has warned of astronomical oil prices if tensions escalate in the Persian Gulf. In a ‘60 Minute’ interview, the Prince called for strong and firm action to deter Iran and lessen the threat to world interests, so as to avoid disruptions of oil exports. The attacks on Saudi oil production facilities caused Brent crude to jump 19.5%, the biggest jump on record. The Middle East provides about 30% of the world’s energy supplies constituting about 4% of world GDP (Gross Domestic Product).

2) In order to avoid a quarterly decline in U.S. retail sales, automakers are offering big discounts to maintain sales growth. For the last three months, auto sales have flattened with average incentive spending rising 6% to more than $4,110 per vehicle, which is a third quarter record.

3) The fashion retailer Forever 21 Inc. has filed for bankruptcy protection and is the latest big fashion merchant who, like many other retailer chains, is unable to cope with high rents and heavy competition from e-commerce. The chain has 800 stores across the world, selling affordable but eye-catching designs, but has falling out of favor with the generation-Z consumers who turn to e-commerce. The bankruptcy will allow the company to reorganize and gain additional capital for operations.

4) Stock market closings for – 30 SEP 19:

Dow              26,916.83    up    96.58
Nasdaq           7,999.34    up    59.71
S&P 500          2,976.74    up    14.95

10 Year Yield:    unchanged   at    1.68%

Oil:    $54.29

30 September 2019

1) The White House is considering putting limits on U.S. investment in China, which would aggravate the protracted trade dispute between the two largest economies in the world. Advisers are discussing ways to limit U.S. investors’ portfolio flows into China, including limiting all U.S. investment in China. One possible method being considered is to delist Chinese companies on the U.S. stock exchanges thereby limiting American’s exposure to the Chinese market.

2) Alexandria Ocasio-Cortex, the New York Representative, announced a comprehensive anti-poverty bill that would provide new protections for tenants, children, immigrants and other Americans who are increasingly vulnerable to the high cost of inequality. One part of the bill is a tenant rights bill which would significantly expand federal housing policy. This would include a cap on annual rent increases or rent control.

3) General Motors has reversed itself and reinstated health care benefits to its striking workers, as a result of sever criticism from politicians and social media. Normal procedure in strikes is for the cost of health care to shift from the company to the union. The strike of 49,000 GM workers has shut down 30 GM plants across the nation for nearly two weeks. The GM plant in Mexico has been forced to close due to parts shortages as a result of the strike.

4) Stock market closings for – 27 SEP 19:

Dow              26,820.25    down    70.87 
Nasdaq           7,939.63    down    91.03
S&P 500          2,961.79    down    15.83

10 Year Yield:    down   at    1.68%

Oil:    $56.18

27 September 2019

1) The first all electric ‘gas station’ has been opened in America in Takoma Park, Maryland. The owner of the gas station, which has been around since 1958, decided to convert to all electric supplier of auto energy because of the difficulties and short comings of business with the oil companies. There are 20,700 registered EVs (Electric Vehicles) in Maryland, and the station has four dispensers that allow four vehicles to charge to 80% battery capacity in 20 to 30 minutes.

2) The market for smartphones is expected to decline by 3.2% for 2019, the largest decline ever. This decline is a result of the market becoming saturated because there’s no longer the innovations in device features plus the life span of devices has increased. Users are reluctant to buy new phones if there isn’t a perception of new abilities and features. The next big push in sales will be from the 5G devices as service areas expand.

3) The e-cigarette industry faces a crisis with Juul Labs potentially being crippled by a ban on most of it’s product. The tobacco giant Altria Group Inc., who owns 35% of Juul Labs, and had been in talks with Philip Morris International for a blockbuster merger, but those talks collapsed in part by the threat of Juul’s potential troubles with federal regulation.

4) Stock market closings for – 26 SEP 19:

Dow                        26,891.12    down    79.59
Nasdaq                     8,030.66    down    46.72
S&P 500                    2,977.62    down      7.25

10 Year Yield:    down   at    1.68%

Oil:    up    $56.54

26 September 2019

1) Devin Wenig, the president and CEO for eBay is stepping down as the company moves forward with potential sale of assets. EBay’s board of directors considers that a new CEO is best for the company at this time. Scott Schenkel, eBay’s senior vice president and chief financial officer has been appointed as interim CEO.

2) Inspired Brands, a restaurant chain holding company, announced it is adding Jimmy John’s Gourmet Sandwiches to its portfolio. Other restaurant chains owned by Inspired Brands is Arby’s, Sonic, Buffalo Wild Wings and Rusty Taco. This acquisition will make Inspired Brands the fourth largest restaurant company in the U.S., with over $14 billion dollars in annual sales from 11,200 restaurants in 16 countries.

3) The number of mortgage applications has fallen 10.1% this last week, as interest rates rise. However, the volume is still 46% higher than a year ago when interest rates were higher. Applications for refinancing home loans, which are very sensitive to interest rates, fell 15%, but again is still 104% higher than a year ago.

4) Stock market closings for – 25 SEP 19:

Dow                26,970.71    up    162.94
Nasdaq             8,077.38    up      83.76
S&P 500            2,984.87    up      18.27

10 Year Yield:    up   at    1.73%

Oil:    $56.66

25 September 2019

1) There are fears that the repo (repurchase agreements) market or short term funding, where banks lend to each other, is looking like it did on the 2007 market crash. The Federal Reserve Bank injected hundreds of billions of dollars into the repo system after it seized up last week when the interest rates quadruple. This has been coming about for the last several years after the Fed ended the policy of quantitative easing (QE) in order to increase liquidity to encourage banks to lend more. The squeeze like last week’s indicates there isn’t enough reserves in the financial system for the repo markets to operate. This means the government is having to buy back treasury securities.

2) Presidential candidate Bernie Sanders has propose a tax that would cut billionaires’s net worth in half. This wealth tax takes Elizabeth Warren’s idea and pushes it even further, with Sanders goal to cut American billionaires’ fortunes in half over 15 years. This wealth tax would raise an estimated $4.35 trillion dollars over the next decade by targeting 0.1% of U.S. households.

3) The consumer confidence index has declined by the most in nine months. Americans’ expectations for the economy and the job market deteriorated posing a risk to the household spending that is key to growth. The index dropped from 134.2 to 125.1, the lowest level since January. The overall measure remains elevated suggesting consumers will continue to support the record long U.S. expansion via spending.

4) Stock market closings for – 24 SEP 19:

Dow               26,807.77    down    142.22
Nasdaq            7,993.63    down    118.84
S&P 500         2,966.60    down       25.18

10 Year Yield:    down   at    1.64%

Oil:    $56.80

24 September 2019

1) Saudi Arabia has restored 75% of its crude oil output and will have restored full production by next week. The September 14 attacks had reduced crude production to half, but promises that production will be fully restored by the end of September. The Saudis have managed to avoid a world wide oil crisis by drawing upon their stockpiles to continue supplying their customers at near pre-attack levels of crude.

2) The retailer giant Amazon plans to purchase 100,000 electric delivery vans from the company Rivian as part of its carbon neutral plan. Furthermore, Amazon announced plans to up its present 40% renewable energy to 100% by 2030. Rivian will design a custom electric delivery van for Amazon to be delivered between 2021 and 2024, who also has an agreement with Ford to develop an electric F-150 pickup truck. Amazon is also working to halt its support of the fossil fuel industry, stopping donations to climate denying politicians and think tanks, and stopping the oppression of climate refugees.

3) The British travel firm Thomas Cook has collapsed with bankruptcy, leaving about 600,000 customers stranded. The 178 year old group, which is debt plagued and struggling against fierce online competition for some time, is blaming Brexit uncertainty for the recent drop in bookings, and thus its inability to secure $250 million dollar loan to prevent collapse. This also leaves 22,000 staff members unemployed, with the British government chartering airlines to fly stranded passengers home.

4) Stock market closings for – 23 SEP 19:

Dow             26,949.99         up   14.92
Nasdaq          8,112.46    down     5.21
S&P 500         2,991.78    down     0.29

10 Year Yield:    down   at    1.71%

Oil:    $58.49