14 June 2019

1) Two tankers have been attacked near the Iran coast, which has caused oil prices to surge with fears that Iran may try to close the Gulf of Oman, which transports oil out of the Middle East. The choke point of the Strait of Hormuz is only 21 miles wide and handles 80% of the oil destined for Asia. Last month four other tankers were attacked near Fujairah using sabotage, which further fueled fears that Iran may become very aggressive in the region and against exports of oil.

2) With voters no longer showing a strong concern for the federal debt, the political support for reining in Federal spending and controlling the growing national debt is melting away with Republicans willing to accept a large deficit in exchange for tax cuts and Democrats making big spending promises in the 2020 campaigns. Some experts, who had once augured against the government growing debt, now say it may not be as critical a problem as they once thought.

3) The mega-retailer Target is upping the ante for e-commerce by offering same-day delivery on thousands of items for just $9.99. Using the delivery startup Shipt, which Target purchased nearly two years ago, the retailer is positioning itself to compete against Walmart and Amazon in what is becoming a ‘delivery time’ war of the major maga-retailers. The one day service will cover 65,000 items from 1,500 stores out of 1,800 stores in 47 states.

4) Stock market closings for- 13 JUN 19:

Dow               26,106.77    up    101.94
Nasdaq            7,837.13    up      44.41
S&P 500           2,891.64    up      11.80

10 Year Yield:    down   at    2.09%

Oil:    down   at    $52.11

12 June 2019

1) For the sixth straight month of a gold buying spree, China continues to add to it’s gold reserves under the protracted trade war. China added 58 tons of gold to its reserves in the five months to April, then added 15.86 tons in May. At this rate China could buy as much as 150 tons of gold in 2019, as they diversify away from the U.S. dollar.

2) The retailer giant Amazon has opened a second cashier-free store in New York, which makes the thirteenth ‘Amazon Go’ store to open in America. The convenience robot store is about 1,700 square feet with Amazon announcing its fourteenth store will open in San Francisco. By 2021, Amazon may open as many as 3,000 of these robot retailing stores which threaten other retailers like 7-Eleven shops, CVS and Walgreens.

3) Ten state attorney generals plan to jointly file a lawsuit to stop the merger of Sprint and T-Mobile. The $26 billion dollar merger will reduce the number of nationwide wireless carriers to three. So far, the deal has won the backing of the majority of the FCC, which makes the Federal Government in favor of the move.

4) Stock market closings for 11 JUN 19:

Dow            26,048.51    down    14.17
Nasdaq         7,822.57    down      0.60
S&P 500        2,885.72    down      1.01

10 Year Yield:    down   at    2.14%

Oil:    down   at    $53.05

10 June 2019

1) Many consider that it is no longer a question if the Fed will cut interest rates, but rather when. With the apparent softening of the job market, many investors firmly believe the Federal Reserve  will move to cut interest rates this year possible as soon as this July. The markets bounced up on the expectation.

2) The job numbers are in for May, with job creation slowing dramatically. There were just 75,000 new jobs added to the economy, about 100,000 less than economist expected. Both March and April job numbers were lower than expected leading experts to conclude a downward trend in the American economy is beginning. There are fears that we may see a recession as early as next year.

3) The book seller Barnes & Noble has closed a deal to sell itself to Elliott Management Corp, a hedge fund based in New York. The news sent Barnes & Noble stock surging upward as much as 36%. Like many other retailers, Barnes & Noble has struggled with little success to counter the power house e-commerce giant Amazon. It’s Nook e-book device was a bust, which the company had heavily invested in. Barnes & Noble has 600 brick and mortar retail stores.

4) Stock market closings for 7 JUN 19: The Dow has had its best week since November.

Dow                   25,983.94    up    263.28
Nasdaq                7,742.10    up    126.55
S&P 500               2,873.34    up       29.85

10 Year Yield:    down   at    2.08%

Oil:    up   at    $54.04

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

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

3 May 2019

1) The Canadian book retailing chain Indigo is expanding into the United States with its new model for brick and mortar bookstores at a time when online book selling is squeezing out traditional American bookstores. Indigo’s success is credited by selling signature gift items along with their books, such as beach mats, bento lunch boxes, herb growing kits, scented candles and crystal pillars.

2) The drug giant CVS Health is closing 46 of its stores as they become more involved in health care services. Nevertheless, CVS remains a solidly profitable business, but like so many other retailers, is worried about Amazon’s entry into the prescription drug business. Amazon has acquired the online drug retailer PillPack, which could serve as a bases for Amazon’s launch into the drug retailing business.

3) The millennials and generation-Z are not the only Americans facing massive college student loans to pay off. Senior citizens are struggling to pay off their student loans. More than three million people, who are over sixty, are still paying for college loans, owing more than $86 billion dollars.

4) 2 MAY 19 Stock market closings:

  Dow            26,307.79    down    122.35
Nasdaq           8,036.77    down      12.87
S&P 500          2,917.52    down        6.21

10 Year Yield:    up   at    2.55%

Oil:    down   at    $61.54

19 April 19

1) Amazon announced it is shutting down its store in China, and instead will focus on cross boarder global sales to China. Amazon cited the high competition in China from local companies, with 80% coming from Alibaba, the giant Chinese online retailer.

2) The magazine National Enquirer is being sold for $100 million dollars, along with two sister publications to reduce the $355 million dollar debt of the holding company AMI. National Enquirer sales have dropped by half over the last four years.

3) Sprint, the wireless carrier, has revealed they are not as strong a performer as the public had been lead to believe. In a proposed merger with T-Mobile, Sprint had to make full disclosure with regulators, disclosing that many of their added new connections were actually free lines.

4) 18 APR 19 Stock market closings:

Dow              26,559.54   up   110.00
Nasdaq           7,998.06   up       1.98
S&P 500          2,905.03   up       4.58

10 Year Yield:    down   at    2.56%

Oil:    unchanged   at    $64.00

16 April 2019

1) The British business climate is expected to get worst after Brexit. A survey of chief finical officers finds that a full 80% consider Britain’s economy will slump after Brexit, especially if an unplanned exit occurs. The long term outlook for investment is poor, so with little investment, the economy will flatten.

2) Battle lines of banking are being drawn in China between virtual banks and conventional banks. A banking shakeup is in progress between hi-tech companies and traditional banks, who find it hard to quickly react to the challenges of virtual banks, much as with Amazon is to retailing or Urber is to transportation.

3) The auto maker Mercedes-Benz is being investigated for software cheating of emissions test. Germany has ordered recall of 238,000 cars using illegal software to defeat government testing for compliance of emissions standards.

4) 15 APR 19 Stock market closings:

Dow            26,384.77    down    27.53
Nasdaq         7,976.01    down      8.15
S&P 500        2,905.58    down      1.83

10 Year Yield:    down   at    2.55%

 Oil:    up   at    $63.57

22 March 2019

1) Walmart has plans to compete with Amazon in the future, by using Jetblack personal shopping service to train AI systems. Jetblack has an army of human agents that can use in training Walmart’s AI system which can power an automatic personal shipping service in the next 5 to 7 years. This makes Jetblack more of a research facility.

2) The Chinese telecom company Tencent’s stock is down after the Chinese government imposed regulations designed to limit online games. They have suffered their largest decline in ten years with a 32% declined. Since smart phones is the biggest part of their business, this drop wiped off $100 billion dollars of book value.

3) The Prime Minister of Britain is trying to obtain a short extension of Brexit by going to Brussels. The major members of the European Union said they would endorse a short extension, but only if the British Parliament approves the exit plan. But British political parties are splintered over what should be done about Brexit.

4) 21 MAR 19 Stock market closings:

 Dow                   25,962.51     up     216.84
Nasdaq                 7,838.96     up     109.99
S&P 500                2,854.88     up        30.65  

10 Year Yield:     unchanged   at    2.54%

Oil:     down   at    $59.87

11 March 2019

1) Netflix has a problem that could have a very major impact on its financial future. There is a debate in the movie industry, if Netflix movies should qualify for Oscars awards, that Netflix movie productions are really just television and so don’t qualify for Oscars. If works could not qualify for Oscars, then big name producers will be less inclined to produce blockbuster movies for Netflix. Netflix has been making multi-billion dollar investments for their content trying to bring high quality productions to its subscribers.

2) Household net worth has fallen by the largest amount since the 2008 Great Recession. The net worth is the measure of total assets such as homes, bank accounts and stocks minus the debts. Net worth declined 3.5% last quarter, driven in part by the poor performance of stock markets.

3) Elizabeth Warren wants to break up ‘Big Tech Companies’, specifically Amazon, Google, Facebook and Apple. She says ‘Big is bad, small is beautiful’ and is calling for major changes to the anti-trust laws.

4) 8 FEB 19 Stock market closings:

Dow               25,450.24    down    22.99
Nasdaq            7,408.14    down    13.32
S&P 500           2,743.07    down      5.86

10 Year Yield:    down   at    2.62%

Oil:    down   at    $56.04