9 August 2019

1) Mexico has become America’s largest trading partner as a result of the U.S. – China trade war. For the first half of 2019, trade between America and Mexico was $309 billion dollars worth of goods, just over 15% of all U.S. trade. In comparison, trade with Canada was $306 billion dollars and China at $271 billion dollars. Trade with Mexico has been steadily rising for several decades, while trade with Canada has historically been high it’s always been flat.

2) A battle may be developing between Amazon and FedEx over handling packages, because of surging e-commerce shipments. With their ground delivery deal ending, FedEx is deepening its pullback from Amazon. The ending of two delivery contracts with Amazon means FedEx will have to seek out new major customers for lost sales while Amazon will now depend more on the U.S. Postal Service and UPS. FedEx is seeking to serve major e-commerce companies such as WalMart as the one-day delivery service for e-commerce heats up.

3) Lift, the internet based ride sharing rival to Uber may become profitable sooner than anyone had predicted. It’s growth is accelerating faster than anticipated, which clears the path to profitability. Some are speculating that 2019 might be Lift’s ‘peak loss’ year with losses being less than 2018. Wall Street is acting positive over the news with Lift’s stock rising from an overnight boost of 4%.

4) Stock market closings for – 9 AUG 19:

Dow                26,378.19    up    371.12
Nasdaq              8,039.16    up    176.33
S&P 500             2,938.09    up      54.11

10 Year Yield:    up   at    1.72%

Oil:    up   at    $52.81

10 July 2019

1) The mega giant online retailer Amazon is facing more labor problems with a strike of Minnesota warehouse workers on the first day of Amazon’s sales extravaganza. Even though Amazon has committed to pay $15 dollar an hour to all workers, the Minnesota warehouse workers plans a six hour work stoppage on July 15, the first day of Amazon Prime Day sale.

2) Cisco Systems, a major manufacture of networking gear such as servers, announced Tuesday it will acquire Acacia Communications for $2.84 billion dollars. Acacia designs and manufactures high speed optical components and is a supplier of components to Cisco. Cisco is paying $70 per share, which is 46% above Acacia’s Monday closing price.

3) The tourist spaceflight company Virgin Galactic is going public for financing by merging with the investment firm Social Capital Hedosophia. This will infuse $800 million dollars into Virgin Galactic in exchange for 49% of the company. About 600 people have spent $250,000 for a ninety minute suborbital space flight. The company has made test flights to near space and has sent its first passenger up sixty two miles near the edge of space.

4) Stock market closings for- 9 JUL 19:

Dow                 26,783.49    down    22.65
Nasdaq              8,141.73         up     43.35
S&P 500             2,979.63        up        3.68

10 Year Yield:    up   at    2.05%

Oil:    up   at    $58.50

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