30 September 2020

1) American businesses have suffered stress that is breaking many, including some in the grocery chains. Like some popular restaurant chains, some grocery chains were filing for bankruptcy before the pandemic, but the virus crisis forced others over the brink. Five specialty and health forward chains have been forced to file for chapter 11. They are Earth Fare, Lucky’s Market, Fairway Market, Kings Food Markets and Balducci’s. The niche marketeers are finding it very difficult to survive in these changing economic hard times.

2) The U.S. guided missile destroyer USS Stout has set a new record for consecutive days at sea when it reached 208 days at sea on the 26th of September. The previous record was 207 days, held by the USS Eisenhower and USS San Jacinto, both records set this year too. The Covid-19 pandemic has forced the Navy to cancel port visits to prevent sailors from being exposed to the virus while ashore. More than 1,000 sailors were infected with the virus on the aircraft carrier USS Theodore Roosevelt at the start of the pandemic, with one sailor dying. Furthermore, the carrier was off line for weeks anchored in Guam until the virus ran its course. While the elimination of port calls and longer sea deployments has arrested the virus, it has put more stress on the crew members.

3) The ‘indoor food grower’ AppHarvest is going public by joining with Novus Capital Corp. (NOVS) and will soon be traded on the Nasdaq exchange. AppHarvest is developing large scale, efficient indoor farming technology, and their first farm is a 60 acre controlled environment in Kentucky. This facility is within a days drive of 70% of the American population and is now producing tomatoes. Right now, 60% of all fresh tomatoes in American are imported. Controlled environment agriculture facilities use far fewer resources to grow far more produce, however this method of agriculture requires far more capital, where conventional farms are themselves capital intensive enterprises.

4) Stock market closings for – 29 SEP 20:

Dow 27,452.66 down 131.40
Nasdaq 11,085.25 down 32.28
S&P 500 3,335.47 down 16.13

10 Year Yield: down at 0.64%

Oil: down at $39.16

16 September 2020

1) A survey by Photonics and Harris Insights and Analytic, a market research company, has found that 35% of Americans would like to avoid traditional in-store shopping, another indication of how American consumerism is fundamentally changing. The traditional in-store sales are becoming less attractive to customers who are now less likely to browse. Retailing is responding by investing in new technologies and creating jobs to meet e-commerce. Now 37% of the fashion retailers are selling more through social media.

2) The aquatic-life theme park SeaWorld is laying off nearly 1,900 furloughed workers because of low attendance from the pandemic. These layoffs include 450 food service attendants, 270 park operation hosts, 121 performers and 18 senior trainers. SeaWorld furloughed 95% of its staff back in March, but long term success of the company has forced less optimistic forecast for the economic recovery time wise.

3) In the last six months, about 100,000 restaurants have had to close permanently as independently owned business struggle to make ends meet during the virus crisis. There are one in six restaurants across America that have closed in just a half a year. Another 40% of owners say it is unlikely their restaurant will still be in business six months from now. Presently, outdoor dining has allows many restaurants to maintain a sustainable revenue stream, but with winter approaching, much of this opportunity will disappear. Coronavirus restrictions limit the in-dinning to as little as 30% normal capacity, which means a drastic cut in sales and revenue to the point that many restaurants are unable to support themselves.

4) Stock market closings for – 15 SEP 20:

Dow 27,995.60 up 2.27
Nasdaq 11,190.32 up 133.67
S&P 500 3,401.20 up 17.66

10 Year Yield: up at 0.68%

Oil: down at $38.51

14 September 2020

1) With 13 million Americans unemployed and their unemployment benefits running out, many will have only seasonal jobs to turn to. But with such wide spread unemployment, getting hired for seasonal work wont be easy. With the coming holidays, seasonal jobs traditionally mushroom with major companies already hosting hiring events to fulfill their temporary ranks. Companies like Michael’s will hire over 16,000 temporary people, with UPS expecting to hire over 100,000 for holiday package delivery. Retailers doing e-commerce, such as Amazon or Walmart are expected to need many seasonal workers and therefore are good places for job seekers to apply.

2) Fears are growing that the coronavirus crisis could cause a double dip recession, that the recession could end up looking like a roller coaster of ups and downs. The upsurge in virus cases is eroding consumer confidence and leading to renewed limits on certain businesses. Economic recovery can bloom then fade away only to repeat again. Some economic factors point to a recovery, yet others point downwards, with the picture further complicated by the ‘what ifs’ of the coronavirus and just how it will play out, where a second wave of the virus could be just as economically disruptive as the first one, maybe even more so. Additionally, a significant portion of the economy has been destroyed. Half the businesses in America are small businesses and at the start of the crisis, about half of those had cash reserves of just fifteen days or less . . . meaning by now they have gone bust! No one knows what the repercussion from such massive losses of business will ultimately have on the economy in general.

3) Mechanical breakdown insurance, which isn’t an extended warranty, but rather is insurance that pays for mechanical auto repairs of a car’s power train, much as accident insurance pays for the repair of body damage. It will have some amount for a deductible, then pays the remainder of a mechanic’s bill for repair, both labor and parts. Usually, any mechanic can be used. Most major insurance companies who offer auto insurance will also offer breakdown insurance too. Prices range from $20 to $100 a year.

4) Stock market closings for – 11 SEP 20:

Dow 27,665.64 up 131.06
Nasdaq 10,853.54 down 66.05
S&P 500 3,340.97 up 1.78

10 Year Yield: down at 0.67%

Oil: up at $37.39

10 September 2020

1) The renowned Mall of America announced plans to lay off and furlough hundreds of employees. Located in Bloomington, Minn. the shopping center will permanently lay off 211 workers across various departments at the end of the month with an additional 178 workers to remain on furlough beyond the end of September. The Mall employs about 1,000 workers. Like most other malls in America, the Mall of America has suffered severely from the pandemic and need for social distancing. The malls across America have suffered a decline in recent years as people’s shopping habits and revenues decline. The Mall of America has been delinquent on its $1.4 billion dollar mortgage for May, June and July, and in turn some of its 500 retail tenants are unable to pay rent or having skip out on lease obligations.

2) Federal report warns of the threat from climate change to the economy. The report considers there are consequences that can create chaos in the financial system and disrupt the American economy. It’s considered that climate change poses a major risk to the stability of the U.S. financial system to sustain the American economy, that jobs, income and opportunity are at stake. This is just another indication of the increasing difficulty and expense of keeping individuals in a high technology society. The report makes 53 recommendations for dealing with the climate risks.

3) With the start up of college and return to campus life, there has been a sharp increase in coronavirus cases stemming from universities. For instance, the University of Tennessee has more than 2,100 students and staff members quarantined for Covid-19. As of Monday the university has 600 active cases of Covid-19. Of the 2,100 quarantined cases, about half are on-campus students and the other half off-campus. The surge is blamed on reckless behavior by a small portion of the students, especially traditional college parties with close personal contact. Many other American universities are having similar experience such as the University of Notre Dame, and North Carolina State. Some universities have implemented curfews, restrictions on visitors and even lockdowns of fraternities and sororities.

4) Stock market closings for – 9 SEP 20:

Dow 27,940.47 up 439.58
Nasdaq 11,141.56 up 293.87
S&P 500 3,398.96 up 67.12

10 Year Yield: up at 0.70%

Oil: up at $37.78

9 September 2020

1) It’s not just American businesses who are feeling the effects of the Covid-19 crisis from reduced sales, American charities are also suffering a major drop in revenues for the same reason. With the recession straining household budgets, people are less able to contribute resulting in charities losing billions of dollars since this spring. Furthermore, traditional money raising methods such a concerts, festivals and galas have been canceled or scaled back to a fraction of their previous size. Many charities are now working to make the holiday season productive to make up shortfalls in revenue.

2) The repressiveness of the Hong Kong police was further exposed when police chased down and tackled a 12 year old girl in a shopping mall. Video footage of several police officers pinning the hapless girl down on the floor went viral worldwide with a public outcry over the excess use of force against political dissenters. The incident touched off angry shouts from onlookers. The police tactics are being criticized as an indiscriminate treatment of children who are not taking part in protest. The girl complained she felt targeted because of her age, that being young has become a crime in Hong Kong, further increasing concerns that the regime is targeting their young for repression.

3) The markets continue their decline after a five week winning streak as investors begin to worry about stretched valuations. The decline is being lead by the technology stocks, which has met a heavy decline for the tech-heavy Nasdaq. Remarks by President Donald Trump to decouple the U.S. economy from China further added to the market’s jitters. The high flying technology company Tesla has suffered it worst one day loss since March with an 18% drop in the price of its stock.

4) Stock market closings for – 8 SEP 20:

Dow 27,500.89 down 632.42
Nasdaq 10,847.69 down 465.44
S&P 500 3,331.84 down 95.12

10 Year Yield: down at 0.68%

Oil: oil down $36.62

3 September 2020

1) Major American companies are extending their ‘work from home’ policy, such as Google, Uber and Airbnb, until the summer of next year. The companies Zillow, Twitter, Facebook and Square have announce that employees can work from home indefinitely. Some companies are also offering stipends to employees for home office equipment as well as a $500 quarterly credit to use specifically on Airbnbs. This at home work policy remains in effect even after offices start reopening. The work at home is even spreading across the international scene with electronic giant Hitachi having 70% of its employees work permanently from home. Nationwide Insurance plans to downsize from 20 physical offices to just four with the majority of its employees continuing to work permanently from home. It’s looking more and more like working at home is becoming the norm for the future in America.

2) In a bid to counter the competition of e-commerce, the traditional department store giant Macy’s has started opening new, smaller stores away from the malls, reflecting a growing trend in the retail industry. The retail giant will test small-format Macy’s and Bloomingdale’s stores outside of underperforming malls, joining a growing trend in retail. The test stores will begin operation the fourth quarter of 2021 in Dallas, Atlanta and Washington DC. Many other major retailers are turning away from the mall format of retailing, leaving many malls withering on the vine, with foot traffic on the decline even before the Convid-19 crisis. This is another indication of a shift in American culture and society.

3) Fashion retailer Old Navy has announced they will pay their employees to work at polling stations comes election day. Each employee will be paid a full days wages for their poll work. Furthermore, store employees will have up to three hours of paid time-off on election day to vote. Old Navy joins other retailers such as Patagonia, PayPal and Levi Strauss & Co. to help in the national elections.

4) Stock market closings for – 2 SEP 20:

Dow 29,100.50 up 454.84
Nasdaq 12,056.44 up 116.78
S&P 500 3,580.84 up 54.19

10 Year Yield: down at 0.65%

Oil: down at $41.78

2 September 2020

1) Five American companies make up 24% of the S&P 500 Index, the big high tech companies Apple, Amazon, Microsoft, Facebook and Alphabet. These five companies made up 17% of the index at the start of the year. This makes a significant part of American net worth and security for retirement dependent on just a handful of stocks, which makes some financial advisers nervous having their eggs in too few baskets. One hiccup in the technology sector could mean major losses across the board.

2) Another shooting of a young black man Monday in South Los Angeles has sparked more protest that could lead to more city rioting. The man was stopped for violating vehicle codes, but then ran, with the police in hot pursuit. When police caught up with him, he punched one policeman in the face at which time a semiautomatic pistol dropped out causing both policemen to open fired. Since the victim didn’t have the weapon in hand, nor was it ever pointed at either police officers, so there are questions about the shooting. So far, protests have been peaceful.

3) The U.S. Justice Department is investigating the protest leaders and their funding in Portland and other cities for possible criminal activity. With riots and civil unrest now at a hundred days, and significant monetary loses have been occurred, questions are being raised about who is behind the well organized protesters seemingly intent on violent confrontation. Of especial interest is the loosely organized far left Antifa and the Black Lives Matter, and who is ultimately controlling their operations through funding and why.

4) Stock market closings for – 1 SEP 20:

Dow 28,645.66 up 215.61
Nasdaq 11,939.67 up 164.21
S&P 500 3,526.65 up 26.34

10 Year Yield: down at 0.67%

Oil: up at $43.01

19 August 2020

1) Walmart retailer giant has had its second quarter e-commerce sales jump by 97% with customers having packages shipped to their homes and using curbside pick-up. This adds optimism to Walmart’s upcoming Walmart+ (pronounced Walmart plus) membership, a subscription based service to rival Amazon Prime designed to drive up sales and loyalty. Exceptions are for Walmart+ to continue pushing up e-commerce sales over and above the big jump for the second quarter, signaling again a major profound shift in American retail segment of the economy. The new service will deliver merchandise in one day, if not just a few hours.

2) FexEx is joining other package delivery services to add extra holiday fees for deliveries, from 2 November to 17 January. These surcharges on regular shipments to homes will be between $1 and $5. It’s been since 2016 when FedEx last applied surcharges during peak volume times, and follows UPS and the US postal service using surcharges for the peak package delivery times. With the massive increase in home delivery of merchandise, because of the pandemic, its expected that the holiday surge will set new records in package volume. This in turn will place a large strain on the company and therefore additional cost to overcome the strain. The amount of the fee will depend on the surge over normal volume. Both UPS and FedEx introduced surcharges earlier this summer, in part to make up for the extra cost to keep workers safe during the pandemic.

3) The USPS (United States Postal Service) chief Louis DeJoy announced he is suspending some changes in the post office until after the 2020 election. Dejoy is avoiding any appearance of any impacting on election mail. The suspension includes some longstanding operational initiatives that were in place before he took office. There are fears that cost cutting measures could impact the November election with widespread mail delays.

4) Stock market closings for – 18 AUG 20:

Dow 27,778.07 down 66.84
Nasdaq 11,210.84 up 81.12
S&P 500 3,389.78 up 7.79

10 Year Yield: down at 0.67%

Oil: down at $42.55

18 August 2020

1) A good sign for the U.S. economy, the American shale oil companies plan to restore nearly all oil production by the end of the third quarter. This will return production to nearly what it was when the shut down came resulting in the oil crash. As oil prices raised to $30 to $40 per barrel range, oil production started to rise. By September, nearly all of the production is expected to be restored. There were fears that shutting down shale oil wells prematurely could hamper future production, but nearly all of the restarted wells are producing normally because of a buildup of pressure. Most companies report a smooth return of operations.

2) Pizza Hut is closing up to 300 locations as part of a deal between the pizza chain and its largest franchisee, NPC International, who is filing for bankruptcy. These will be under performing restaurants, mostly with dine in facilities. The franchisee will put its remaining 927 Pizza Hut locations up for sale. NPC also operates nearly 400 Wendy’s restaurants, but has had to file for chapter 11 protection because of its $1 billion dollar debt. In recent years, Pizza Hut has drawn away from the dine-in business and concentrated more on delivery and takeout. Final determinations has not been made as to which locations will close or when.

3) In an indication of just how quickly the virus can pop up, the Oklahoma State sorority Pi Beta Phi has had 23 members test positive for the coronavirus, resulting in the entire sorority being put in quarantine. So far, none of the girls have been hospitalized and any who are ill are experiencing minor effects from the virus. The sorority members moved into the sorority house (off campus) between August 2 and 6, with all testing negative for the Covid-19. Then on 11 August, a small group of members who reside outside the house joined the chapter for a short informal gathering at the house. Within just a few days, the members in the sorority house tested positive. There has been a major spike in the pandemic, with the number of cases surpassing the previous peak levels on 31 of May, with 78% of new cases in the Sun Belt states.

4) Stock market closings for – 17 AUG 20:

Dow 27,844.91 down 86.11
Nasdaq 11,129.72 up 110.42
S&P 500 3,381.99 up 9.14

10 Year Yield: down at 0.68%

Oil: up at $42.77

4 August 2020

1) Tailored Brands, who owns Men’s Wearhouse and Jos. A. Bank, has filed for bankruptcy, becoming the latest retailer to succumb to the pandemic. The Covid-19 has wiped out demand for office attire forcing the layoffs of 20% of its workforce and closing up to 500 stores. Lord & Taylor, one of the oldest department stores in America has also filed for bankruptcy. It has started liquidating 19 of its 38 stores. In the first half of 2020, more than 3,600 companies have filed for bankruptcy, with experts predicting that things are only going to get worse. Retail names such as Justice, Ann Taylor, Lane Bryant, Luck Brand, J.C. Penny, Brooks Brothers, Sur La Table, Neiman Marcus, Tuesday Morning, Tailored Brands, GNC and J. Crew have gone into bankruptcy. Such a large number of retailers in trouble can only signal a fundamental change in the American economy.

2) The airline industry in America is facing a round of layoffs in the near future without additional federal aid to save jobs. The airlines received $32 billion dollars in federal payroll support from the CARES Act, with the condition of no layoffs until 30 September, and the anticipation of air traveling increasing by then. But this hasn’t occurred, so as the end of September approaches, layoffs loom. The airline unions have been pushing for an extension in payroll support to preserve the jobs sector of the airlines. American Airlines and United Airlines warn that more than 60,000 employees risk losing heir jobs when the aid terms expire. Other airlines like Alaska, Sprint and Frontier also warn of upcoming layoffs.

3) The owner of 7-Eleven is buying Marathon Petroleum’s Speedway gas stations for $21 billion dollars in cash. This will increase the present 9,800 convenience store chains by another 4,000. Investors were unnerved by the steep price for the deal, with shares falling nearly 9%. Like many other retailers, the chain has also been hit hard by the coronavirus pandemic, with profits down significantly. Another acquisition that finalized is T-Mobile buying Sprint, with the Sprint brand name disappearing from the American business scene.

4) Stock market closings for – 3 AUG 20:

Dow 26,664.40 up 236.08
Nasdaq 10,902.80 up 157.52
S&P 500 3,294.61 up 23.49

10 Year Yield: up at 0.56%

Oil: down at $40.76