23 July 2019

1) Despite the world wide forces that normally pushes oil prices higher, the oil markets remain surprisingly flat. Available oil has dropped with the embargos on Venezuela and Iran, plus tensions over the Strait of Hormuz which would have normally pushed oil prices up. But at the same time, consumption has dropped with China leading the way, plus U.S. oil production continues to creep up. The International Energy Agency recently cut its expectations for global demand for 2019 and 2020.

2) Ford Motor Company stumbles in its attempt for global growth, in particular in trying to expand its market in China. Ford’s auto sales in China are down 27% for the first six months. Ford is being threatened by much improved Chinese’s domestic brands, resulting in a speedy and deep decline in Ford’s sales in China. So Ford is now counting on introducing new-models to revive its sales. Auto sales in China are softening as the Chinese economy slows and with the uncertainty over trade relations with America.

3) American farmers now facing a third obstacle to profits with a stifling heat wave spreading across the continent this summer. First, farmers faced the trade war with China imposing counter tariffs which dropped the demand for food products from one of their biggest customers. Then torrential rains flooded farmland delaying planting of crops and harvesting. Now droughts threaten to severely limit production and harvests. Many farmers may be facing financial disaster by the end of this year, not having the monetary resources to hold out for a better next year.

4) Stock market closings for – 22 JUL 19:

Dow             27,154.20    down    68.77
Nasdaq         8,146.49    down    60.75
S&P 500        2,976.61    down    18.50

10 Year Yield:    up   at    2.05%

Oil:    up   at    $55.74

2 July 2019

1) At a time when auto sales are slowing or even sagging, pickup truck sales continue to rise even with hefty yearly price increases. The industry average for full size pickups is $45,260 in 2019. Chevrolet has announced an all new version of its Silverado that tops the $100,000 price. Profit margins for pickups are large compared with standard automobiles, about $10,000 per truck, with high end trucks bringing as much as $20,000.

2) Importers are dodging the tariffs on Chinese goods by entering the U.S. via third countries such as Vietnam. This practice is called transshipment where Chinese goods are minimally processed or altered in a third country then shipped to America as exports from that third country. The administration has spent this last year investigation strategies to best counter this ploy, which cost America billions of dollars in uncollected tariffs.

3) As global demand for oil weakens amid America’s shale oil boom, OPEC considers extending its production cuts for another nine months. The supply growth in oil is expected to exceed the demand growth for 2020 with OPEC members wanting to get ahead of the situation to avoid a drastic drop in world oil prices. Russia in particular is pushing for extension as it strives to raise its production capacity.

4) Stock market closings for- 1 JUL 19:

Dow                 26,717.43    up    117.47
Nasdaq              8,091.16    up      84.92
S&P 500             2,964.33    up      22.57

10 Year Yield:    up   at    2.03%

Oil:    up   at    $59.19

23 April 2019

1) The United States announced that economic exemptions for Iran oil will be invalid starting the second of May. There are eight countries with exemptions, Asian nations who would suffered hardships from the oil sanctions, but some have already foregone their exemption status. China and India will be the hardest hit from no longer being exempt from Iranian oil sanctions.

2) The Trump administration is cracking down on zero-down home loans from the national affordable housing programs. Fears are mounting over the $1.3 trillion dollar Federally insured home mortgages, stemming from the 2008 housing crash which cost $17 billion dollars from defaults.

3) Executives of automotive manufactures are very concerned about new car sales, considering that at best, stagnation will occur in 2019. For the first three months, new auto sales have been down, they considering that the auto industry having reached a plateau. With half the new auto sales being SUV’s and crossovers, verses only one third for traditional sedans with many models being phase out, there are concerns over the typical new auto costing $34,000 to $35,000. Rising high prices are increasing putting new cars out of the reach of the average American.

4) 22 APR 19 Stock market closings:

Dow              26,511.05    down    48.49
Nasdaq           8,015.27         up    17.20
S&P 500          2,907.97         up      2.94

10 Year Yield:    up   at    2.59%

Oil:    up   at    $64.00