25 March 2021

1) There is a large backup of freighters parked in the San Francisco Bay and in Long Beach, which are awaiting an opening at the Port of Oakland. This is because of a trade bottleneck, a result of the COVID-19 outbreak, thereby leaving U.S. businesses anxiously awaiting goods from Asia. The pandemic has wreaked havoc with the supply chain since early 2020, because it forced the closure of factories throughout China. The problem arose last March, when Americans stayed home, thus dramatically changing their buying habits. Instead of clothes, they bought electronics, fitness equipment and home improvement products. In turn U.S. companies responded by flooding the reopened Asian factories with orders, which then lead to a chain reaction of congestion at ports and freight hubs as the goods began arriving. Ships with as many as 14,000 containers have sat offshore, some of them for over a week, with as many as 40 ships waiting.

2) The manufacturing crisis with automakers continues to grow, with the auto industry bracing for more chip shortages after a fire at a plant owned by Japanese chipmaker Renesas. The company makes chips for Toyota, Nissan and Honda, and expects production at one of the buildings at its Naka Factory in Hitachinaka to be halted for a month. Renesas said the fire started when some equipment overheated and ignited, though it isn’t known what caused it to overheat. Renesas said two-thirds of the products made in the building could be produced elsewhere, although due to the recent increase in demand for semiconductors, the situation does not allow for all products to be immediately produced alternatively. This further reduction in semiconductor production will further reduce production of automobiles worldwide.

3) North Korea tells China they should team up as ‘Hostile Forces’. North Korea’s Supreme Leader Kim Jong Un reportedly praised his country’s close ties with neighboring China, looking to boost their ties to counter the hostile policies of the United States. China and North Korea’s close ties date back to the founding of the People’s Republic in 1949, then the outbreak of the Korean War a year later. In the war, Chinese troops supported North Korean forces with the backing of the Soviet Union, against South Korea and a U.S. led United Nations coalition. However, the fighting ended in a stalemate with an armistice but no official peace, which continues to this day. The North Korea considers that the world is now undergoing transformations rarely seen in a century, which is also overlapped by the ‘once in a century’ pandemic. What this portents for China and North Korea’s future actions . . . only time will tell.

4) Stock market closings for – 24 MAR 21:

Dow Jones 32,420 down by 3.09
NASDAQ 12,962 down by 265.81
S&P 500 3,889 down by 21.38

10 Year Yields: 1.6280

Oil: up at 64.41

8 March 2021

1) Walt Disney Co. will close at least 60 Disney stores in North America this year, which amounts to about one-third of their stores. Like so many other retailers, Disney has found that shopping has changed because of the coronavirus pandemic- and so has Disney’s entire business with its theme parks closed to some extent. But Disney+ streaming service has blossomed to 94.9 million subscribers. Disney’s revenue in the October to December quarter fell 22% to $16.25 billion from $20.88 billion in the previous year but still beat Wall Street expectations.

2) General Motors said it’s exploring the possibility of a second battery production site in the country, the first is its facility in Lordstown, Ohio, a site it will operate with partner LG Chem. Reports are that GM is interested in a second site in Tennessee, as a venture with Korea’s LG. The Ohio operation is set to open next year with enough capacity to build hundreds of thousands of batteries per year. The automaker is keen to quickly capitalize on a shift to electric vehicles and said it aspires to only sell zero-emissions, light-duty vehicles by 2035, including light-duty pickup trucks. The Ohio plant may be a down payment on this EV future, in which the automaker has invested $2.3 billion.

3) Lumber prices have skyrocketed 140% over the last year, although the economy might not be able to handle further increases in 2021, nevertheless lumber is the best performing commodity. Analyst predict lumber prices could gain another 35% in the next year. Rising lumber prices are from the pandemic induced housing boom, fueled by record low mortgage rates and a mass exodus to the suburbs. It’s a sign that the economy is recovering, but if prices of lumber and other commodities continue to rise quickly, the economy might falter, as prices move higher driven by demand, while supply will continue to shrink. Worker wage increases haven’t been keeping pace with the dramatic spike in all the commodities at this point in time. With interest rates going up and all these inflationary commodities advancing in price, there are growing fears of people being self-sustaining when wages remain static.

4) Stock market closings for – 5 MAR 21:

Dow 31,496.30 up by 572.16
Nasdaq 2,920.15 up by 196.68
S&P 500 3,841.94 up by 73.47

10 Year Yield: unchanged at 1.55%

Oil: up at $66.28

5 March 2021

1) For many years, there has been one report after another about the critical need to repair, replace and expand our infrastructure of roads, waterways, air travel systems, highways, dams, bridges, electric power and many other necessary parts of a modern society. The U.S. is facing a $2.59 trillion dollar shortfall in meeting its infrastructure needs. The American Society of Civil Engineers released its latest report card on U.S. infrastructure giving an overall grade of C-. That’s an upgrade from the D+ of the last report from four years ago, but leaves lots of room for improvement. America is spending about half what our infrastructure bill is, the total investment gap has gone from $2.1 trillion to nearly $2.59 trillion in over 10 years.

2) The General Motors auto company is extending its production cuts amidst the chip crisis shortage at three North American plants and added a fourth to the list of factories hit by the global semiconductor chip crisis. However, the cut did not change GM’s February forecast of a $2 billion loss in 2021. The automaker expects chip supplies to normalize by the second half of the year with no incremental losses. GM did not disclose the impact on volumes or parts affected by the chip shortage but said it intends to recover much of the lost output. Power outage in Texas further hit chip production. President Joe Biden has also pushed for $37 billion in Congressional funding to tackle the chip crisis.

3) Banning natural gas would cut carbon emissions. Cities across the country are pushing for electric only buildings, some by banning natural gas, as part of an ongoing effort to curb emissions and stall climate change. But another national push is underway in state legislatures to prevent this banning from happening elsewhere. HB 1191 is written in a way that says cities can’t put in place policies or requirements that would prioritize one fuel over another for heat and appliances in buildings. The bill is effectively a ban on banning natural gas. Advocates say it’s a necessary effort to protect consumer choice and keep energy costs low, but others are saying the gas industry is trying to protect itself by taking away local control and stifling cities’ sustainability goals. Critics question whether protecting consumers is the true aim.

4) Stock market closings for – 4 MAR 21:

Dow 30,924.14 down by 345.95
Nasdaq 12,723.47 down by 274.28
S&P 500 3,768.47 down by 51.25

10 Year Yield: up at 1.55%

Oil: up at $64.31

2 July 2020

1) The airline industry is one of the hardest hit segments of the economy from the pandemic, with an estimated 36% drop in traffic this year. But the International Air Transport Association is warning that it could worsen with a 53% drop if boarder curbs on emerging market countries and the U.S. remain in place. The U.S. – EU (European Union) air travel market generates $29 billion dollars a year is threaten by the ban on non essential flights from the U.S. as the EU attempts to avoid an resurgence of the virus. Air travel was down over 90% for April and May, with little prospects for improvement in the near future, leaving the future of air carriers in doubt too.

2) The maker of electric automobiles Tesla has become the world’s most valuable automaker, surpassing Toyota’s for the first time on record. Tesla’s valuation is roughly $206.5 billion dollars compared with Toyota’s valuation of about $202 billion dollars. This underscores the vast investor enthusiasm for the automaker, which has yet to turn a profit on an annual basis. While it’s valuation exceeds Toyota, its car production of 103,000 cars lags far behind Toyota’s production of 2.4 million vehicles. The valuation comes from the stock in the company, with investors piling money in since there aren’t any other electric vehicles investments available, with Tesla stock soaring to $1,135 per share.

3) Electricity bills are set to surge this summer because of millions of Americans sheltering in place. This added demand will mean higher electricity costs for months to come. This will mean an additional $30 to $40 per month on electric bills in cities like New York and Philadelphia. Increases are anticipated to be highest for the northeast area of the country, decreasing when going westward. This comes when people’s finances are already stretched tight because of the coronavirus crisis.

4) Stock market closings for – 1 JUL 20:

Dow 25,734.97 down 77.91
Nasdaq 10,154.63 up 95.86
S&P 500 3,115.86 up 15.57

10 Year Yield: up at 0.68%

Oil: down at $39.71

8 April 20

1) The dizzying swings in the stock market has made a mockery of efforts to forecast the market. This phenomena graphically reveals the high degree of uncertainty prevalent in the world today. One day, markets are up by one or two thousand points, next day down by the same amount as people are unable to decide if the economy will grow or contract. Market experts are unable to decide if the economic downturn is a short impulse from the coronavirus, or a long term event covering months or even years. One major component in seeing the economic future is the question of how many small businesses will fail during the shutdown, most from lack of cash. A high number of failures could drag the rest of businesses down.

2) American colleges and universities are also suffering financial problems from the coronavirus shutdown. Institutions are scrambling to close deep budget holes from loss of tuition and fees, refunds for student housing, dining and parking from students forced to leave school. Some have had a huge share of their reserves wiped out with some schools are facing financial collapse. Some face a double loss with their reserves in the stock market. To add to college’s worry, is the question of how many students will return this fall if the shut down is over. Furthermore, surveys show significant number of highschool seniors planning to take a year off before continuing their education, another loss of revenues for colleges.

3) Because of the virus shut down, demand for gasoline in America has collapsed. Sales are down 46.5% from last year. The same sharp decline in gasoline sales has been seen in Europe with demand for gasoline down as much as 85%. With big box retailers slowing and automakers shutting down, a slowdown is expected in the next few weeks.

4) Stock market closings for – 7 APR 20:

Dow 22,653.86 down 26.13
Nasdaq 7,887.26 down 25.98
S&P 500 2,659.41 down 4.27

10 Year Yield: up at 0.74%

Oil: down at $24.26

31 December 2019

1) The automaker of electric cars Tesla has made its first deliveries of their Model 3 that were manufactured in China. The gigafactory in Shanghai is Tesla’s first outside the U.S., which is expected to significantly boost Tesla sales in China, which Tesla considers will become its largest market for the Model 3. Production will soon be 1,000 cars a week, eventually reaching an annual production of 150,000 a year.

2) The national average price for gasoline increased by 1.6 cents to $2.57 a gallon. Gas prices had been dropping for seven consecutive weeks prior to the upswing. The price increase is a result of the drop in oil inventories while oil prices are above $61 a barrel. Gas prices are above $3 a gallon in Hawaii, California, Nevada, Alaska and Washington, while Missouri, Oklahoma, Mississippi, Texas and Louisiana are the five states with the lowest priced gas states.

3) Vietnam is switching from producing and selling raw robusta beans on the commodity markets, to producing instant coffee for the burgeoning Asian market. Instant coffee brings more profit with less risk while also bringing protection from large swings in international commodity prices. Vietnam aims to overtake Nestle as Vietnam’s biggest pure instant coffee supplier in the next five years, and doubling its coffee exports to $6 billion dollars a year.

4) Stock market closings for – 30 DEC 19:

Dow              28,462.14    down   183.12
Nasdaq           8,945.99    down     60.62
S&P 500          3,221.29    down     18.73

10 Year Yield:    up   at    1.90%

Oil:    down   at    $61.68

23 December 2019

1) Stock markets ended at record highs this last week, coming closer to what may well be a blockbuster year. This rally now covers four weeks, with one record closing after another, driven by easing of geopolitical worries. Trade worries have kept investors on the edge for most of 2019. The questions is, will this rally continue into next year?3) Steel maker US Steel is closing a mill near Detroit and will lay off 1,500 workers, and in addition will cut its dividend in an attempt to reverse operating losses which is forecasted for the fourth quarter. The Great Lakes Works mill, which rolls slabs into sheets of steel will close, and shift its work to three other mills. Additional cost savings measures will be implemented including a $75 million dollar reduction on capital expenditures and cutting labor cost.1) Stock markets ended at record highs this last week, coming closer to what may well be a blockbuster year. This rally now covers four weeks, with one record closing after another, driven by easing of geopolitical worries. Trade worries have kept investors on the edge for most of 2019. The questions is, will this rally continue into next year?

1) Stock markets ended at record highs this last week, coming closer to what may well be a blockbuster year. This rally now covers four weeks, with one record closing after another, driven by easing of geopolitical worries. Trade worries have kept investors on the edge for most of 2019. The questions is, will this rally continue into next year?

2) Automaker Fiat-Chrysler Automobiles is making an all out push to clear out tens of thousands of vehicles which their dealerships have not ordered, because their new data driven production strategy has swelled their inventory. The automaker is offering its most aggressive discounts since the financial crisis to sell certain 2019 models under their Dodge, Jeep and Ram brands. Their sales staff is working overtime to sell more than 70,000 unassigned cars in December to their 2,400 dealerships.

3) Steel maker US Steel is closing a mill near Detroit and will lay off 1,500 workers, and in addition will cut its dividend in an attempt to reverse operating losses which is forecasted for the fourth quarter. The Great Lakes Works mill, which rolls slabs into sheets of steel will close, and shift its work to three other mills. Additional cost savings measures will be implemented including a $75 million dollar reduction on capital expenditures and cutting labor cost.

4) Stock market closings for – 20 DEC 19:

Dow                28,455.09    up    78.13
Nasdaq             8,924.96    up    37.74
S&P 500            3,221.22    up     15.85

10 Year Yield:    up   at    1.92%

Oil:    down   at    $60.36

1) Stock markets ended at record highs this last week, coming closer to what may well be a blockbuster year. This rally now covers four weeks, with one record closing after another, driven by easing of geopolitical worries. Trade worries have kept investors on the edge for most of 2019. The questions is, will this rally continue into next year?3) Steel maker US Steel is closing a mill near Detroit and will lay off 1,500 workers, and in addition will cut its dividend in an attempt to reverse operating losses which is forecasted for the fourth quarter. The Great Lakes Works mill, which rolls slabs into sheets of steel will close, and shift its work to three other mills. Additional cost savings measures will be implemented including a $75 million dollar reduction on capital expenditures and cutting labor cost.1) Stock markets ended at record highs this last week, coming closer to what may well be a blockbuster year. This rally now covers four weeks, with one record closing after another, driven by easing of geopolitical worries. Trade worries have kept investors on the edge for most of 2019. The questions is, will this rally continue into next year?

2) Automaker Fiat-Chrysler Automobiles is making an all out push to clear out tens of thousands of vehicles which their dealerships have not ordered, because their new data driven production strategy has swelled their inventory. The automaker is offering its most aggressive discounts since the financial crisis to sell certain 2019 models under their Dodge, Jeep and Ram brands. Their sales staff is working overtime to sell more than 70,000 unassigned cars in December to their 2,400 dealerships.

3) Steel maker US Steel is closing a mill near Detroit and will lay off 1,500 workers, and in addition will cut its dividend in an attempt to reverse operating losses which is forecasted for the fourth quarter. The Great Lakes Works mill, which rolls slabs into sheets of steel will close, and shift its work to three other mills. Additional cost savings measures will be implemented including a $75 million dollar reduction on capital expenditures and cutting labor cost.

26 July 2019

1) Tesla, the manufacture of all-electric automobiles, has suffered a worse than expected loss. Additionally, there has been another major management shakeup, all of which is casting doubts on the future of the unique automaker. While Tesla delivered a record number of cars in its second quarter, its stock dropped 14% with a loss of $1.12 per share. Nevertheless, Tesla has opened twenty-five new stores and service centers.

2) Concerns grow that the trade tensions may be pushing U.S. economic growth downwards. Fears that the gross domestic product figures due out this Friday will show business investment has weakened. Additional factors stem from slow global growth and falling oil prices. The gains in jobs and wages are preventing growth from sinking. It’s anticipated that the Federal Reserve will lower interest rates by a quarter point to check softening of the economy.

3) Nissan, the world automobile manufacture, has announced the layoff of 12,500 employees worldwide, or about 10% of its work force. Nissan is striving to rein in the costs increases incurred during the former CEO Carlos Ghosn tenure and alleged financial misconduct. Japan’s number two automaker has suffered a collapse in its quarterly profits, a result of sluggish sales and rising cost. This is another indication of the world’s depressed auto market with other renowned automakers like Ford suffering similar major financial problems.

4) Stock market closings for – 25 JUL 19:

Dow             27,140.98    down    128.99
Nasdaq          8,238.54    down      82.96
S&P 500         3,003.67    down      15.89

10 Year Yield:    up   at    2.07%

Oil:    down   at    $55.91