11 January 2021

1) Boeing Aircraft Co. has reached a $2.5 billion dollar agreement to settle the criminal charge that it defrauded the U.S. government by concealing information about the troubled 737 MAX. This is the ill-fated jet airliner involved in two fatal crashes that killed 346 people. The airline manufacturer entered into a deferred prosecution agreement and in turn, the Justice Department will dismiss the charge against Boeing. This settlement caps a two-year criminal investigation into the two MAX crashes. This settlement will have no bearing on any pending civil litigation. In addition, Boeing will pay a $243.6 million criminal penalty. With the penalty and the fund for relatives, Boeing says it expects to pay an additional $743.6 million dollars for the fourth quarter of 2020.

2) The cryptocurrency Bitcoin is at an all-time high in 2021, one coin now worth $36,000. It has doubled its value in 30 days. Bitcoin is the first and biggest cryptocurrency, which started up in January 2009, and eleven years after its invention, the total value of all Bitcoins in the world is around $359 billion. The Bitcoins are long, unbreakable codes stored in clouds or computers. Bitcoins were invented at the height of the 2008-9 financial crisis. The idea is a type of money that didn’t depend on the traditional banking systems. Cryptocurrency is popular in countries with inflation.

3) Venture capital backed companies in the United States raised nearly $130 billion dollars last year, setting a record despite the COVID-19 pandemic, up 14% from 2019, while the number of deals is down 9% to 6,022. The so-called mega-rounds, which are deals that are $100 million dollars or higher, also hit a record amount and number, with $63 billion dollars raised in 318 deals. However, there is a big drop in the very early stage investment called the seed money stage. The trend of big investments doesn’t look like it will slow in 2021 as there is a lot of capital chasing investments. It’s expected that 2021 is going to be a banner year for many tech companies.

4) Stock market closings for – 8 JAN 21:

Dow 31,097.97 up by 56.84
Nasdaq 13,201.98 up by 134.50
S&P 500 3,824.68 up by 20.89

10 Year Yield: up at 1.10%

Oil: up at $52.73

10 December 2020

1) American airlines are preparing to return their Boeing 737 MAXs back into service following the Federal Aviation Administration’s approval for flight service. Starting in 2021 airlines such as American Airlines, United Airlines, Southwest Airlines, and Alaska Airlines will fly the 737 MAX in 2021, starting the first of the year. Southwest airlines operates an all-Boeing 737 fleet, so incorporating the 737 MAX into its daily flying operations, after all the FAA’s required fixes have been completed, will be straightforward. Their pilots training on the aircraft won’t be difficult at all. Southwest currently has 34 MAX aircraft in its fleet with orders for nearly 300 more aircraft.

2) Americans out of work because of the coronavirus are depending on food banks and pantries for their daily subsistence. But these food resources are being depleted of their supplies of food, raising fears of pending food shortages looming. Food banks across Texas are already preparing for expected food shortages during the coming early months of 2021. There are three key federal and state programs that enabled food banks in-state to keep up with the demand this year, but these are about to end. Food insecurity is twice as high as before the pandemic. One food bank system warns that it could face a deficit of up to 10 billion pounds of food in the months leading up to June 2021. This translates into a shortage of about 8 billion meals. Estimates are that 50 million people could experience food insecurity, which is a 50% increase from 2019. Additionally, while remote learning is preventing the spread of the coronavirus, it is also causing food insecurity for children who rely on school-provided meals each day.

3) A test flight of a SpaceX’s Starship rocket, which is expected to eventually carry passengers to the moon and Mars, exploded after launch Wednesday while trying to land, but instead it impacted with the ground. The launch and ascent were successful, but as the engines reignited for landing, the vehicle flipped back to vertical and then slammed into the ground, exploding on ground impact. The test was expected to reach an altitude of about 41,000 feet. There were a number of objectives, 1) How the three Raptor engines perform, 2) The overall aerodynamic entry capabilities of the vehicle 3) How the vehicle manages propellant transition. The SN8 also attempted to perform a landing flip maneuver, a first for a vehicle of this size.

4) Stock market closings for – 9 DEC 20:

Dow 30,068.81 down by 105.07
Nasdaq 12,338.95 down by 243.82
S&P 500 3,672.82 down by 29.43

10 Year Yield: up at 0.94%

Oil: up at $45.71

8 December 2020

1) Experts forecast that a rising stock market and a weak dollar will keep going hand in hand in the near future. The movements of the past month are consistent with movements between equities and the dollar observed this year, which is at its strongest level since before the global financial crisis. Additionally, the seesaw relationship between the dollar and equities is getting more intense, so a rapidly falling currency serves as fodder for stock-market bulls, who are expecting this pattern to endure for some time. Stocks saw a historic rise in November, with the Dow Jones Industrial Average logging its biggest monthly rise since January 1987, as major indexes hit all-time highs. At the same time, the dollar fell 2.3%, its worst month since a 4.2% fall in July and its worst November since 2006. A weaker dollar is often seen as supportive to equities.

2) Boeing Aircraft Co. is considering an equity sale and other ways to ease its debt burden that has soared to $61 billion this year, a result of the worst slump in aviation history. Additionally, Boeing will cut back on production of its 787 Dreamliner from six down to five planes a month by mid-2021. The company has sufficient reserves to see it through months of tumult until coronavirus vaccines are widely distributed. Boeing is prepared to speed up deliveries of 450 of its 737 MAX planes that it built but couldn’t deliver during the global grounding. Therefore undelivered aircraft are starting to stack up around Boeing’s factories and in a storage lot in the California desert, and so it will take the manufacture through 2021 to clear them from its inventory.

3) Negotiations for Britain to exit the European Union continue as the dead line nears. The fundamental differences between the two sides remain over a ‘level playing field’ of the standards the U.K. must meet to export into the bloc, how future disputes are resolved and the fishing rights for EU trawlers in U.K. waters. Ireland finds itself in a difficult place with the most to lose from a no-deal exit. Speed is now of the essence since the 27 EU member states have to unanimously support any deal. Both sides will suffer economically from a failure to secure a trade deal, but most economists think the British economy would take a greater hit. The main problem is how Britain wrests itself free of EU rules with the bloc’s insistence that no country, should get easy access to EU’s market by undercutting its high environmental and social standards.

4) Stock market closings for – 7 DEC 20:

Dow 30,069.79 down by 148.47
Nasdaq 12,519.95 up by 55.71
S&P 500 3,691.96 down by 7.16

10 Year Yield: down at 0.93%

Oil: down at $45.66

19 November 2020

1) A crew of three astronauts went into space aboard a Crew Dragon spacecraft atop a SpaceX Falcon 9 booster. Not since the end of the Space Shuttle program in 2011 has America launched humans into orbit from American, to docked with the International Space Station. The Crew Dragon carried an international assembly of astronauts, three Americans and one Japanese, who are expected to spend the next six months in the station. The launch is another milestone in the commercialization of space. Previously, NASA was purchasing flights on the Russian Soyuz spacecraft but with SpaceX, NASA will save about $25 million per seat.

2) There are growing fears that tourism may not fully recover in New York city until 2025, another result of the coronavirus pandemic. New York city may only get one-third as many visitors as it did last year, a city that is one of the world’s most popular destinations. Forecasters predict that tourism will not fully rebound for at least four years, where in recent years tourism has been a vital part of the city’s economy, that supports hundreds of thousands of workers from hotels to restaurants to Broadway. New York had a record 66.6 million visitors in 2019 and drew $46 billion dollars in annual spending. The collapse of tourism has been a key reason that New York’s economy has been hit harder than most other major American cities. The city’s unemployment rate is 14.1 percent, more than double the national rate.

3) Experts predict that Boeing’s 737 MAX debacle could be the most expensive corporate blunder ever. The 20-month grounding of the 737 MAX could end very soon, but Boeing’s mounting costs have soared to tens of billions of dollars, which may rank among the most expensive corporate mistakes in history. Financially, Boeing continues to pay a high cost to ensure the safety of future 737 MAX passengers, with about $20 billion dollars in direct costs from the grounding, then $8.6 billion dollars in compensation to customers, $5 billion for costs of production, and $6.3 billion for increased costs of the 737 MAX program. Also, Boeing is spending $600 million for jet storage, pilot training and software updates that are not included in the company’s overall cost estimate. Finally, the company has established a $100 million dollar victim compensation fund, which also is not included in Boeing’s $20 billion dollars in estimated costs. Not included is the cost of legal liability which may add another $500 million. Boeing has had to borrow billions of dollars at a roughly 5% interest rate adding more money to be paid out over the 737 MAX. There is also the cost of opportunity lost from the lost of sales with 448 canceled orders for the MAX this year, compared with only nine for its other models. In addition Boeing has dropped another 782 orders from its backlog of orders believed to be no longer certain enough to rely on. In at least some cases those uncertain plane orders are jets airline customers have said they no longer want.

4) Stock market closings for – 18 NOV 20:

Dow 29,438.42 down by 344.93
Nasdaq 11,801.60 down by 97.74
S&P 500 3,567.79 down by 41.74

10 Year Yield: up at 0.88%

Oil: up at $41.62

12 November 2020

1) Biden said he’ll forgive $10,000 in student debt for all borrowers. Will it actually happen? During his campaign, Biden advocated forgiving a large portion of outstanding student loan debt. Now that Biden is the President-elect, the 42 million Americans with education loans may be wondering, will it really happen? Biden’s proposal is a scaled-down version of plans that his rivals to the left in the Democratic primary campaigned on. Sen. Elizabeth Warren, wants to cancel up to $50,000 in student debt for individuals with household incomes under $100,000, while Sen. Bernie Sanders, said he’d erase all of the country’s outstanding education debt.

2) The European Union will impose tariffs on $4 billion dollars of U.S. goods starting Tuesday. This is a tit-for-tat escalation of a transatlantic fight over illegal aid to aircraft manufacturers Boeing Co. and Airbus. The EU tariffs will be on various Boeing models of airliners with a 15% duty, as well as other goods ranging from spirits and nuts to tractors and video games, which will be subject to a 25% levy. The move comes at an awkward moment for the EU, which is contending with a surge of Covid-19 cases and its worsening recession. For the last 13 months, the EU has faced U.S. tariffs on $7.5 billion dollars of European goods after Washington won a WTO (World Trade Organization) case against market-distorting aid. In a parallel lawsuit, the EU received final WTO permission to hit $4 billion dollars of American products with duties because of unfair subsidies to Boeing.

3) EU (European Union) regulators announced antitrust charges against Amazon. The European Commission considers Amazon’s collection of non-public data on its platform is then used to benefit its own retail business because sales of third-party retailers is then used to launch Amazon’s own products and undercut its competition. This complaint is one of the most common charges against Amazon as an anti-competitive outfit. About 2.3 million third-party sellers do business on the Amazon marketplace. The EU also has a second formal investigation which has officially been opened.

4) Stock market closings for – 11 NOV 20:

Dow 29,397.63 down by 23.29
Nasdaq 11,786.43 up by 232.58
S&P 500 3,572.66 up by 27.13

10 Year Yield: down at 0.96%

Oil: down at$41.62

30 October 2020

1) The Boeing Aircraft Co. is selling new bonds to help repay its nearly $3 billion dollars of debt. Boeing announced the sale just minutes after a downgrade to the company’s credit rating. Fitch Ratings put out a report reducing Boeing’s credit rating down to BBB-, the lowest investment-grade rating, with a negative outlook. The company has burned through about $22 billion dollars of its free cash since March 2019, when the company’s best-selling jet, the 737 MAX, was grounded. It is anticipated that it will take two years until Boeing’s financial metrics return to that of a credit rating one level higher.

2) The Philippines has removed a major hurdle in advancing oil exploration with Beijing in the South China Sea, but the two nations will have to navigate their overlapping claims in the area to reach a deal. The island nation has lifted a six-year ban on oil exploration to stop activities that might annoy China. The Philippines has recently toughened its stance against China and is leaning back towards the U.S. It is estimated that 4 trillion cubic feet of gas reserves, that’s worth billions of dollars, could be found in South China Sea areas that is claimed by the Philippines and disputed by China. However an international arbitration court has ruled in favor of the Philippines in 2016. The two nations could set aside the ownership issue and proceed with joint development.

3) Exxon announces additional job cuts, that it intends to reduce its U.S. staff by around 1,900 employees. These reductions will be both voluntary and involuntary, a result of COVID-19 on the demand for oil aimed at improving efficiency and reducing costs. Amid declining oil prices, energy companies are taking drastic measures to improve their balance sheets, including reducing staff and in some cases suspending dividends, with the company’s fourth quarter dividend at 87 cents per share, although this is the first time since 1982 that it didn’t raise its dividend.

4) Stock market closings for – 29 OCT 20:

Dow 26,659.11 up 139.16
Nasdaq 11,185.59 up 180.73
S&P 500 3,310.11 up 39.08

10 Year Yield: up at 0.84%

Oil: down at $36.10

29 October 2020

1) One major factor in the spread of Covid-19 virus, is the portability of societies, the degree which people are moving about and interacting with each other with ease. This is a major cause of the spread of infectious disease. Now with the surge of coronavirus in Europe, Germany and France, they are planning to restrict movement of people for at least a month, coming close to the stringent lockdowns of the spring as European leaders seek to rein in a resurgent pandemic outbreak. Spain, Italy, the U.K., Greece and Portugal reported record numbers of new cases on Wednesday. Asia, Singapore and Hong Kong could start a planned ‘travel bubble’ as soon as next month. This also means restrictions of travel for migrant workers, which in turn means restricting their ability to make money, where much is sent back home to families to support their subsistence.

2) Boeing Aircraft company, a major manufacture of airliners, will cut 7,000 more jobs amid the pandemic, almost doubling its planned job cuts. The coronavirus pandemic has prolonged the grounding of Boeing’s 737 Max jet, thus dimming prospects for financial recovery. Executives are abandoning their forecast that Boeing will stop burning cash next year and so they are now forced to eliminate an additional 7,000 jobs. That will bring the expected losses from layoffs, retirements and attrition to 30,000 people, or 19% of the pre-pandemic workforce, by the end of 2021.

3) Taiwan’s microcircuit manufacture United Microelectronics Corp. has pledged its assistance to the U.S. in a high-profile trade-secrets prosecution of Chinese chipmaker Fujian Jinhua Integrated Circuit Co. UMC has pleaded guilty Wednesday in federal court as part of a deal with U.S. prosecutors. Prosecutors agreed to drop serious charges of economic espionage and conspiracy for theft of proprietary information from Idaho-based Micron Technology Inc. UMC instead admitted to trade-secret theft and agreed to pay a $60 million dollar fine. Prosecutors haven’t publicly detailed the cooperation they are seeking from UMC against Fujian

4) Stock market closings for – 28 OCT 20:
Dow 26,519.95 down 943.24
Nasdaq 11,004.87 down 426.48
S&P 500 3,271.03 down 119.65

10 Year Yield: unchanged at 0.78%

Oil: down at $37.69

15 October 2020

1) The much feared Diablo winds, along with its low humidity, will bring critical fire weather to Northern California through Friday, increasing the risks of wild fires. There are widespread red flag fire warnings for Northen California above San Francisco because of extremely dry, gusty, north to northeast winds which will bring critical fire conditions. With the relative humidity down into the single digits and teens, winds could reach about 45 mph, with gust up to 55 mph, both conditions very conducive to rapidly spread wild fires. The Diablo winds are much like the Santa Ana winds so familiar to Southern Californians.
2) Boeing’s troubles continue with no new orders for jets and more 737 MAX cancellations as the companies crisis continues. There were more orders for the 373 MAX canceled in September with delivery of only 11 total aircraft to customers, which is less than half the number from the same month a year ago. Furthermore, the quality flaws on the 787 Dreamliner continue to hamper efforts to develop an alternative cash cow to the 737 MAX. The major source of Boeing’s problems is the coronavirus pandemic, which continues to hurt the demand for jets, for Boeing as well as its rival Airbus, and this is a factor that neither aircraft manufacture has any control over.
3) The prices for crude oil are rising with the dollar’s decline, which in turn is boosting appeal of commodities priced in dollars. There are signs of oil demand increasing in Asia, which is helping lift the overall outlook for oil consumption. The company Rogsheng Petrochemical of Singapore is buying up oil futures to run its expanded refinery operation in Zhejiang this quarter. The outlook for refineries output remain precarious, with refining margins severely depressed for this time of the year. Refineries typically need a spread of more than $10 a barrel to make it profitable to process crude oil.
4) Stock market closings for – 14 OCT 20:
Dow 28,514.00 down 165.81
Nasdaq 11,768.73 down 95.17
S&P 500 3,488.67 down 23.26
10 Year Yield: unchanged at 0.72%
Oil: up at $41.22

8 October 2020

1) Despite the economic failure of the first supersonic airliner, the French-British Concorde, there are now attempts to revitalize the supersonic airline service. Boom Supersonic has unveiled its first demonstrator aircraft called the X-B1, which is scheduled to start flight testing next year. The demonstrator is planned as a commercial stepping stone to an actual commercial supersonic airliner to transverse the Atlantic ocean in about three and a half hours- about half the present flight time. Plans called for supersonic jets that are quieter and more fuel efficient than the Concorde. Some might consider a supersonic airliner to be an optimistic endeavor considering the concerns over the airline’s industry future over the next several years.

2) Like other restaurant chains in decline, Ruby Tuesday’s decline was several years in the making, accelerated by the pandemic. Amidst speculation by industry insiders, the renowned Ruby Tuesday has filed for bankruptcy. By April, Ruby Tuesday had closed about 30% of its 470 restaurants, and with the virus crisis, restaurants continued closing. It has closed 300 restaurants in the last three years, 186 this year alone, while amassing a $43 million dollar debt plus $19 million dollars owed to landlords and vendors. The company is filing for chapter 11 bankruptcy and will continue operating about 230 restaurants in its bid to survive. Ruby Tuesday’s decline in sales was due to a major shift in consumer attention from casual dine-in to fast food and fast casual options.

3) The troubled aircraft manufacture Boeing Aircraft cuts their forecast for airplane demand due to the pandemic. Over the next decade, Boeing now expects deliveries of 18,350 commercial aircraft, which is down from its previous forecast by 10.7%. The coronavirus crisis is expected to create minimal demand for new jets during the next few years. Boeing still expects to deliver 43,110 commercial aircraft over the next 20 years, a forecast down only slightly from its previous forecast of 44,040 and so will be able to make up for lost sales in the years after the next decade.

4) Stock market closings for – 7 OCT 20:

Dow 28,303.46 up 530.70
Nasdaq 11,364.60 up +210.00
S&P 500 3,419.45 up 58.50

10 Year Yield: up at 0.78%

Oil: up at $40.06

24 August 2020

1) Despite being in a major recession with unemployment hovering around 22 million, the home sales market is on fire, last month setting a record 24.7% increase compared with June. While the housing market was all but frozen this spring, surprisingly it has rebound from the effects of the pandemic crisis. The previous record for sales was set in 1968 with a 20.7% rise. Furthermore, all regions of the country reported strong sales of homes. One factor is considered that all the work at home has homeowners looking for larger houses. The strong sales is driving prices upward, with the median price of homes up 8.5% from July, now at $304,100. This is the 101st straight month of increasing prices.

2) AI (Artificial Intelligence) has made significant inroads in competing with humans to do tasks better and faster. In a field most people would consider as strictly a human endeavor- Dog fighting, or aerial combat where fighter aircraft chase each other through the sky trying to shoot each other down, now has AI systems to replace people. An AI system developed by Heron Systems went against a human F-16 fighter pilot in simulated air combat and defeated him 5-0. The simulation was limited to the nose cannon only, no missiles allowed. A couple of years ago, Boeing Aircraft said they were developing robot airliners which flew by themselves- no pilots!

3) Researchers have created a minuscule robot beetle, weighing only 88 milligrams, that can operated for two hours without a battery. The machine runs on liquid methanol that powers its artificial muscles allowing it to carry 2.6 times its body weight. The artificial muscles are called ‘catalytic artificial micro-muscle’, that uses special metals that allows the use of methanol to generate power to a micro-machine. While the RoBeetle is just a demonstration of a technology, it shows that power can be derived without the use of conventional batteries, which limit the size and weight of micro-robots.

4) Stock market closings for – 21 AUG 20:

Dow 27,930.33 up 190.60
Nasdaq 11,311.80 up 46.85
S&P 500 3,397.16 up 11.65

10 Year Yield: down at 0.64%

Oil: down at $42.25