24 November 2020

1) The European Union warned that the United Kingdom has not moved sufficiently to overcome the main obstacles to a post-Brexit trade deal. One major point of contention is the fishing rights for EU fishermen in having access to U.K. fishing waters. Late on Thursday, the leaders of France, Belgium and the Netherlands called on the EU to make contingency plans for the failure of a deal in time. Officials on both sides privately voiced cautious optimism that a deal could be concluded as soon as next week, with talks now at a delicate stage. On fishing, the two sides still can’t agree on how much of the British catch the EU boats will be allocated, while the two sides also haven’t agreed on cross retaliation clauses, the official said.

2) Great Britain and Canada have reach a trade deal in a Brexit giving Prime Minister Johnson a boost. U.K. has agreed with Canada to maintain the trading conditions it has from their European Union membership and to begin talks on a broader deal that would pave the way for even closer links with Britain. Canada is Britain’s 12th largest trading partner. The two countries will begin negotiations next year to expand their commercial agreements to cover digital trade, the environment and women’s economic empowerment. Without the new agreement, Britain and Canada face tariffs on trade from the first of the year, when the Brexit transition period ends. Britain is Canada’s third-largest export market after the U.S. and China.

3) The CDC has released a report that counties in Kansas who complied with a mask mandate saw a decrease in cases compared to counties that didn’t. Those counties that opted out of mandatory wearing of masks saw an increase by 100%. While experts have said that masks are a key part of limiting the virus, their usage has been the subject political debate for months. The same declines has been seen in 15 states and in Washington DC. Covid-19 infections decreased in 24 counties with mask mandates but increased in 81 counties that opted out of the order. This translates into a 6% in counties with a mandate compared to an increase of 100% in counties where masks were not mandated. There have been 136,861 confirmed cases of coroniavirus throughout the state of Kansas, which have resulted in at least 1,306 deaths. With more than 35% of tests administered coming back positive, three times higher than the 10% rate nationally.
4) Stock market closings for – 23 NOV 20:

Dow 29,591.27 up by 327.79
Nasdaq 11,880.63 up by 25.66
S&P 500 3,577.59 up by 20.05

10 Year Yield: up at 0.86%

Oil: up at $42.84

16 June 2020

1) The markets sank Monday, down by 762 points, when the news of the Feds bond-buying plan became known, reversing the selling to buying which raised the Dow up 150 points. The downward slide was from fears of a second round of the Convid-19 virus with the possibility of more economic damage. The plan is for the Federal Reserve to buy individual corporate bonds, on top of the exchange traded funds it is already buying. This is a move to ease credit conditions to further stimulate the economy. The program can buy up to $750 billion dollars worth of corporate credit, which the Feds can buy on the secondary market, individual bonds that have maturities of five or less years. Bonds is how corporations typically fund their operations and expansion using debt, and this program will ease debt for corporations allowing them to grow more and provide jobs.

2) The oil giant BP (British Petroleum) has signaled to investors that the economic shock of the pandemic will reverberate for years. This in turn means less gas and oil needed by the world in the future. The company is expected to write down $17.5 Billion dollars of its oil and gas holdings this next quarter, meaning they are worth less in the future than what they are worth today. The coronavirus pandemic has caused steep declines in demand for gas and oil worldwide, and this is expected to last for a number of years. This write down is in the approximate class of the Deepwater horizon disaster in the Gulf of Mexico, which was $32 billion dollars.

3) Britain’s Brexit, the planned exit of Britain from the European Union, has been overshadowed by the world wide pandemic, but nevertheless Brexit trade talks have continued. But the talks have reached an impasse. Britain left the union at the end of January, but had not reached agreements on traded with the other European countries. Although Britain left the union, the two economies have continued operating as before Brexit, so there has been little changed in trading. But this is only to the end of the year, and with Britain a major trader of goods with Europe, it’s important to reach agreements before that time comes. One major point of contention is how future disagreements will be adjudicated or arbitrated.

4) Stock market closings for – 15 JUN 20:

Dow 25,763.16 up 157.62
Nasdaq 9,726.02 up 137.21
S&P 500 3,066.59 up 25.28

10 Year Yield: unchanged at 0.70%

Oil: up at $37.07

10 June 2020

1) President Trump is slipping in the polls, and this may pose a risk to the markets. Even though the wild swings of the markets have subsided and then surged upwards, with the Democrat Joe Biden gaining in the polls, there is concerns that the markets will take a down turn as Biden becomes stronger. The President is facing criticism over his handling of the coronavirus pandemic and the protest from the killing of George Floyd by the police. A victory by Joe Biden and a Democratic sweep are considered more ‘market unfriendly’ outcomes. Taxes are one major area of contrast between the candidates, with taxes a major concern for American businesses. These fears are fueled by the Dow sliding downwards for the first time this month as the rally pauses.

2) Borrowing by the British government to pay for the coronavirus shutdown is soaring to levels not seen since World War II. This is on top of the financial problems from Brexit with Britain’s debt jumping five-fold to a 300 billion pound deficit ($380 billion dollars) . This could leave Britain with a 2.2 trillion pound debt and the need to raise taxes with an impact on economic growth. Britain is funding this expenditure with sales of bonds, but have fears of a Greece style loss of confidence among investors. The government is hoping for a fast recovery after restrictions are lifted, allowing the debt to quickly be paid down.

3) There are fears that the U.S. dollar is entering a bear market so may no longer be the safe haven for investors. This bear market could go for five to ten years. This would occur if the global economy really is bottoming out and thereby rebound again, while U.S. interest rates are at zero, with potential growth lower than the merging markets. The U.S. dollar is depreciating against many international peer currencies these last few days.

4) Stock market closings for – 9 JUN 20:

Dow 27,272.30 down 300.14
Nasdaq 9,953.75 up 29.01
S&P 500 3,207.18 down 25.21

10 Year Yield: down at 0.83%

Oil: down at $38.39

3 February 2020

1) Brexit, the exit of Britain from the European Union, has been confirmed by the European Parliament with a vote Wednesday, which ratified the withdrawal agreement. The vote to ratify was 621 to 49 with 13 abstentions. For the EU (European Union) the loss of Britain represents a significant defeat, a loss of size, reach, momentum and permanence akin to the U.S. losing Texas. Potentially, the EU bloc now has less clout, although the remaining 27 countries have been drawn tighter together by the debate. Now comes the negotiations of EU’s future relationship with Britain to try and maintain the single open market.

2) Delta Air Lines and American Airlines announced they are suspending service to mainland China to counter the spread of coronavirus. It is expected that United Airlines is expected to soon follow suit. American will continue service to Hong Kong. Other world air carriers have also announced suspended or reduced services to China.

3) With the decision two years ago by the Supreme Court to widely legalize sports betting, companies are rushing in to expand sports betting operations. U.S. casino operators, fantasy apps and betting grands from Europe and Australia are in a race for American customers now that the way has been cleared for betting outside of Nevada.

4) Stock market closings for – 31 JAN 20: Fears of China’s coronavirus continue to push markets down.

Dow                   28,256.03    down    603.41
Nasdaq               9,150.94     down    148.00
S&P 500              3,225.52     down       58.14

10 Year Yield:    down   at    1.52%

Oil:    down   at    $51.63

22 October 2019

1) Oil prices are falling over fears of global demand declining. Fears that global economic growth is shrinking coupled with ample global supplies of oil are pushing oil prices down. Additionally, there are fears that an economically damaging no-deal Brexit may cause further economic slowdown internationally. Oil prices serve as an economic bellwether of overall world economic health, higher prices indicating strong economies causing increase demand for oil world wide.

2) Four drug companies have reached a settlement to avoid a trial. The litigation stemmed from claims that the four companies fueled the opioid crisis, but details of the settlement have not be announced yet. The drug companies are McKesson Corp., Cardinal Health Inc., AmerisourceBergen Corp. and Teva Pharmaceutical Industries Ltd.

3) Bank of America announced that any customer of its retail banking loyalty program will now get unlimited free trades for stocks, ETFs and options. The banking giant joins others in a brokerage war of unlimited free trades for preferred members, which include Robinhood, J.P. Morgan Chase, Charles Schwab, E-Trade and TD Ameritrade.

4) Stock market closings for – 21 OCT 19:

Dow           26,827.64    up    57.44
Nasdaq        8,162.99    up    73.44
S&P 500       3,006.72    up    20.52

10 Year Yield:    up   at    1.79%

Oil:    down   at    $53.56

18 October 2019

1) New home construction has dropped from a twelve year high in September, although single home construction rose for a fourth straight month. This indicates the housing market remains supported by lower mortgage rates even as economy slows. Housing starts declined 9.4% last month as construction in the volatile multi-family housing segment dropped.

2) The Prime Minister of the United Kingdom announced a great new Brexit deal. The proposed exit plan goes before the U.K. parliament this Saturday, the EU (European Union) claimed the deal was a fair and balance one. Parliament must vote approval before the deal can be accepted, however, this time the Conservative party is now committed to this deal and not a ‘no-deal’ and so will campaign for a majority support.

3) The employees for the bank Goldman Sachs will receive the lowest pay in the last ten years. This is a result of software systems doing more and more of the company’s business, another example of technology displacement. The bank set aside 35% of its revenues for staff compensation and benefits this year, the lowest rate since 2009, with an average employee earning of $246,000 less than half of the $527,000 from last year.

4) Stock market closings for – 17 OCT 19:

Dow           27,025.88    up    23.90
Nasdaq        8,156.85    up    32.67
S&P 500       2,997.95    up      8.26

10 Year Yield:    up   at    1.76%

Oil:    up   at    $54.05

14 October 2019

1) China has announced they are ending caps to foreign financial ownership, allowing foreign firms to have full ownership of financial services companies. Starting in 2020, overseas institutions can apply for total control of onshore ventures. China has been opening its financial sector at an unprecedented pace to lure financial giants such as Goldman Sachs, JP Morgan Chase and Morgan Stanley into greater participation in China’s economy.

2) Investors are retracting the fastest since the collapse of Lehman Brothers. In the past six months, money market funds have attracted billions of dollars of inflows, the largest flight to safe assets since the second half of 2008, with investors raising their cash holdings despite falling interest rates. This is being driven by unresolved issues of the trade war, Brexit and the domestic political turmoil mixed with fears of a recession.

3) The U.S. and China have reached a partial agreement Friday which would broker a truce in the trade war. This will lay the groundwork for a broader deal later with Presidents Trump and Xi Jinping. News to the agreement cause the markets to shoot up over 300 points. Part of the agreement is for China to make agricultural concessions and the U.S. provide some tariff relief.

4) Stock market closings for – 11 OCT 19:

Dow 26,816.59 up 319.92
Nasdaq 8,057.04 up 106.26
S&P 500 2,970.27 up 32.14

10 Year Yield: up at 1.75%

Oil: up at $54.91

24 September 2019

1) Saudi Arabia has restored 75% of its crude oil output and will have restored full production by next week. The September 14 attacks had reduced crude production to half, but promises that production will be fully restored by the end of September. The Saudis have managed to avoid a world wide oil crisis by drawing upon their stockpiles to continue supplying their customers at near pre-attack levels of crude.

2) The retailer giant Amazon plans to purchase 100,000 electric delivery vans from the company Rivian as part of its carbon neutral plan. Furthermore, Amazon announced plans to up its present 40% renewable energy to 100% by 2030. Rivian will design a custom electric delivery van for Amazon to be delivered between 2021 and 2024, who also has an agreement with Ford to develop an electric F-150 pickup truck. Amazon is also working to halt its support of the fossil fuel industry, stopping donations to climate denying politicians and think tanks, and stopping the oppression of climate refugees.

3) The British travel firm Thomas Cook has collapsed with bankruptcy, leaving about 600,000 customers stranded. The 178 year old group, which is debt plagued and struggling against fierce online competition for some time, is blaming Brexit uncertainty for the recent drop in bookings, and thus its inability to secure $250 million dollar loan to prevent collapse. This also leaves 22,000 staff members unemployed, with the British government chartering airlines to fly stranded passengers home.

4) Stock market closings for – 23 SEP 19:

Dow             26,949.99         up   14.92
Nasdaq          8,112.46    down     5.21
S&P 500         2,991.78    down     0.29

10 Year Yield:    down   at    1.71%

Oil:    $58.49

1) There are expectations that global growth will slow this year to a rate that can become a financial crisis. The Organization for Economic Cooperation and Development claims new data showing the US-China trade dispute is increasingly threatening the outlook of the two largest economies as well as others. Furthermore, the uncertainty from the Brexit and a possible crash out would further aggravate economic growth in the European sector.

2) Saudi Arabia is avoiding a global oil crisis by using the crude it holds in reserve until production can be fully restored. The Saudi’s claim necessary repairs will be completed in two to three weeks, thus restoring production levels prior to the attack. However, oil experts are skeptical that these repairs can be done in such a short period of time. This uncertainty is due in part from Saudi Arabia’s lack of transparence of their oil operations.

3) Good news for home owners, sales of used homes rose to its highest in more than a year, with the median price up 4.7% from last year to $278,200. This home sale bonanza is fueled in part by the low interest rates now available and by income gains. However, there are fears of a global economic slow down darkening this rosy picture in the near future. Presently, it would take 4.1 months to sell all the available houses, with realtors considering anything below a five month supply a tight market.

4) Stock market closings for – 19 SEP 19:

Dow              27,094.79    down   52.29 
Nasdaq           8,182.88          up     5.49
S&P 500          3,006.79          up     0.06

10 Year Yield:    down   at    1.77%

Oil:    $58.68

29 August 2019

1) Threat of a ‘no deal’ Brexit has the British pound falling relative to the US dollar and euro. The new British prime minister Boris Johnson announced the annual suspension of Parliament would be extended until 14 October, just two weeks before the UK is set to leave the European Union. This suspension is considered a move to block a no-deal Brexit within the UK parliament.

2) If General Motor exits from China, it will mean billions of dollars of profit lost. President Trump’s threatening order for American business to leave China would leave GM the hardest hit of the big three American automakers. While most of GM’s profits comes from North America, it makes about 43% of it annual auto sales in China. This would also mean the loss of all future growth potential, leaving it almost a North American only company, since GM has sold off its European operations.

3) The international gold market is falling prey to a forgery crisis. Gold bars are being stamped with logos of major refineries which makes them of questionable purity. These fake bars are being used as a means to launder cash money or trafficking illegally mined gold. The fakes became apparent when gold bars were found with identical serial numbers. In 2017 and 2018 there were 655 forged bars reported. Gold Kilobars are the most common form of gold in circulation and are worth about $50,000 each

4) Stock market closings for – 28 AUG 19:

Dow                26,036.10    up    258.20
Nasdaq             7,856.88    up      29.94
S&P 500            2,887.94    up      18.78

10 Year Yield:    down   at    1.47%

Oil:    up   at    $55.90