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
1) Bill Gates, the co-founder of Microsoft is stepping down from the company’s board of directors, which makes it the biggest boardroom departure in the tech industry, since the death of Apple’s Steve Jobs. Additionally, Mr. Gates is vacating his board seat at Berkshire Hathaway Inc., intending to devote his time to his philanthropic efforts. He will continue serving as a technical advisor to Microsoft.
2) Oil prices climbed up 5% on the announcement by President Trump that the Department of Energy would purchase crude for the nations’ strategic petroleum reserve. The objective is to boost oil prices to keep shale producers in business, because oil needs to be $40 or more a barrel to break even, depending on the particulars of an oil field. The shale oil companies are further in trouble because they are carrying a high debt level. Shale oil production is very capital intensive and therefore very sensitive to oil prices if companies aren’t to go bankrupt. Some suggest that the Russians engineered the rupture of the Saudi Arabia – Russian agreement to limit production levels as a means to cripple the U.S. shale oil production and thereby make America dependent on foreign oil again.
3) President Trump and the Congress have agreed on several provisions of a package, but have been far apart on others. Their discussions center on ways to minimize the economic impact of the coronavirus fears. One point is to ensure that every American can receive a virus test without consideration of money.
4) Stock market closings for – 13 MAR 20:
Dow 23,185.62 up 1985.00 Nasdaq 7,874.88 up 673.07 S&P 500 2,711.02 up 230.38 10 Year Yield: up at 0.95% Oil: up at $32.93
Billionaire Democratic presidential candidate Michael Bloomberg, will be unveiling tax proposals and tax plans that will aim at wealthy Americans.
Mr. Bloomberg will be instituting a five percent surtax to incomes of five million and more, while also increasing the capital gains, and corporate gains.
Mr. Bloomberg wants to expand healthcare, public housing, education and infrastructure. The tax plans outlined by Mayor Bloomberg indicates that it could raise over $5 trillion dollars, in over a decade. Estimates have projected to go up and down depending on how reliant the calculations are.
Bloomberg’s plan would bring back the personal income tax to 39.6% (currently reduced to 37%). Capital gains on personal income over $1 million dollars would be tax, and 5% surtax on incomes over $5 million dollar, while also changing the estate tax as well. Corporate taxes will increase from 21% to 28%. -SB
1) Celadon, a truckload carrier and American trucking giant, is slated to declare bankruptcy as early as December the 11 th. This may possibly be the largest truckload bankruptcy in history. Already, fuel cards for truck drivers are getting turned off, leaving truckers stranded in the field unable to get home without using their own money. As many as 3,200 truck drivers may find themselves stranded in addition to being without jobs. In the first half of 2019, about 640 trucking companies went bankrupt, triple the number from last year as freight volumes decline for 11 straight months. Celadon’s stock has gone from $20 a share down to 41 cents.
2) The Federal Government’s liquidity problem hasn’t gone away yet, even with hundreds of billions of dollars in new liquidity created out of thin air. The Feds will not know if there is enough money to cover repos, the short term loaning of money from bank to bank to cover short term cash shortages. If there is insufficient liquidity, then there’s the danger of a ‘lock up’ of American’s financial system.
3) Yes Bank Ltd. is expected to reject an offer of $1.2 billion dollars, more than half its planned $2 billion dollar capital raising. Instead, the company is turning to institutional investors to make up the shortfall. The bank would prefer to have institutions rather than individual investors in their fund raising. Yes Bank needs new investors in order to replenish its capital, which is now down to regulatory minimum as a result of bad loans.
4) Stock market closings for – 9 DEC 19:
Dow 27,909.60 down 105.46 Nasdaq 8,621.83 down 34.70 S&P 500 3,135.96 down 9.95
1) In their Friday report the U.S. economy added 128,000 jobs in October, a report considered to be very strong when many economist expected a gain of 75,000 jobs. Furthermore, job growth for September was revised upwards to 180,000 from 136,000 and August jobs up from 168,000 to 219,000 new jobs. The good news has spurred the stock markets up.
2) Alphabet, the parent company for Google, is acquiring Fitbit in an attempt to strengthen the search giant’s lineup of hardware and move further into the health market. The $2.1 billion dollar sale will strengthen Fitbit to complete against Apple. Fitbit has slowed since Apple introduced its smartwatch.
3) The U.S. dollar may be weakening with Citi latest projections that the dollar index could fall to as low as 85 as the Federal Reserve increases its balance sheet by purchasing more bond assets. The dollar usually weakens when bond yields fall. If the dollar index were to weaken to 85, the euro could strengthen to 1.21 which helps emerging market equities. Additionally, capital could flow to the Hong Kong market if the dollar weakens, making a lot of stocks very attractive.
4) Stock market closings for – 1 NOV 19:
Dow 27,347.36 up 301.13 Nasdaq 8,386.40 up 94.04 S&P 500 3,066.91 up 29.35
1) Global economic slowdown is due to rising interest rates and the trade war. The international slowdown is faster for other nations than for America, while England’s growth rate is slowing because of the additional problem of Brexit.
2) Government funding may run out on the seventh of December, when Congress might shut down the government over the boarder wall funding.
3) Worries are growing about high corporate debt, which might cause economic problems in the future, with corporate debt now totaling nine trillion dollars. Furthermore, increasing interest rates on debts may pull corporations down who are unable to service that debt. Corporate debt has double over the last decade.
4) 21 NOV 18 Stock market closings:
Dow 24,464.69 down 0.95
Nasdaq 6,972.25 up 63.43
S&P 500 2,649.93 up 8.04
New article posted below, titled “Recession Worries?”
1) As the major retailer Sears follows Toys-‘R’-Us into financial collapses, there are seven other major retailers who are also financially weak. They are JC Penny, Barnes & Noble, Stein Mart, Neiman Marcus, Rite Aid Pharmacy, J Crew and Stage Stores. Several are plagued with several years of loses and double digit decline in sales.
2) England’s plans to exit the EU (European Union) regardless if there’s an agreement has put fears in the European markets if England exits without first getting an agreement.
3) So far, the California wild fires have destroyed some 12,800 structures, a loss which is a sever economic hit to the state, starting with loss tax revenues. There was already limited construction resources before the fires, so long delays are expected in rebuilding.
4) 16 NOV 18 Stock market closings:
Dow 25,413.22 up 123.95
Nasdaq 7,247.87 down 11.16
S&P 500 2,736.27 up 6.07
1) Eighteen states will increase their minimum wage starting in 2019, but eight of these states will have smaller initial increases with automatic increases that adjust the minimum wage to keep pace with price growth.
2) Amazon’s ‘Alexa’ has been reprogram to speak Spanish, so is being released for sale in Mexico as Amazon expands into the Mexican market.
3) The Federal Reserve has held interest rates the same, but signaled that most likely it will be increased this next month.
4) Amazon plans to split it’s new headquarters (HQ2) between two cities, Long Island City in New York and Arlington, Virginia.
5) 8 NOV 18 Stock market closings:
Dow 26,191.22 up 10.92
Nasdaq 7,530.88 down 39.87
S&P 500 2,806.83 down 7.06