1) Hallmark Greeting Cards is suffering a downturn in the brick-and-mortar retail industry, closing sixteen of its retail outlets across America. Social media is crushing the card business, so it’s no longer a viable business. People use to buy and send cards all the time, but now it’s all online. This is just another indicator of how the retail business is changing, more people doing their shopping on line.
2) Franchise businesses remain a popular strategy for people to start their own business, giving them the benefit of an established brand. About two-thirds of Americans say they want to start a small business, but fears of failure stop most, with good reason. About half the small business startups fail within five years, and two-thirds within ten years. Most businesses do not fail because they don’t make a profit, but rather because of insufficient cash flow problems.
3) Independent grocery stores and regional supermarket chains, who are already facing brutal competition and shrinking profits, now face losing a valuable source of sales- the food stamp recipients. New rules for SNAP (Supplemental Nutrition Assistance Program) could eliminate 700,000 people from eligibility. Loss of sales could result in reduce orders from suppliers, reducing labor in stores or the closing of stores. Grocery stores have a profit margin of only about 1 % to 2% leaving little room for changes in their sales volume.
4) Stock market closings for – 30 JAN 20:
Dow 28,859.44 up 124.99 Nasdaq 9,298.93 up 23.77 S&P 500 3,283.66 up 10.26
1) New York Life Insurance is buying Cigna business, which sells life and disability insurance, for $6.3 billion dollars. This is just one of several which have bought into the group benefits business. Such businesses are attractive to insurers seeking to diversity, because the units are less capital intensive, don’t rely as much on investment income and also provide cash flow.
2) Auto makers Fiat Chrysler and Peugeot maker PSA have agreed on a binding merger for $50 billion dollars, which paves the way to the creation of the world’s fourth largest automaker. The merger will create a cost savings of $4 billion dollars by combining technologies and through shared purchasing agreements.
3) There are more people being rejected for auto loans according to a Federal Reserve Bank report. Auto loan rejections spiked in October at 8.1% compared to 4.5% a year ago, while for a full year, rejections are up at 7.1% from 6.1% for 2018. A decade of easy auto credit has sparked concerns that U.S. households could be on the verge of another financing bubble. Other segment of consumer credit have reported fewer rejections of credit applications.
4) Stock market closings for – 18 DEC 19:
Dow 28,239.28 down 27.88 Nasdaq 8,827.74 up 4.38 S&P 500 3,191.14 down 1.38
1) As part of its restructuring plan, HP announced they will cut about 7,000 to 9,000 jobs, resulting in an estimated savings of about $1 billion dollars. While HP expects to incur labor and non-labor cost of about $1 billion dollars, they expect to generate at lease $3 billion dollars of free cash flow. As of 31 October 2018, HP had world wide employment of about 55,000 workers.
2) Consumer spending has been the bright spot in an economy showing signs of weakening on multiple fronts, in particular manufacturing. Economists worry if consumer spending will continue to prop up the economy, saying that the up coming Christmas season will be a test. Issues such as trade, interest rates, global risk factors and political rhetoric are where confidence can be eroded by deterioration of these items.
3) The new Costco in Shanghai China reports membership of more than 200,000 as compared to an American average of 68,000 per store. Costco will open a second Shanghai location in early 2021. The first day opening, the store was so swamped with customers, that the doors had to be closed for four hours to limit the number of people inside to safe limits.
4) Stock market closings for – 4 OCT 19:
Dow 26,573.72 up 372.68 Nasdaq 7,982.47 up 110.21 S&P 500 2,952.01 up 41.38