1) Several high profile companies have missed their third quarter earnings, making analysts worry if a long feared earnings recession may be getting closer. Earnings missed from expectations are FedEx by 3%, McDonald’s 5%, Caterpillar 8% and Boeing 30%. Texas Instruments has given a very poor revenue guidance for the fourth quarter of 11% below consensus. This quarter, 83% of reporting companies have beaten expectations by 4.2% average, so earnings misses by large companies is fairly rare.
2) Walmart will start its holiday sales earlier this year, starting this Friday at midnight. This is about a week earlier than last year. Retailers are facing a short holiday shopping season this year, which is just 26 days between Thanksgiving and Christmas. This is about a week shorter than the same period last year.
3) Car prices have been rapidly increasing, leaving consumers having a hard time affording new vehicles. This forces buyers to take out long term auto loans making a further burden on hard pressed consumers. The average new car purchase price in the U.S. is $36,718 with interest rates at about 6%, which is up 2% from 2017. A decade ago, the average price for a new car was $23,900, while average wages has remained static.
4) Stock market closings for – 23 OCT 19:
Dow 26,833.95 up 45.85 Nasdaq 8,119.79 up 15.50 S&P 500 3,004.52 up 8.53
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
1) Fears are growing that the world is moving towards an economic crisis, based on signs from Washington and Wall Street, starting with President Trump’s retreat from adding new tariffs. The stock market rose over the news meaning Christmas had been saved for this year’s sales. But the bond market wasn’t as optimistic, the rates dropping indicating a lack of confidence in the future economy. Called an inverted yield curve, it signals investors expect a weak growth and lower inflation over the years.
2) The troubling signals from the bond market caused the stock markets to drop, with the Dow dropping 800 points to erase all of Tuesdays gains. Worried about the state of the economy, investors are rushing to long term safe haven assets, pushing the yield on 30 year Treasury bonds to a new record low. The Cboe Volatility Index jumped to a high of 22.
3) The financial problems plaguing Boeing aircraft from the 737 MAX grounding may delay or even cancel Boeing’s next airliner design, the 797. A mid-size airplane, the aviation industry expected Boeing would go ahead with a new design, but the sever loses from the 737 MAX are now casting doubt on that happening, especially if the world economy does deteriorate. The 797 is expected to be a long range jet seating about 250 passengers. The design would make extensive use of light weight composites giving good fuel economy and range. Additionally, engineering resources are being pulled away from the 797 to work the 737 MAX problem.
4) Stock market closings for – 14 AUG 19:
Dow 25,479.42 down 800.49 Nasdaq 7,773.94 down 242.42 S&P 500 2,840.60 down 85.72
Merry Christmas to all, & to all a very merry, jolly and blessed Christmas.
To all my Christians who are facilitating Christmas, remember this important day on December 25 is not about you or I but about our yearly blessings; it’s about the birth of the Savior Jesus Christ, who was brought on earth to heal us from our sins and sacrificed his life so we can SAVE OUR OWN….
This shall be remembered eternally. Merry CHRIST-MAS…. #StayBlessed & May #GODBLESS US ALL!!!!!!- SB