3 September 2020

1) Major American companies are extending their ‘work from home’ policy, such as Google, Uber and Airbnb, until the summer of next year. The companies Zillow, Twitter, Facebook and Square have announce that employees can work from home indefinitely. Some companies are also offering stipends to employees for home office equipment as well as a $500 quarterly credit to use specifically on Airbnbs. This at home work policy remains in effect even after offices start reopening. The work at home is even spreading across the international scene with electronic giant Hitachi having 70% of its employees work permanently from home. Nationwide Insurance plans to downsize from 20 physical offices to just four with the majority of its employees continuing to work permanently from home. It’s looking more and more like working at home is becoming the norm for the future in America.

2) In a bid to counter the competition of e-commerce, the traditional department store giant Macy’s has started opening new, smaller stores away from the malls, reflecting a growing trend in the retail industry. The retail giant will test small-format Macy’s and Bloomingdale’s stores outside of underperforming malls, joining a growing trend in retail. The test stores will begin operation the fourth quarter of 2021 in Dallas, Atlanta and Washington DC. Many other major retailers are turning away from the mall format of retailing, leaving many malls withering on the vine, with foot traffic on the decline even before the Convid-19 crisis. This is another indication of a shift in American culture and society.

3) Fashion retailer Old Navy has announced they will pay their employees to work at polling stations comes election day. Each employee will be paid a full days wages for their poll work. Furthermore, store employees will have up to three hours of paid time-off on election day to vote. Old Navy joins other retailers such as Patagonia, PayPal and Levi Strauss & Co. to help in the national elections.

4) Stock market closings for – 2 SEP 20:

Dow 29,100.50 up 454.84
Nasdaq 12,056.44 up 116.78
S&P 500 3,580.84 up 54.19

10 Year Yield: down at 0.65%

Oil: down at $41.78

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

26 May 2020

1) Sales of homes in the U.S. have dropped their biggest drop in nearly 10 years, because of the coronavirus crisis in April. The upending of the labor market and the broader economy has undercut demand for housing. Sales of existing homes have plunged 17.8% with existing home sales making up about 90% of U.S. home sales. In addition, April showed a record collapse in homebuilding and permits. With unemployment up past 38 million people and still climbing, it’s expected the home sale market will remain depressed for long after the pandemic crisis is over. The problem is further exasperated by a four month inventory of homes where a six to seven month supply is considered a healthy balance between supply and demand.

2) More contraction of consumerism with more retailers announcing closing of stores. The retailers Victoria’s Secret and Bath & Body Works will be permanently closing about 300 stores in America and Canada. With the young people of America having fewer good job opportunities and less disposable income, the hyper-consumerism economy born in the seventies is finding it harder to sustain itself, raising questions of what economic model might replace the present one . . . and what the job future would be for the young.

3) Companies have been borrowing at a rampant pace to shore up their liquidity during the pandemic. The wireless carrier AT&T is joining in with a new bond sale of $12.5 billion dollars of unsecured bonds in five parts. The intent is to take advantage of a global rally in credit to refinance their outstanding debt. Their 40 year security has a yield 250 basic points over the Treasuries. In the last few years, AT&T has been reducing its debt of nearly $200 billion dollars now down to $164 billion dollars, most of the debt coming from its acquisitions of Time Warner Inc and DirectTV.

4) Stock market closings for – 22 MAY 20:

Dow 24,465.16 down 8.96
Nasdaq 9,324.59 up 39.71
S&P 500 2,955.45 up 6.94

10 Year Yield: down at 0.66%

Oil: down at $33.56

7 May 2020

1) The bust in the Texas oil fields is the worst in memory, says the billionaire Russell Gordy. The coronavirus pandemic has triggered an unbelievable collapse in crude oil prices that is sinking fortunes across Texas, with no clear way out visible in the near future. Texas accounts for 9% of the nations GDP (Gross Domestic Product), so as oil pulls Texas’ economy down, it will undoubtably pull the nations down too. In the past, declining energy prices have helped the U.S. economy, but this time its likely to cut into investment and employment. Texas may lose 1.3 million jobs by June, as the virus puts an end to the U.S. shale oil revolution, which may spill into a broader downturn for Texas, that will also drag the rest of the country down too. Furthermore, Americans are driving and flying much less, which has reduced the demand for oil, bringing on a crisis in storage for the oil surplus. There are expectations that home prices will decline during the remainder of this year and into the next. This in turn will impact the construction industry.

2) As a result of the pandemic, the mortgage industry is implementing reforms that will be long lasting in terms of how lenders operate and how consumers obtain financing. It’s anticipated that digital mortgage processing will become more prevalent as people seek to minimize contact with others. Relators are seeing as much as a 500% increase in home video tours. Reports are that many people are seeing involuntary credit reductions and even terminations of their credit cards as banks seek to reduce their exposure to risk in a troubled economy where jobs are at risk of elimination. This means a further reduction on consumer spending.

3) Disney has seen a 91% plunged of it profits last quarter, a direct result of the coronavirus crisis. The operating profits in Disney’s parks lost about $1 billion dollars to add to a total loss of $1.4 billion dollars in total operating income. Disney has had to close its Walt Disney World and Disneyland theme parks, plus its Disney Stores and the suspension of its cruises and disruptions of its supply chain . However, its new video streaming service Disney Plus grew 26% to 33.5 million subscribers last quarter with revenues up 260%

4) Stock market closings for – 6 MAY 20:

Dow 23,664.64 down 218.45
Nasdaq 8,854.39 up 45.27
S&P 500 2,848.42 down 20.02

10 Year Yield: up at 0.71%

Oil: down at $24.35

7 April 2020

1) Ten million people have rushed to file unemployment claims only to find a system swamped to the point of being nonfunctional. State websites are buckling, their phone lines jammed with backlogs mounting from jobless people seeking benefits, needing help. To make matters worst, the federal government has not dispersed all the necessary monies to states so there isn’t enough money for benefits. While the coronavirus is concentrated in a few areas of the country, the economic havoc has been nation wide.

2) Wells Fargo bank is bowing out of the new federal program aimed at helping small businesses retain workers and pay bills. The bank is no longer accepting new loan applications under the Paycheck Protection Program, which is part of the $2.2 trillion dollar economic relief package. The bank had committed $10 billion dollars to the loan program, but has already reached more than that amount in applications. Last year, Wells Fargo arranged more small business loans than any other lender. The Paycheck Protection Program offers 1% interest loans to business with fewer than 500 workers, and if borrowers don’t lay off workers in the next eight weeks, they will have their loans and interest forgiven. The program allots $350 billion dollars, but as of Friday only 17,000 loans have been approved for a total of $5.4 billion dollars.

3) Jamie Dimon, CEO for JP Morgan Chase, predicts a ‘bad recession’ as a result of the coronavirus, where the GDP (Gross Domestic Product) could plunge as much as 35% annual rate in the second quarter with a down turn lasting the rest of the year. Furthermore, the unemployment rate could spike as high as 14% during this recession. Because of the extension of new credit, a major recession means we are exposing the bank to billions of dollars of additional credit losses in helping businesses through this setback.

4) Stock market closings for – 6 APR 20:

Dow 22,679.99 up 1627.46
Nasdaq 7,913.24 up 540.16
S&P 500 2,663.68 up 175.03

10 Year Yield: up at 0.68%

Oil: down at $26.73

16 May 2019

1) Markets continue to rise as President Trump delays the actual implementation of auto tariffs. Reportedly, the tariffs are to be delayed for up to six months. Other news helped push the markets up, such as Boeing expects to have its 737 MAX software fix released soon.

2) Monet’s ‘Meules’ is now the most expensive painting ever sold at auction. The painting sold for $110.7 million dollars after an eight minute bidding war at Sotheby’s in New York. This is a crushing return on investment, which was bought for $2.56 million dollars in 1986, giving a return on investment of 4,300%.

3) Prior to the new tariffs, China’s economy was slowing down, showing the fragility of the world’s second largest economy. China’s industrial output, retail sales and investment have slowed more than economist expected. With the faltering of credit coupled with slowing consumption at home, combining with a weaker global economy translates into China running out of steady growth right when it’s most needed.

4) 15 MAY 19 Stock market closings:

Dow                  25,648.02    up    115.97
Nasdaq               7,822.15    up      87.65
S&P 500              2,850.96    up      16.55

10 Year Yield:    down   at    2.38%

Oil:    up   at    $62.13

MOODY UPGRADES INDIA CREDIT RATING……

By: Economic & Finance Report

India’s financial industry is probably celebrating and if they are not, they should be. Moody’s the international crediting agency, recently upgraded India’s bond and credit ratings.

The last time India received an improved credit rating from Moody’s was in 2004, close to 14 years ago, the reasoning??? Well it’s because there has not been sufficient criterium met by Moody’s, that was pursued by past governments.

Moody upgraded India’s credit and bond ratings from positive outlook to stable, because of the economic and business reforms that have been instituted by Prime Minister Modi, and the progress that India has taken within the past decade; in regards to institutional reforms within the government. -SB

GOLDMAN SACHS WILL NOW BE RATING EMPLOYEES VIA REAL TIME !!!!!!!

By: Economic & Finance Report

Goldman Sach’s rolled out a new review/performance based system to rate and grade employees performance at the work place. The new system allows employees to attain, receive information and feed back from their supervisors and managers.

This innovative system allows employees and managers to get feedback among themselves all year round.  Entitled Ongoing Feedback 360+ allows employees more interactons and communication with their superiors on many work related issues and allows the managers to communicate to the employee on how to handle different work related issues, in a timely fashion.

The Ongoing Feedback 360+ will be used to allow direct communication with management and the employees at Goldman Sach’s, in a real time based ordinance. -SB

THE NAIRA DROPS INSTANTLY AFTER BEING DEVALUED……………

CBN pic

By: Economic & Finance Report

The Naira devalued over 30% instantly on Monday, June 20, 2016.  It dropped 260 to 1 USD. The Central Bank of Nigeria last week insisted that it would remove restrictions on the Naira and allow it to “float freely” against the dollar.  The move was applauded by traders, analyst, the IMF (International Monetary Fund), whom all have indicated for over a year to allow the Naira to drop because of depleting oil prices.

On Monday, the dollar went skyrocketing against the Naira, some indicated they expected a drop, but not a 30% drop perhaps.  Many analysts including credit rating agency Moody’s; believe devaluing the Naira is a step forward in helping to stabilize Nigeria’s economy; which took a major hit the past few years because of declining oil prices. -SB

Standard & Poor Downgrades Brazil’s Debt Credit To “Junk Status”

Brazil credit rating

By: Economic & Finance Report

Standard and Poor downgraded Brazil’s debt credit to “Junk”. The Bovespa stock index fell 0.33% Thursday, by end of the day. Brazil must cut spending and expenditures to increase stability to its economy.

President Dilma Rousseff discussed alternatives and options with her economic team, on finding certain solutions to the downgrade by Standard & Poor’s… One of the main options discussed was cutting spending drastically. Economically, Brazil is already over ten billion dollars in debt. Inflation is north of 10% and unemployment has risen drastically, over the course of a few years time.-SB