12 March 2020

1) The WHO (World Heath Organization) has declared the coronavirus to be a pandemic, which in turn has cause the markets to make another plunge after its apparent recovery on Tuesday. The number of coronavirus cases world wide is now in excess of 100,000 with more than 1,000 in the U.S. The central banks in other western nations are cutting their interest rates in an attempt to minimize the effects of the virus and avoid a world wide economic slowdown. At present, there doesn’t seem to be an end to the markets volatility.

2) The United Kingdom is levying an additional 2% tax on big high tech companies starting the first of April. Call the ‘digital services tax’, it will levy a tax on the revenues from search engines, social media services and online marketplaces used by British citizens, but it only applies to companies making more than $650 million dollars and derive more than $35 million dollars revenue from UK users. This will encompass companies like Amazon, Apple, facebook and Google. The EU (European Union) is considering a similar tax, but with a 3% rate.

3) Oil production in the U.S. is expected to drop as a result of the dramatic collapse in oil prices. This would be the first decline in output since 2016 as drillers are cutting back on capital spending. Oil prices are below $35 a barrel, well below the breakeven price for most American shale fields. Oil prices have been pushed down by the economic impact of the coronavirus plus Saudi Arabia and Russian failing to agree on limited oil production.

4) Stock market closings for – 11 MAR 20 Stocks down 20% from their high.

Dow 23,553.22 down 1464.94
Nasdaq 7,952.05 down 392.20
S&P 500 2,741.38 down 140.85

10 Year Yield: up at 0.82%

Oil: down at $33.12

2 December 2019

1) Deere & Co., the famous manufacture of green and yellow tractors, reported lower earnings blaming trade tensions and poor weather in the U.S. farm belt. Last year’s difficult growing and harvesting conditions have made farmers cautious about investing in new farm equipment. Sales of the construction and forestry division are expected to be down by 10% to 15%, while agricultural is down 5% to 10% next year.

2) Texas oil explorers say predictions of shale production isn’t reflecting the industry’s slowdown. Producers are being starved of funding, stocks have plunged and little interest in public offerings, which may cause a downturn to be more enduring. Seeking to cut costs, drillers have laid off 1,000 workers. There are predictions that U.S. oil production growth will flatten as early as 2021. There is a rapid decline of shale well production, partly a result of placing wells too close together.

3) Global manufacturing has been dragging the world economy down this last year. Weak auto sales have added to the problem, with China’s auto market the worst with a 11% decline in sales. Slow auto sales have cut production at auto plants, with Audi cutting 7,500 jobs. U.S. dealerships are struggling to clear inventory for the new year, with a 12% rise in incentive spending in November, compared to a typical 4%.

4) Stock market closings for – 29 NOV 19:

Dow         28,051.41    down    112.59
Nasdaq      8,665.47    down      39.70
S&P 500     3,140.98    down      12.65

10 Year Yield:    up   at    1.78%

Oil:    down   at    $55.42