16 October 2019

1) The IMF (International Monetary Fund) has made another cut to its 2019 global growth forecast, the fifth in a row. The reason given is a broad deceleration of the world’s largest economies with trade tensions undermining the expansion. Their projections of world economic growth has gone from a high of 3.9%, down to 3.5%, then to 3.4%, to 3.2% and finally to 3%.

2) The low mortgage rates has caused an epic housing shortage. The average mortgage rate for 30 year fixed was over 5% last November and stayed above 4.5%, but now is around 3.5%. Inventory trends in the mid-market indicate lower levels of inventory in early 2020. Housing starts have been moving up slowly, but mostly in the higher end homes, leaving the ‘starter home’ market depleted.

3) The production and delivery of Harley-Davidson’s new LiveWire electric motorcycle has been halted with the discovery of a problem with its charging mechanism. There was a non-standard condition in the final quality check, which halted deliveries of LiveWire bikes, however customers can continue riding their LiveWare motor cycles. Additional testing and analysis is progressing well.

4) Stock market closings for – 15 OCT 19:

Dow         27,024.80    up    237.44
Nasdaq      8,148.71    up    100.06
S&P 500     2,995.68    up       29.53

10 Year Yield:     up   at    1.77%

Oil:    down   at    $52.93

26 July 2019

1) Tesla, the manufacture of all-electric automobiles, has suffered a worse than expected loss. Additionally, there has been another major management shakeup, all of which is casting doubts on the future of the unique automaker. While Tesla delivered a record number of cars in its second quarter, its stock dropped 14% with a loss of $1.12 per share. Nevertheless, Tesla has opened twenty-five new stores and service centers.

2) Concerns grow that the trade tensions may be pushing U.S. economic growth downwards. Fears that the gross domestic product figures due out this Friday will show business investment has weakened. Additional factors stem from slow global growth and falling oil prices. The gains in jobs and wages are preventing growth from sinking. It’s anticipated that the Federal Reserve will lower interest rates by a quarter point to check softening of the economy.

3) Nissan, the world automobile manufacture, has announced the layoff of 12,500 employees worldwide, or about 10% of its work force. Nissan is striving to rein in the costs increases incurred during the former CEO Carlos Ghosn tenure and alleged financial misconduct. Japan’s number two automaker has suffered a collapse in its quarterly profits, a result of sluggish sales and rising cost. This is another indication of the world’s depressed auto market with other renowned automakers like Ford suffering similar major financial problems.

4) Stock market closings for – 25 JUL 19:

Dow             27,140.98    down    128.99
Nasdaq          8,238.54    down      82.96
S&P 500         3,003.67    down      15.89

10 Year Yield:    up   at    2.07%

Oil:    down   at    $55.91

15 July 2019

1) It appears the oil boom in the Permian basins is slowing down as producers dial back growth plans in face of numerous problems. These problems include pipeline limits, reduced flow from wells drilled too close together, low natural gas prices and high land cost. Most serious is that the shale-well oil production is falling off at such a high rate (as much as 70% in first year) that producers are forced to keep spending additional money on new wells in order to maintain production output.

2) Imports from China to U.S. are down by 31% as a result of the trade war. Trade has weakened since the trade war started, with tariffs and counter tariffs and with suppliers looking for alternative countries to fill their orders. This has put pressure on the Chinese government to shore up economic growth and avoid politically dangerous job losses. Nevertheless, Chinese leaders are confident they can survive the tariff fight.

3) The Argyle diamond mine in Western Australia, world’s largest diamond mine, is closing at the end of the next year as diamond supples are exhausted. The mine is famed for the coveted pink and red diamonds it produced, rather than the quantity of lower quality gems it has produced for almost forty years. A glut of cheap and small diamonds has eroded profits worldwide with other diamond mines scheduled to also close operations.

4) Stock market closings for – 12 JUL 19: All three markets closed with record setting highs. Also Standard & Poors broke the 3,000 mark.

Dow               27,332.03    up    243.95
Nasdaq            8,244.14    up     48.10
S&P 500           3,013.77    up     13.86

10 Year Yield:    down   at    2.11%

Oil:    up   at    $60.39

3 July 2019

1) The U.S. economy has entered its 121st month of economic growth setting a new record. Some experts are saying the real economic recovery may only be in its infancy. It’s just this last year that the gross domestic product caught up with estimates of its potential. Periods when GDP exceed potential are when workers typically enjoy the greatest wage gains. There are concerns of a changing environment with global trade disputes and other risks slowing down the economy.

2) Another daily newspaper has announce it is closing down, in what this year has been a rash of daily newspaper closing as well as massive layoffs. The Vindicator of Youngstown Ohio, which just celebrated its 150th anniversary, will cease publication the end of August, with 144 people losing their jobs. Virtually all daily newspapers have had deep cuts in staff these last couple of years, giving credence to the prediction that all the daily newspapers in America will be gone in ten years, displaced by newer mass media technologies.

3) The Payless ShoeSource is going out of business, closing all of its 2,500 retail stores. Once the largest and most successful family owned business in the country, the chain is succumbing to competition from big-box stores and on-line retailers. Founded in the 1960s, its demise could be the largest retail liquidation in history. Payless strategy uses customer self help allowing a minimal labor force of one manager and a couple of cashiers.

4) Stock market closings for- 2 JUL 19:

Dow               26,556.14    up    19.32
Nasdaq            7,958.05    up    45.06
S&P 500           2,926.73    up    12.95

10 Year Yield:    down   at    1.98%

Oil:    up   at    $56.66

1 July 2019

1) Consumer spending increased in May as well as prices creeping up too. Both point to a slowing economic growth and benign inflation pressures. These two facts gives the Federal Reserve more reason to cut interest rates next month. Inflation is under the 2% target for this year with a projected 1.5% verses 1.8% originally expected. Consumer spending is about two thirds the U.S. economy.

2) Consumerism is changing fast, with a push to ‘no cashier checkouts’. Amazon Go stores are pushing the technology where sales payment is made automatically just by picking out items and walking out the door. E-commerce and on-line shopping continue their assault on traditional brick and mortar stores. Another strategy is showrooms in place of stores that allow the customer to try out products prior to purchasing them. Finally, drone delivery allows getting your purchases at home in less time than it takes to drive to and from a store. All these new technologies are coming together with increased profits by reducing labor cost.

3) The weekly jobless claims has increased more than expected, although there is no sign of significant layoffs as the economy slows down. Unemployment claims were 227,000 up by 10,000. The economy is slowing with manufacturing sliding down and the trade deficient widening as consumer confidence ebbs.

4) Stock market closings for- 28 JUN 19: Results from bank stress test edged markets up. Best June performance since 1938.

Dow            26,599.96    up    73.38
Nasdaq         8,006.24    up    38.49
S&P 500        2,941.76    up    16.84

10 Year Yield:    down   at    2.00%

Oil:    down   at    $58.20

30 April 2019

1) Reports are that China and the U.S. are nearing the conclusion of talks to overhaul their economic relationships. Talks are nearing a point where they will produce a deal or end with no agreement. These talks have been in progress for months and have included tariffs from both sides, and in the process have upset world markets. The biggest obstacle is agreeing on how to enforce an agreement.

2) This March, U.S. consumer spending has increased the most in nine years, driven by purchases of motor vehicles. However, fears of inflation remain mute, giving support to a stronger economic growth in the second quarter.

3) Corporate economists consider there will be slower U.S. growth in the future. They fear the tariffs recently imposed are a drag on growth. Still, they consider the economy will continue to expand, just not at a fast rate.

4) 29 APR 19 Stock market closings:

 Dow             26,554.39    up    11.06
Nasdaq           8,161.85    up    15.45
S&P 500          2,943.03    up      3.15

10 Year Yield:    up   at    2.54%

Oil:    up   at    $63.57

10 April 2019

1) The IMF (International Monetary Fund) has reduced their forecasted for world economic growth from 3.5% to 3.3%, which is the third reduction since last October. It forecasted 2.3% growth for the US economy, as well as reduced growth forecast for Germany and Great Britain.

2) Walmart is rolling out thousands of robots for use in their retail stores across America. These robots will automatically scan shelves and clean floors. With a million employees, Walmart is seeking ways to keep labor cost down.

3) Bank of America is raising it’s minimum wage to $20 an hour over the next two years. Starting the first of May, the rate will increase to $17 per hour. The bank has 205,000 employees.

4) 9 APR 19 Stock market closings: Markets pulled down by industrial sector.

Dow             26,150.58    down    190.44
Nasdaq          7,909.28    down      44.61
S&P 500         2,878.20    down      17.57

10 Year Yield:    down   at    2.50%

Oil:    up   at    $64.24

5 April 2019

1) German economic forecast for growth has been reduced as foreign industrial orders fall. Last year, Germany narrowly skirted a recession. The forecast for economic growth was reduced from 1.8% down to 1.0% due to slower global economic growth and the uncertainties from Brexit.

2) There are about 54,000 bridges in America which need urgent repair, and it’s estimated it will take 80 years to rebuild them. The report by the American Road and Transportation Builders Association says that about 9% of the highway bridges are deficient with 174 million vehicles crossing each day. On a rating scale of 0 to 9, a rating of 4 or below is considered deficient.

3) Oil prices briefly topped $70 for the best grade of crude oil, but was unable to hold because of signs of tightening global supplies plus uncertainty over world economic outlook. Prices were pushed up by forecast of declining OPEC exports.

4) 4 APR 19 Stock market closings:

Dow           26,384.63          up     166.50
Nasdaq        7,891.78     down        3.77
S&P 500       2,879.39           up        5.99

10 Year Yield:    down   at    2.51%

Oil:    up   at    $62.18

27 December 2018

1) Economic growth revised downwards to 3.4% for the fourth quarter.

2) De Beers, the major marketeer of diamonds, is fighting back on lab-grown diamonds. For decades De Beers has refused to sell artificial diamonds, but the widen price gap is cutting into the sales of traditional diamonds, with artificial diamonds now 42% lower. With growing sales to the millennials, De Beers has invested in a factory to produce its own artificial diamonds.

3) The Dow had the largest single day gain in history of over 1000 points, a drastic reversal of the previous consecutive days of large losses. The sudden unexpected surge is driven by the best holiday retail sales season in six years, with $850 billion dollars in Christmas sales, making it a record breaking season. Fears abound that this will be reversed in the near future because of the troubled world economies.

4) 26 DEC 18 Stock market closings: Record breaking gains.

 Dow               22,878.45 up 1086.25
Nasdaq           6,554.36 up   361.44
S&P 500           2,467.70      up        116.60

10 Year Yield: up   at       2.80%

Oil: up    at      $46.62

24 DEC 18 Previous stock market closings (Monday):

 Dow               21,792.20 down 653.17
Nasdaq          6,192.92 down 140.08
S&P 500          2,351.10 down       65.52

10 Year Yield: down at 2.75%

Oil: up at $42.87