19 September 2019

1) The Federal Reserved voted for a quarter percent drop in the interest rate, bringing the ire of President Trump in a tweet, complaining the Feds lack the guts and vision to cut more. But the board surprised everyone by its divided vote, three of the members voted against a policy decision, while seven voted for it. This is considered an indication of how uncertain things are and just what the economic future holds. In response, the stock markets fell over the news of just a quarter percent rate reduction.

2) Some fear that parallels in the market signal the coming of another recession. These parallels include an inverted yield curve with the stock markets making new highs in July, followed by a correction in August, then a rally in early September. Additionally, growth is slowing. These same signs occurred in 2007 prior to sliding into a sever recession. All that is needed is a trigger such as the world oil supply.

3) As a result of the UAW (United Auto Workers) strike, GM (General Motors) announced 1,300 layoffs in their Oshawa plant in Canada. This is because GM plants in the US are shut down and unable to deliver needed parts and assemblies to the Canadian plant. This shows that the strike is spreading to other units of the automakers business.

4) Stock market closings for – 18 SEP 19:

Dow             27,147.08         up    36.28
Nasdaq          8,177.39    down      8.62
S&P 500         3,006.73          up      1.03

10 Year Yield:    down   at    1.79%

Oil:    $58.25

16 September 1019

1) Two of the largest Wall Street banks are trying to create an index to track the market impact of President Trumps’s tweets. J.P. Morgan Chase and Company has created an index to quantify the effects on U.S. bond yields. Citigroup Inc.’s foreign exchange team consider Trump’s tweets increasingly relevant to foreign exchange moves. Approximately 10% of the president’s tweets since his election in 2016 pertain to subjects of importance to U.S. markets.

2) The Elliott Management Corp. offers a plan to boost the share price of AT&T by more than 50% through asset sales and cost cutting. The four part plan calls for the company to divest assets including satellite-TV provider DirecTV, Mexican wireless operations, parts of its land line business and other assets. The bases for the plan is for AT%T to exit businesses that don’t fit its strategy as well as running more efficient operations, plus stop making major acquisitions.

3) China has added almost 100 tons of gold to its reserves since resuming buying in December. Bullion is near a six year high as central banks including the Federal Reserve cut interest rates. Trade war restrictions as with China, or sanctions as with Russia, gives an incentive for central banks to diversify, with gold providing an ideal hedge with increasing political and economic uncertainty. Spot gold was $1,510.27 an ounce on Monday, and is expected to rise to $1,600 an ounce in the coming months.

4) Stock market closings for – 13 SEP 19:

Dow                  27,219.52         up    37.07
Nasdaq               8,176.71    down   17.75
S&P 500              3,007.39    down     2.18

10 Year Yield:    up   at    1.90%

Oil:    down   at    $54.82

3 September 2019

1) Gold is renowned for being a panic investment, something that investors move their money into when fearing that sever financial troubles are coming. Investors are worried about political uncertainty that plagues world markets, and are pushing gold prices up to record highs. Real yields in the US have fallen to about zero which makes gold especially appealing as a safe haven.

2) The Price of oil falls as the trade war deepens stoking concerns over growth. Principal cause for concern is the trade war and the deterioration of manufacturing in China. Oil prices is considered a gage of economic health because slower growth means there will be less demand for oil, so prices drop. Furthermore, since oil is bought and sold as futures commodities, the price reflects anticipation of near future economic state of the world.

3) Owners of 98,000 Volkswagen AG U.S. vehicles which had fuel economy labels overstating efficiency will ask a U.S. judge for $26 million dollars. The EPA said the German automaker must forfeit greenhouse gas emissions credits and lower the fuel economy ratings on these vehicles after using software to falsify fuel efficiency ratings.

4) Stock market closings for – 2 SEP 19:

Markets closed for holiday.

16 August 2019

1) Retail giant Walmart reported a strong second quarter and raised its earnings expectations for the year. This news eases concerns about consumer demand dropping because of the trade war with China. Shoppers spent more at stores and websites, indicating the consumer economy has not lost steam. Walmart posted a 20 quarter or five years of growth unmatched by any other retailer. The retailer gets 56% of its revenues from grocery sales, so it is less vulnerable to tariffs.

2) In July, American’s spent more at retail stores and restaurants, indicating the economic growth remains healthy, despite fears of a coming global economic slowdown and possible recession. Despite such fears, consumer confidence remains steady. Most economists are not forecasting a recession, because consumer spending and the job market remains strong.

3) Saudi Arabia is ramping up its oil exports to China, with crude shipments doubled over the last year, while its oil exports to America have dropped by nearly two thirds. This shift has occurred in part from oil embargo on Iran, which has caused Asian importers to shift away from Iran to other sources, aided by U.S. growing independence of any oil imports. The U.S. is becoming the worlds largest producer of oil.

4) Stock market closings for – 15 AUG 19:

Dow            25,579.39         up    99.97
Nasdaq         7,766.62    down      7.32
S&P 500        2,847.60          up      7.00

10 Year Yield:     down   at    1.53%

Oil:     up   at    $54.70

7 August 2019

1) There are fears that the deepening China and American trade war may severely effect the fragile oil market. The tariffs increases has already send oil prices spiraling down over concerns of a sever global economic slowdown or recession. But China could use oil as an economic weapon by purchasing vast quantities of oil from Iran thus driving oil prices down from $60 to as low as $40 while also undermining President Trump’s foreign policy.

2) Gold, always a panic investment from economic fears, is again attracting investors with its prices pushing upward. With the devaluation of the Chinese money and threats that the U.S. might follow suit, investors are worried about the value of other monies sliding down. Fears of what will happen to the Euro and British Pound with a ‘no deal’ exit, coupled with European government bonds rates that are so low, is further attracting investors to gold. Hence, investors are migrating to the traditional safe heaven of gold.

3) In an attempt to further push into the Nordic markets, payment processor Mastercard Inc will buy the majority of the corporate services businesses of Scandinavian payments group Nets. The financial technology sector is consolidating fast as more people switch from cash to digital payments, both on line and on the street. The $3.19 billion dollar deal gives Mastercard further clearing and instant payment services plus e-billing solutions.

4) Stock market closings for – 6 AUG 19:

Dow             26,029.52    up    311.78
Nasdaq           7,833.26    up    107.23 
S&P 500          2,881.77    up      37.03

10 Year Yield:    up   at    1.74%

Oil:    down   at    $53.46

18 July 2019

1) News for budding entrepreneurs. Each year, roughly 30,000 new consumer products are introduced to the market place, but 95% of them fail. The primary reason for failure is lack of preparation, of not understanding the ‘product life cycle’. The life cycle is the time from inception to obsolescence the product experiences. As a product goes through its life cycle, the sales and profit margins will fluctuate, so you must adjust your marketing mix accordingly. The subject is complex and extensive, and a new entrepreneur should spend time researching and understanding the topic before investing in a new product venture.

2) AT&T and Microsoft announced they have agreed on a cloud deal worth more than $2 billion dollars. AT&T will use Microsoft’s Azure cloud service for its computing needs and Office 365 software for its 268,000 people. Additionally, the two companies will work together on edge computing with Microsoft technology deployed alongside AT&T’s up coming 5G network and applications requiring extremely small delays in passing data back and forth such as real time control systems applications.

3) The debt of America is about to hit a record high, a result of cheap money and soaring debt, which has fueled the decade long economic expansion and bull market. There are raising fears of what could happen if there is a shift in the fragile economic balance. The total American debt, both public and private amounts to nearly $70 trillion dollars, with the economy about $21 trillion dollars in size. Difficulties could arise if America should experience a recession with both government and private sectors having trouble meeting their repayments.

4) Stock market closings for – 17 JUL 19: Disappointing quarterly reports pulled the markets down.

Dow                   27,219.85    down    115.78
Nasdaq                8,185.21    down      37.59
S&P 500               2,984.42    down      19.62

10 Year Yield:    down   at    2.06%

Oil:    down   at    $56.58

16 July 2019

1) Chinese economic growth has slowed to its lowest level in twenty-seven years, a result of the prolong trade war. Additionally, global growth has slowed, coupled with external uncertainties increasing. China is reporting a fall in both exports and imports for the first six months of this year. The Chinese are working on more stimulus measures to stabilize growth such as boosting infrastructure spending and interest rates cut, while also seeking loans from abroad.

2) Just like all youth, the millennials and generation-Z, have aspirations for their lives and the direction they want to go. Presently, these two groups comprise 40% of the American population, but like previous generations they disdain much about the older generation’s lives such as cars, big houses and material wealth. They want careers that make a difference even if not paying much, where they can provide some greater good to society. The fly in the ointment is their exploding student loan debt coupled with the growing obsolescence of American workers, in particular the younger ones.

3) Huawei, the Chinese telecommunications giant recently in the news so much, plans hundreds of layoffs in the near future. These layoffs are expected to be in Huawei’s U.S. development subsidiary Futurewei, a technology development center, which employs 850 people across several states. Blacklisted by the American government because of security risk issues, the company expects to lose $30 billion dollars in sales over the next two years.

4) Stock market closings for – 15 JUL 19: All three markets set new record highs.

Dow              27,359.16    up   27.13
Nasdaq           8,258.18    up   14.04
S&P 500          3,014.30   up      0.53

10 Year Yield:    down   at    2.09%

Oil:    down   at    $59.30

20 June 2019

1) The $800 billion dollar trucking industry is in a slowdown as retailers and manufacturers are shipping less. Freight rates have declined for the last six months with the spot market dropping 62.5% for May verses last year. Already, a few major trucking firms have gone bankrupt, with one laying off 550 employees. Even the major trucking companies FedEx, UPS and J.B. Hunt have experienced declines sparking fears of a slowdown of the economy.

2) Harley-Davidson is making good its promise to build more motorcycles outside the United States by partnering with China’s Qianjiang Motorcycle to produce smaller motorcycles. The new bike will have a 338 cubic centimeter engine verses the 601 cc engine for its domestic motorcycles. Harley-Davidson is trying to boost its overseas sales as its domestic market shrinks.

3) Expectations for future global growth and corporate profits have shrank as investor confidence continues to decline amid the trade war. Concerns of an economic slowdown further fuel fears of investors for the demise of global growth, despite America’s stock market now trading near its record high. Global profit expectations fell by the second largest amount on record. The giant retailer Walmart announced they will be laying off nearly 600 employees later this year.

4) Stock market closings for- 19 JUN 19:

Dow                 26,504.00    up    38.46
Nasdaq              7,987.32    up    33.44
S&P 500             2,926.46    up      8.71

10 Year Yield:    down   at    2.03%

Oil:    up   at    $54.14

18 June 2019

1) Traditional retail stores, who have been suffering the ravages of e-commerce, are worried about another coming blow. The new tariffs on Chinese imports, which President Trump threatens to impost, could have a disastrous effect on retailers such as Walmart and Target. These next round of tariffs will be specific to consumer goods, which these retailers sell, and will start to force price increases and so most likely will result in decline of sales revenue.

2) While President Trump has been pressing for a cut in the interest rate, the U.S. Federal Reserve is expected to defer and leave the interest rates unchanged. However, the board may possibly lay the groundwork for a rate cut later this year. While the economic outlook has become less clear, there still isn’t sufficient indication of a slow down to warrant cutting interest rates yet.

3) The Pfizer pharmaceutical company is buying Array BioPharma for $10.6 billion dollars for a price 62% above the company’s closing price this last Friday. Pfizer will gain medical technology for new drugs to treat cancer that limit or suppress the effects of chemotherapy. The drugs target a mutation that’s found across many tumor types in those patients who carry the mutation. Two of Array BioPharma drugs have been FDA approved for use in advanced melanoma. There are other drugs which are in the development pipeline.

4) Stock market closings for- 17 JUN 19:

Dow               26,112.53    up    22.92
Nasdaq             7,845.02    up    48.37
S&P 500            2,889.67    up      2.69

10 Year Yield:    down   at    2.09%

Oil:    down   at    $51.90

7 June 2019

1) Years of slow economic progress, where the South nearly reach equality with northen and western neighbors, has reversed. Since 2009, the South’s growth in output and wages has slowed so the South is now receding compared with the rest of America. The twin forces of automation and globalization have wiped out millions of factory jobs where the lower wages and taxes were instrumental in the South drawing those businesses. The net result is the South’s economy is falling behind.

2) The discount retailer chain Costco announced they will be raising prices, stating the tariffs on China as the reason. Costco joins other retailers such as Walmart, Target and Macy in having to raise prices to consumers. There are fears that the wave of retail store closures will further increase as consumers retract from their spending habits.

3) Presidential candidate’s promise of free college to alleviate the growing student debt problem is facing problems of implementation. Low income students need more than just free tuition for gaining a college degree, and therefore the presidential plans will aid those who least need the financial help. The tuition accounts for half or less of college expenses. Presently, student debt stands at $1.6 trillion dollar, where presently 20 to 25% of new college graduates are unemployed or underemployed.

4) Stock market closings for 10 JUN 19:

Dow            26,062.68    up    78.74
Nasdaq         7,823.17    up    81.07
S&P 500        2,886.73    up    13.39

10 Year Yield:    up   at    2.14%

Oil:    up   at    $53.42