1 May 2020

1) The numbers are in for the weekly jobless claims, with another 3.84 million people losing their jobs. This brings the total to over 30 million in the past six weeks. Expectations were for about 3 million, so the news was not upsetting. The claims peaked at 6.87 million so officials feel the worst is over with declines each week since, but still this has been the worst employment crisis in U.S. history. While some states are starting to bring their economies back on line, much of the key American infrastructure remains on lockdown. Predictions are for the second quarter to decline worse than anything America has ever seen. The unemployment rate is anticipated to be about 15.1%.

2) The crash of the oil market continues across the globe, with the American shale or fracking oil industry being hit the hardest. The shale oil industry had been fueled by lots of easy money, almost unlimited borrowing allowing companies to dramatically ramp up production, despite what the market demand was. Many companies had been in trouble before the coronavirus hit, and that combined with the Russian and Saudi Arabia oil dispute, oil prices have dropped by three-quarters since early January. There is $43 billion dollars of energy junk bond defaults coming in 2020 with hundreds of oil companies facing bankruptcy. The problem isn’t just American, with Shell Oil Co. announcing a cut in their dividends for the first time since World War II. Finally, the pandemic appears to be making fundamental changes to the oil market and consumption so the oil market may never fully recover.

3) The virus pandemic has adversely affected more than just traditional businesses, large and small. Dirty money from the illegal drug business is piling up in Los Angeles because the money laundering systems has also been put on hold by ‘closing orders’ of non-essential businesses. The businesses used by the drug trade to launder their money have been forced to close up, thereby ceasing operations leaving the drug dealers with growing stacks of cash that cant be used until cleaned.

4) Stock market closings for – 30 APR 20:

Dow 24,345.72 down 288.14
Nasdaq 8,889.55 down 25.16
S&P 500 2,912.43 down 27.08

10 Year Yield: down at 0.62%

Oil: up at $18.64

2 March 2020

1) The stock markets continue their downward crash over worries of the conronavirus impact on economies making the week the worst week since the financial crisis. Caterpillar, a bellwether stock for global growth, slide down 3%, the worst performer among Dow stocks. Apple dropped 2.9% while Chevron and Cisco Systems are down more than 2%. Investors are worried the downward slide may continue after the conronavirus subsides, especially if China doesn’t return to its previous position, so recovery could be a long haul.

2) The sale of smartphones is collapsing in China, which is the largest market in the world. The plunged in sales is directly due to the coronavirus outbreak. Chinese companies had skidded to a halt, with the accelerated outbreak last month a result of quarantine mandates, travel restrictions and factory shutdowns. Huawei, the Chinese tech company, is being hit hard because it is the top selling smartphone in China.

3) Gold prices have been acting strangely with the reversals in the markets because of coronavirus fears. Traditionally, gold has been a ‘panic investment’ that investors flee to when there’s economic uncertainty, but this time investors are selling gold to generate cash. They are fleeing anything priced via bidding, for safer assets such as treasury bonds, which in turn is driving down bond interest rates. This indicates how worried the professional investors are about the world economic system.

4) Stock market closings for – 28 FEB 20:

Dow 25,409.36 down 357.28
Nasdaq 8,567.37 up 0.89
S&P 500 2,954.22 down 24.54

10 Year Yield: down at 1.13%

Oil: down at $45.26

26 November 2019

1) America’s largest manufacturer of truck engines plans to lay off 2,000 workers. Orders for heavy duty trucks is down last year by 51%. This market dip is forcing Cummins Diesel to cut back on its production, reducing its 62,610 workforce by the 2,000. The company is forced to do a more aggressively cost cutting program because the down turn is happening faster than anticipated. Other manufactures of parts and assemblies, such as drivetrains, braking and axles used in large trucks are also forced into layoffs and bankruptcies.

2) The national debt has just passed $23 trillion dollars the first of November. This is a record high for the amount of money owed by the Federal government brought on by the growing budget deficits and is roughly equal to the Chinese, Japanese and German economies combined. Both parties have abandoned fiscal conservative spending and are intent on spending more on the domestic and military fronts, a contest over promises of who will spend more while cutting taxes.

3) The Ford Motor Company has $37 billion dollars in cash and short term assets on its balance sheet , but is strapped for cash. This makes Ford one of the top ten U. S. companies flush with cash. But Ford faces so many future challenges, it must hold onto every penny it can. First is a major multi-year restructuring, principally in Europe and South America. Also, Ford is overdue to refresh its key vehicles, including the company’s best selling F series pickup trucks, which will cost several billion dollars. Finally, Ford’s efforts to join the rush into electric vehicles, with seven new electric models due by the end of 2020.

4) Stock market closings for – 25 NOV 19:

Dow               28,066.47    up    190.85
Nasdaq           8,632.49     up    112.60
S&P 500          3,133.64     up       23.35

10 Year Yield:    down   at    1.76%

Oil:    down   at   $57.91

3 October 2019

1) Despite positive last quarters, both General Motors and Ford Motor company’s are concerned about the U.S. auto market taking a turn for the worse. Shares for the two automakers, as well as Fiat Chrysler, fell because of smaller figures for the quarter, although smaller than market analysis projected. There are also concerns of the overall impact from a slowing U.S. and international economies with the impact it would have on new car sales.

2) For the second day, the stock markets nose dived with the Dow losing more than 800 points these last two days. Fears of an economic recession cause the Dow to lose 490 points on Wednesday, with indications that manufacturing is slowing down, and even though manufacturing accounts for only 10% of the economy, investors see this as an indication that the economy is contracting soon with a possible recession in the near future.

3) With the markets in decline, there is a lot riding on the up coming job numbers this Friday. Fears of a coming recession could be reinforced with poor job numbers signaling that a recession is nearing. So far, there is little evidence of layoffs on the rise despite scattered reports that more companies are cutting jobs.

4) Stock market closings for – 2 OCT 19:

Dow           26,078.62    down    494.42
Nasdaq        7,785.25    down   123.44
S&P 500       2,887.61    down     52.64

10 Year Yield:    down   at    1.60%

Oil:    down   at    $52.47

1) There are expectations that global growth will slow this year to a rate that can become a financial crisis. The Organization for Economic Cooperation and Development claims new data showing the US-China trade dispute is increasingly threatening the outlook of the two largest economies as well as others. Furthermore, the uncertainty from the Brexit and a possible crash out would further aggravate economic growth in the European sector.

2) Saudi Arabia is avoiding a global oil crisis by using the crude it holds in reserve until production can be fully restored. The Saudi’s claim necessary repairs will be completed in two to three weeks, thus restoring production levels prior to the attack. However, oil experts are skeptical that these repairs can be done in such a short period of time. This uncertainty is due in part from Saudi Arabia’s lack of transparence of their oil operations.

3) Good news for home owners, sales of used homes rose to its highest in more than a year, with the median price up 4.7% from last year to $278,200. This home sale bonanza is fueled in part by the low interest rates now available and by income gains. However, there are fears of a global economic slow down darkening this rosy picture in the near future. Presently, it would take 4.1 months to sell all the available houses, with realtors considering anything below a five month supply a tight market.

4) Stock market closings for – 19 SEP 19:

Dow              27,094.79    down   52.29 
Nasdaq           8,182.88          up     5.49
S&P 500          3,006.79          up     0.06

10 Year Yield:    down   at    1.77%

Oil:    $58.68

NIGERIA & SOUTH AFRICA EXIT RECESSION !!!!!!!!!!!!!!!!

By: Economic & Finance Report

Two of Africa’s biggest economies have officially exited recession.  In the second quarter of 2017, Nigeria’s economy improved by 0.55%, a large part attributed to Nigeria’s growing agri sector (agriculture); as well as Nigeria’s oil production stabilizing again.

South Africa economy grew by 2.5% also attributed by their economy’s agri sector also. Nigeria for the past 25 years had not been in a recession, so when the country contracted this past year; it took many people by surprise, while in South Africa many economic factors played into its recession, especially from the finance sector and government interference tailgaiting corruption scandals. -SB

*The National Bureau of Statistics of Nigeria & South Africa provided current  statistical data*

10 BEST STOCK EXCHANGES IN AFRICA FOR 2016………………

By: Economic & Finance Report

Every year there is a study of the top best stock exchanges in Africa. Last year’s (2016) study was conducted by Jamelle Cole, CFA, CPA for Relentless Investment Research.

Mr. Cole’s analysis included indicators such as trade data, historical dividends, company evaluation/information, and trading hours by their respective exchanges.  Each category for each trading exchange; the highest number they could possibly accumulate was a 5.

The top 10 stock trading exchanges in Africa that made the list for 2016 (last year) in numerical order, were countries such as:

  1. CSE (Casablanca Stock Exchange) (Morocco)
  2. ZSE (Zimbabwe Stock Exchange) (Zimbabwe)
  3. NSE (Nigerian Stock Exchange) (Nigeria)
  4. LuSE (Lusaka Stock Exchange) (Zambia)
  5. EGX (Egyptian Exchange) (Egypt)
  6. GSE (Ghana Stock Exchange) (Ghana)
  7. JSE (Johannesburg Stock Exchange) (South Africa)
  8. USE (Uganda Securities Exchange) (Uganda)
  9. BSE (Botswana Stock Exchange) (Botswana)
  10. NSE (Namibian Stock Exchange) (Namibia)

There you have it; these are top stock and securities exchanges in Africa, for the year 2016. We shall see what the list has forthcoming in 2017…..-SB

*Study conducted by Mr. Jamelle Cole, CFA, CPA *Source: Relentless Investment Research*