4 June 2019

1) The electric car manufacturer Tesla has been getting significant revenues by selling credits to other car makers who need to offset sales of polluting vehicles. General Motors and Fiat-Chrysler disclosed that they have reached agreements to buy federal greenhouse gas credits from Tesla. These companies want to bank their green credits for use later when emission rules get tougher, especially if democrats regain the White House.

2) Bond yields are dropping at the fastest rate since th 2008 global financial crisis, in anticipation that the Federal reserve will cut interest rates to counter the fallout from the trade tensions. The two year Treasury yield has fallen for five straight days. This is likely to have damaging effects on business confidence as businesses become more concerned with future growth.

3) The U.S. Manufacturing Purchasing Managers’ Index fell by more than 2 points in May, the lowest level since September 2009, 6 points over the last year. This index reflects a drop in new orders or postponement of orders due to the uncertainty of the economic future. Manufactures are having to hold selling prices lower because of diminished sales, which in turn is squeezing profits.

4) 3 JUN 19 Stock market closings:

Dow             24,819.78   up            4.74
Nasdaq          7,333.02   down   120.13
S&P 500         2,744.45   down        7.61

10 Year Yield:    down   at    2.08%

Oil:    down   at    $52.85

29 May 2019

1) Reports continue of a General Motors and Ford merger in the near future, both are in deep financial trouble. The proposed merger would make the new company the third largest in the world, behind Toyota and Volkswagen. Car sales have flattened in the U.S. and are dropping in China, which are the two largest car markets in the world. There are also questions of how successful Ford can enter the electric and hybrid car markets.

2) Amazon, the worlds largest retailer, is starting to purge many of its small vendors, and concentrate on large major brands like Lego, Procter & Gamble and Sony to better compete with the large traditional retailers such as Target and Walmart. This will be one of the biggest shifts in Amazon’s strategy since it started using independent sellers, and is scaring the daylights out of many smaller companies.

3) The prices for homes is rising at its slowest pace in six years, down 2.7% from last year’s 3%. Price gains in hot cities like San Francisco have cooled, which is causing sellers to pull in their price increases. The home and auto segments of the economy constitute one half of the U.S. economy.

4) 28 MAY 19 Stock market closings:

Dow              25,347.77    down    237.92
Nasdaq           7,607.35    down      29.66
S&P 500          2,802.39     down     23.67

10 Year Yield:    down   at    2.27%

Oil:    down   at    $59.06

23 January 2019

1) The electric car manufacturer Tesla announced a 7% cut of their full-time staff. The company faces very difficult times ahead in selling affordable renewable energy products, in part because the ending of some tax credits.

2) China economic growth slows down to 6.6%, the lowest in 25 years, with a forecast of 6.3% for this year. China constitutes one third of the global growth.

3) The International Monetary Fund cuts world economic growth forecast because of the risk stemming from Brexit as well as China’s slowing growth.

4) 22 JAN 19 Stock market closings:

Dow                      24,404.48             down     301.87
Nasdaq                   7,020.36             down     136.87
S&P 500                  2,632.90             down       37.81

10 Year Yield:      down   at    2.73%

Oil:     up    at    $53.02