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

6 March 2020

1) The devastation that the coronavirus fears has wrought on Europe’s tourist industry is brought into glaring focus in front of the famous Mona Lisa painting in Paris. Where there would normally be a continuous surge of admiring people to view the art classic, now just vacant space. The same at St. Peter’s Basilica in Rome, the normally long lines of waiting people to get in, are also gone. The drop in tourism is costing the EU (European Union) $1.1 billion dollars a month, just when the high season is getting under way. Expectations are that it will only get worst as the year progresses.

2) General Motors is making an all out effort to dominate the EV (Electric Vehicle) market and in the process beat Tesla at its own game. GM has developed new battery modules called Ultium that is said to reduce the cost of batteries and therefore make more affordable EVs. Plans are to offer 20 new EVs by 2023, both in America and China, with marketing plans to sell one million electric cars in the next five years. However, the UAW is concerned that EVs will hurt the union because they require less manpower to assemble. Presently, GM holds over 3,000 patents on electric automobile design.

3) Seattle area school district has closed down its 33 schools of more than 23 thousand kids for up to two weeks due to the coronavirus threat. These students will use online teaching during this time through Google Apps for Education. Students needing a device or internet connection will be provided with one. Teaching staff have been provided with a one day instruction on using the apps and how to monitor the progress of their students. ATS (Automated Teaching Systems) has been on the cusp of revolutionizing American schools, and the coronavirus may provide the impetus to open the market to wide spread commercialization.

4) Stock market closings for – 5 MAR 20: The instability of the markets continue with wild swings of the trading indexes.

Dow 26,121.28 down 969.58
Nasdaq 8,738.60 down 279.49
S&P 500 3,023.94 down 106.18

10 Year Yield: down at 0.93%

Oil: down at $46.13

3 February 2020

1) Brexit, the exit of Britain from the European Union, has been confirmed by the European Parliament with a vote Wednesday, which ratified the withdrawal agreement. The vote to ratify was 621 to 49 with 13 abstentions. For the EU (European Union) the loss of Britain represents a significant defeat, a loss of size, reach, momentum and permanence akin to the U.S. losing Texas. Potentially, the EU bloc now has less clout, although the remaining 27 countries have been drawn tighter together by the debate. Now comes the negotiations of EU’s future relationship with Britain to try and maintain the single open market.

2) Delta Air Lines and American Airlines announced they are suspending service to mainland China to counter the spread of coronavirus. It is expected that United Airlines is expected to soon follow suit. American will continue service to Hong Kong. Other world air carriers have also announced suspended or reduced services to China.

3) With the decision two years ago by the Supreme Court to widely legalize sports betting, companies are rushing in to expand sports betting operations. U.S. casino operators, fantasy apps and betting grands from Europe and Australia are in a race for American customers now that the way has been cleared for betting outside of Nevada.

4) Stock market closings for – 31 JAN 20: Fears of China’s coronavirus continue to push markets down.

Dow                   28,256.03    down    603.41
Nasdaq               9,150.94     down    148.00
S&P 500              3,225.52     down       58.14

10 Year Yield:    down   at    1.52%

Oil:    down   at    $51.63

18 October 2019

1) New home construction has dropped from a twelve year high in September, although single home construction rose for a fourth straight month. This indicates the housing market remains supported by lower mortgage rates even as economy slows. Housing starts declined 9.4% last month as construction in the volatile multi-family housing segment dropped.

2) The Prime Minister of the United Kingdom announced a great new Brexit deal. The proposed exit plan goes before the U.K. parliament this Saturday, the EU (European Union) claimed the deal was a fair and balance one. Parliament must vote approval before the deal can be accepted, however, this time the Conservative party is now committed to this deal and not a ‘no-deal’ and so will campaign for a majority support.

3) The employees for the bank Goldman Sachs will receive the lowest pay in the last ten years. This is a result of software systems doing more and more of the company’s business, another example of technology displacement. The bank set aside 35% of its revenues for staff compensation and benefits this year, the lowest rate since 2009, with an average employee earning of $246,000 less than half of the $527,000 from last year.

4) Stock market closings for – 17 OCT 19:

Dow           27,025.88    up    23.90
Nasdaq        8,156.85    up    32.67
S&P 500       2,997.95    up      8.26

10 Year Yield:    up   at    1.76%

Oil:    up   at    $54.05

13 June 2019

1) Demand for oil is shrinking as the trade war causes the world economies to retract. China’s economy is slowing faster than experts had expected, with the EU and US also not growing in oil demand. Fears that oil prices will drop below $40 a barrel fuel fears of a continual global slowing of economies. The U.S. boom in domestic oil production using fracking is dependent on high oil prices, and with American petroleum stocks at an all time high, it may not be feasible to continue fracking.

2) With mortgage rates dropping to their lowest level in nearly two years, there has been a surge in refinancing applications. In just one week, applications increased 26.8%, which is 41% greater than a year ago. Refinance mortgages are the most rate-sensitive because when low, people rush to refinance while they can get the lower rates.

3) For the second straight month, Boeing aircraft reports no new aircraft sales. The drop isn’t just because of the 737 MAX grounding, but the company already has a massive 5,000 aircraft backorder to fill, so many customers don’t need to place additional orders. With the airline Jet Airways halting operations, their pending sales contracts have been canceled, which totaled 71 aircraft.

4) Stock market closings for- 12 JUN 19:

Dow           26,004.83    down    43.68
Nasdaq        7,792.72 down    29.85 
S&P 500          2,879.84    down      5.88 

10 Year Yield:   down   at    2.13% 

Oil:    down   at    $51.08

11 April 2019

1) Boeing has not received any new orders for its 737 since its grounding, in addition, Boeing has had 100 cancellations of orders. Its stock is down 19%, but worst its stockholders have filed a law suit against Boeing claiming the company has defrauded its investors because Boeing failed to disclosed safety issues concerning their 737 MAX-8.

2) British Prime Minister May has asked the EU (European Union) for a second extension. Britain will be leaving the EU this Friday if an extension is not granted, so the EU held an emergency summit to consider warnings that a crash-out might cause a recession. Last reports are that the EU will grant an extension to 31 October this year.

3) The ECB (European Central Bank) will leave interest rates steady, forecasting no change for 2019. The ECB is being forced to backtrack on its tightening monetary policy as signs of a world economic slowdown are increasing.

4) 10 APR 19 Stock market closing:

Dow            26,157.16     up     6.58
Nasdaq         7,964.24     up   54.97
S&P 500        2,888.21     up   10.01

10 Year Yield:    down   at    2.48%

Oil:   down   at    $64.47  0.14

9 April 2019

1) In ten years, the US debt to GDP ratio will be equal (100%). The debt to GDP ratio is presently 78%, the highest since the end of World War II, but it’s anticipated to be 96% by 2028. To bring this into perspective, countries with sever economic problems such as Greece have a ratio of 188%, Italy 130%, Portugal at 120% and Spain with 97%. On the positive side, Germany has a ratio of 59%. The IMF is warning of the problem for America if the ratio is left to continue as is. A high ratio hinders a government’s ability to counter any economic downturn. America’s entitlements is the principle cause for the increase, because when Social Security was started, there were 16 workers to support each retiree, now there are just 2.6 workers.

2) European Union borrowers are eager to see how a Brexit extension will effect markets, by possibly reducing the uncertainty that Brexit has brought on. This spring, the IMF and World Bank will be meeting for their annual conference on world economic matters.

3) Tesla, the maker of electric automobiles, is starting its new quarter with another round of cuts of sales staff following poor deliveries. The company is closing some of it’s show rooms in favor of online sales. These actions are rattling investors by stoking confusion.

4) 8 APR 19 Stock market closing:

Dow                          26,341.02     down     83.97
Nasdaq                       7,953.88           up     15.19
S&P 500                      2,895.77           up       3.03

10 Year Yield:    up   at    2.52%

Oil:    up   at    $64.46

6 February 2019

1) The executive and CEO of Quadriga, Canada’s largest crypto exchange, dies with $145 million dollars of customer money electronically locked away. Only the CEO knew the pass words needed to unlock the money.

2) EU economic slow down, with EU experiencing its weakest growth since 2013, amidst manufacturing slowdown. The German economy is accelerating while Frances is slowing down.

3) Tech companies Slack, Airbnb and Uber are making their IPOs this year, but several other tech companies are pulling their plans for IPO because of the uncertain world economic.

4) 5 FEB 19 Stock market closings:

Dow             25,411.52    up    172.15
Nasdaq          7,402.08    up      54.55
S&P 500         2,737.70    up      12.83

10 Year Yield:    down   at    2.70%

Oil:     up   at    $53.81

5 February 2019

1) With just seven weeks remaining before Brexit, Scotland is warning of the looming consequences, but so far has been sidelined and ignored. Contend that Britain is not remotely prepared for exit and therefore calls for an extension, fearing a ‘crash out’ will be a catastrophe because EU rules touches every aspect of EU trade, and therefore will cause trade to come to a sudden halt.

2) White House economic adviser critiqued the Democratic tax proposals being pursued as being economically illiterate.

3) Car dealers are holding large numbers of unsold cars with sales expected to drop this year. This will put pressure on manufactures to cut car production and offer deep discounts to lower inventories.

4) 4 FEB 19    Stock market closings:

Dow              25,239.37    up   75.48
Nasdaq           7,347.54    up   83.67
S&P 500          2,724.87    up   18.34

10 Year Yield:    up   at    2.72%

Oil:    up   at    $54.82

16 January 2019

1) China releases data showing a further slowdown of their economy, with consumer spending retreating as people buy less. They reduced their forecast for their 2019 GDP.

2) The British parliament voted to reject the Brexit plan by 432 to 202. With just ten weeks before Britain exits the EU, concerns for the British economy are growing. Britain exits the EU on 29th of March, with the exit agreement having taken two and a half years to negociate. Prime Minister May’s future is in doubt with an upcoming no confidence vote likely soon.

3) It’s estimated there is a 0.1% drop in the economy for every week of government shutdown. Job expansion is threaten as workers are dropped off the payrolls.

4) 15 JAN 19 Stock market closings: Netflix pushed the markets up with their announcement they are raising their rates.

 Dow                      24,065.59   up   155.75
Nasdaq                    7,023.83   up   117.92
S&P 500                   2,610.30   up      27.69

10 Year Yield:   up   at   2.71%

Oil:   down   at   $51.91