1) As Boeing’s 737 MAX crisis continues, Boeing is talking with banks to borrow $10 billion dollars or more to finance the rising cost from its 737 MAX woes. So far, the company has borrowed $6 billion dollars to cover its cash-sapped operations after having suspended production of the planes this month. The crisis which grounded the 737 MAX is now entering its eleventh month.
2) The global auto industry continues its downward slide into deeper recession with sales down 4%. Automakers are struggling to find buyers in China and India, with the downward trend expected to continue this year. The number of vehicles sold dropped from 94.4 million down to 90.3 million last year, with the record high in 2017 of 95.2 million. The IMF says new autos account for 5.7% of economic output and 8% of the goods exported. Autos are the second largest consumer of steel and aluminum.
3) Because of unrest in Iraq and Libya, oil rose to its highest in more than a week. Oil prices have always been heavily influenced by geopolitical instability, especially those countries heavily involved with oil exports. Lybia has Africa’s largest oil reserves, with their Sharara oil field being Lybia’s largest by pumping 300,000 barrels a day.
4) Stock market closings for – 20 JAN 20:
Dow 29,348.10 up 50.46
Nasdaq 9,388.94 up 31.81
S&P 500 3,329.62 up 12.81
10 Year Yield: up at 1.84%
Oil: down at $58.70
1) J. P. Morgan Chase posted profit and revenue far in excess to analysts’ expectation at the end of 2019. Fourth quarter profit was up 21% to $2.57 a share compared with $2.35 estimates of analysts. The investment bank produced record revenue for the fourth quarter. Citigroup also beat estimates for profit and revenue, their fixed income trading revenue gaining 49%.
2) Consumer prices rose at the fastest pace in eight years, in 2019. The increase was driven by higher gasoline, health care and rent prices in addition to the biggest annual advance in inflation since 2011. The consumer price index rose 0.2% in December, while economist had forecast 0.3%. The cost of living in 2019 rose 2.3% from 2.1%. Price increase for food was mild, while prices fell for used vehicles and airline fares.
3) Three of China’s automakers are considering expanding into Mexico with factories. Car makers Changan, BYD (electric cars) and Anhui Jianghuai or JAC, who already has manufacturing facilities in Mexico, but is considering expanding. The companies are considering expansion sometime this next year. No comments on if and where cars will be exported to.
4) Stock market closings for – 14 JAN 20:
Dow 28,939.67 up 32.62
Nasdaq 9,251.33 down 22.60
S&P 500 3,283.15 down 4.98
10 Year Yield: down at 1.82%
Oil: up at $58.14
1) The mega brewers Anheuser-Busch and MillerCoors, America’s two largest brewers of beer, are embroiled in a legal battle with Anheuser-Busch claiming MillerCoors stole recipes and trade secrets. The legal conflict rose from attack ads in Super Bowl commercials last February. The legal war continues to escalate with suits and counter suits being filed by both companies. During discovery, Anheuser-Busch claims to have uncovered evidence MillerCoors had obtained trade secrets.
2) The very popular SUVs across the world has led to a nearly sixfold increase in the number of SUVs on the road since 2010, which makes them the second biggest contributor to the rise in carbon dioxide emissions. Only the generation of electrical power produces more carbon dioxide, although SUVs account for about a third of the emissions compared to power generation. SUVs are also the reason that oil demand from passenger cars has grown by 3.3 million barrels a day since 2010, while oil use has declined slightly for other kinds of cars.
3) The export of pork from America has hit an all time high. Buyers are stocking up in anticipation of a widening protein gap in China, the result of a pig killing disease in Asia. American exports jumped to 351,000 metric tons as both Mexico and China buy up future pork contracts, as well as sales of soybeans, another prime source of protein in Asia. The African swine fever has devastated pig herds causing domestic pork production to plunge.
4) Stock market closings for – 18 OCT 19:
Dow 26,770.20 down 255.68
Nasdaq 8,089.54 down 67.31
S&P 500 2,986.20 down 11.75
10 Year Yield: down at 1.75%
Oil: down at $53.70
1) Boeing Aircraft, the manufacture of the now grounded 737 MAX, has not ruled out further reductions or even shutting down production of its 737 MAX. Boeing had cut production of its best selling jet from 52 per month to 42, a 20% reduction. For its second quarter, Boeing has expended $1.01 billion dollars in cash as a result of the grounding, compared to the $4.3 billion dollars of free cash it had on hand last year. With deliveries on hold, Boeing isn’t receiving payments while also footing the cost of aircraft being stored waiting for re-certification.
2) With the commodity prices of coffee bottomed out and depressed incomes, coffee growers in Guatemala are facing a crisis. This crisis is made worse with threats of tariffs on Guatemala over undocumented migrants. Additional remittance fees and sanctions could spell disaster for Guatemala’s principle export if implemented, which in turn may actually exacerbate the flow of migration as small growers are forced out of business and head north.
3) The food giant Kraft Heinz, faced with a large corporate debt, has been exploring methods to pay down that debt by selling off some of its brands, so it can focus on its staple brands such as Heinz ketchup. But the sale of Maxwell House coffee, Breakstone’s sour cream and cottage cheese and Plasmon baby food, has glean lukewarm response from potential buyers. For years, the giant has been run by a ‘cost focused’ management team, but now management considers the company should be driven more by growth. The soup giant Campbell soup faced the same problems earlier this year.
4) Stock market closings for – 24 JUL 19:
Dow 27,269.97 down 79.22
Nasdaq 8,321.50 up 70.10
S&P 500 3,019.56 up 14.09
10 Year Yield: down at 2.05%
Oil: up at $55.94
This week’s episode Sammy BE, James Lymon and Jon Don “On The Boards”, discuss the G7 summit-conference, that President Donald Trump attended.
The trio discussed the economic and financial impact of the G7 meeting amongst the world’s most developed countries. Topics ranged from manufacturing, tariffs, trade, deficit, and surplus were discussed among the group, as well as other relevant topics in relation to the economy and finance in general, because this is what we do… THE EFR PODCAST…….
Online Platforms To Check Out:
3) www.Economic&FinanceReport.com (Economic & Finance Blog Site)
4)@Economic-FinanceReport (Podcast/Online Show)
5)www.youtube.com/channel/UCWZo5bug…Nlb2VRfDCQ/videos (EFR.Tv Youtube Ch)
6)www.SammyBuysHomes.com (Real Estate Investment)
7) www.TraderSoul.com (Financial Trading Website)