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
1) World oil prices dropped sharply with Saudi Arabian source saying that their oil production could be fully back on line within weeks. This is far sooner than was initially assumed by world markets. Production may be back up in as little as two to three weeks. The attacks resulted in the largest single supply disruption in half a century.
2) Economists say the GM (General Motors) strike no longer has the economic impact that they once did. They assert it will take a lengthy shutdown to make a national impact. This is a result of GM’s market share shrinking while its work force is now smaller, in part because of automation. A prolonged strike could impact the economy by disrupting the supply chain effecting other industries. GM has shifted workers health care cost to the UAW (United Auto Workers) union, increasing pressure on the union for a quick settlement.
3) There are expectations that the Federal Reserve will lower interest rates on Wednesday for the second time in two months with another likely cut later this year. The consensus is the feds will drop the interest rate by about a quarter percent in an attempt to starve off the world economic slowdown from reaching America. Job growth has slowed and the index of manufacturing activity shows contraction, increasing fears that a recession will happen in the near future.
4) Stock market closings for – 17 SEP 19:
Dow 27,110.80 up 33.98 Nasdaq 8,186.02 up 32.47 S&P 500 3,005.70 up 7.74
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
1) Boeing aircraft has not received any new orders for their 737 MAX in six months. This could give Boeing’s competitor Airbus a major market advantage having made 389 commercial plane deliveries in the same six months, making Airbus the largest supplier of this market segment with its A320 design. The grounding of the 737 MAX has forced Boeing to park completed aircraft to await its air worthiness to be restored.
2) Signs of inflation are increasing as U.S. consumer prices increased broadly in July. Expectations are for the Federal Reserve to again cut interest rates next month as much as half a percentage point in September. Continue trade tensions between China and America out weight fears of inflation so interest rates will continue to remain low, if not go lower.
3) Fears grow that protests in Hong Kong, which have persisted for the last two months, could have a lasting detrimental effect on U.S. and global markets. Hong Kong operates with a high degree of autonomy from China, having its own currency and judiciary system. This is fueling the rising concerns of investors of a major violent eruption of conflict between Hong Kong and main line China, coupled with concerns over U.S. – China trade war and the total impact on the world markets. With Hong Kong a financial hub, an invasion by Chinese troops with sever repressive measures on the people could disrupt other markets across the world. Furthermore, violence with loss of life could make it impossible for President Trump to resolve differences with China.
4) Stock market closings for – 13 AUG 19:
Dow 26,279.91 up 382.20 Nasdaq 8,016.36 up 152.95 S&P 500 2,926.32 up 43.23
1) General Electric suffered a loss last quarter despite two previous profitable quarters, a result of the restructuring cost of its electric power division and the grounding of Boeing’s 737 MAX. GE provides the jet engines used on the 737, which Boeing has reduced production of. The grounding of Boeing has drained off more cash than expected, but General Electric forecast a profitable year for 2019.
2) President Trump has fulfilled his campaign promise to lower drug prices by creating a pathway to allow Americans to legally and safely import lower cost prescription drugs from Canada. This reverses the opposition from federal health authorities, despite the public outcry over high prices for drugs in America. It’s uncertain when imports can start as the plan has to go through the time consuming regulatory approval and possible court challenges from drug makers. The opening of the door for cheaper drugs and keeping it open still faces an up hill battle with the political organizations of the pharmaceutical industry.
3) In an effort to keep the American economy on track, the Federal Reserve has reduced the benchmark interest rate by a quarter point to about 2.25%. This is a modest and widely expected move intended to keep the economy healthy in face of the trade war with China and the slowing economic growth overseas. In addition, the feds signaled that the cental bank is ready to make more cuts to stimulate the economy if necessary. A higher interest rate makes for a stronger dollar, a disadvantage for international trade. Wall Street anticipates as many as three more cuts this year, while in addition to the rate reduction, the feds will stop selling off assets this August, two months earlier than expected.
4) Stock market closings for – 31 JUL 19:
Dow 26,864.27 down 333.75 Nasdaq 8,175.42 down 98.19 S&P 500 2,980.38 down 32.80
1) Tesla, the manufacture of all-electric automobiles, has suffered a worse than expected loss. Additionally, there has been another major management shakeup, all of which is casting doubts on the future of the unique automaker. While Tesla delivered a record number of cars in its second quarter, its stock dropped 14% with a loss of $1.12 per share. Nevertheless, Tesla has opened twenty-five new stores and service centers.
2) Concerns grow that the trade tensions may be pushing U.S. economic growth downwards. Fears that the gross domestic product figures due out this Friday will show business investment has weakened. Additional factors stem from slow global growth and falling oil prices. The gains in jobs and wages are preventing growth from sinking. It’s anticipated that the Federal Reserve will lower interest rates by a quarter point to check softening of the economy.
3) Nissan, the world automobile manufacture, has announced the layoff of 12,500 employees worldwide, or about 10% of its work force. Nissan is striving to rein in the costs increases incurred during the former CEO Carlos Ghosn tenure and alleged financial misconduct. Japan’s number two automaker has suffered a collapse in its quarterly profits, a result of sluggish sales and rising cost. This is another indication of the world’s depressed auto market with other renowned automakers like Ford suffering similar major financial problems.
4) Stock market closings for – 25 JUL 19:
Dow 27,140.98 down 128.99 Nasdaq 8,238.54 down 82.96 S&P 500 3,003.67 down 15.89
1) The cultivation of marijuana is the fastest growing industry in the U.S. generating $10.4 billion dollars in 2018 while supporting an estimated 500,000 jobs by2022. But starting a cannabis business is harder than most small business startups because it’s harder to do basics such as opening a bank account or leasing office space. Startup finance is a major problem since marijuana is still illegal federally.
2) New jobs for June exceeded estimates by economist, with 224,000 compared to 72,000 in May. The jobless rate crept up to 3.7% from a half-century low of 3.6%. Average hourly earnings increased 3.1% less than expect. The high number have brought on fears that the Federal Reserve will forego an interest rate cut for the near future. Despite the good news, the economy still faces trade tensions and possible inflation.
3) As many as 10 million Samsung-Android phones users have been tricked into installing firmware updates, but the software is actually an app that re-directs the user to an ad-filled website that charges for firmware downloads. A fake Samsung app named ‘Updates for Samsung’ is touted as firmware updates. The fake software takes advantage of the difficulties in getting software updates for the Samsung phone. Users complain that the site is loaded with ads making it very difficult to use, plus the app limits download speed to 56 KBS so large updates actually time out. While the app isn’t malware, it is fraudulent and a scam.
4) Stock market closings for- 5 JUL 19:
Dow 26,922.12 down 43.88 Nasdaq 8,161.79 down 8.44 S&P 500 2,990.41 down 5.41
1) Consumer spending increased in May as well as prices creeping up too. Both point to a slowing economic growth and benign inflation pressures. These two facts gives the Federal Reserve more reason to cut interest rates next month. Inflation is under the 2% target for this year with a projected 1.5% verses 1.8% originally expected. Consumer spending is about two thirds the U.S. economy.
2) Consumerism is changing fast, with a push to ‘no cashier checkouts’. Amazon Go stores are pushing the technology where sales payment is made automatically just by picking out items and walking out the door. E-commerce and on-line shopping continue their assault on traditional brick and mortar stores. Another strategy is showrooms in place of stores that allow the customer to try out products prior to purchasing them. Finally, drone delivery allows getting your purchases at home in less time than it takes to drive to and from a store. All these new technologies are coming together with increased profits by reducing labor cost.
3) The weekly jobless claims has increased more than expected, although there is no sign of significant layoffs as the economy slows down. Unemployment claims were 227,000 up by 10,000. The economy is slowing with manufacturing sliding down and the trade deficient widening as consumer confidence ebbs.
4) Stock market closings for- 28 JUN 19: Results from bank stress test edged markets up. Best June performance since 1938.
Dow 26,599.96 up 73.38 Nasdaq 8,006.24 up 38.49 S&P 500 2,941.76 up 16.84
1) Many consider that it is no longer a question if the Fed will cut interest rates, but rather when. With the apparent softening of the job market, many investors firmly believe the Federal Reserve will move to cut interest rates this year possible as soon as this July. The markets bounced up on the expectation.
2) The job numbers are in for May, with job creation slowing dramatically. There were just 75,000 new jobs added to the economy, about 100,000 less than economist expected. Both March and April job numbers were lower than expected leading experts to conclude a downward trend in the American economy is beginning. There are fears that we may see a recession as early as next year.
3) The book seller Barnes & Noble has closed a deal to sell itself to Elliott Management Corp, a hedge fund based in New York. The news sent Barnes & Noble stock surging upward as much as 36%. Like many other retailers, Barnes & Noble has struggled with little success to counter the power house e-commerce giant Amazon. It’s Nook e-book device was a bust, which the company had heavily invested in. Barnes & Noble has 600 brick and mortar retail stores.
4) Stock market closings for 7 JUN 19: The Dow has had its best week since November.
Dow 25,983.94 up 263.28 Nasdaq 7,742.10 up 126.55 S&P 500 2,873.34 up 29.85
We’rrreeeeeeee back new episode of the EFR Podcast with your hosts Businessman Bassey (Sammy BE) @Ecofiretv, James Lyman @ObsoletePeople (finally getting a twitter handle), and on the engineering boards Jon “The Don” Sterling @TheDramaBlock.
trio discussed the tax season in the U.S. of A, month of April, as well
as topics ranging from President Donald J. Trump’s tax returns,
American citizen having to pay taxes (or if you don’t want to, face the
penalty & consequences), @ YOUR OWN RISK, of course.
as topics, such as Herman Cain & Stephen Moore possibly being
nominated for the prestigious Federal Reserve Board; then both gentlemen
dropping out from the nomination process; and plenty of more economic,
financial and business discussion topics…..