23 March 2021

1) Some analysts expect Tesla Inc. stock to hit $3,000 by 2025, up from its current price of $655. This would make the company worth almost $3 trillion dollars. This is based on expectation of a 50% chance of Tesla achieving fully autonomous driving systems within five years. This would allow the company to scale up its planned robotaxi service quickly. Additionally, Tesla’s insurance business adds value to the company, believing the offering could be rolled out to more states in the next few years with better than average margins, thanks to highly detailed driving data the company collects. Presently, their insurance is currently available only in California. Forecasts are for Tesla’s unit sales to be between 5 million and 10 million vehicles in 2025, assuming increased capital efficiency.

2) Intel made small waves by launching an ad campaign featuring none other than the “I’m a Mac guy” himself . . . Justin Long to explain why PCs are better than Macs. Intel’s five YouTube videos have racked up over a million views, but the ad campaign extends to a website extolling the benefits of PC over Mac. In the real world, a PC with an 11th Gen Intel Core mobile processor offers users more, with real research and test results to prove it. Many Apple M1 claims don’t translate to real world usage and appear questionable. When compared to a PC with the 11th Gen Intel Core mobile processor, the M1 MacBook features just don’t stack up.

3) After years of outcry about corruption and wasteful spending, Congress banned earmarks, the legislative maneuver of having special budget items that allow members to funnel money to projects in their districts. Earmark spending went away in 2011 after corruption scandals, but now it’s back on the table. Leaders in both parties are taking steps to allow limited earmarks on spending legislation, opening the door to the sort of ‘horse trading’ that Democrats hope could lead to GOP support for Biden initiatives on issues ranging from infrastructure to the annual federal agency funding bill. Republicans are leery of what type of taxes and revenue-raising devices the Democrats are considering to finance a legislative package that could top $1 trillion dollars. With $28 trillion dollars worth of debt, and on the way to a $30 trillion debt, the Congress ought to be focused on how to save money.

4) Stock market closings for – 22 MAR 21:

Dow 32,731.20 up by 103.23
Nasdaq 13,377.54 up by 162.31
S&P 500 3,940.59 up by 27.49

10 Year Yield: down at 1.69%

Oil: up at 61.47

13 January 2021

1) Reports are that Biden will unveil plans to spend trillions of dollars in pandemic and economic relief money this next week. Biden is introducing several members of his economic team, after data shows the U.S. economy has lost jobs for the first time in eight months as a resurgent COVID-19 pandemic has again shuttered restaurants and other businesses. Biden is calling for raising the minimum wage to $15, and for sending out $2,000 in direct cash payments. Biden claims that economic research confirms that with today’s crisis, especially with such low interest rates, taking immediate action, even with deficit financing , is going to help the economy. Biden also say they are looking into other economic relief actions that can be taken unilaterally, including extending a pause on repayments of federal student loans.

2) US naval aircraft carrier groups still rule the seas, but both Russia and China have plans to change that as they strive to expand their blue water navies, by developing new weapons that could threaten America’s dominance. For instance, it is reported that China launched two ballistic missiles that hit a moving target ship in the South China Sea thousands of miles from their launch sites. The Russian navy conducted its third test launch of it’s hypersonic anti-ship cruise missile that was launched from a frigate. The missile reached a speed of Mach 8 before hitting a target more than 200 miles away. These tests are the latest indication that American aircraft carriers, long viewed as kings of the seas, may soon face a real threat to their existence.

3) Iran has told South Korea not to politicize the seizure of their vessel, while demanding the release of $7 billion dollars in funds frozen amid U.S. sanctions. Additionally, Iran has denied all allegations that the seizing of South Korea’s tanker and its 20-member crew amounted to hostage taking, claiming instead it was Seoul who was holding Iran’s funds hostage. The vessel was seized based on an Iranian court order for ‘environmental pollution’, however, the ship’s Busan-based operator, said there was nothing to indicate that before the seizure of the vessel that Iranian authorities were probing possible violations of environmental rules.

4) Stock market closings for – 12 JAN 21:

Dow 31,068.69 up by 60.00
Nasdaq 13,072.43 up by 36.00
S&P 500 3,801.19 up by 1.58

10 Year Yield: up at 1.14%

Oil: up at $53.38

30 December 2020

1) With President Trump signing the COVID-19 relief bill into law, millions of Americans will again have pandemic-related benefits. The COVID-19 relief bill gives those who depend on unemployment benefits some amount of relief. In addition to enhancing unemployment benefits, there is also a $600 check for every adult making less than $75,000 a year.

2) To add to the economic woes of many Americans this year, for a second consecutive week, a massive winter storm is sweeping across the north and east. A new storm system brought heavy rain, gusty winds and thunderstorms to Southern California and will move across the country this week. The new storm system will move across the US during New Year’s Eve leaving heavy snow, winds, severe thunderstorms.

3) With President Trump’s veto of the annual military bill, the House voted to override President Trump’s veto, mustering bipartisan support to enact the legislation over the president’s objections and handing him a rare legislative rebuke in the final days of his presidency. The defense bill also takes steps to slow or block President Trump’s draw down of American troops from Afghanistan. The 322 to 87 vote is the first time a chamber of Congress has overridden one of Trump’s vetoes. The bill also authorizes a pay raise for the nation’s troops. However, the Senate, which must also get a two-thirds vote of its chamber to override vetoes, will take up the legislation later in the week. But the vote is complicated by another separate bill that would increase the size of individual stimulus checks to $2,000. For 60 years, lawmakers have used the annual military bill to bring home wins to their constituents. So far, the Congress has failed to over ride any of President Trump’s vetoes. But for the Senate to gain the two thirds vote to over ride, twelve Republicans must cross over. Other provisions of the bill are new benefits for tens of thousands of Vietnam-era veterans who were exposed to Agent Orange, a 3% increase in pay for service members and a boost in hazardous duty incentive pay. The bill also requires all federal officers enforcing crowd control at protests and demonstrations to identify themselves and their agencies, as well as directing the Pentagon to rename military bases which are named after Confederate leaders.

4) Stock market closings for – 29 DEC 20:

Dow 30,335.67 down by 68.30
Nasdaq 12,850.22 down by 49.20
S&P 500 3,727.04 down by 8.32

10 Year Yield: unchanged at 0.93%

Oil: up at $48.25

23 December 2020

1) The sailing of a Chinese aircraft carrier group, led by the country’s newest carrier, through the sensitive Taiwan Strait, caused Taiwan’s navy and air force to deploy. While this isn’t the first time China’s carriers have passed close to Taiwan, it comes at a time of heightened tension between Taipei and Beijing, which claims the democratically-ruled island as its territory. China says such trips by carriers through the strait are routine, often on their way to exercises in the disputed South China Sea. Taiwan said it sent six warships and eight military aircraft to monitor the Chinese ships’ movements. China has little experience with naval air operations compared to the United States, which has operated integrated carrier battle groups with multiple vessels for decades.

2) Steven Mnuchin, the Treasury Secretary, said that millions of Americans could begin seeing stimulus payments as soon as next week. The stimulus measure is combined with other bills into a giant piece of legislation to include money to fund the government through September 2021 as well as the extension of various tax cuts. The stimulus has $600 direct payments to people as part of the bill, plus $300 in weekly unemployment benefits for 11 weeks.

3) The Justice Department has filed suit against Walmart, alleging they unlawfully dispensed controlled substances through their pharmacies thereby fueling the nation’s opioid crisis. Claims are Walmart pressured its pharmacists to fill opioid prescriptions quickly, thus denying pharmacists the ability to refuse invalid prescriptions. Therefore those pharmacists were knowingly filled thousands of prescriptions that came from ‘pill mills’. The government charges Walmart with failing to detect and report suspicious prescriptions to the U.S. Drug Enforcement Administration, as the law requires, so for years Walmart has reported virtually no suspicious orders at all. Walmart has more than 5,000 pharmacies around the country, but Walmart contends that bad doctors are to blame. Therefore, Walmart filed its own preemptive suit against the Justice Department, Attorney General William Barr and the Drug Enforcement Administration saying the Justice Department’s investigation has identified hundreds of doctors who wrote problematic prescriptions. The company is asking a federal judge to declare that the government has no basis to seek civil damages.

4) Stock market closings for – 22 DEC 20:

Dow 30,015.51 down by 200.94
Nasdaq 12,807.92 up by 65.40
S&P 500 3,687.26 down by 7.66

10 Year Yield: down at 0.92%

Oil: down at $46.80

CONGRESS FINALLY REACHES $900 BILLION STIMULUS DEAL BEFORE HOLIDAYS!!!!!!!!!!

By: Economic & Finance Report

Eureka!!!!!! Finally a resolution for the stimulus package to be garnered to the American people and American struggling small businesses; in the United States. The stimulus package reached by the Republican & Democrat Senate & House leadership; will have a full vote by the US Senate & House of Reps on Monday, December 21, 2020.

The $900 billion price tag leaves out state aid, that governors and mayors across party lines have indicated they desperately need, to revive their local economies. Local officials will have to figure out ways to attribute their fiscal budget without the aid support being provided by the federal government.

The stimulus deal was reached late Sunday night December 20, 2020 by both Republicans and Democrats. It had been in negotiations for months, as Democrats and Republicans had been jostling for superiority on what should be included for the second wave of stimulus checks to the American people and American small businesses. The package aid was desperately needed because of the collapse of the economy, caused by the coronavirus pandemic. -SB

Image Credit: Forbes.com

12 October 2020

1) With the recession from the Covid-19 came predictions of waves of bankruptcy filings as businesses, large and small, failed. But that wave of bankruptcy has not materialized, and so far, there’s no sign that it will, indeed bankruptcies are down a little from last year. This is a good sign that companies and households are not as stressed as many economist feared. However, bankruptcy filings aren’t a perfect measure of hardship, with many companies barely hanging on, so bankruptcies may still be coming. Many small businesses and households go bust without ever formally filing for bankruptcy.

2) The four massive high tech companies, Google, Amazon, Apple and Facebook are under investigation at Federal and State levels for antitrust. These investigations are spurred by concerns that competition is being stifled by the domination of these companies, but there are concerns that the big tech is trying to also stifle conservative voices. Google is facing a relatively narrow complaint from the Justice Department that it seeks to disadvantage rivals in search and advertising. The focus on Apple is their apps store with accusations that Apple introduces new products and then put out apps that compete with them. Facebook has raised concerns over how they treat some of their app developers on its platform and therefore engaged in unlawful monopolistic practices. Amazon is suspected of conflict of interest in competition with small sellers on its marketplace platform.

3) Silicon Valley companies are thinking about the future of work taking actions from pay cuts to permanent work-from-home as they strive to cope with the coronavirus crisis. The big tech companies have formed various plans for the future of work. Some companies, (Twitter and Slack), said their employees never need to return to the office, while others, such as Microsoft, are adopting a hybrid model where employees report to the office only a few days a week. Amazon and Salesforce are adopting new benefits to help out working parents, such as subsidized back-up childcare and extended paid leave, while Facebook, employees may work from home permanently. However, if they leave the Bay Area for a less expensive city, they’ll may face a pay cut. Silicon Valley may bear little resemblance to the thriving hub before the pandemic. Tech companies have largely shut down their sprawling campuses and asked employees to work from home — in some cases, forever. When those offices reopen office life is unlikely to resemble the past. Companies may change their real estate plans, opting instead for a new type of office, or none at all.

4) Stock market closings for – 9 OCT 20:

Dow 28,586.90 up 61.39
Nasdaq 11,579.94 up 158.96
S&P 500 3,477.13 up 30.30

10 Year Yield: up at 0.78%

Oil: down at $40.52

26 August 2020

1) The American Airlines Group Inc. will layoff 19,000 workers once the federal payroll act expires on the first of October, making for a 30% reduction in its workforce since the Convid-19 crisis. This will result in 17,500 workers furloughed and about 1,500 cuts to management staff. These cuts are forced by a 70% drop in passenger numbers. This will bring the airlines pandemic cuts to 40,000 positions since the coronavirus outbreak. Presently, American plans to fly less than 50% of its normal schedule in the fourth quarter, while their long haul international flights will be just 25% of 2019. The airlines will have 100,000 employees compared with 140,000 in March of this year.

2) Real estate investors, including some of the largest investment groups, are skipping loan payments while raising billions of dollars for new investments. While the pandemic has devalued some real estate, it has also created new targets for investors loaded with cash. It’s the age-old strategy of abandoning ‘loser investments’ to buy winners, the losers being commercial properties with businesses that don’t need as much space as before the pandemic. Property owners are more likely to walkaway when their equity has been wiped out by lower values. Restaurants and hotels properties are especially vulnerable.

3) Reverse mortgages have new appeal for older Americans because of the super low interest rates, which means more of the equity is available to the home owners since less is going towards the interest. Essentially, a reverse mortgage is like a loan, where the owner sells his property for cash, but continues living in it. This makes retirement more comfortable or even possible with the homeowner having access to his house equity without having to actually sell his home.

4) Stock market closings for – 25 AUG 20:

Dow 28,248.44 down 60.02
Nasdaq 11,466.47 up 86.75
S&P 500 3,443.62 up 12.34

10 Year Yield: up at 0.68%

Oil: up at $43.43 this will

20 July 2020

1) The international British Airways has announced they are retiring their entire fleet of Boeing 747 jets, a direct result of the Convid-19 crisis. Once one of the biggest airlines using the iconic jumbo jet, the contraction of the airline industry and the likelihood that air travel will not return to its previous size is forcing all airlines to abandon their jumbo jets early. They are going to the more modern fuel efficient Airbus A350 and Boeing 787 in their place. British Airways now has 31 Boeing 747s, about 10% of its total fleet, with an average age of 23 years.

2) What appears to be a massive attempt to embezzle monies from the general public has come to light with the social media Twitter confirming that 130 accounts were targeted in a hack. The accounts of a handful of prominent users were compromised that allowed criminals to gain access to prominent users such as Joe Biden, Barack Obama, Elon Musk, Bill Gates and Kanye West to post solicitations for money. The attackers were able to gain control of accounts then send Tweets from those accounts asking to send money via Bitcoin to commit cryptocurrency fraud. Wire fraud is a federal felony crime, so the FBI immediately began an investigation of who and how the fraud was perpetrated.

3) Delta Airlines is proposing a 15% cut to minimum pay for pilots to avoid furloughs for a year. This would have to come after the first of October when federal aid terms expire. This is in view that a quick recovery in air travel is becoming increasingly remote because of the rise in new coronavirus cases. More than 60,000 airline employees across several carriers have been warned that their jobs are at risk, including more than 2,500 of Delta’s 14,000 pilots. As financial losses pile up, employees are urge to take early retirements, buyouts and other forms of leave in a attempt to slash cost as financial losses pile up. So far, more than 1,700 pilots have signed up for early retirements. This is just another indicator how the air travel business is probably fundamentally changing.

4) Stock market closings for – 17 JUL 20:

Dow 26,671.95 down 62.76
Nasdaq 10,503.19 up 29.36
S&P 500 3,224.73 up 9.16

Year Yield: up at 0.63%

Oil: down at $40.57

7 July 2020

1) Research by the Wall Street firm UBS, predicts that as many as 100,000 brick and mortar retail stores in the U.S. will close by 2025. Because of the pandemic, retailers are closing store locations permanently at an un-precedent rate. But this closure was going on before the coronavirus shutdown, with shoppers embracing other ways to buy such as e-commerce and picking up products at stores purchased online. This is in addition to large traditional retailers going into bankruptcy. This prediction is in keeping with the 9,800 stores already closed this year, with 25,000 stores predicted to close by the end of 2020. The retail sector has already lost 1.2 million jobs between March and June. This opens questions if the present hyper-consumerism economy can continue.

2) With the continued threat of the pandemic and a slowdown of reopening of economies in states, evictions are likely to skyrocket as jobs remain scarce. This is because a backlog of eviction cases is beginning to move through the court system. Millions of people had been counting on federal aid and eviction moratoriums to remain in their homes, but now fear of being thrown out is mounting. This situation is further aggravated as the enhanced unemployment benefits run out at the end of July. The enhanced unemployment and $1,200 stimulus payment had been supporting households this spring. There are 110 million people living in rental households with 20% at risk of eviction by the end of September.

3) The food delivery service Uber has acquired rival Postmates, despite Uber not having become a profitable enterprise yet. This should make Uber a stronger competitor to its main rival Doordash. The food delivery sector is undergoing a major consolidation this year, people jumping from service to service to find the best deal. With this acquisition, Uber gets a bigger share of the market with 31% of the business with DoorDash the largest at 44%.

4) Stock market closings for – 6 JUL 20:

Dow 26,287.03 up
Nasdaq 10,433.65 up
S&P 500 3,179.72 up

10 Year Yield: 0.68%

Oil: up at $40.59

4 June 2020

1) The stock market continues to climb, with some saying this signals the end of the recession. The S&P 500 has a return of 37.7% over the past 50 trading days, which is the largest 50 day rally in history. This rally is attributed to the quick response of the Federal Reserve, with a record $2 trillion dollar federal stimulus package. Another factor is the unlimited asset purchases by the Federal Reserve. While the shutdown depressed retail and airlines businesses, other parts of the economy saw a boost, such as Netflix, Amazon and Facebook. But there is still the record high of over 40 million workers idled by the pandemic, while the weakening in the Chinese’s economy coupled with the tensions between China and America could have a telling effect to the economic recovery.

2) There are fears of another round of layoffs in the later part of 2020, amid questions of where the economy will go in the next six to twelve months. Businesses are now reluctant to expand and hire new people, and may decide to contract thus being better able to weather economic hard times. There is also the unspoken problem of continued automation taking jobs as AI (Artificial Intelligence) and automation that experts predict will continual to sap jobs for the next decade. Automation gives companies an added advantage in surviving when the economy slows down, but a second wave of layoffs may trigger that slowdown.

3) The giant movie theater chain AMC has announced they doubt they can remain in business after the effects of the coronavirus shutdown. The company has problems with their liquidity, their ability to generate revenue and the timeline for reopening its theaters. The chain expects to lose $2.1 to $2.4 billion dollars for the first quarter, with the second quarter to be even worst. With all its theaters closed down, AMC is generating zero revenues. The major problem in reopening is having enough cash for operations until cash starts coming in again, and there is still questions of when theaters will be able to open again, especially if there are flare-ups of the virus.

4) Stock market closings for – 3 JUN 20:

Dow 26,269.89 up 527.24
Nasdaq 9,682.91 up 74.54
S&P 500 3,122.87 up 42.05

10 Year Yield: up at 0.76%

Oil: down at $36.75