5 October 2020

1) Economic watchers were disappointed with the job reports for last month, with just 661,000 jobs added and the unemployment rate down to 7.9% from 8.4% in August. But this is because the labor force shrank by about 700,000. The job report is the last before the November elections and it shows a slowing recovery, thereby raising the specter of a gap that could take several years to close. The Nation has recovered a little over half the 22.1 million jobs lost at the start of the virus crisis. The job numbers fell short of the economic forecast of 850,000 new jobs and was the first month since April with a net job growth dropping below 1 million. September is the seventh month of the pandemic and the resulting crisis in American labor.
2) Some good news for California and its plague of wild fires- two of the largest fires are now fully contained. But still, several others threaten life and property, with weather forecast into next week not providing much hope from the threat of fires. The heat is expected to continue in Southern California with strong winds and dry conditions making for elevated fire conditions. The two, now contained wild fires, have burned for more than six weeks charring an area about the size of Rhode Island. Mega fires have become the norm in California with today 10 fires that are 100,000 acres plus in size and one that is over 850,000 acres. Northen California, with its wine country, continues to struggle with large fires, with the Glass Fire in Napa County being only about 5% contained and the Zogg Fire in Shasta County at 26% contained. All of California is fighting 24 major fires burning in California.
3) There is growing evidence that nearly 4 million American jobs have vanished forever because of the pandemic. This means that many initially lost jobs, which were hoped to be furloughs or temporary job losses, are becoming permanent as businesses shut down and cut costs. Technology displacement plays a major part in permanently shedding jobs by allowing combining job functions or outright replacement of people with machines. Each week, more companies announce thousands of layoffs as they struggle to survive in an ever changing business world and hostile economic environment. Those able to integrate technology and AI (Artificial Intelligence) into their operations are the ones most likely to survive, and that translates into permanently lost jobs.
4) Stock market closings for – 2 OCT 20:
Dow 27,682.81 down 134.09
Nasdaq 11,075.02 down 251.49
S&P 500 3,348.44 down 32.36
10 Year Yield: up at 0.70%
Oil: down at $37.01

24 September 2020

1) California’s annual bout of fires has just added a new dimension to the state’s history. The Creek Fire has become the state’s single most massive wildfire in history by burning 286,519 acres in Fresno and Madera counties. Ignited on September the fourth, it has so far destroyed 855 structures and damaged 71 others. There are now 50 major fires across the West coast this week, so far claiming 26 fatalities, while consuming 2.2 million acres. There are forty crews with 3,100 personnel who are fighting the fires, but only about 32% of the Creek fire blaze has been contained. No estimates yet of just how much monetary damages the state has suffered.
2) As the remnants of Sally continue moving across the southeastern United States, the first estimates are in for the damages. Sally made landfall as a category 2 storm near Gulf Shores, Alabama bringing a storm surge that caused major flooding in places like Pensacola with several feet of water. Damages are expected to cost upwards of $2 billion dollars. NOAA’s aerial imagery is being evaluated to more accurately determine the extent of flooding and damages in Florida and Alabama. Major beach erosion is also apparent too.
3) Tesla’s much touted Battery Day appears to have disappointed most of the average people, with Tesla (TSLA) stock tumbling down 8.6% in midday trading, on track for its lowest close in two weeks. Investors fear that promised new batteries will take years to fully develop and be available for automobiles. Tesla unveiled a new battery design that is 56% cheaper and more efficient for use in automobiles, which should be a big step towards the viability of fully electric cars. Additionally, the company announced a future robot car for $25,000 that will be fully autonomous, and available in the next three years. The new battery technology will enable sleeker affordable cars that can travel much longer distances on a single charge. Investors had expected announcements of two big innovations, the first one is a ‘million mile’ battery that would be good for ten years or more, as well as a cost reduction, a target specified as dollars per kilowatt-hour, which would finally drop the price of an electric vehicle below that of a gasoline car.
4) Stock market closings for – 23 SEP 20:
Dow 26,763.13 down 525.05
Nasdaq 10,632.98 down 330.65
S&P 500 3,236.92 down 78.65
10 Year Yield: up at 0.68%
Oil: up at $39.59

30 August 2019

1) The American trucking industry is in trouble with many major trucking firms such as J.B. Hunt, Knight-Swift and Schneider cutting their annual outlooks. In a growing wave of trucking firms bankruptcies, 3,000 truck drivers have lost their jobs. One positive point is the trucking volume seems to be rising, although trucking is a highly cyclic business with wide swings in high and low peaks. With about 1.8 million American truckers, there is the rising threat of automated robot trucks, which the automatic driving technology industry is eyeing and experimenting already with UPS and the post office.

2) More troubles for Tesla’s SolarCity solar-panels and fires with people’s houses being set on fire resulting in extensive damage. Both Walmart and Amazon.com are suing, claiming Tesla’s solar energy systems have caused fires at their stores and warehouses. Tesla is telling home owners their need to do preventive maintenance on their solar power systems, but with 400,000 solar customers, one of the largest customer bases in America, this may not be a strategy to avoid law suits.

3) Disney’s Disney+ is penetrating NetFlix market share with very aggressive pricing and promotion programs that undercuts NetFlix rates, offering with rates that are as much as one third of NetFlix, while locking customers into contracts for as long as three year. When Disney+ announced its entry into the streaming market, Netflix grew its customer base by 2.7 million, instead of the 5 million that had been forecast. The increased competition from Disney+ and other streaming services is forcing NetFlix to use large amounts of capital to create new video content and so remain a viable competitor.

4) Stock market closings for – 29 AUG 19:

Dow 26,362.25 up 326.15
Nasdaq          7,973.39 up 116.51
S&P 500 2,924.58 up 36.64

10 Year Yield: up at 1.52%

Oil: down at $56.61