28 September 2020

1) Another round of protest against the police was spurred by the grand jury in Kentucky deciding to indict only one of the three officers in the case of the 26 year old medical technician. The case of Breonna Taylor, who was fatally shot by police inside her apartment during a no-knock drug raid on 13 March 2020, is a closely watched case across the nation. The protests which started almost four months ago, seem to be getting more violent with one policemen in Seattle attacked by a protester and struck from behind with a metal baseball bat that cracked the policeman’s helmet. The officer sustained only minor injuries and was checked at the scene by the Seattle Fire Department. A video of the incident instantly went viral.

2) The U.S. Navy is considering expanding the naval force to a maximum of 534 ships by the year 2045, with many of the ships unmanned designs. Currently, the fleet has 355 ships, so this would mean a major construction undertaking that in turn would be a stimulus to the economy for years to come. The plan is to build a new fleet of lightly manned ships that over time can be unmanned. The goal for the unmanned ships is to allow the independently operated robot navigation systems to provide ammunition reloads to attacking vessels. Right now, the Navy is researching and developing the means to deploy the automated systems.

3) Florida is reopening from the coronavirus with Governor Ron DeSantis lifting restrictions on capacity of restaurants and other businesses, vowing not to turn back. This is despite the state reporting hundreds of Covid-19 deaths a week. Furthermore, the Governor is making it harder for local governments to institute their own restrictions that go above and beyond the state’s rules. There is still uncertainty about the consequences of schools reopening and other more relaxed measures. Presently, Florida is experiencing about 700 Covid-19 deaths a week.

4) Stock market closings for – 25 SEP 20:

Dow 27,173.96 up 358.52
Nasdaq 10,913.56 up 241.30
S&P 500 3,298.46 up 51.87

10 Year Yield: down at 0.66%

Oil: down at $40.04

13 August 2020

1) Another national retail outlet, Stein Mart, is going the way of the brick and mortar retail system announcing they are closing all their stores in bankruptcy amid Covid-19 pandemic. Based in Jacksonville, Florida the company operates 281 stores in 30 states with 9,000 employees. Stein Mart ‘going out of business’ sale is expected to begin in August 14 or 15 with complete liquidation of inventory, with the anticipation of all stores closed by the fourth quarter of 2020. The retailer joins a long list of businesses to file for bankruptcy protection amid the coronavirus crisis.

2) With all the money being pumped into the economy by the government, there were fears of fueling inflation. Those fears were increased with the July consumer price data showing that prices are indeed on the rise. But some are saying these price increases are a result of supply and demand dynamics from the pandemic, and will fall once the supply system becomes stable with production reaching equilibrium again. It’s just a matter of time.

3) Amid suspicion of a rigged election by authoritarian leader Alexander Lukashenko, Germany and Lithuania is calling for renewed sanctions on Belarus. Claiming a landslide victory in his presidential election, Lukashenko has cracked down on protesters and demonstrators. The EU (European Union) has call an extraordinary meeting of foreign ministers to discuss the situation, considering the election was neither free nor fair, and efforts to suppress demonstrations as unacceptable. The EU is considering reinstating sanctions. The protest have been violent with about 1,000 people arrested to add to the 5,000 already being held, and injuries to both protesters and police.

4) Stock market closings for – 12 AUG 20:

Dow 27,976.84 up 289.93
Nasdaq 11,012.24 up 229.42
S&P 500 3,380.35 up 46.66

10 Year Yield: up at 0.67%

Oil: up at $42.56 +0.01

24 July 2020

1) The parent company of Ann Taylor and Lane Bryant clothing chains, the Ascena Retail Group Inc., will close more than half its stores, a total of more than 1,000 stores. The troubled retailer was struggling like many other retailers to remain afloat, but the Covid-19 crisis tipped the scales into bankruptcy. Ascena has about 40,000 employees and there’s the expectation of cutting its 2,800 stores down to just 1,200 with significant losses of jobs. The chapter 11 will erase about $1 billion dollars in debt from its $12.5 billion dollars of liabilities, which includes $1.6 billion dollars of funded debt. Retailers have been among the hardest hit by Covid-19 lockdowns coupled with online shopping, which drained revenues and pushed so many retailers into bankruptcy.

2) Almost 16,000 restaurants have closed permanently from the Covid-19 pandemic, an indication of just how deeply the virus has affected the food industry, especially the restaurants. So far, about 60% of the restaurant closures have been permanent, with the number increasing with time. Restaurants now surpass the retail industry in the highest total business closures since the start of the pandemic. Bars and the night life industry has met the same fate, with 5,454 total business closures of which 2,429 are considered permanent closures, or 44% lost.

3) There is mounting evidence that America’s fragile economic recovery is faltering even as the pandemic seems to be leveling out. Reservations for restaurants are waning, air traffic is leveling off and foot traffic at stores is dwindling again. With rising infections in California, Texas and Florida, there is a growing sense that the recovery is fading. Small businesses have suffered the worst, having limited cash reserves and ability to obtain loans, and therefore are failing at record numbers. To compound the problem, there is weaker spending by consumers. Hopes for a real recovery depend more and more on an effective vaccine being created and available. Until there is one, there appears little hope that the economic will make any real lasting progress towards recovery.

4) Stock market closings for – 23 JUL 20:

Dow 26,652.33 down 353.51
Nasdaq 10,461.42 down 244.71
S&P 500 3,235.66 down 40.36

10 Year Yield: down at 0.58%

Oil: down at $41.21

30 June 2020

1) The Boeing Aircraft Co. has started it re-certification process for the 737 MAX with the take off of a test aircraft for the first flight. An FAA (Federal Aviation Administration) pilot was on board as test flights begin, to determine if the aircraft is safe for flying with passengers. The first flight test is to fly maneuvers for about three hours, the test craft being fitted with a number of instruments and monitoring equipment to test and record how the aircraft performs. Test include the ‘wind-up turn’ which is a steep turn that essentially approaches a stall, with wings almost at 90 degrees of bank. This maneuver should trigger the Boeing software system that played a role in both crashes, which caused the aircraft design to be grounded. The software caused the aircraft’s nose to be repeatedly pointed downward at the ground until pilots lost control. These certification flights are expected to take approximately three days, and while they are an important milestone, there remains a number of key tasks to be completed.

2) According to the Bureau of Labor Statistics, 47.2% of American adults are now jobless, almost half the adult population. This is a direct result of losing 30 million jobs because of the coronavirus crisis. While there was an unexpected snap back in May, there are now signs of a slowdown in the labor market improvement because of fears of a Convid-19 resurgence increased these last few weeks. The massive loss of jobs is what is now dragging the economy down. Both Texas and Florida have paused plans for further reopening because of a record spike in coronavirus cases.

3) Lending institutions are pulling back sharply on their lending to U.S. consumers during the pandemic, because they can’t tell who is creditworthy anymore. There are millions of Americans out of work and behind on their debts, but many of these missed payments aren’t reflected in credit scores. This is a result of the government’s stimulus package which allows borrowers to defer their debt payments, but credit companies can’t report these late payments to credit reporting companies. For May, there were more than 100 million accounts with deferred debt payments. This is a sign of widespread financial distress.

4) Stock market closings for – 29 JUN 20:

Dow 25,595.80 up 580.25
Nasdaq 9,874.15 up 116.93
S&P 500 3,053.24 up 44.19

10 Year Yield: unchanged at 0.64%

Oil: up at $39.55

THE CAST PODCAST EP. #13 feat. MIKE SMIFF (Youtube Edition)

THE CAST PODCAST EP. #13 SLIP N’ SLIDE FEAT. MIKE SMIFF

18 November 2019

1) Experts question if proposals to tax the billionaires, the so call wealth taxes, really work in practice? Lawyers and advisers to the wealthy say the tax would never collect the amounts claimed by proponents, simply because a yearly determination of assets isn’t easy and straight forward. There are just too many strategies that can be used to shelter assets, including moving them off shore. Attempts to tax the wealthy in other nations have been far from successful, the Great Brain Drain of Britain is a prime example. The rich simply move somewhere else.

2) While U.S. retail sales rebounded in October, consumers cut back on purchases of big ticket household items and clothing. This could temper expectations for a strong holiday shopping season. Still, compared to October of last year, retail sales are up 3.1%. Consumer spending accounts for more than two-thirds of the economy.

3) NextEra Energy Inc., the world’s first utility with capitalization of $100 billion dollars plus, owes its success to clean power business. Two decades ago this Florida utility plowed some of its extra cash into a wind farm in Oregon. Then NextEra made loans to wind-farm developers, and when some ran into financial troubles, NextEra forgave debts in exchange for majority stakes in the farms. Without any master plan for renewables, NextEra grew in the industry to become the largest.

4) Stock market closings for – 15 NOV 19:

Dow             28,004.89    up    222.93
Nasdaq          8,540.83    up      61.81
S&P 500         3,120.46    up      23.83

10 Year Yield:    up   at    1.83%

Oil:    up   at    $57.93

9 September 2019

1) Several state attorney generals will investigate Facebook for possible stifling competition and putting users at risk. This comes after reports that Google will face antitrust investigations from state attorney generals. The investigations will center on actions that endangered consumer data, reduced the quality of consumers’ choices or increased the price of advertising. States investigating include New York, Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, Tennessee and the District of Columbia.

2) President Trump unhappy at GM for decision to close four of its domestic auto plants. General Motors, which was once the giant automaker in Detroit, is now one of the smallest. GM has gone from 33 plants in the US to 29, but has an additional 27 manufacturing plants in China. Presently, GM sells more cars in China than it does in America. This accounts for $16 billion dollars in profit for GM.

3) The American consumer is carrying the U.S. economy in last quarter. The personal expenditures rose last quarter while business and residential investment, net exports and inventories have declined. There are concerns that consumers may rein in spending from fears of economic future. Global commerce is slowing, partly in response to the trade war, and without strong consumer spending it’s hard to see alternate sources of economic growth.

4) Stock market closings for – 6 SEP 19:

Dow               26,797.46         up     69.31
Nasdaq            8,103.07    down    13.75
S&P 500           2,978.71          up      2.71

10 Year Yield:    down   at    1.55%

Oil:     up   at    $56.73

21 March 2019

1) Fears of climate change is causing some retired seniors to pull up and move out of Florida, which for many years has drawn the ‘sixty plus year olds’ demographics for a life of peaceful retirement with its low cost of living, no income tax and nice warm weather. But the threat of hurricane damage from flooding and rising sea levels is also making the associated insurance cost soar, in turn causing retirees to reconsider and move more inland, the result some are claiming from global warming.

2) Losses from the flooding in Nebraska is estimated to be over one billion dollars with more flooding forecasted. But even worst is the anticipated impact on farmers. Last year, 19% of Nebraskan farms filed for bankruptcy, and many more are now anticipated to file as the consequence of the flooding pushes more farmers under.

3) The Feds have elected to not raise interest rates again this year, expecting an economic slowdown ahead. There isn’t any need to guard against inflation coupled with indicators of slower growth from household spending and business fixed investment. The GDP was 2.1% instead of the expected 2.3%.

4) 20 MAR 19 Stock market closings:

Dow                25,745.67    down     141.71
Nasdaq             7,728.97          up         5.02
S&P 500            2,824.23     down         8.34

10 Year Yield:    down   at    2.54%

Oil:     down   at     $59.99

FIU LAW SCHOOL DEAN NAMED AS US LABOR SECRETARY NOMINEE………

By: Economic & Finance Report

R. Alexander Acosta Dean of Florida International University’s Law School, has been selected to be the new US Labor Secretary. Mr.  Acosta is also the Chairman of the Board at U.S. Century Bank, he was former assistant attorney general of the civil rights division, under former President George W. Bush, and former US attorney for the Southern District of Florida.

After President Trump initial nominee, Mr. Andrew Puzder withdrew on February 16, 2017, Mr. Acosta’s name was in contention. Mr. Acosta has been nominated and proceeded before the Senate in several different occasions, so many experts believe he will be confirmed as Trump’s new Labor Secretary. -SB