15 March 2021

1) Canoo of Los Angeles is offering a battery-powered truck, with a skateboard-style EV platform, having a highly modular, cab-forward, for a blisteringly quick utility vehicle. Similar to Ford’s F-150, it comes in about the height and two inches narrower, and with a wheelbase 10 inches shorter. Without a conventional drive train, its extended cab is far forward, thus giving it a larger bed than the Ford. With its battery and electric motor, it can generate 600 horsepower and 550 foot-pound of torque even down at zero rpm. These should make the Canoo a respectable tow rig, not to mention a capable crawler, what with its short wheelbase, skid plates front and rear, and integral tow hooks.

2) America has now administered over 100 million doses of COVID-19 vaccine (101.1 million). That equates to more than 35 million Americans fully vaccinated or 10.5% of the total U.S. population. Nearly 66 million, or almost 20% of the total population, have gotten at least one dose, while one-third of Americans age 65 and older are fully vaccinated. The first shot was given on December 14, and more doses have been administered in the U.S. than any other country in the world, although several smaller nations have vaccinated a higher proportion of their populations. The U.S. should have enough COVID-19 vaccine to immunize the nation’s entire adult population by this summer, with enough left over for some 172 million more people. The nationwide pace of vaccinations has quickened to an average of over 2 million doses a day. The majority of states have already vaccinated many of their front line essential workers and residents over 75 years old.

3) Rare earth elements are produced in various parts of the world, but primarily in China, who has been holding the U.S. and some other countries hostage under threat of a trade war by using these ‘must have’ minerals. But that is about to change with Noranda Alumina of Gramercy, Louisiana, who is proposing developing an $800-million dollar high tech refining center for extracting rare earth minerals from over 35-million tons of residual bauxite stored in Louisiana. Investing nearly a billion dollars on the new plant, it will create 2,000 construction jobs. Once in operation, the facility will employ 200 full time high paying jobs along with nearly 600 indirect jobs. This opportunity enables America to domestically produce these rare earth elements that go into a lot of green earth technologies, plus by recycling the residual bauxite, the extraction plant will be carbon neutral.

4) Stock market closings for – 12 MAR 21:

Dow 32,778.64 up by 293.05
Nasdaq 13,319.86 down by 78.81
S&P 500 3,943.34 up by 4.00

10 Year Yield: up at 1.64%

Oil: down at $65.56

16 February 2021

1) General Motors is the latest automaker to report that a global chip shortage is affecting its production. Other automakers include Stellantis, Volkswagen, Ford, Nissan, Subaru, Renault, Honda, Toyota, and Mazda. Chipmakers in Asia are rushing to boost production but say the supply gap will take many months to plug. The chip shortage is expected to cut global output in the first quarter by more than 670,000 vehicles and last into the third quarter, for an estimated total production lost this year reaching 1 million vehicles. When there is a shortage of semiconductors that impacts production, GM intends to build vehicles without certain modules and will complete them as soon as possible. This will help us quickly meet strong customer demand as more semiconductors become available. The shortage is affecting production of automaker’s most profitable cars: the Chevy Equinox, Colorado, GMC Canyon, and Terrain, Ford’s F-150, and Toyota’s Camry and Tundra.

2) The Pentagon has awarded contracts to Lockheed Martin, Northrop Grumman and General Atomics to develop an air-launch, missile-packed drone. The U.S. Defense Advanced Research Projects Agency (DARPA) handed out the contracts for Phase I design work on the LongShot unmanned air vehicle (UAV). The program is designed to use UAVs to deploy multiple air-to-air weapons. LongShot is part of the effort to allow crewed planes to launch drones from a standoff range away from enemy threats and allow the drones to close the gap and take more effective missile shots. Both the Air Force and the Navy consider that UAVs are the future in attempting to broaden their crewless arsenal both to save U.S. service person lives, and to cut costs. LongShot is likely to be designed in such a way that it can be deployed under the wing of a fighter or from the weapons bay of a bomber, which would extend its range well past whatever amount of fuel the drone is able to carry.

3) SpaceX has just crashed another test rocket, the Starship, which is designed to be 100% reusable, thus drastically dropping the cost of entering space. The Starship flew 10 kilometers up into the air, turned sideways, fell 10 kilometers back down, pivoted again to attempt a vertical landing, but failed to stick the landing. Descending too fast, it touched down more diagonal than vertical, exploding in a ball of flame on impact. However, SpaceX already has a clear solution to the problem by firing three engines in the landing burn instead of two.

4) Stock market closings for – 15 FEB 21:

Dow 31,458.40 up by 27.70
Nasdaq 14,095.47 up by 69.70
S&P 500 3,934.83 up by 18.45

10 Year Yield: up at 1.20%

Oil: up at $60.19

11 February 2021

1) The Ford Motor Co. has ended its joint venture of electric vehicles with China’s auto maker Zotye, a company with financial troubles so severe that it’s fighting for survival. This does not change Ford’s commitment to producing vehicles for the largest electric vehicle market in the world . . . China. Ford and Zotye had agreed to develop joint ventures but had never actually formed the joint venture ship. Ford plans to move forward with its joint venture with Changan, allowing the Dearborn car maker to produce the already developed Mustang Mach-E in the country quickly and with little additional investment. Ford still has ambitions involving electric vehicles overall and specifically in China. Zotye is in deep financial trouble, requiring state intervention to continue, being on the cusp of collapse.

2) Bond yields are surging, but here’s the bigger threat to stock markets. The stock market rally has hardly been derailed as the yield on the 10-year Treasury reached 1.20% on Monday, which makes for a point advance, with the U.S. stock futures pointing to an upbeat start. Charting the earnings and bond yields show the gap between the two isn’t as narrow as it was at the end of 2018, when stocks lurched lower. The current spread suggests equities could absorb Treasury yields above 1.5%, and assuming earnings continue to move in line with analyst expectations, U.S. and European equities markets could absorb another 135 basis points of tightening by the end of the year. Analysts expect the S&P 500 earnings to grow 24% this year and 16% next year.

3) Oil futures moved up on Tuesday, thereby shedding off earlier weakness, as signs of improving energy demand put global benchmark prices on track to tally an eighth consecutive session gain. That rally has been aided by longer term optimism and expectations of broader market strength, but current prices are likely to generate some anxiety that the rally is near overextended territory. Saudi Arabia’s decision to unilaterally cut output by 1 million barrels a day in February and March, helping to keep supplies in check and prices higher. Crude prices in the $55 to $60 range have historically been sufficient to trigger new production activity in parts of major U.S. shale basins. The prospect of an eventual return of Iranian exports and an unwinding of the record deal between the Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, offer additional downside price risk.

4) Stock market closings for – 10 FEB 21:

Dow 31,437.80 up by 61.97
Nasdaq 13,972.53 down by 35.16
S&P 500 3,909.88 down by 1.35

10 Year Yield: down at 1.13%

Oil: down at $58.24

10 February 2021

1) Fear in American society is apparent with the soaring gun sales for this last year. Measuring, by using the Federal background checks, there have been 4.3 million checks for 2021 vs. 2.7 million for 2020. About 60% of these buyers are new buyers of guns, and about 40% are women. Sales have been so heavy that gun shops are closing because they don’t have any inventory, with people buying two and three guns at a time. The high sales are driven by fear of social unrest, rioting in major cities across the country lasting weeks on end, and fears of suppression of gun ownership by the new administration. Also, people don’t feel they can rely or trust the police to protect them anymore. Additionally, ammunition of all types has been sold out across the land.

2) The global microchip shortage for automobiles continues to spread with the next victim being Ford’s most profitable truck, the F-150 pickup. Many companies have scaled back car production because of the computer chip shortage. Ford is temporarily cutting the number of shifts in its truck production plants in half. Microchip shortages has Volkswagen production limited, and Honda and GM have also had to cut back. Nissan and Toyota have had to slow their truck production lines as well. Ford has already limited production of other models, the Escapes and Lincoln Corsairs. Modern cars have computer systems for almost every component these days, from digital speedometers to vital vehicle functions like controlling emissions and emergency brake systems. The microchip shortages isn’t confined to automobiles with manufactures of telephones, computers, appliances and home entertainment systems feeling the pinch too.

3) Unemployment agencies across the country were flooded with so many claims during the pandemic that many struggled to distinguish the correct from the criminal. Some Americans are receiving tax forms saying they owe money on unemployment benefits they never received. This is an indication of the extent of identity theft in the nation’s state run unemployment systems. Unemployment benefits are taxable, so government agencies must send a tax form to people who received them, and some Americans are receiving tax forms saying they owe money on unemployment benefits they never received. State run unemployment offices are lucrative targets for fraud particularly when the agencies are swamped with applications and not having the time and resources to check. This signals that someone has likely stole personal information and used it to claim benefits, but that data may later be used to steal an identity for more fraud. Nearly 26 million people requested unemployment aid in the initial months after states began ordering shutdowns due to the pandemic.

4) Stock market closings for – 9 DEB 21:

Dow 31,375.83 down by 9.93
Nasdaq 14,007.70 up by 20.06
S&P 500 3,911.23 down by 4.36

10 Year Yield: down at 1.16%

Oil: up at $58.39

4 February 2021

1) Two companies, AmSty and Agilyx, have announced the certified circular recycling pathway for polystyrene for recycling has been cleared. Polystyrene waste is currently being transformed from solid form to its liquid feedstock called recycled styrene monomer (RSM) at their joint venture facility, to produce circular recycled products. These products can now be put back into the marketplace with original quality. This is the major advancement in recycling polystyrene waste in a world being overrun by plastic waste.

2) QuantumScape, the solid-state battery company, debuted its stock which soared up 256% in less than a month, but then plunged 60% from the high. The solid-state battery is lighter, has greater energy density, therefore more range, lower cost and faster recharge times. But solid-state battery packs for cars are far from ready. They do away with the liquid electrolyte that makes conventional lithium-ion batteries heavy, as well as being dangerous at high temperatures. Getting solid-state batteries to the market is difficult and will take some time, so battery packs for cars are far from ready. Two things sent the company stock down. First is a January 4 report saying that QuantumScape’s batteries are small and unproven, smaller than an iWatch battery and never tested outside a lab. A few days later, the law firm Gainey McKenna and Egleston announced a class-action lawsuit against QuantumScape on behalf of investors, noting a 40 percent drop in the stock price after the story ran. QuantumScape has made clear the batteries are still in the development stage, with results from testing small prototypes instead of full power packs. Other companies, such as Toyota, General Motors, Samsung, Ford and Hyundai are working and investing in the new battery technology. The solid-state space energy storage field has been dormant for many years but now it is heating up.

3) It’s reported that China has stolen personal data from 80% of Americans using their Chinese hackers. On the news show 60 Minutes on CBS the former director of the US National Counterintelligence and Security Center disclosed that 80% of American adults have had some amount of their personally identifiable information stolen by the Communist Party of China. Furthermore, there are concerns that the Chinese regime is taking all that information about Americans, such as what we eat, how we live, when we exercise and sleep, and combining it with our DNA data. With information about heredity and environment, suddenly they know more about us than we know about ourselves.

4) Stock market closings for – 3 FEB 21:

Dow 30,723.60 up by 36.12
Nasdaq 13,610.54 down by 2.23
S&P 500 3,830.17 up by 3.86

10 Year Yield: up at 1.13%

Oil: down at $55.95

3 November 2020

1) With the pandemic, working at home became the sudden norm, but now companies are starting to think ‘remote work’ isn’t that great after all. Companies are finding that projects take longer, collaboration is harder, and the training of new workers is a struggle. While many companies thought remote working would be the future, giving many cost savings, they now say this is not going to be sustainable. Some companies had even decided to give up their physical office spaces entirely, which would be a big savings in operating cost. The early productivity gains that companies witnessed with remote work has peaked and leveled off. Few companies expect remote work to go away in the near term, though the evolving thinking among many CEOs reflects a significant shift from the early days of the pandemic.

2) As oil prices continue to tumble, there are world wide concerns about oil and its effect on economies. Global oil inventories fell at a rate of about 2 million barrels a day in September and October, and that trend will probably continue, as demand unexpectedly fell from the lockdown measures. The European Union is accelerating the transition away from fossil fuels, one of its members still sees its own small oil industry continuing for a decade or more.

3) From the start, all electric automobiles have been plagued by their high cost, but now Ford motor company says they have an affordable $20,000 electric car in the mix. This gives a cost on price parity with traditional vehicles using an internal-combustion engine. Ford is returning to its roots with cars for the common working man, having costs for buyers that will range between $20,000 to $70,000 avoiding the sky-high price tags of other electric cars. Ford is expecting future EVs to account for over 10% of the company’s revenue in the future. The Ford Mustang Mach-E was introduce this year, while the electric F-150 EV pickup is set for a debut in 2022. Ford expects to offer a full lineup of electric commercial vehicles in the future, but a $20,000 EV could be just the ticket to get battery-powered cars into the mainstream.

4) Stock market closings for – 2 NOV 20:
Dow 26,925.05 up by 423.45
Nasdaq 10,957.61 up by 46.02
S&P 500 3,310.24 up by 40.28
10 Year Yield: down at 0.85%
Oil: up at $37.09

1 October 2020

1) After two previous recalls for Mustangs and Super Duty pickups, Ford has announced a third recall of nearly every new vehicle it sells today, a total of about 620,246 vehicles for dysfunctional (blank picture) backup cameras. All 2020 models are being recalled, the Ford Explorer, F-150 pickups, Mustang, Transit, Super Duty pickups, Expedition, Escape, Range and Edge. The only exception is the Ecosport. All have defective back up camera systems that can go dark or have a flickering image. Backup cameras are federally mandated, and therefore Ford vehicles don’t comply with Federal Motor Vehicle Safety Standards and therefore must be repaired.
2) Disney has announced it is laying off 28,000 employees in the U.S., a direct result of the pandemic’s effects on its theme parks. The laid-off employees comprise 67% of their part time workers and will affect Disney’s Parks, Experiences and Products unit. The parks and resorts division has more than 100,000 U.S. employees. On shutting down its theme parks globally this spring, Disney’s profits dropped a whopping 91% for the first three months of 2020. The theme parks have been impacted, a result of the limited capacity from physical distancing requirements and the continued uncertainty of the duration of the pandemic.
3) Nigeria is overhauling its State Oil Company and may sell a stake in the company. Nigeria is Africa’s biggest crude oil producer so the sale of shares is a big deal. The Nigerian government seeks to establish a commercially oriented and profit driven national petroleum company, which generates about half of the government’s revenue and more than 90% of its export earnings. The company has for years been a tool for political patronage to cronies, with its closed operations fueling corruption. Being a publicly traded company sheds the cloak of secrecy by opening the books for inspection thereby making corruption more difficult and likely to be detected.
4) Stock market closings for – 30 SEP 20:
Dow 27,781.70 up 329.04
Nasdaq 11,167.51 up 82.26
S&P 500 3,363.00 up 27.53
10 Year Yield: 0.68% up 0.03
Oil: up at $39.86

21 July 2020

1) Another major U.S. airline, Southwest Airlines, is facing reduction in staff as the airline business continues to contract with little expectation of returning to its pre-corona days of business. About 24% of Southwest pilots and 33% of flight attendants have agreed to early retirement or long term leaves of absence. This accounts for about 4,400 employees who have decided to leave permanently with another 12,500 for extended emergency time off. Southwest is trying to avoid its first involuntary job cuts in its 49 year history. The company says that passenger numbers will have to triple by year end to eliminate the need for layoffs. There is growing evidence that the airline business is fundamentally changing.

2) The freight truck company TuSimple is building the world’s first network of self driving delivery trucks by 2024. The autonomous semi truck-trailers will operate across the America. TuSimple has partnered with UPS, Penske Truck Leasing, US Xpress and McLane for this autonomous freight network project. TuSimple is creating digital routes, terminals and a monitoring system in three phases that tracks its truck. Phase I is until end of 2021 to bring autonomous trucking services to Phoenix and Tucson in Arizona, plus El Paso, Dallas, Houston and San Antonio in Texas. Phase II, from 2022 till 2023, will expand the network coast to coast with a line from Los Angeles to Jacksonville in Florida. Finally, phase III between 2023 and 2024, will expand service nation wide to 48 states.

3) Both automakers GM and Ford have lost 27% of their market value this year, while electric car maker Tesla continues its unbelievable rise in the market. The reasons for the decline are different for the two companies. Ford sales relied too heavily on the F-150. While GM continues to sell more cars in the U.S. and worldwide, it’s hammered by the pandemic and failure in China, the world’s largest car market.

4) Stock market closings for – 20 JUL 20:

Dow 26,680.87 up 8.92 %
Nasdaq 10,767.09 up 263.90
S&P 500 3,251.84 up 27.11

10 Year Yield: down at 0.62%

Oil: up at $40.70

6 July 2020

1) Newest job report is out with America gaining 4.8 million jobs as people return from the shutdown to work again. This gives an unemployment rate of 11.1%, which is still in the recession category, but is coming down over time. These returning jobs were mostly in the restaurant, hotel and retail sectors. There remains the question of how many restaurant jobs will finally return, with significant numbers of privately own businesses failing financially because of the shutdown.

2) The cornerstone of Ford’s reorganization, its F series Ford pickups, has dropped 22% in sales. Most of these are the F-150 full size pickups, with a new version just recently released. Total Ford sales are down 33.3%, with Ford executives making it clear just how critical the F-150 is to the future of Ford. Before the pandemic crisis set in, Ford had implemented a major restructuring of its operations intent on remaining a strong profitable company, and had expected to pay for this plan in part with the strong sales of the F-150. The F series models have been a part of Ford’s product line since 1948.

3) It’s reported that the developing world loses billions of dollars in money from migrant workers. These migrant workers range from Polish farmhands in the fields of southern France, to Filipino workers on cruise ships in the Caribbean, almost all of them losing their jobs because of the pandemic shutdown. These workers routinely sent cash home, so the third world economy is suffering too. Migrant workers comprise tens of millions of Indians, Filipinos, Mexicans and others from the developing countries, who sent a record $554 billion dollars back home last year. This is more than three times the development aid from foreign governments. Family members depend on this cash to pay for food, fuel and medical care. This drop in money sent home is four times the fall in the 2008 Great Recession.

4) Stock market closings for – 3 JUL 20:

Dow 25,827.36 up 92.39
Nasdaq 10,207.63 up 53.00
S&P 500 3,130.01 up 14.15

10 Year Yield: down at 0.67%

Oil: unchanged $40.32 back home

25 June 2020

1) There are ten companies that may not make it through the summer. These are high brand names of Hertz, J.C. Penney, Pier 1 Imports, Tuesday Morning, J. Crew, Neiman Marcus, Gold’s Gym, Tailored Brands (Men’s Warehouse and Jos. A. Banks) and Diamond Offshore Drilling, which are all in bankruptcy now. The high number of retailers shows the ongoing retail apocalypse with the retail sector, which had already hit before the pandemic by falling sales, lower costumer traffic and too many stores. Retail was near the edge of collapsed with last years Christmas holiday shopping doing little to boost business, especially those located in malls. Last year, 9,500 retail stores closed, with estimates of 15,000 stores closing for good in 2020. This may indicated a fundamental shift in America’s economy, a shift away from hyper-consumerism to something else besides a service based economy. Shopper visits to stores are about half of last year’s numbers, and that’s with businesses reopening after more than two months on lockdown.

2) Fears continue to grow that we are not finished with the Convid-19 crisis yet, as the number of new cases continues to increase. This is happening with states and cities easing their shutdown measures to reopen the economy to start a recovery. The seven day average of new virus cases has swung up 30% from a week ago. It was hoped the warm weather would suppress the virus spread as it does with the flu, but if the virus is resurrecting, then the shutdown may need to returned with the resulting economic impact.

3) The Ford Motor Co., who is in the process of its global restructuring plan and paying off debt related to the coronavirus pandemic, is betting its future on its new line of pickups. Ford is offering its popular F-150 model in traditional internal combustion engines, new hybrids and all electric versions. The Ford F-150 has been the country’s top selling truck for more than 40 years, the best selling for the last consecutive 38 years. Their F-150 is a key part in Ford’s plans to profitably grow their business, to help in the $11 billion restructuring cost and pay off the $20 billion dollars in new debt.

4) Stock market closings for – 24 JUN 20:

Dow 25,445.94 down 710.16
Nasdaq 9,909.17 down 222.20
S&P 500 3,050.33 down 0.96

10 Year Yield: down at 0.68%

Oil: down at $38.07