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
1) The ever present problem of growing student debt is being aggravated by the ever rising cost of college. This rise in cost is fueled by decreasing funding by governments, a lack of cost controls by college administrations and an emphases on plush facilities instead of real education support.
2) Manufacturing shrank in August for the first time since August 2016. The manufacturing index slid to 49.1 from 51.2 in July, where an index below 50 signals a contraction. Production declined by 1.3 percent while employment fell by 4.3 percent with new orders falling by 3.6 percent. With the trade war increasing the cost of Chinese manufactured imports, it would be expected that American manufacturing would be increasing.
3) The United Auto Workers union is targeting GM for contract talks, with the UAW approving a strike. The UAW represents nearly 150,000 hourly workers at Ford, General Motors and Fiat Chrysler with 96% of it’s workers OKing a strike. Leaders of the UAW are under investigation for corruption by the FBI who have conducted raids on key leadership members recently for mis use of monies. The union is angry at GM for layoffs and the closing of plants, plus production plants in Mexico.
4) Stock market closings for – 3 SEP 19:
Dow 26,118.02 down 285.26 Nasdaq 7,874.16 down 88.72 S&P 500 2,906.27 down 20.19
1) Disney, the owner of the Star Wars franchise rights, is finding that today’s kids are not as interested in Star Wars as previous generations have been. While the last of the trilogies have turned a profit, they have not met the success of previous movies. Purchased from Lucasfilm Ltd in 2012 for $4.05 billion dollars, Disney is worried about the long term profitability of the franchise. It’s newly opened attraction Star Wars theme-park hasn’t meet expectations, indicated the young are not entranced by the intergalactic saga.
2) Gold continues to increase in value as more jittery investors flee traditional havens for money, to the supposed safety of gold ownership. With gold now at $1,500 per ounce, it is outperforming stocks this year. Concerns over the world economy from uncertainty of the U.S. and China trade war, China’s currency, oil and repercussions from political hot spots across the world have all combined to form a economic climate of fear and uncertainty. All foretell of a global slow down in growth, and as always the case, gold provides safety better than money in economic hard times.
3) A federal judge has ordered litigation over defective General Motors ignition switches to be narrowed in claims by owners. Owners claimed they lost value in their vehicles because of the defect, but the judge ruled the owners have failed to show the value of their vehicles has declined as a result of the defect. Instead, damages could only be measured by costs to repair defective vehicles, which is zero if GM paid for repairs. This defect is linked to 124 deaths.
4) Stock market closings for – 7 AUG 19:
Dow 26,007.07 down 22.45 Nasdaq 7,862.83 up 29.56 S&P 500 2,883.98 up 2.21
1) The electric car manufacturer Tesla has been getting significant revenues by selling credits to other car makers who need to offset sales of polluting vehicles. General Motors and Fiat-Chrysler disclosed that they have reached agreements to buy federal greenhouse gas credits from Tesla. These companies want to bank their green credits for use later when emission rules get tougher, especially if democrats regain the White House.
2) Bond yields are dropping at the fastest rate since th 2008 global financial crisis, in anticipation that the Federal reserve will cut interest rates to counter the fallout from the trade tensions. The two year Treasury yield has fallen for five straight days. This is likely to have damaging effects on business confidence as businesses become more concerned with future growth.
3) The U.S. Manufacturing Purchasing Managers’ Index fell by more than 2 points in May, the lowest level since September 2009, 6 points over the last year. This index reflects a drop in new orders or postponement of orders due to the uncertainty of the economic future. Manufactures are having to hold selling prices lower because of diminished sales, which in turn is squeezing profits.
4) 3 JUN 19 Stock market closings:
Dow 24,819.78 up 4.74 Nasdaq 7,333.02 down 120.13 S&P 500 2,744.45 down 7.61
1) Reports continue of a General Motors and Ford merger in the near future, both are in deep financial trouble. The proposed merger would make the new company the third largest in the world, behind Toyota and Volkswagen. Car sales have flattened in the U.S. and are dropping in China, which are the two largest car markets in the world. There are also questions of how successful Ford can enter the electric and hybrid car markets.
2) Amazon, the worlds largest retailer, is starting to purge many of its small vendors, and concentrate on large major brands like Lego, Procter & Gamble and Sony to better compete with the large traditional retailers such as Target and Walmart. This will be one of the biggest shifts in Amazon’s strategy since it started using independent sellers, and is scaring the daylights out of many smaller companies.
3) The prices for homes is rising at its slowest pace in six years, down 2.7% from last year’s 3%. Price gains in hot cities like San Francisco have cooled, which is causing sellers to pull in their price increases. The home and auto segments of the economy constitute one half of the U.S. economy.
4) 28 MAY 19 Stock market closings:
Dow 25,347.77 down 237.92 Nasdaq 7,607.35 down 29.66 S&P 500 2,802.39 down 23.67
1) The economic balance in US trade deficient soared last year to $621 billion dollars, the highest level in ten years. Exports from the US fell 1.9% while imports rose 2.1%. The deficient with China was $419 billion dollars. The strong US economy is considered a factor in the increase of the imbalance.
2) Italy’s experiment with Universal Basic Income is having dismal results, with Italy’s poverty and unemployment rising. The intent of the program was to alleviate poverty and address it’s high unemployment, for Italy has the highest unemployment rate in Europe. Finland tried the same scheme, but scraped it’s program after two years. The European Union is taking exception to Italy’s spending habits.
3) The General Motor’s Lordstown plant is shutting down with the loss of 5,400 jobs. This shows that despite the booming job market in America, the economy is still leaving people behind. Major problem is the workers are older and lack the computer and technical knowledge to retrain for other job fields.
4) 6 MAR 19 Stock market closings:
Dow 25,673.46 down 133.17 Nasdaq 7,505.92 down 70.44 S&P 500 2,771.45 down 18.20
General Motors announced they were closing its operations in Venezuela. GM is closing shop in Venezuela because the Maduro government has seized their plant in Valencia.
As protests were on going in the country on April 19, 2017; protesters were clashing with the Maduro government over free and fair elections; and food scarcity within the country. Maduro’s government decided to take over the factory in Valencia. This seemed to be the last straw for the General Motors corporation.
The plant in Valencia, last produced a car in 2015 but the company has over 79 dealerships in Venezuela and close to four thousand employees. Venezuela has taken over private companies property many times before, especially when protests have broken out in the country. -SB