22 November 2019

1) After HP rejected Xerox’s offer of $22 per share, Xerox is now threatening to go hostile with its $33.5 billion dollar buyout if HP does not agree to a friendly discussion before November the 25 th. Goldman Sachs & Co. set a $14 target price , the median price target on HP stock by 15 analysts is $20. HP had rejected Xerox first offer considering the combined companies would be saddled with outsized debt, and therefore not in the best interest of the shareholders.

2) The world economy is predicted to expand just 2.9% next year. The global economy is stuck in a rut which it wont exit unless governments revolutionize policies and how they invest, rather than just hope for a cyclical upswing. The biggest concern is that the deterioration of the outlook continues unabated, reflecting unaddressed structural changes. The risk of further escalation of world tensions is a serious concern.

3) General Motors and Fiat Chrysler are embroiled in a law suit with GM alleging that fiat Chrysler got an unfair business advantage by bribing officials of the United Auto Workers union. The suit alleges racketeering by paying millions in bribes to get concessions and gain advantages in three labor agreements with the UAW union. Details of the racketeering have been exposed in a federal probe of corruption in the union which resulted in multiple arrests starting in 2017.

4) Stock market closings for – 21 NOV 19:

Dow             27,766.29    down    54.80
Nasdaq          8,506.21    down    20.52
S&P 500         3,103.54    down      4.92

10 Year Yield:    up   at    1.77%

Oil:    unchanged   at    $57.09

11 November 2019

1) General Motors announced it has sold its Lordstown Assembly plant in Ohio, which has been idle since 8 March. The 6.2 million square foot facility was sold to an investment group called Lordstown Motors, in conjunction with Workhorse Group, a maker of electric trucks, for an undisclosed amount. The company plans to build its Endurance electric pickup focusing on electric pickup trucks for commercial fleets. The operation is expected to create 450 jobs.

2) Truck drivers cheer the automation of LA ports with robots, which will reduce their wait time to be loaded, while the longshore locals, with 9,300 register members, are fighting the robots. The 13,000 truckers are nonunion who get paid by the load-trip and have little to no fringe benefits, while the longshoremen have excellent pay and benefits. The truckers must wait from half an hour to as much as seven hours, for which they receive no pay for. The robots will automate the loading/unloading process reducing the wait times for truckers.

3) Today, 44% of Americans, age 18 to 64, are low-wage workers with a median wage of $10.33 an hour. This is despite a near five decade low in unemployment, the workforce participation at its highest in six years. Low wage workers is defined as those who earn less than two-thirds the median wage. There are 53 million low wage Americans who have little prospects for anything better in life, with nearly half of those working in just ten occupations such as cooks, cleaners, construction and retail sales.

4) Stock market closings for – 8 NOV 19:

Dow          27,681.24    up      6.44
Nasdaq       8,475.31    up    40.80
S&P 500      3,093.08   up       7.90

10 Year Yield:    up   at    1.93%

Oil:    up   at    $57.44

3 October 2019

1) Despite positive last quarters, both General Motors and Ford Motor company’s are concerned about the U.S. auto market taking a turn for the worse. Shares for the two automakers, as well as Fiat Chrysler, fell because of smaller figures for the quarter, although smaller than market analysis projected. There are also concerns of the overall impact from a slowing U.S. and international economies with the impact it would have on new car sales.

2) For the second day, the stock markets nose dived with the Dow losing more than 800 points these last two days. Fears of an economic recession cause the Dow to lose 490 points on Wednesday, with indications that manufacturing is slowing down, and even though manufacturing accounts for only 10% of the economy, investors see this as an indication that the economy is contracting soon with a possible recession in the near future.

3) With the markets in decline, there is a lot riding on the up coming job numbers this Friday. Fears of a coming recession could be reinforced with poor job numbers signaling that a recession is nearing. So far, there is little evidence of layoffs on the rise despite scattered reports that more companies are cutting jobs.

4) Stock market closings for – 2 OCT 19:

Dow           26,078.62    down    494.42
Nasdaq        7,785.25    down   123.44
S&P 500       2,887.61    down     52.64

10 Year Yield:    down   at    1.60%

Oil:    down   at    $52.47

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

4 September 2019

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

10 Year Yield:    down   at    1.47%

Oil:    down   at    $53.90

PRESIDENT TRUMP GOES AFTER GENERAL MOTORS FOR DWINDLING U.S. WORKFORCE!!!!!!!!!

By: Economic & Finance Report

President Trump is not a happy camper. The president recently gave GM a scathing tweet on Friday, about their diminishing workforce presence in the United States.

General Motors (GM), the Detroit based automaker had once been the country’s biggest auto manufacturer, and it has been apparent since 2009, their workforce has constantly been decreasing.

GM has countered those claims of a diminishing workforce, and has insisted they have invested billions of dollars in U.S. based manufacturing operations for the past 10 years. -SB

8 August 2019

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

10 Year Yield:    down   at    1.68%

Oil:    up   at    $52.29

4 June 2019

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

10 Year Yield:    down   at    2.08%

Oil:    down   at    $52.85

29 May 2019

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

10 Year Yield:    down   at    2.27%

Oil:    down   at    $59.06

7 March 2019

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

10 Year Yield:     down   at   2.69%

Oil:     down   at    $56.15