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