14 May 2019

1) China has countered U.S. tariffs imposed last Friday with tariffs on $60 billion dollars of U.S. imports to China. About 10 to 15% of America’s import revenues come from China, and while the trade war is high stakes and risky, it’s the only real tool America has to deal with China, because China ignores the world trade organization rulings.

2) Fears are increasing that China may not buy as many U.S. treasury notes as she has in the past, which would force America to increase the prime interest rate. There are even fears that China might not buy any bonds at all, or even start selling off bonds she now holds in retaliation for the tariffs. It’s reported that China is also buying up gold.

3) Boeing aircraft is fearful of being a target for tariff reprisals, who holds substantial orders from China. Apple, who gets 20% of its revenues from China, and Caterpillar are also facing business downturns if China places tariffs on imports of their products.

4) 13 MAY 19 Stock market closings: China’s tariffs announcement turns markets downward.

Dow               25,324.99    down    617.38
Nasdaq            7,647.02    down    269.92
S&P 500           2,811.87    down      69.53

10 Year Yield:     down   at    2.41%

Oil:     down   at    $60.97

4 April 2019

1) Ghawar, the biggest Saudi oil field is declining faster than was generally accepted by the world oil market. Oil production and reserves have been a state secret for more than forty years, but in a just released prospectus, Saudi Arabia open it’s books to reveal that their largest oil field has a maximum production three quarters what was assumed. Still, the Saudis claim they are able to pump oil at the maximum capacity of 12 million barrels a day, enough for another 52 years.

2) Signet Jewelers plans to close more than 150 of its stores in the fiscal year 2020. This is part of their plan to turn around the company and includes stores from Kay, Zales and Jared. Signet based their decision on a decline of mall foot traffic and increasing promotions required to get sales. They expect sales to drop 2.5% next year.

3) As the dollar weakens, gold has shown little change. Some claim gold prices reveal the true state of US economic health. When high, the economy is not healthy, while when low, it is healthy. People invest in gold as a hedge, a heaven or as a direct investment. The price of gold is more than just supply or demand since gold production is just a small fraction of the world gold supply.

4) 3 APR 19 Stock market closings:

Dow          26,218.13    up    39.00
Nasdaq       7,895.55    up    46.86
S&P 500      2,873.40    up      6.16

10 Year Yield:    up   at    2.52%

Oil:     unchanged   at    $62.46