17 September 2019

1) The drone attacks on two Saudi oil refineries has caused a jump in world oil prices. The strikes wiped out half of Saudi Arabia’s output capacity leading to fears of de-stabilization of the world’s crude producing region and therefore to the world’s economy. Prices for oil leaped with the opening of markets on Monday, the biggest jump in prices ever. President Trump claims that Iran was behind the attacks and that a coalition should be formed to counter the threat of Iran. The strike was made using 10 drones with the disruption surpassing the Kuwaiti invasion by Saddam Hussein in 1990.

2) UAW (United Auto Workers) workers at GM (General Motors) have gone on strike which has shut down the automakers highly profitable U.S. operations. Lost production is expected to cost GM $40 to $50 million dollars a day. There are a number of issues which GM and union officials said must be resolved before a new contract can be signed. The UAW wants to block the closing of plants engaged in manufacturing of sedans, which the company and other manufactures are discontinuing as the market goes to SUVs and crossover automobiles.

3) Gold and silver prices have surged from the global turmoil of Saudi oil attacks. Gold and silver are the traditional safe haven for investors in times of uncertainty. This gives further impetus to lower the interest rates by a quarter point to counter a slide into a recession.

4) Stock market closings for – 16 SEP 19:

Dow            27,076.82    down    142.70
Nasdaq        8,153.54    down      23.17
S&P 500       2,997.96    down        9.43

10 Year Yield:    down   at    1.84%

Oil:    down   at    $61.90

16 September 1019

1) Two of the largest Wall Street banks are trying to create an index to track the market impact of President Trumps’s tweets. J.P. Morgan Chase and Company has created an index to quantify the effects on U.S. bond yields. Citigroup Inc.’s foreign exchange team consider Trump’s tweets increasingly relevant to foreign exchange moves. Approximately 10% of the president’s tweets since his election in 2016 pertain to subjects of importance to U.S. markets.

2) The Elliott Management Corp. offers a plan to boost the share price of AT&T by more than 50% through asset sales and cost cutting. The four part plan calls for the company to divest assets including satellite-TV provider DirecTV, Mexican wireless operations, parts of its land line business and other assets. The bases for the plan is for AT%T to exit businesses that don’t fit its strategy as well as running more efficient operations, plus stop making major acquisitions.

3) China has added almost 100 tons of gold to its reserves since resuming buying in December. Bullion is near a six year high as central banks including the Federal Reserve cut interest rates. Trade war restrictions as with China, or sanctions as with Russia, gives an incentive for central banks to diversify, with gold providing an ideal hedge with increasing political and economic uncertainty. Spot gold was $1,510.27 an ounce on Monday, and is expected to rise to $1,600 an ounce in the coming months.

4) Stock market closings for – 13 SEP 19:

Dow                  27,219.52         up    37.07
Nasdaq               8,176.71    down   17.75
S&P 500              3,007.39    down     2.18

10 Year Yield:    up   at    1.90%

Oil:    down   at    $54.82

3 September 2019

1) Gold is renowned for being a panic investment, something that investors move their money into when fearing that sever financial troubles are coming. Investors are worried about political uncertainty that plagues world markets, and are pushing gold prices up to record highs. Real yields in the US have fallen to about zero which makes gold especially appealing as a safe haven.

2) The Price of oil falls as the trade war deepens stoking concerns over growth. Principal cause for concern is the trade war and the deterioration of manufacturing in China. Oil prices is considered a gage of economic health because slower growth means there will be less demand for oil, so prices drop. Furthermore, since oil is bought and sold as futures commodities, the price reflects anticipation of near future economic state of the world.

3) Owners of 98,000 Volkswagen AG U.S. vehicles which had fuel economy labels overstating efficiency will ask a U.S. judge for $26 million dollars. The EPA said the German automaker must forfeit greenhouse gas emissions credits and lower the fuel economy ratings on these vehicles after using software to falsify fuel efficiency ratings.

4) Stock market closings for – 2 SEP 19:

Markets closed for holiday.

29 August 2019

1) Threat of a ‘no deal’ Brexit has the British pound falling relative to the US dollar and euro. The new British prime minister Boris Johnson announced the annual suspension of Parliament would be extended until 14 October, just two weeks before the UK is set to leave the European Union. This suspension is considered a move to block a no-deal Brexit within the UK parliament.

2) If General Motor exits from China, it will mean billions of dollars of profit lost. President Trump’s threatening order for American business to leave China would leave GM the hardest hit of the big three American automakers. While most of GM’s profits comes from North America, it makes about 43% of it annual auto sales in China. This would also mean the loss of all future growth potential, leaving it almost a North American only company, since GM has sold off its European operations.

3) The international gold market is falling prey to a forgery crisis. Gold bars are being stamped with logos of major refineries which makes them of questionable purity. These fake bars are being used as a means to launder cash money or trafficking illegally mined gold. The fakes became apparent when gold bars were found with identical serial numbers. In 2017 and 2018 there were 655 forged bars reported. Gold Kilobars are the most common form of gold in circulation and are worth about $50,000 each

4) Stock market closings for – 28 AUG 19:

Dow                26,036.10    up    258.20
Nasdaq             7,856.88    up      29.94
S&P 500            2,887.94    up      18.78

10 Year Yield:    down   at    1.47%

Oil:    up   at    $55.90

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

7 August 2019

1) There are fears that the deepening China and American trade war may severely effect the fragile oil market. The tariffs increases has already send oil prices spiraling down over concerns of a sever global economic slowdown or recession. But China could use oil as an economic weapon by purchasing vast quantities of oil from Iran thus driving oil prices down from $60 to as low as $40 while also undermining President Trump’s foreign policy.

2) Gold, always a panic investment from economic fears, is again attracting investors with its prices pushing upward. With the devaluation of the Chinese money and threats that the U.S. might follow suit, investors are worried about the value of other monies sliding down. Fears of what will happen to the Euro and British Pound with a ‘no deal’ exit, coupled with European government bonds rates that are so low, is further attracting investors to gold. Hence, investors are migrating to the traditional safe heaven of gold.

3) In an attempt to further push into the Nordic markets, payment processor Mastercard Inc will buy the majority of the corporate services businesses of Scandinavian payments group Nets. The financial technology sector is consolidating fast as more people switch from cash to digital payments, both on line and on the street. The $3.19 billion dollar deal gives Mastercard further clearing and instant payment services plus e-billing solutions.

4) Stock market closings for – 6 AUG 19:

Dow             26,029.52    up    311.78
Nasdaq           7,833.26    up    107.23 
S&P 500          2,881.77    up      37.03

10 Year Yield:    up   at    1.74%

Oil:    down   at    $53.46

24 June 2019

1) Gold, which is known as a ‘panic’ investment to guard against economic collapse, is passing $1,400 an ounce for the first time since 2013. Fueled by the fears of an international economic downturn and possible military action between Iran and the U.S., coupled with the large buying of gold by China, experts say that prices could reach $1,500 to $1,600 per ounce in the next year. Gold has historically been seen as a guard against devaluation of currencies.

2) Slack, the workplace messaging software used in tech and media companies, may be breaking the grip Wall Street has on Silicon Valley. The IPO’s of tech companies have been the controlling link of Wall Street on tech companies, but Slack used direct listing of its stock instead of the traditional IPO, thus cutting Wall Street out of the equation. This means that Wall Street isn’t able to tell companies what to do in becoming a public company.

3) Automation continues to cut into the job market with these ten career fields declining because of technology. The Telemarketer jobs are down 52%, followed by File clerks down 46%, Sorters of mail at 44%, Bill collectors down 39%, Data entry 36%, Order clerks 36%, Chief executives at 35%, Production worker helpers 30%, Installation, maintenance and repair helper 30% and finally Telecommunication line installer/repairers down 30%.

4) Stock market closings for- 21 JUN 19:

Dow                    26,719.13    down    34.04
Nasdaq                 8,031.71    down    19.63
S&P 500                2,950.46    down      3.72

10 Year Yield:    up   at    2.07%

Oil:    up   at    $57.60

12 June 2019

1) For the sixth straight month of a gold buying spree, China continues to add to it’s gold reserves under the protracted trade war. China added 58 tons of gold to its reserves in the five months to April, then added 15.86 tons in May. At this rate China could buy as much as 150 tons of gold in 2019, as they diversify away from the U.S. dollar.

2) The retailer giant Amazon has opened a second cashier-free store in New York, which makes the thirteenth ‘Amazon Go’ store to open in America. The convenience robot store is about 1,700 square feet with Amazon announcing its fourteenth store will open in San Francisco. By 2021, Amazon may open as many as 3,000 of these robot retailing stores which threaten other retailers like 7-Eleven shops, CVS and Walgreens.

3) Ten state attorney generals plan to jointly file a lawsuit to stop the merger of Sprint and T-Mobile. The $26 billion dollar merger will reduce the number of nationwide wireless carriers to three. So far, the deal has won the backing of the majority of the FCC, which makes the Federal Government in favor of the move.

4) Stock market closings for 11 JUN 19:

Dow            26,048.51    down    14.17
Nasdaq         7,822.57    down      0.60
S&P 500        2,885.72    down      1.01

10 Year Yield:    down   at    2.14%

Oil:    down   at    $53.05

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