1) Royal Dutch Shell is building a 386 acre chemical plant to make bulk plastic. The construction project is one of the largest active construction projects in America employing over 5,000 people. The plant has hundreds of miles of pipelines to feed it petroleum and will have its own rail system with 3,300 freight cars. The new plant is expected to produce a million tons of plastic pellets each year.
2) Saudi oil company Aramco is buying a 20% share in Reliance Industries Ltd of India an oil to chemicals business. This will include the 1.24 million barrels a day Jamnagar refining complex. This is part of Aramco plan for refinery investments to double its processing network and handle as much as 10 million barrels of oil a day by 2030. Reliance has agreed to purchase 500,000 barrels of crude a day over the long term.
3) The IMF (International Monetary Fund) has warned that addition tariffs in the trade war will sharply cut Chinese growth. The IMF has already forecast a 6.2% decline in China’s growth for this year, which assumes no new tariffs. They forecast a sharp cut in China’s growth if the additional tariffs threaten are imposed on the first of September. President Trump has cast doubts on a trade deal, and indicated he might cancel the trade talks scheduled for September.
4) Stock market closings for – 12 AUG 19:
Dow 25,897.71 down 389.73 Nasdaq 7,863.41 unchanged 0.00 S&P 500 2,883.09 down 35.56
1) Managing Director Christine Lagarde of the IMF (International Monetary Fund) announced her resignation to become the next head of the European Central Bank. Her resignation from the global lender will be effective the twelfth of September. Lagarde’s second five year term as Managing Director of the IMF was not due to end until July 2021.
2) The pizza giant Domino’s Pizza is seeing its business eroded by food-delivery startups. Second quarter financial reports shows Domino’s sales fell short of analyst estimates causing its stock to drop as much as 7%. Services like GrubHub, DorrDash and EuberEats are cutting into Domino’s food-delivery business in recent years, a result of aggressive promotions and discounts, with Domino’s countering by speeding up its delivery time and expanding number of locations.
3) The electronic news magazine ‘60 Minutes’ had an interview this last Sunday with venture capitalist Kai-Fu Lee about the future of artificial intelligence and China’s efforts to dominate the emerging AI markets. Mr. Lee estimates that in the next fifteen to twenty-five years about 40% of the jobs will disappear from technology displacement. This is in keeping with the recent Osborne Report forecasting that as much as 47% of the jobs will disappear in the next 20 years. An example is the Navy has mandated that new ship designs must use automation to reduce crew sizes by 20%.
4) Stock market closings for – 16 JUL 19:
Dow 27,335.63 down 23.53 Nasdaq 8,222.80 down 35.39 S&P 500 3,004.04 down 10.26
1) The IMF (International Monetary Fund) has reduced their forecasted for world economic growth from 3.5% to 3.3%, which is the third reduction since last October. It forecasted 2.3% growth for the US economy, as well as reduced growth forecast for Germany and Great Britain.
2) Walmart is rolling out thousands of robots for use in their retail stores across America. These robots will automatically scan shelves and clean floors. With a million employees, Walmart is seeking ways to keep labor cost down.
3) Bank of America is raising it’s minimum wage to $20 an hour over the next two years. Starting the first of May, the rate will increase to $17 per hour. The bank has 205,000 employees.
4) 9 APR 19 Stock market closings: Markets pulled down by industrial sector.
Dow 26,150.58 down 190.44 Nasdaq 7,909.28 down 44.61 S&P 500 2,878.20 down 17.57
1) In ten years, the US debt to GDP ratio will be equal (100%). The debt to GDP ratio is presently 78%, the highest since the end of World War II, but it’s anticipated to be 96% by 2028. To bring this into perspective, countries with sever economic problems such as Greece have a ratio of 188%, Italy 130%, Portugal at 120% and Spain with 97%. On the positive side, Germany has a ratio of 59%. The IMF is warning of the problem for America if the ratio is left to continue as is. A high ratio hinders a government’s ability to counter any economic downturn. America’s entitlements is the principle cause for the increase, because when Social Security was started, there were 16 workers to support each retiree, now there are just 2.6 workers.
2) European Union borrowers are eager to see how a Brexit extension will effect markets, by possibly reducing the uncertainty that Brexit has brought on. This spring, the IMF and World Bank will be meeting for their annual conference on world economic matters.
3) Tesla, the maker of electric automobiles, is starting its new quarter with another round of cuts of sales staff following poor deliveries. The company is closing some of it’s show rooms in favor of online sales. These actions are rattling investors by stoking confusion.
4) 8 APR 19 Stock market closing:
Dow 26,341.02 down 83.97 Nasdaq 7,953.88 up 15.19 S&P 500 2,895.77 up 3.03
1) Brexit, now on going for 2 ½ years, is dividing the British people in strife, the debate impacting and dividing family relationships across the country. The web site eHarmony reports one and a half million relationships have broken up over Brexit.
2) American retail workers face mass layoffs. In addition to the traditional after Christmas layoffs of seasonal workers, many permanent workers face significant reduction in work hours per week, if not actual layoffs in retail giants such as Amazon, Target and Walmart.
3) Stocks close lower because of Caterpillar and Nvidia announcing significantly lower profits than was expected. Caterpillar was down 9% and Nvida down 13.8%, with expectations of further poor performance in 2019. Caterpillar is considered a economic bellwether, and together with the IMF, is warning of international economies slowing down faster than expected.
4) 28 JAN 19 Stock market closing:
Dow 24,528.22 down 208.98 Nasdaq 7,085.68 down 79.18 S&P 500 2,643.85 down 20.91
Nigeria reclaimed its numero uno status as the biggest economy in Africa again, last week. The IMF indicated that Nigeria’s GDP contracted to $415 billion, while #2 runner up South Africa had $280 billion and rounding off #3 was Egypt, (which data has not come out yet when writing this piece).
The International Monetary Fund (IMF) also indicated Nigeria should be out of their recession by early 2017. Nigeria has seen recession before; during 1982-1984 when current Nigerian President Muhammadu Buhari was military head of state then, and in 1991 when Ibrahim Babangida was also head of state at the time. -SB
One of the biggest economies in Africa has recently hit recession. The GDP fell over 2% in the second quarter of 2016. The International Monetary Fund believes Nigeria will see negative -1.8% in its real GDP for the rest of the 2016 year.
The recession in Nigeria may be the very worst to hit the country since the 1980s, probably as bad as 1987. Nigeria Finance Ministry has indicated that Nigeria will borrow close to 10 billion dollars USD, which over $5 billion dollars USD being borrowed from foreign lenders. The government has indicated the money borrowed will be used on domestic projects such as power, agriculture, mineral and infrastructure development.
It is also to be noted, that Nigeria’s service sectors represents about 50% of the country’s GDP to date. The service sector in Nigeria will have to take the lead in developing jobs and other attributable assets, to get Nigeria growing and prospering from its recession. -SB
The Naira devalued over 30% instantly on Monday, June 20, 2016. It dropped 260 to 1 USD. The Central Bank of Nigeria last week insisted that it would remove restrictions on the Naira and allow it to “float freely” against the dollar. The move was applauded by traders, analyst, the IMF (International Monetary Fund), whom all have indicated for over a year to allow the Naira to drop because of depleting oil prices.
On Monday, the dollar went skyrocketing against the Naira, some indicated they expected a drop, but not a 30% drop perhaps. Many analysts including credit rating agency Moody’s; believe devaluing the Naira is a step forward in helping to stabilize Nigeria’s economy; which took a major hit the past few years because of declining oil prices. -SB
The IMF (International Monetary Fund) has placed the Chinese yuan as one of the few reserved currency for an international scope. Though the yuan has been added the US Treasury has indicated that the US dollar will continuously be the #1 currency reserved used around the globe.
The yuan and other reserved currencies have a long way to go to catch up to the dollar; as the dollar weighting system is 41.7%. Other currencies that follow behind the US dollar are; the Euro (30.9%), the yuan (10.9%), yen (8.3%) and the British pound (8.1%). -SB
Greece is still in negotiations with creditors about the debt it has encountered. Finance Minister, Yanis Varoufakis has indicated that the country is close in securing deals with many of its creditors and resuming relations with its creditors.
Greece still may be facing bankruptcy because of the risk of defaulting on their international creditors. In June, Greece finance treasury has to start repaying back the IMF (International Monetary Fund) and the ECB (European Central Bank). As currently Greece will have to choose in either paying back the IMF & ECB or paying off their own citizens pensions and wages. -SB