10 March 2020

1) Monday markets opened in a steep downward spiral from sell offs, driven by the coronavirus fears, followed by the sharp drop in oil prices. The Dow dropped 2,000 points, with a massive sell off of both the S&P 500 and Nasdaq, which triggered a key market circuit breaker that halted trading for fifteen minutes. There are widespread fears over the economic impact of low oil prices, with some experts fearing oil prices down to $20 a barrel. Gold prices crossed the $1,700 dollar an ounce, hitting the highest since December 2012. The banks are hard pressed as the interest continues to sink, cutting into their margins.

2) Experts speculate that the Feds will cut the interest rate to zero in the next few months in an effort to forestall a downturn of the economy. The entire U.S. yield curve fell below 1% for the first time in history on expectations that the Federal Reserve will cut rates to zero in the next few months. Some speculate the Feds may adopt a negative rate just as some European countries have, such as Germany’s -1%.

3) While checkout-free with cashless supermarkets is now a novelty, Amazon expects this technology to spread to other retailers. Amazon has announced it plans to license its automated checkout technology to other retailers, telling of several other companies that have already signed up for the technology. The technology has been proven with cashless convenience stores across America and with Amazon’s new Go-supermarkets. The technology represents another significant step in retail automation.

4) Stock market closings for – 9 MAR 20: The stock market is like a rectal thermometer- it’s rude and crude, but surprisingly effective in showing a sick economy.

Dow 23,851.02 down 2013.76
Nasdaq 7,950.68 down 624.94
S&P 500 2,746.56 down 225.81

10 Year Yield: down at 0.50%

Oil: down at $30.24

13 February 2020

1) NASA (National Air and Space Administration) has asked for a 12% increase to give a $25.2 billion dollar budget for next year. Nearly half of this years proposed budget is for NASA’s lunar project with much of the money going to the biggest American space companies. Lockheed Martin, Boeing and Aerojet Rocketdyne will be the primary beneficiaries with $1.4 billion dollars going to the Orion spacecraft and $2.26 billion dollars for the Space Launch System. There is $3.37 billion dollars proposed to fund a crewed lunar lander system.

2) Federal Reserve Chairman Jerome Powell suggest that the central bank may not have the ability to fight the next recession and therefore Congress may need to get ready to help. This is a result of the already low interest rate, one of the prime tools used by the central bank to counter recession trends. Tax cuts and government spending increases may be necessary to fight a downturn, for there is little else the central bank has to counter a recession.

3) The giant aircraft maker Boeing Aircraft is facing bigger problems than just fixing its 737MAX and getting it certified to fly. The company needs to be focused on its next generation of passenger aircraft. Boeing didn’t get any new orders for aircraft in January compared with 45 orders last year, while delivering 13 airliners compared with 46 last January. Boeing is falling behind its rival Airbus and must build its next generation of planes to remain competitive. This means getting its 777X finished and ready for delivery with its other wide body plane, the 787 Dreamliner. In the background is a possible new design concept the 797.

4) Stock market closings for – 12 FEB 20:

Dow 29,551.42 up 275.08
Nasdaq 9,725.96 up 87.02
S&P 500 3,379.45 up 21.70

10 Year Yield: up at 1.63%

Oil: up at $51.69

31 October 2019

1) The Federal Reserve has cut interest rates for the third time this year to ensure the U.S. economy weathers a global trade war without a recession. While the feds signaled the rate cut cycle might be at a pause, there is signs for a future rate cut if need be. The markets have shown little response to the cut because the action was widely expected. While unemployment is near a 50 year low, inflation is moderate while gross domestic product grew at 1.9% in the third quarter, parts of the economy like manufacturing having slowed as well as the global economy.

2) A new kind of consumer debt is gaining popularity, called the Online Installment Loan. It is a longer maturity loan unlike the payday loans, but also comes with the triple digit interest rates. Unlike the payday loans aimed at the nation’s poor, these loans are targeting the working class who have amassed debt over years. The installments generate much greater revenue for loan companies than the payday loans, with loan amounts much larger.

3) While the U.S. economy continues growing, with unemployment at a half century low, factory activity has contracted for two consecutive months. Manufactures of consumer goods are still stronger, while those manufactures engaged in global markets are feeling the effects of trade wars and profound uncertainly of the future. Thousands of factory workers have been laid off in the mid-west with factory wages being higher than average, as well as higher benefits than other jobs not requiring a college degree..

4) Stock market closings for – 30 OCT 19:

Dow                  27,186.69    up    115.27
Nasdaq               8,303.98    up      27.12
S&P 500              3,046.77    up         9.88

10 Year Yield:    down   at    1.80%

Oil:    down   at    $54.90

19 September 2019

1) The Federal Reserved voted for a quarter percent drop in the interest rate, bringing the ire of President Trump in a tweet, complaining the Feds lack the guts and vision to cut more. But the board surprised everyone by its divided vote, three of the members voted against a policy decision, while seven voted for it. This is considered an indication of how uncertain things are and just what the economic future holds. In response, the stock markets fell over the news of just a quarter percent rate reduction.

2) Some fear that parallels in the market signal the coming of another recession. These parallels include an inverted yield curve with the stock markets making new highs in July, followed by a correction in August, then a rally in early September. Additionally, growth is slowing. These same signs occurred in 2007 prior to sliding into a sever recession. All that is needed is a trigger such as the world oil supply.

3) As a result of the UAW (United Auto Workers) strike, GM (General Motors) announced 1,300 layoffs in their Oshawa plant in Canada. This is because GM plants in the US are shut down and unable to deliver needed parts and assemblies to the Canadian plant. This shows that the strike is spreading to other units of the automakers business.

4) Stock market closings for – 18 SEP 19:

Dow             27,147.08         up    36.28
Nasdaq          8,177.39    down      8.62
S&P 500         3,006.73          up      1.03

10 Year Yield:    down   at    1.79%

Oil:    $58.25

1 August 2019

1) General Electric suffered a loss last quarter despite two previous profitable quarters, a result of the restructuring cost of its electric power division and the grounding of Boeing’s 737 MAX. GE provides the jet engines used on the 737, which Boeing has reduced production of. The grounding of Boeing has drained off more cash than expected, but General Electric forecast a profitable year for 2019.

2) President Trump has fulfilled his campaign promise to lower drug prices by creating a pathway to allow Americans to legally and safely import lower cost prescription drugs from Canada. This reverses the opposition from federal health authorities, despite the public outcry over high prices for drugs in America. It’s uncertain when imports can start as the plan has to go through the time consuming regulatory approval and possible court challenges from drug makers. The opening of the door for cheaper drugs and keeping it open still faces an up hill battle with the political organizations of the pharmaceutical industry.

3) In an effort to keep the American economy on track, the Federal Reserve has reduced the benchmark interest rate by a quarter point to about 2.25%. This is a modest and widely expected move intended to keep the economy healthy in face of the trade war with China and the slowing economic growth overseas. In addition, the feds signaled that the cental bank is ready to make more cuts to stimulate the economy if necessary. A higher interest rate makes for a stronger dollar, a disadvantage for international trade. Wall Street anticipates as many as three more cuts this year, while in addition to the rate reduction, the feds will stop selling off assets this August, two months earlier than expected.

4) Stock market closings for – 31 JUL 19:

Dow             26,864.27    down    333.75
Nasdaq           8,175.42    down      98.19
S&P 500          2,980.38    down      32.80

10 Year Yield:    down   at    2.02%

Oil:    down   at    $57.90

19 June 2019

1) The pizza giant Domino’s will test pizza delivery using fully autonomous vehicles in Houston. Domino’s has been exploring this technology for the last two years with robot cars that had standby drivers for safety, but these robots will be human free. The Silicon Valley startup Nuro, who has been working with the grocery chain Kroger testing home delivery service, will provide the automobiles. Customers will be able to make orders via their smart phones, track progress of the cars, then use their smart phone to unlock the robot car to obtain their pizza.

2) Boeing Aircraft Co., the manufacture of the grounded 737 MAX, announce they have not received one single order for new airliners at the Paris air show. Their rival Airbus recorded orders and options for 123 new planes. Overall orders for this year’s Paris air show is expected to be the lowest since 2016, with emphasis on defense spending.

3) President Trump announced he will meet with China’s Xi Jinping at the G-20 summit, raising hopes of resumption of Chinese-American trade talks and a deal which will resolve the current trade war. The President says he will have extended meetings next week at the G-20 conference in Japan. News of the meeting coupled with expectations of near future cuts in the interest rates boost confidence in the markets.

4) Stock market closings for- 18 JUN 19 Stocks rally on news of US-China trade talks.

Dow                    26,465.54    up    353.01
Nasdaq                 7,953.88    up    108.86
S&P 500                2,917.75    up      28.08

10 Year Yield:     down   at    2.06%

Oil:    up   at    $53.97

18 June 2019

1) Traditional retail stores, who have been suffering the ravages of e-commerce, are worried about another coming blow. The new tariffs on Chinese imports, which President Trump threatens to impost, could have a disastrous effect on retailers such as Walmart and Target. These next round of tariffs will be specific to consumer goods, which these retailers sell, and will start to force price increases and so most likely will result in decline of sales revenue.

2) While President Trump has been pressing for a cut in the interest rate, the U.S. Federal Reserve is expected to defer and leave the interest rates unchanged. However, the board may possibly lay the groundwork for a rate cut later this year. While the economic outlook has become less clear, there still isn’t sufficient indication of a slow down to warrant cutting interest rates yet.

3) The Pfizer pharmaceutical company is buying Array BioPharma for $10.6 billion dollars for a price 62% above the company’s closing price this last Friday. Pfizer will gain medical technology for new drugs to treat cancer that limit or suppress the effects of chemotherapy. The drugs target a mutation that’s found across many tumor types in those patients who carry the mutation. Two of Array BioPharma drugs have been FDA approved for use in advanced melanoma. There are other drugs which are in the development pipeline.

4) Stock market closings for- 17 JUN 19:

Dow               26,112.53    up    22.92
Nasdaq             7,845.02    up    48.37
S&P 500            2,889.67    up      2.69

10 Year Yield:    down   at    2.09%

Oil:    down   at    $51.90

7 January 2019

1) The chairman for the Federal Reserve suggested that the interest rate may not be raised this year, which stimulated the markets.

2) The December unemployment rose to 3.9% with 312,000 jobs added, which may serve to raise interest rates. This news also stimulated the markets.

3) Apple faces partial ban of their phones in Germany, the German courts ordering bans on some models of Apple phones because of patent infringement disputes for energy saving chips.

4) 4 JAN 19 Stock market closings:

Dow           23,433.16 up 746.94
Nasdaq      6,738.86     up   275.35
S&P 500   2,531.94     up          84.05

10 Year Yield: up at 2.66%

Oil: up at $48.31

21 December 2018

1) There are suggestions that people shouldn’t be worried about the stock market, rather they should worry about having a job with the possible weakening of economy.

2) Markets fell with the announcement of Feds raising interest rate. There are forecast of fewer raises for 2019, with four raises already having been made for 2018, with an interest rate of 2.5% at the close of the year. Amidst this is worries of a slower economy in 2019 from President Trump’s spending, the effects of the $1.5 trillion dollars tax cuts fading and global economic slowdowns.

3) Fears mount over pending government shutdown as the Congress and President grapple over the $5 billion dollar expenditure for border wall.

4) 20 DEC 18 Stock market closings:     All three market indices have lost over 10% in December.

Dow        22,859.60 down 464.06
Nasdaq               6,528.41 down        108.42
S&P 500      2,467.42        down 39.54

10 Year Yield: up at 2.79%

Oil: up at $46.36