1) Stock markets fell sharply over new trade war moves with the Dow dropping over 700 points and the S&P and Nasdaq also sharply dropping too. Troubles renewed with China devaluating its currency, opening at seven yuan to the U.S. dollar. In return President Trump accused China of manipulating its currency which suggests the Chinese have abandoned all hopes of resolving the trade war with America, and instead are moving in another direction for the future. Reports are that China has asked state owned companies to suspend U.S. agriculture imports. A weaker Chinese currency gives them an unfair export advantage, and so can be used as a potent weapon in the trade war.
2) Fears continue to increase over a near future recession, with bond yields giving the highest alert since 2007. The 10-year notes sank on Monday to 1.74% with fears of it sinking to a low of 1.5%. This is further pressure for the feds to further cut interest rates to starve off a recession. There are further concerns about the trade war with China that America will move to let the dollar weaken to counter China’s devaluation. Wall Street’s VIX volatility index, also know as their ‘fear gage’ rose to 21.48, its highest level since May 9, with Asian markets also plummeting.
3) Huawei, China’s manufacture of smart phones, might release a phone running the HongMeng OS by the end of the year. HongMeng OS is a competitor to Google’s Android OS, which would free Huawie paying licensing fees for other’s operating systems, allowing Huawei to undercut competition in the low end smart phone market. This is a response to President Trump’s executive order banning Google and Qualcomm from Huawei over security risks. The HongMeng OS is considered part of a long term strategy.
4) Stock market closings for – 5 AUG 19:
Dow 25,717.74 down 767.27 Nasdaq 7,726.04 down 278.03 S&P 500 2,844.74 down 87.31
1) Many consider that it is no longer a question if the Fed will cut interest rates, but rather when. With the apparent softening of the job market, many investors firmly believe the Federal Reserve will move to cut interest rates this year possible as soon as this July. The markets bounced up on the expectation.
2) The job numbers are in for May, with job creation slowing dramatically. There were just 75,000 new jobs added to the economy, about 100,000 less than economist expected. Both March and April job numbers were lower than expected leading experts to conclude a downward trend in the American economy is beginning. There are fears that we may see a recession as early as next year.
3) The book seller Barnes & Noble has closed a deal to sell itself to Elliott Management Corp, a hedge fund based in New York. The news sent Barnes & Noble stock surging upward as much as 36%. Like many other retailers, Barnes & Noble has struggled with little success to counter the power house e-commerce giant Amazon. It’s Nook e-book device was a bust, which the company had heavily invested in. Barnes & Noble has 600 brick and mortar retail stores.
4) Stock market closings for 7 JUN 19: The Dow has had its best week since November.
Dow 25,983.94 up 263.28 Nasdaq 7,742.10 up 126.55 S&P 500 2,873.34 up 29.85
1) Boeing has not received any new orders for its 737 since its grounding, in addition, Boeing has had 100 cancellations of orders. Its stock is down 19%, but worst its stockholders have filed a law suit against Boeing claiming the company has defrauded its investors because Boeing failed to disclosed safety issues concerning their 737 MAX-8.
2) British Prime Minister May has asked the EU (European Union) for a second extension. Britain will be leaving the EU this Friday if an extension is not granted, so the EU held an emergency summit to consider warnings that a crash-out might cause a recession. Last reports are that the EU will grant an extension to 31 October this year.
3) The ECB (European Central Bank) will leave interest rates steady, forecasting no change for 2019. The ECB is being forced to backtrack on its tightening monetary policy as signs of a world economic slowdown are increasing.
4) 10 APR 19 Stock market closing:
Dow 26,157.16 up 6.58 Nasdaq 7,964.24 up 54.97 S&P 500 2,888.21 up 10.01
President Trump is set to nominate Herman Cain for the US Federal Reserve Board of Governors.
Herman Cain was a former presidential candidate in 2012. He also served as chairman of the Kansas City Federal Reserve Board. His business background includes being the President/CEO of Godfather Pizza, CEO of National Restaurant Association, and being on boards such as Nabisco, Whirlpool, & Reader’s Digest.
Mr. Cain to be on the Fed Board, would have to pass an extensive background check and Senate confirmation process.-SB
1) PG&E (Pacific Gas and Electric) stock has tumbled down with the announcement that its credit rating has been reduced to junk rating because of large possible liabilities from massive claims expected as a result of the wildfires. There are threats of further credit rating reductions.
2) The American budget deficient is expected to top $1 trillion dollars this coming year. This debt could become a serious problem if interest rates rise. It’s unknown what the impact to world economies might be, although other nations and their debts could be adversely affected.
3) There are fears that a prolong government shut down may cause the food stamp program to run out of money in February.
4) 8 JAN 18 Stock market closings: China talks spur markets.
Dow 23,787.45 up 256.10
Nasdaq 6,897.00 up 73.53
S&P 500 2,574.41 up 24.72
US Federal Reserve may be raising interest rates as early as the first week of September. The Federal Reserve just completed their annual retreat in Jackson Hole, Wyoming. The interest rate hike coming, has seen a surge of the dollar against it’s Asian market counterparts.
The Financial sector has been the leading sector leading the stock market, and probability of an interest rate hike sooner then later, seems to be paramount. This seems to have a very formal effect on how the 3rd quarter will develop. Stocks have been rebounding and gaining in the last couple of weeks, because of a possibility of a interest rate hike, and it certainly seems to be heading in that direction… -SB
In today’s economy people tend to be saving a whole of money, and economists are stating that this is not expected. When people save money, then there is no spending to assist in bolstering the economy; meaning there is even less demand for goods and services, which then also implicates stagnation.
Recently people are not spending as much but saving more, and this happens to be throwing economists through a “whirlwind”. People in a good economy should be spending according to economists, and when this is not happening, theories and concepts are sort of disproven to an extent. People are currently saving more money, even though interest rates are at the lowest that they have been for decades.
Borrowers are benefactors of low interest rates (theoretically), so spending should be indicative; this seems not to be the case in 2015. Currently, government and business entities are benefiting from low interest rates as opposed to current borrowers. Something seems to be brewing, but exactly what it is????? Is the definitive question…-SB
The US economy is doing well, but the the Fed has decided not to raise interest rates, yet. The job market in the US has almost fully recovered, and inflation will eventually go back to 2%. Again, inflation is expected to be very low this year, and by next year should increase.
It seems that the decision not to raise interest rates lied with what the current global economy is going through. China, the Eurozone, Brazil and other countries globally, are going through economic turbulence; so it looks as though the Fed took into account these worldly factors, as an endemic issue.
The Fed has not stated that it won’t raise interest rates before the end of the year, but as global factors pan out, observers are watching to see where the trends are going to head. -SB
The world continues to slow down economically, and will continue until 2016 as well. Stagnation seems to be currently occuring for the rest of 2015 and this will also hinder 2016 prospects. More developed countries such as the US, Great Britain, Germany, have been able to weather the storm and hold up recovery efforts being influenced world wide.
However OECD (Organization for Economic Cooperation & Development) indicates that future outlook seems bleek for the most part for the next couple of years because of the slowdown of the economy in Japan, and other eurozone/european countries. They instituted this as being ” puzzles and uncertanties”
The OECD maintained that “prospect of higher interest rates in the US and UK had exposed the vulnerability of emerging market economies to higher borrowing costs.”
China and Brazil happen to be two of the hardest countries hit by the economic slowdown. -SB