28 February 2020

1) Many on Wall Street are betting the Federal Reserve Bank will again reduce the cost of borrowing in light of the coronavirus economic threat. Futures contract traders consider there is nearly a 60% chance of a rate cut this March, when the Feds meet, in an effort to counter the effects of the virus on America’s economy. While it appears the spread of the pathogen is declining in China, elsewhere in the world it’s on the rise.

2) Oil prices continue its downward spiral with a twelve month low for U.S. crude. The drop in oil prices is in anticipation of slowing of the U.S. and world economies, a direct result of the spreading coronavirus threat. China, a major world importer of oil, has cut back purchases as it containment policies reduces oil consumption from limited travel to and from major cities, as well as travel within those cities.

3) The home food delivery business continues to grow with DoorDash filing the paperwork with the SEC (Security and Exchange Commission) to start the IPO (Initial Public Offering) process to offer stock to the public. The IPO process has met with poor results from unprofitable companies like Lyft Inc. and Uber Technologies Inc. while WeWork was forced to abandon its IPO last year because of a poor showing of its stock. DoorDash faces the same challenges as Lyft and Uber..

4) Stock market closings for – 27 FEB 20: This is the worst point decline ever for the three markets. The Dow has dropped 3,000 points since Monday.

Dow 25,766.64 down 1190.95
Nasdaq 8,566.48 down 414.30
S&P 500 2,978.76 down 137.63

10 Year Yield: down at 1.30%

Oil: down at $46.34

30 January 2020

1) The Federal Reserve has left the interest rates unchanged, which was widely expected as the U.S. economy continues to grow at a slow and steady pace. So the interest rate will remain in the range of 1.5% to 1.75% , thereby encouraging more lending and home buying. Presently, those in the government don’t anticipate any changes, up or down, to the interest rate this year.

2) Founded in 1893, Sears was once the world’s largest retailer with billions of dollars in profits. Ten years ago, the giant retailer had 3,500 stores, but now Sears’ and Kmart combined have just 182 locations. Sears became the first major retailer to have an IPO (Initial Public Offering) in 1906 at $97.50 a share. Originally a mail order retailer, Sears opened its first department store in Chicago in 1928.

3) The budget deficient for the Federal government is forecast to past $1 trillion dollars in 2020 from contentious spending exceeding government income. Federal borrowing is likely to continue climbing dramatically over the next decade, reaching an un-precedent $31 trillion dollars by 2030. Some say this is a poor refection on the fiscal health of the nation.

4) Stock market closings for – 29 JAN 20:

Dow           28,734.45         up    11.60
Nasdaq        9,275.16         up      5.48
S&P 500       3,273.40    down      2.84

10 Year Yield:    down   at    1.59%

Oil:    down   at    $53.15

5 November 2019

1) Saudi Arabia has started its long anticipated IPO (Initial Public Offering) of Aramco, the Saudi state run oil giant. A sliver of the firm will be offered on a local stock exchange with the intent of raising billions of dollars for the kingdom. Initially, the firm’s shares will be traded on Riyadh’s Tadawul stock exchange, but later shares will be offered on foreign exchanges. Aramco is valued at $2 trillion dollars, with first and second quarter income of $46.8 billion dollars.

2) The high end luxury retailer Barneys of New York fell into bankruptcy, parts sold off as scrape to end an era. The retailer introduced such names as Armani, Alaia, Comme des Garcons, Louboutin and Zegna. The name Barneys was taken control of by Authentic Brands Group, a name which is part of the New York culture since 1923, and will license it to other companies like Saks Fifth Avenue. Next week, the company’s inventory at its five stores and two warehouse locations will be sold.

3) Predictions for 2020 investors include a recession, questions of interest rate cuts, market volatility, impact of the up coming election cycle, Brexit, earnings growth, low unemployment, mild inflation and wage growth. Each of these uncertainties can play a part on the ultimate outcome for the 2020 economy with interactions of them making the future economy uncertain for investors.

4) Stock market closings for – 4 NOV 19:

Dow           27,462.11    up    114.75
Nasdaq        8,433.20    up      46.80
S&P 500       3,078.27    up      11.36

10 Year Yield:    up   at    1.79%

Oil:    up   at    $56.45

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

17 May 2019

1) The worst case for China in the trade war is slow growth, rising debt with companies exiting. If China’s growth should tumble, her debt would surge resulting in foreign companies fleeing a worsening business environment. The escalating economic clash with America is exacerbating the existing economic jitters across the world.

2) In the worsening trade war China, the largest owner of US debt, is selling off it’s Treasury holdings at the fastest rate in the last two years. China holds $1.12 trillion dollars, or about 7% of America’s total debt. China has been threatening to either not buy additional Treasury bonds or even selling off its holdings in retaliation for US actions in the trade war.

3) Pinterest Inc. stock has dropped more than 15% after it released its first earnings report. This is just twenty trading days after their IPO (Initial Public Offering). Pinterest explained the earnings drop as a result that the reported period was before the IPO, plus an increase in cost as a result of hiring of new employees.

4) 16 MAY 19 Stock market closings: Third day of across the board of stock rises.

Dow            25,862.68    up    214.66
Nasdaq        7,898.05    up      75.90
S&P 500       2,876.32    up       25.36

10 Year Yield:    up   at    2.41%

Oil:    up   at    $63.18

UBER STOCK TANKED, AFTER IT’S IPO HIT THE MARKETS!!!!!!!!!!!!!!!!

By: Economic & Finance Report

Uber the rideshare tech company, its stock tanked on its first official trading day on the NYSE, Friday, May 10, 2019 will be a day of turmoil on the Uber corporate calendar. It was a horrible trading day for the mammoth ride sharing tech company.

Uber declined close to 8% during the stock market trading day. The stock plummeting so much (in which it did), is the first time any stock has come out the gates on Wall St and lost so much market share. The valuation of Uber was at $76 billion dollars, when analysts had predicted that it would be valued around $90-$100 billion dollars, well that didn’t happen. Not only that, Uber has been bleeding money and the perception is that, Uber won’t actually make any real money until the year 2024, hopefully.

Uber being one of the biggest IPO companies probably since Alibaba, Facebook and a few others. So it to falter as it did was a shocker to some and to others, not so much. Technology companies tend not to fare well in the beginning of their IPO presence. Facebook had a rocky start coming out the gates and other big tech companies before it, have gone through similar revelations.

It’s the test of time that will dictate the longevity of Uber’s existence and if they can navigate their ship in theses rough and turbulent stock market waters. -SB

10 May 2019

1) Uber raised $8.1 billion in it’s IPO (Initial Public Offering), which was priced near the bottom of the range. Uber sold 180 million shares at $45 each, making its listing among the 10 largest U.S. IPOs. This gives Uber a market value of $75.5 billion dollars, however Uber is deeply unprofitable with $3.04 billion dollars in losses last year.

2) Traders wait to see if President Trump hikes tariffs today. U.S. equity futures were little changed this Thursday while traders wait for the midnight deadline when tariffs are scheduled to take effect. These tariffs will be imposed on $200 billion dollars worth of Chinese goods. Fears are that market reaction will be severe, which either way the tariffs goes.

3) The U.S. trade deficient has widened to $50 billion dollars in March, up 1.5% from February. Economists had anticipated the U.S. trade deficit to fall, but much of the increase came from higher crude imports.

4) 9 MAY 19 Stock market closings:

Dow              25,828.36    down    138.97
Nasdaq           7,910.59    down      32.73
S&P 500          2,870.72    down        8.70

10 Year Yield:    down   at    2.46%

Oil:    down   at    $61.68

3 April 2019

1) Just two days after its IPO, Lyft stock price has dropped to $68 per share, which is $4 below it’s offering price of $72 per share. No bad news had been released about Lyft, it’s just that volatile stock prices is part of IPO’s.

2) Netflix prices to customer goes up this next month. Price increases is going to help pay for new program production. Netflix budgeted $8 billion dollars for new shows and movies in 2018 and expects a larger budget for 2019.

3) 2 APR 19 Stock market closings:

Dow               26,179.13     down    79.29
Nasdaq            7,848.69           up    19.78
S&P 500           2,867.24           up      0.05

10 Year Yield:    down   at    2.48%

Oil:    up   at    $62.59

1 April 2019

1) Britain’s Prime Minster’s third try to get her Brexit plan voted through Parliament has failed, even though it was a stripped down version. This time the vote was by the narrowest margin. It’s now two weeks remaining to draw up a new plan and try again before the crash out. There is growing dissatisfaction with British people over Brexit with increasing numbers of demonstrations for and against. Also, there are growing calls for a general election, with the Labor party apparently using the Brexit issue to force a general election.

2) Lyft, the competitor to Uber, goes public with stock going for about $10 more than anticipated. Initially priced at $72, the stock opened at $87.24 per share and closed 8.7% higher. The company anticipates to raise $29 billion dollars in it’s offering. The stock is a two tier stock with one tier having one vote per share and the other having 20 votes per share.

3) 29 MAR 2019 Stock market closings:

Dow         25,928.68    up    211.22
Nasdaq     7,729.32    up      60.15
S&P 500     2,834.40    up     18.96

10 Year Yield:    up   at    2.41%

Oil:    up   at    $60.18

25 March 2019

1) The English pound has had its biggest single day drop because of Brexit. Brexit will be delayed until May the twenty-second if the British Parliament passes the exit deal.

2) Boeing has experience its first cancellation of its 737 MAX with Indonesia canceling a huge order of 49 aircraft. Boeing is rushing to complete its new warning system since the 737 MAX is its biggest seller.

3) Pinterest files for its IPO, releasing its prospectus this last Friday showing a $53 million dollar loss. Presently, the software has about 265 million users. Uber also plans to list its IPO on the New York Stock Exchange, the largest so far this year.

4) 22 MAR 19 Stock market closings: Dow dropped over fears of a global slowdown.

Dow                 25,502.32       down     460.19
Nasdaq              7,642.67       down     196.29
S&P 500             2,800.71       down       54.17

10 Year Yield:     down   at    2.46%

Oil:      down   at    $58.97