1) The American economy last quarter is the worst on record, with a 32.9% annual rate contraction (April – June). American business ground to a halt from the pandemic lockdown this spring, leaving the country in its first recession in eleven years. This wipes out five years of economic gains in just months. From January to March, the GDP (Gross Domestic Product) declined by an annualized rate of 5%. While the unemployment is declining as states open up from the shutdown, there are still about 15 million unemployed workers. Americans are spending less money during th lockdown, partly because of lost of jobs. Consumer spending is the biggest driver of the economy, and it declined at an annual rate of 34.6% for the second quarter.
2) While Walmart has posted surging sales for each month, it is still taking cost savings measures. The retailer has laid off hundreds of workers including store planning, logistics, merchandising and real estate. Also, Walmart is reorganizing its 4,750 stores by consolidation of divisions and eliminating some regional manager roles. Walmart is performing well because of high demand and low prices during the pandemic. The company isn’t opening as many new stores in the U.S. anymore, so Walmart doesn’t need as many people to find new locations and so design them.
3) Job postings in technology are 36% down from 2019 levels. This is attributed to increased competition, low priority in hiring and uncertainty over the pandemic. Therefore, the tech industry is also feeling the economic effects of the coronavirus pandemic. Sending a very significant portion of its workers remote to work at home, there were predictions tech jobs would lead the recovery with increase job numbers. The ‘work at home’ was thought to show tech jobs might be available outside the traditional hubs. Neither has proved to be true. In short, the tech jobs are faring worst than the overall economy.
4) Stock market closings for – 30 JUL 20:
Dow 26,313.65 down 225.92 Nasdaq 10,587.81 up 44.87 S&P 500 3,246.22 down 12.22
1) Another major U.S. airline, Southwest Airlines, is facing reduction in staff as the airline business continues to contract with little expectation of returning to its pre-corona days of business. About 24% of Southwest pilots and 33% of flight attendants have agreed to early retirement or long term leaves of absence. This accounts for about 4,400 employees who have decided to leave permanently with another 12,500 for extended emergency time off. Southwest is trying to avoid its first involuntary job cuts in its 49 year history. The company says that passenger numbers will have to triple by year end to eliminate the need for layoffs. There is growing evidence that the airline business is fundamentally changing.
2) The freight truck company TuSimple is building the world’s first network of self driving delivery trucks by 2024. The autonomous semi truck-trailers will operate across the America. TuSimple has partnered with UPS, Penske Truck Leasing, US Xpress and McLane for this autonomous freight network project. TuSimple is creating digital routes, terminals and a monitoring system in three phases that tracks its truck. Phase I is until end of 2021 to bring autonomous trucking services to Phoenix and Tucson in Arizona, plus El Paso, Dallas, Houston and San Antonio in Texas. Phase II, from 2022 till 2023, will expand the network coast to coast with a line from Los Angeles to Jacksonville in Florida. Finally, phase III between 2023 and 2024, will expand service nation wide to 48 states.
3) Both automakers GM and Ford have lost 27% of their market value this year, while electric car maker Tesla continues its unbelievable rise in the market. The reasons for the decline are different for the two companies. Ford sales relied too heavily on the F-150. While GM continues to sell more cars in the U.S. and worldwide, it’s hammered by the pandemic and failure in China, the world’s largest car market.
4) Stock market closings for – 20 JUL 20:
Dow 26,680.87 up 8.92 % Nasdaq 10,767.09 up 263.90 S&P 500 3,251.84 up 27.11
1) Sales of homes in the U.S. have dropped their biggest drop in nearly 10 years, because of the coronavirus crisis in April. The upending of the labor market and the broader economy has undercut demand for housing. Sales of existing homes have plunged 17.8% with existing home sales making up about 90% of U.S. home sales. In addition, April showed a record collapse in homebuilding and permits. With unemployment up past 38 million people and still climbing, it’s expected the home sale market will remain depressed for long after the pandemic crisis is over. The problem is further exasperated by a four month inventory of homes where a six to seven month supply is considered a healthy balance between supply and demand.
2) More contraction of consumerism with more retailers announcing closing of stores. The retailers Victoria’s Secret and Bath & Body Works will be permanently closing about 300 stores in America and Canada. With the young people of America having fewer good job opportunities and less disposable income, the hyper-consumerism economy born in the seventies is finding it harder to sustain itself, raising questions of what economic model might replace the present one . . . and what the job future would be for the young.
3) Companies have been borrowing at a rampant pace to shore up their liquidity during the pandemic. The wireless carrier AT&T is joining in with a new bond sale of $12.5 billion dollars of unsecured bonds in five parts. The intent is to take advantage of a global rally in credit to refinance their outstanding debt. Their 40 year security has a yield 250 basic points over the Treasuries. In the last few years, AT&T has been reducing its debt of nearly $200 billion dollars now down to $164 billion dollars, most of the debt coming from its acquisitions of Time Warner Inc and DirectTV.
4) Stock market closings for – 22 MAY 20:
Dow 24,465.16 down 8.96 Nasdaq 9,324.59 up 39.71 S&P 500 2,955.45 up 6.94
1) In their Friday report the U.S. economy added 128,000 jobs in October, a report considered to be very strong when many economist expected a gain of 75,000 jobs. Furthermore, job growth for September was revised upwards to 180,000 from 136,000 and August jobs up from 168,000 to 219,000 new jobs. The good news has spurred the stock markets up.
2) Alphabet, the parent company for Google, is acquiring Fitbit in an attempt to strengthen the search giant’s lineup of hardware and move further into the health market. The $2.1 billion dollar sale will strengthen Fitbit to complete against Apple. Fitbit has slowed since Apple introduced its smartwatch.
3) The U.S. dollar may be weakening with Citi latest projections that the dollar index could fall to as low as 85 as the Federal Reserve increases its balance sheet by purchasing more bond assets. The dollar usually weakens when bond yields fall. If the dollar index were to weaken to 85, the euro could strengthen to 1.21 which helps emerging market equities. Additionally, capital could flow to the Hong Kong market if the dollar weakens, making a lot of stocks very attractive.
4) Stock market closings for – 1 NOV 19:
Dow 27,347.36 up 301.13 Nasdaq 8,386.40 up 94.04 S&P 500 3,066.91 up 29.35
1) The Russian company Rusal plans to build an up-to-date $200 million dollar aluminum rolling mill in Kentucky, which they intend to start construction of after sanctions have been lifted. The mill will provide about 1,500 jobs and is expected to open in 2021.
2) Gasoline prices are quickly rising to the three dollar a gallon mark, even four dollars for parts of California. This rise in price is attributed to several different factors, such as problems with loss of refinery capacity, reduced production from OPEC, higher domestic consumption, flooding reducing grain production for ethanol and sanctions on oil exporting countries.
3) Donations are already coming in to restore Notre Dame less than twenty-four hours after the fire. So far, several billionaires have contributed $700 million dollars to restore the 850 year old church. No doubt, the restoration will require substantially more money and will probably take decades to accomplish.
4) 16 APR 19 Stock market closings:
Dow 26,452.66 up 67.89 Nasdaq 8,000.22 up 24.21 S&P 500 2,907.06 up 1.48
Webisode episode #3, Sammy BE meets with a potential business partner “Alexis” (Armentha “Hazel” Carrington), to discuss partnering on a business venture, as well as conjuring up investment ideas and business as usual; this is an episode you have to watch….Peep GAME… & remember “REAL RECOGNIZE DEALS” . -SB
Dangote Cement will be adding another cement refinery in Ethiopia. The refinery that is being constructed to be valued at around $500 million. The refinery plant will be stationed in Mugher, Ethiopia. The plant is expected to produce somewhere around 7,000 jobs in Ethiopia.
Ethiopia is going through a construction and infrastructure development boom currently. Infrastructure is widely being constructed in cities around Ethiopia. These investments have allowed Dangote to invest in cement plants in the country, because cement is needed in the infrastructure developments. Dangote Cement has positioned its self to be the manufacture supplier to builders and developers within Ethiopia as they construct more. -SB