19 June 2020

1) Kroger, the largest supermarket chain in the U.S., has been surprised by a 92% gain in its e-commerce sales. The giant has lagged behind its competitors like Walmart, Amazon and Target with e-commerce, but the coronavirus has provided the motivation for people to use the service to stay at home and do their cooking during the pandemic. The grocer has been working hard to expand into the electronic marketing area, including working with a robotics company for automated ‘stores’ to fill orders for delivery. With the pandemic changing shopping habits of Americans, now is the time for Kroger to establish its position for the future. The question now is can Kroger maintain this increased sales of e-commerce as the virus crisis subsides. Kroger had $41.55 billion dollar revenues compared with $37 million a year ago.

2) Looking back at the 100 days of the Convid-19 crisis and shutdown, we find the American economy has endured an extraordinary upheaval. Americans have endured over 2.1 million people suffering with Covid-19 which resulted in 117,000 deaths. The closing of non essential businesses sent the economy crashing into a deep recession, with record numbers of layoffs and a skyrocketing unemployment rate. This in turn made for record drops in household spending and manufacturing. Businesses such as automobile manufacturing, the airlines and hotels came to a near complete standstill. Small businesses such as restaurants were stopped dead in their tracks with fears than a large portion would not survive. The feds cut the interest rates to near zero, while pumping in trillions of dollars to stabilize the economy and support businesses until recovery starts.

3) Unemployment claims for last week were 1.5 million more people, up from the expected 1.3 million. This is the thirteenth straight week that claims were above one million. The elevated claims continue even as the country starts to open up and resume business. The real question is how many of those jobs will return and how many will be replaced by technology. Times of economic stress is when automation makes significant inroads as companies look for ways to cut cost to survive.

4) Stock market closings for – 18 JUN 20:

Dow 26,080.10 down 39.51
Nasdaq 9,943.05 up 32.52
S&P 500 3,115.34 up 1.85

10 Year Yield: down at 0.69%

Oil: up at $38.84

9 January 2020

1) The result of the Iranian missile attack on gas prices is expected to be minimal. Oil prices did briefly surge on Tuesday on news of the attacks fueling fears of a Middle East war between Iran and America, spiking 4% to top oil prices of $65 a barrel, but slipped down to 1.3% early next day. Some are expecting gas prices across the nation to rise five to ten cents per gallon over the next several days.

2) Data for the fourth quarter indicated 2019 will show strong growth, which will most likely lead into a strong growth for 2020. The GDP (Gross Domestic Product) growth for the fourth quarter is estimated to be 2.3%, better than the 2.1% growth for the third quarter. This would close out the GDP growth for 2019 at 2.4%, down from the 2.9% growth of 2018, but still enough to put fears of a recession to rest.

3) Walmart has unveiled its latest technology to counter Amazon and Kroger in the grocery battle- a grocery picking robot. The automated grocery system is called Alphabot and is designed to pick and pack orders as much as ten times faster than a human. The robot will allow Walmart to rapidly expand its capacity to fill orders for ‘demand on online’ grocery shopping. The Alphabot is a 20,000 square foot facility built onto present stores consisting of about 30 small cubic robots inside a giant shelving system, which can pick and pack products from a selection of 4,500 items.

4) Stock market closings for – 8 JAN 20:

Dow               28,745.09    up    161.41
Nasdaq            9,129.24    up      60.66
S&P 500           3,253.05    up      15.87

10 Year Yield:    up   at    1.87%

Oil:    down   at    $59.98

2 October 2019

1) The retailer giant Amazon is expanding into the grocery business by leasing retail space across the Los Angeles area, signing leases for more than twelve locations. This is the first step of plans to open grocery stories across the nation. Amazon job postings are looking for people to work in retail concepts for a multiple customer experiences under one roof. Stores are reportedly to be about 35,000 square feet and intended to compete with big box stores such as Walmart, Target and Kroger.

2) The Institute for Supply Management says its manufacturing index dropped to 47.8 last month, the lowest since June 2009, below the forecast 49.1. Indexes below 50 indicate a contraction in manufacturing. Manufacturing accounts for 12% of the GDP (Gross Domestic Product), so a slowdown could effect other parts of the economy. Other indicators have shown output increased over last month.

3) Oil prices record its weakest quarter since late last year as fears over a global economic slowdown overshadowed the attacks on Saudi Arabia’s oil production facilities. Brent futures are down 8.7% since the end of June, despite the peak after the attacks. The price of oil is considered an economic indicator, since demand goes down as economies slow down, making more oil available, thus causing oil prices to decline.

4) Stock market closings for – 1 OCT 19:

Dow               26,573.04    down    343.79
Nasdaq            7,908.68    down      90.65
S&P 500           2,940.25    down      36.49

10 Year Yield:    down   at    1.64%

Oil:    down   at    $53.98

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