4 September 2020

1) For first time since World War II the U.S. government’s debt will nearly equal the size of the entire American economy. By the end of 2020, the amount of debt owed by the United States will be about 98% of the nation’s gross domestic product with a debt that is about three times the 2019 level. The huge surge in debt is a result of the Congress spending an additional $3 trillion dollars in emergency funding since March, a result of the economic downturn from the coronavirus crisis. This is why some members of Congress and the White House have balked at approving an additional $2 trillion dollars in spending in view of the weak economy coupled with having little promise of improving soon. Few experts believe the Congress is likely to do something to reduce the deficit in the short term, all the while unemployment remains near 10 percent. Interest rates are low, which makes it less costly for the federal government to borrow. In addition to increase emergency spending, tax revenues fell as business slowed and many people lost their jobs.

2) After a steady increase in the markets, setting new records for highs, the stock markets took a sudden nose dive. This was caused by a massive and sudden sell off of the technology sector. The tech stocks had been on a ten day winning streak then a sudden overnight change which caught everyone by surprise. The Nasdaq dropped almost 600 points while the Dow was down 800 points. Market experts are left wondering what will come next, especially with the next jobs report for August coming out.

3) The pace of rehiring is expected to slow in August, so the economy will likely add fewer jobs than in July, while workers continue to be laid off. Because of the pandemic, America lost about 22 million jobs in March and April. In May through July, about 9.3 million jobs came back, so we are still short about 12 to 13 million jobs. Part of this is a result of so many small businesses having gone bust, so it will take a long time to replace those businesses and therefore replace the jobs they had. Economic turmoil is when technology displacement is prevalent as business seek the means to survive by reducing labor cost (eliminating jobs).

4) Stock market closings for – 3 SEP 20:

Dow 28,292.73 down 807.77
Nasdaq 11,458.10 down 598.34
S&P 500 3,455.06 down 125.78

10 Year Yield: down at 0.62%

Oil: down at $41.03

26 February 2020

1) Global trade experiences its first full-year drop since the financial crisis, with weaker world growth and a manufacturing recession taking their toll. The spread of the coronavirus, with its impact on businesses and households, is increasingly pulling world economics down. While the decline isn’t huge, it is the first since 2009 and follows growth of more than 3% in 2018. The virus has shut off huge areas of China causing the closing of factories and now is spreading internationally.

2) The markets continue to follow the Dow’s thousand point drop with more large loses. To add to the financial worries, bond yields are slipping down, raising concerns that the global economy is slowing significantly because of the spreading coronavirus. There is heavy buying of treasuries in order to shelter money, with the ten year Treasury yield traded at 1.32%, an all time low, with the thirty year bond yield also reaching a record low. Analysts are already cutting their earnings estimates for the first quarter, further dampening hopes for better near term growth.

3) Retail giant Amazon has opened its first Go Grocery store in Seattle. The automated store is cashierless where customers walk in, and get what they want, and on walking out, computer and sensors electronically charging their purchases. The store is over 10,000 square feet and has about 5,000 items including fresh produce, meats and alcohol. This is just another example of the grocery retailers efforts to automate their operations and reduce labor costs.

4) Stock market closings for – 25 FEB 20: Dow is down 1900 points in two days and some experts fear the markets are 500 points away from being a correction.

Dow 27,081.36 down 879.44
Nasdaq 8,965.61 down 255.67
S&P 500 3,128.21 down 97.68

10 Year Yield: down at 1.33%

Oil: down at $50.10

23 December 2019

1) Stock markets ended at record highs this last week, coming closer to what may well be a blockbuster year. This rally now covers four weeks, with one record closing after another, driven by easing of geopolitical worries. Trade worries have kept investors on the edge for most of 2019. The questions is, will this rally continue into next year?3) Steel maker US Steel is closing a mill near Detroit and will lay off 1,500 workers, and in addition will cut its dividend in an attempt to reverse operating losses which is forecasted for the fourth quarter. The Great Lakes Works mill, which rolls slabs into sheets of steel will close, and shift its work to three other mills. Additional cost savings measures will be implemented including a $75 million dollar reduction on capital expenditures and cutting labor cost.1) Stock markets ended at record highs this last week, coming closer to what may well be a blockbuster year. This rally now covers four weeks, with one record closing after another, driven by easing of geopolitical worries. Trade worries have kept investors on the edge for most of 2019. The questions is, will this rally continue into next year?

1) Stock markets ended at record highs this last week, coming closer to what may well be a blockbuster year. This rally now covers four weeks, with one record closing after another, driven by easing of geopolitical worries. Trade worries have kept investors on the edge for most of 2019. The questions is, will this rally continue into next year?

2) Automaker Fiat-Chrysler Automobiles is making an all out push to clear out tens of thousands of vehicles which their dealerships have not ordered, because their new data driven production strategy has swelled their inventory. The automaker is offering its most aggressive discounts since the financial crisis to sell certain 2019 models under their Dodge, Jeep and Ram brands. Their sales staff is working overtime to sell more than 70,000 unassigned cars in December to their 2,400 dealerships.

3) Steel maker US Steel is closing a mill near Detroit and will lay off 1,500 workers, and in addition will cut its dividend in an attempt to reverse operating losses which is forecasted for the fourth quarter. The Great Lakes Works mill, which rolls slabs into sheets of steel will close, and shift its work to three other mills. Additional cost savings measures will be implemented including a $75 million dollar reduction on capital expenditures and cutting labor cost.

4) Stock market closings for – 20 DEC 19:

Dow                28,455.09    up    78.13
Nasdaq             8,924.96    up    37.74
S&P 500            3,221.22    up     15.85

10 Year Yield:    up   at    1.92%

Oil:    down   at    $60.36

1) Stock markets ended at record highs this last week, coming closer to what may well be a blockbuster year. This rally now covers four weeks, with one record closing after another, driven by easing of geopolitical worries. Trade worries have kept investors on the edge for most of 2019. The questions is, will this rally continue into next year?3) Steel maker US Steel is closing a mill near Detroit and will lay off 1,500 workers, and in addition will cut its dividend in an attempt to reverse operating losses which is forecasted for the fourth quarter. The Great Lakes Works mill, which rolls slabs into sheets of steel will close, and shift its work to three other mills. Additional cost savings measures will be implemented including a $75 million dollar reduction on capital expenditures and cutting labor cost.1) Stock markets ended at record highs this last week, coming closer to what may well be a blockbuster year. This rally now covers four weeks, with one record closing after another, driven by easing of geopolitical worries. Trade worries have kept investors on the edge for most of 2019. The questions is, will this rally continue into next year?

2) Automaker Fiat-Chrysler Automobiles is making an all out push to clear out tens of thousands of vehicles which their dealerships have not ordered, because their new data driven production strategy has swelled their inventory. The automaker is offering its most aggressive discounts since the financial crisis to sell certain 2019 models under their Dodge, Jeep and Ram brands. Their sales staff is working overtime to sell more than 70,000 unassigned cars in December to their 2,400 dealerships.

3) Steel maker US Steel is closing a mill near Detroit and will lay off 1,500 workers, and in addition will cut its dividend in an attempt to reverse operating losses which is forecasted for the fourth quarter. The Great Lakes Works mill, which rolls slabs into sheets of steel will close, and shift its work to three other mills. Additional cost savings measures will be implemented including a $75 million dollar reduction on capital expenditures and cutting labor cost.

19 July 2019

1) The video streaming service Netflix has lost customers for the first time in eight years while also missing its target for new subscriptions overseas. The lost of 130,000 customers from April to June resulting in a 10.3% drop in its stock. Netflix confessed that its new TV shows for this quarter were not as appealing as expected and price increases in some markets has slowed their growth.

2) The software giant Microsoft beat analysts estimates for fourth quarter revenue and profit, primary because of its flagship cloud products Azure and Office software. Microsoft has tapped into the booming demand for cloud based services, pushing its capitalization to about $1.05 trillion dollars. Microsoft’s net income rose to $13.19 billion dollars in the quarter ending on June, up from $8.87 billion dollars.

3) The Democrats have pass legislation to raise the minimum wage to $15 per hour. The raises will be over a six year span from the present $7.25 hour, and will be halted if a study shows job losses or other adverse effects. The increase in labor cost will most likely spur development of automation technologies to reduce the need for people in company’s labor force. The bill still has to be voted on and passed by the Senate before it can go to the President for signing.

4) Stock market closings for – 18 JUL 19:

Dow             27,222.97    up      3.12
Nasdaq          8,207.24    up    22.04
S&P 500         2,995.11    up    10.69

10 Year Yield:    down   at    2.04%

Oil:    up   at    $55.78

12 July 2019

1) The production of the Volkswagen Beetle, probably the most recognized automobile in the world, is coming to an end at their Puebla, Mexico plant on Wednesday. The demand for the iconic automobile has been squashed by years of low gasoline prices and the market shift to SUVs and pickups. In its place, VW is manufacturing a version of the Chinese SUV, the Tharu, but will be a beefed up version to be called the Tarek.

2) The Consumer Price Index edged upwards while the inflation rate remains steady. The index rose 0.1% in June with low gas prices being offset by higher rents and auto cost. However, core inflation rose 0.3%, which is the largest increase in eighteen months. This persistently low inflation is justification for lowering the short term interest rates. Usually, a low jobless rate forces employers to increase pay to get workers, and in turn they must raise their prices to pay the extra labor cost.

3) Dollar General is changing its marketing strategy to attract wealthier customers by expanding into home furnishings, kitchenware and party supplies. Their strategy, which built the highly successful retailer, had been to focus on selling cheap consumables such as food, cleaning and household supplies and personal care products, which have a low margin. Dollar General will now carry products with higher margin such a pillows, candles, home decorations, gift bags and wrapping paper.

4) Stock market closings for – 11 JUL 19: Oil prices jump as approaching a storm shuts down energy operations in the Gulf. The Dow broke the 27,000 mark for the first time.

Dow            27,088.08         up   227.88
Nasdaq         8,196.04    down       6.49
S&P 500        2,999.91         up        6.84

Year Yield:    up   at    2.12%

Oil:    up   at    $60.43

10 April 2019

1) The IMF (International Monetary Fund) has reduced their forecasted for world economic growth from 3.5% to 3.3%, which is the third reduction since last October. It forecasted 2.3% growth for the US economy, as well as reduced growth forecast for Germany and Great Britain.

2) Walmart is rolling out thousands of robots for use in their retail stores across America. These robots will automatically scan shelves and clean floors. With a million employees, Walmart is seeking ways to keep labor cost down.

3) Bank of America is raising it’s minimum wage to $20 an hour over the next two years. Starting the first of May, the rate will increase to $17 per hour. The bank has 205,000 employees.

4) 9 APR 19 Stock market closings: Markets pulled down by industrial sector.

Dow             26,150.58    down    190.44
Nasdaq          7,909.28    down      44.61
S&P 500         2,878.20    down      17.57

10 Year Yield:    down   at    2.50%

Oil:    up   at    $64.24