8 September 2020

1) About two-thirds of the restaurants in New York are expected to permanently close by the end of this year. Restaurants in New York State are not allowed to do indoor dining, only takeout and outdoor dining is permitted. Therefore, a major portion of New York restaurants are unable to meet their revenue requirements without the indoor dinning. Surveys indicated that 64% of restaurant owners are likely to close by the end of this year, and about 55% to shut down before November, which amounts to a collapse of the restaurant industry in New York State. A group of 100 restaurant owners are banning together to launch a class action lawsuit to open up indoor dining.

2) In August, the American economy added 1.37 million jobs, which was above the 1.32 million forecasted by economist. The big winners were the Government and Retail trade, with the 2020 censes accounting for much of the government’s increase in jobs, but like the censes itself, those jobs will be temporary. The job increase in retail is a result of retail stores opening back up, and so those jobs should remain, baring losses from stores closing from failure. With the growing signs that the U.S. economy is improving and jobs are coming back, there is less pressure on Congress to pass a new fiscal stimulus package. The unemployment rate has fallen below 10% to 8.4%, but is still a long way from the 3.5% before the pandemic.

3) The hopes of a comfortable retirement are continually dimming for the youth of America because of a number of reasons. The increase life span after retirement means more money is needed to cover retirement. Retired people are still subject to economic downfalls such as the Great Recession of 08 that robbed workers of earning power. The age of private pensions is gone, with workers now expected to provide all their own retirement out of their own pockets. This goes hand and hand with Social Security’s money reserves dropping as more retirees take their pension. Interest rates are low, making saving for retirement unproductive while the stock market is risky, plus people are reaching retirement with more debt and therefore requiring more money to sustain themselves. The average American needs to have three quarters of a million dollars to retire and be able to maintain their standard of living.

4) Stock market closings for – 4 SEP 20:

Dow 28,133.31 down 159.42
Nasdaq 11,313.13 down 144.97
S&P 500 3,426.96 down 28.10

10 Year Yield: up at 0.72%

Oil: down at $39.51

For- 7 SEP 20:

Dow 28,133.31 down 159.42
Nasdaq 11,313.13 down 144.97
S&P 500 3,426.96 down 28.10

10 Year Yield: up at 0.72%

Oil: down at $39.15

5 August 2020

1) The FAA (Federal Aviation Administration) has issued a 36 page document detailing the fixes and training that Boeing needs to implement so the 737 MAX can return to commercial service. The document was in the works before the planes were grounded in the spring of 2019, a result of two air crashes. There were few requirements that Boeing management wasn’t already aware of, and it’s considered a milestone in the certification process. The document only applies to 737 MAX aircraft flying in the U.S., and it is expected the changes will be adopted by aviation regulators around the world. Once done, all 737 MAX jets will undergo an operational readiness flight prior to returning each airplane to service. The European Union Aviation Safety Agency is waiting on doing its flight test as the FAA moves ahead.

2) The oil company giant Exxon Mobil Corp., is seeking the dismissal of a climate change lawsuit brought on by the Massachusetts attorney general. The lawsuit alleges that Exxon defrauded consumers and investors by the company’s public position on climate change, that Exxon hid its early knowledge of climate change and misled investors about the projected financial impact of global warming on its business. Exxon claims the law suit amounts to improper retaliation against the company over its views on climate change. The bases for Exxon’s challenge is the state’s anti-Slapp law which prohibits the use of litigation to punish a defendant for statements on matters that are under consideration by a legislative or judicial body.

3) The Department of Labor has come down hard on social investing or EAG, proposing rules that strongly limit such activities for private pension plans covered by the Employee Retirement Income Security Act of 1974 (ERISA). They consider that pension fund investing is not the place to solve the ills of the world, that it is unlawful for a fiduciary to sacrifice return or accept additional risk to promote a public policy, political or any other nonpecuniary goal.

4) Stock market closings for – 4 AUG 20:

Dow 26,828.47 up 164.07
Nasdaq 10,941.17 up 38.37
S&P 500 3,306.51 up 11.90

10 Year Yield: down at 0.52%

Oil: up at $41.53

12 May 20:

1) Economic advisers are urging the reopening of the economy as quickly as possible to reduce unemployment rates, which they fear are already above 20%. But despite the risk of permanent economic damage, public health experts warn that reopening nonessential businesses could lead to a flare up of the pandemic. This could mean unemployment worst than the 1930’s great depression with a true unemployment rate reaching 25%. However, there are early reports that China is experiencing a recurrence of the coronavirus after they’ve started their reopening process, so the warnings of health experts isn’t to be taken lightly. While some officials state that 80% of the unemployment is from furloughs and expect very rapid re-employment with the ending of the shutdown, there remains the very real problem of how fast they can be rehired. With a large portion of businesses now strapped for cash, they will have to restart slowly as money permits. No doubt, many will have gone bust during the shutdown, having already run out of money, while many more will be cash starved for weeks, months or even years, teetering on the brink of bankruptcy.

2) Toyota Motor company plans to cut North American production by about a third before October, with expectations that it will be some time before production is restored to present levels. The company will build about 800,000 vehicles in the United States, Canada and Mexico, a number which is down 29% from the same time last year.

3) The electric automaker Tesla, controlled by Elon Musk, has filed a federal lawsuit Saturday against Alameda County in California to reverse the closing of the auto plant. The Tesla’s plant in Fremont, California was closed by health orders from the county and remain closed for social distancing reasons. Additionally, Musk is threatening to move the manufacturing plant to a more business friendly state such as Texas or Nevada, considering the regulation to be the last straw. In the last few years, California has faced a ‘business drain’ as significant number of businesses and skilled/educated workers move out of California for states offering more opportunity.

4) Stock market closings for – 11 MAY 20:

Dow 24,221.99 down 109.33
Nasdaq 9,192.34 up 71.02
S&P 500 2,930.32 up 0.52

10 Year Yield: up at 0.73%

Oil: at up at $25.38

2 January 2020

1) The ride sharing business Uber has filed a lawsuit against California, in response to a landmark gig worker law as being unconstitutional. The new law is designed to upend gig economy companies such as Uber and Lyft. Uber claims the new law unfairly targets workers and companies in the on-demand economy, treating them differently than traditional companies. The law forces on-demand companies to reclassify their independent contractors as employees, which would break up their businesses. With Uber actively researching auto-driving cars, this point may soon become mute.

2) In the wake of continual losses despite rising postal rates, America’s postal system, as a public government run entity, may be coming to a end as early as this year. New leadership is being brought into the USPS tasked with creating a package of large structural changes intent on privatizing and selling pieces of the public service off. One proposal is that the postal service stops delivering packages, since there are already several successful businesses who are already doing that.

3) Department stores and apparel retailers continue to shrink as customers continue their migration to Amazon. For the last several years, retailers such as Sears, Macy’s and the Gap have struggled to survive and prosper by closing their retail outlets with even more closures are forecast for this next year. One additional loss of retail revenues is the lost of store credit cards.

4) Stock market closings for – 31 DEC 19:

Dow                28,538.44    up    76.30
Nasdaq            8,972.60    up     26.61
S&P 500           3,230.78    up        9.49

10 Year Yield:    up   at    1.92%

Oil:    down   at     $61.21

12 June 2019

1) For the sixth straight month of a gold buying spree, China continues to add to it’s gold reserves under the protracted trade war. China added 58 tons of gold to its reserves in the five months to April, then added 15.86 tons in May. At this rate China could buy as much as 150 tons of gold in 2019, as they diversify away from the U.S. dollar.

2) The retailer giant Amazon has opened a second cashier-free store in New York, which makes the thirteenth ‘Amazon Go’ store to open in America. The convenience robot store is about 1,700 square feet with Amazon announcing its fourteenth store will open in San Francisco. By 2021, Amazon may open as many as 3,000 of these robot retailing stores which threaten other retailers like 7-Eleven shops, CVS and Walgreens.

3) Ten state attorney generals plan to jointly file a lawsuit to stop the merger of Sprint and T-Mobile. The $26 billion dollar merger will reduce the number of nationwide wireless carriers to three. So far, the deal has won the backing of the majority of the FCC, which makes the Federal Government in favor of the move.

4) Stock market closings for 11 JUN 19:

Dow            26,048.51    down    14.17
Nasdaq         7,822.57    down      0.60
S&P 500        2,885.72    down      1.01

10 Year Yield:    down   at    2.14%

Oil:    down   at    $53.05