9 July 2019

1) America now has such a surplus of natural gas, that it’s being burned off instead of sold and used. The problem isn’t a lack of a market to sell to, rather it is insufficient distribution infrastructure. There isn’t enough pipeline capacity to get the gas from the oil fields to customers. In West Texas, enough gas is burned off each day to fuel every house in Texas. Natural gas prices are negative in some areas as producers pay people to take the gas off their hands.

2) The international banking giant Deutsche Bank is getting out of the investment banking by closing its equities business. This restructuring will result in posting a $3.1 billion dollar loss for the second quarter and an overall loss of $8.3 billion dollar into 2022. Additionally, there will be a loss of 18,000 jobs or one fifth of their labor force.

3) The summer labor force of teenagers is shrinking as American youth opt for summer school and extracurricular activities. Only about 40% of highschool age kids are working during their summer vacations, compared to more than 60% in the twentieth century. This leaves businesses with a dilemma of find enough workers, especially those business which are more active in the summer months and need that extra short term labor boost. Much of this shift is because of increased emphasis on education for the young, who opt for summer school and summer college prep programs instead of earning some pocket money.

4) Stock market closings for- 8 JUL 19:

Dow         26,806.14    down    115.98
Nasdaq      8,098.38    down      63.41
S&P 500     2,975.95    down      14.46

10 Year Yield:    down   at    2.03%

Oil:    down   at    $57.54

3 July 2019

1) The U.S. economy has entered its 121st month of economic growth setting a new record. Some experts are saying the real economic recovery may only be in its infancy. It’s just this last year that the gross domestic product caught up with estimates of its potential. Periods when GDP exceed potential are when workers typically enjoy the greatest wage gains. There are concerns of a changing environment with global trade disputes and other risks slowing down the economy.

2) Another daily newspaper has announce it is closing down, in what this year has been a rash of daily newspaper closing as well as massive layoffs. The Vindicator of Youngstown Ohio, which just celebrated its 150th anniversary, will cease publication the end of August, with 144 people losing their jobs. Virtually all daily newspapers have had deep cuts in staff these last couple of years, giving credence to the prediction that all the daily newspapers in America will be gone in ten years, displaced by newer mass media technologies.

3) The Payless ShoeSource is going out of business, closing all of its 2,500 retail stores. Once the largest and most successful family owned business in the country, the chain is succumbing to competition from big-box stores and on-line retailers. Founded in the 1960s, its demise could be the largest retail liquidation in history. Payless strategy uses customer self help allowing a minimal labor force of one manager and a couple of cashiers.

4) Stock market closings for- 2 JUL 19:

Dow               26,556.14    up    19.32
Nasdaq            7,958.05    up    45.06
S&P 500           2,926.73    up    12.95

10 Year Yield:    down   at    1.98%

Oil:    up   at    $56.66

1 July 2019

1) Consumer spending increased in May as well as prices creeping up too. Both point to a slowing economic growth and benign inflation pressures. These two facts gives the Federal Reserve more reason to cut interest rates next month. Inflation is under the 2% target for this year with a projected 1.5% verses 1.8% originally expected. Consumer spending is about two thirds the U.S. economy.

2) Consumerism is changing fast, with a push to ‘no cashier checkouts’. Amazon Go stores are pushing the technology where sales payment is made automatically just by picking out items and walking out the door. E-commerce and on-line shopping continue their assault on traditional brick and mortar stores. Another strategy is showrooms in place of stores that allow the customer to try out products prior to purchasing them. Finally, drone delivery allows getting your purchases at home in less time than it takes to drive to and from a store. All these new technologies are coming together with increased profits by reducing labor cost.

3) The weekly jobless claims has increased more than expected, although there is no sign of significant layoffs as the economy slows down. Unemployment claims were 227,000 up by 10,000. The economy is slowing with manufacturing sliding down and the trade deficient widening as consumer confidence ebbs.

4) Stock market closings for- 28 JUN 19: Results from bank stress test edged markets up. Best June performance since 1938.

Dow            26,599.96    up    73.38
Nasdaq         8,006.24    up    38.49
S&P 500        2,941.76    up    16.84

10 Year Yield:    down   at    2.00%

Oil:    down   at    $58.20

23 May 2019

1) British Steel, Britain’s second biggest steel maker, collapsed on Wednesday. This leaves 5,000 jobs directly at risk, while also threatening another 20,000 at suppliers. The company had been seeking a $95 million dollar loan to cover losses suffered because of European orders lost from the uncertainty of Brexit. European steel manufactures have been under pressure from Chinese steel manufactures, with Europe taking antidumping measures against China.

2) The collapse of airline Wow Air is having a detrimental effect on Iceland’s economy. The airline had turn tourism into Iceland’s major economic boom which pulled Iceland out of its financial collapse over a decade ago. In addition, Iceland has suffered a disastrous fishing season. With Wow Air out of business, tourism is expected to drop dramatically.

3) The Dollar General store chain is making its millions of profit via catering to those in the lower economic strata. About 57% of Dollar General’s customers come from households of less than $49,000 yearly income, with 30% less than $25,000. The company has been able to sidestep the recent meltdown of retailing that has ravaged other big retailers, despite having a minimum of e-commerce.

4) 22 MAY 19 Stock market closings:

Dow             25,776.61    down    100.72
Nasdaq         7,750.84     down      34.88
S&P 500        2,856.27     down        8.09

10 Year Yield:    down   at    2.39%

Oil:     down   at    $61.32

21 May 2019

1 ) Ford Motor Company announces a 10% reduction in its work force by eliminating 7,000 jobs world wide. These jobs are salaried white-collar jobs, which are part of a major restructuring to eliminate bureaucracy and increase the number of workers reporting to each manager. Technologies allow large corporations to streamline their management staff and thereby reduce their staff.

2) The U.S. home sales fell unexpectedly in April with persistent weakness in lower-priced housing market. This market segment had been experiencing an acute shortage of properties. Economist had been forecasting a 2.7% rise in home sales, but the existing home sales dropped 4.4% from last year, making this the 14th straight year-on-year decrease in home sales. Existing home sales make up about 90% of U.S. home sales.

3) The United States Postal Service has started a two week test of commercialized autonomous vehicle technology to carry the mail cross country via robot driven semi-trucks. The test run is between Phoenix and Dallas with five round trips, each 2,100 long. Each test truck will have a safety driver on guard and an engineer. The test vehicles will travel the interstates through Arizona, New Mexico and Texas. To drive the same route would require multiple human truck drivers.

4) 21 MAY 19 Stock market closings:

Dow              25,877.33    up    197.43
Nasdaq          7,785.72    up       83.35
S&P 500         2,864.36    up       24.13

10 Year Yield:     up   at    2.43%

Oil:    down   at    $62.97

1 May 2019

1) As American farmers age, more of them are cashing out of the grain business with the number of farms decreasing from consolidation. Auction houses report their sales of closing farms are up 30%, a result of consecutive years of harvest and low grain prices, made worst by the China-U.S. trade war.

2) The Las Vegas based resort company MGM announced a planned 1,000 layoffs by June in an attempt to reduce costs and boost earnings. So far, 35 executives have taken voluntary retirement as part of the company’s restructuring.

3) Rising meat prices is weighing down on many restaurant chain’s bottom lines, at a time when rising minimum wages is cutting deeply into profits, which will start forcing their prices up leaving consumers paying more.

4) 30 APR 19 Stock market closings:

  Dow             26,592.91         up     38.52
Nasdaq           8,095.39    down    66.47
S&P 500          2,945.83          up      2.80

10 Year Yield:      down   at    2.51%

Oil:    down   at    $63.47

26 April 2019

1) Stock for the company 3M took a tumble today with a 12.9% drop, the largest drop of 3M’s stock in thirty years. Their first quarter earnings were way below projected earnings, causing 3M to take measures to shore up their operations, starting with layoffs for two thousand employees.

2) Intel corporation forecasts weak second quarter revenues, and have also reduced their full year outlook from fears for an industry wide slowdown. Their 2019 forecast of $69 billion dollars is now down from their original $71.5 billion dollars estimate.

3) Sears is closing its ‘store of the future’ after just six months. Sears spent a year renovating the 56 year store in Oak Brook Illinois, which was a prototype of Sears new marketing strategy. This closing shows Sears doesn’t have a long term plan for its survival.

4) 25 APR 19 Stock market closings:

Dow             26,462.08    down    134.97
Nasdaq         8,118.68          up      16.67
S&P 500        2,926.17     down        1.08

10 Year Yield:      up   at    2.53%

Oil:     down   at    $65.10

23 January 2019

1) The electric car manufacturer Tesla announced a 7% cut of their full-time staff. The company faces very difficult times ahead in selling affordable renewable energy products, in part because the ending of some tax credits.

2) China economic growth slows down to 6.6%, the lowest in 25 years, with a forecast of 6.3% for this year. China constitutes one third of the global growth.

3) The International Monetary Fund cuts world economic growth forecast because of the risk stemming from Brexit as well as China’s slowing growth.

4) 22 JAN 19 Stock market closings:

Dow                      24,404.48             down     301.87
Nasdaq                   7,020.36             down     136.87
S&P 500                  2,632.90             down       37.81

10 Year Yield:      down   at    2.73%

Oil:     up    at    $53.02