24 March 2021

1) The CLEAN Future Act, a nearly 1,000-page piece of legislation, is meant to curb greenhouse gas emissions and air pollution that’s emitted from the petrochemical facilities that produce plastics or the raw materials used to make plastics. More significantly, the bill would impose a temporary pause on air pollution permits needed for approval of new plastics production facilities. But Republican lawmakers are raising concerns that provisions in the sweeping climate bill from top house democrats would stifle the plastics industry. The EPA regulations also require any permit for a plastics production facility to be accompanied by an ‘environmental justice assessment’, which would include consulting with the people living in the region where the facility is located.

2) Canadian Pacific Railway announced its plan to acquire the Missouri-based Kansas City Southern Lines rail company, which operates railroads in Mexico, Panama, and the United States. The new agreement will result in the first ever rail network to span the length of the North American continent to create the first rail network spanning from Canada to Mexico.
The CP values KCS at $29 billion dollars and agrees to assume $3.8 billion in outstanding debts as part of the agreement. The deal awaits final approval from the U.S. Surface Transportation Board.

3) President Biden’s economic advisers are preparing to recommend spending as much as $3 trillion dollars aimed at boosting the economy, reducing carbon emissions and narrowing economic inequality, including a giant infrastructure plan that may be financed in part through tax increases on corporations and the rich. Rather than trying to push a mammoth package through Congress, Biden has separated his plan into legislative pieces. The bill includes money for rural broadband, advanced training for millions of workers and 1 million affordable and energy efficient housing units. Additionally there is nearly $1 trillion dollars in spending on the construction of roads, bridges, rail lines, ports, electric vehicle charging stations and improvements to the electric grid and other parts of the power sector. But Republican support will depend in large part on how the bill is paid for.

4) Stock market closings for – 23 MAR 21:

Dow Jones 32,423 down by 308.05
NASDAQ 13,228 down by 149.85
S&P 500 3,911 down by 30.07

10 Year Yield: unchanged at 1.69%

Oil: down at 60.62

9 February 2021

1) The 141 year old Chevron Corp. has built a $170 billion dollar fossil fuels empire that has made it synonymous with the oil and gas industry. Chevron, and many other petrochemical companies, may not be ‘oil-first’ companies in 2040. The climate crisis is forcing oil companies, large and small, to rethink their once reliable business models. Facing political and shareholder pressure, BP (British Petroleum), Shell and other European oil majors see the writing on the wall, announcing plans to gradually retreat from fossil fuels. Recently BP released a report forecasting that recoverable oil reserves will be as little as one fifth of today’s levels by 2050. Oil companies are embracing clean energy including electric vehicle charging and renewable energy. But Chevron is not banking on solar and wind energy.

2) The era of gasoline powered automobiles is coming to an end faster than anyone expected. One of the questions that has long plagued automobile executives was whether motorists would be willing to switch to electric vehicles that typically require hours to charge. Automakers are forging ahead with plans to convert the majority of new car and light truck sales to electric by the 2030s. Batteries for power are so much more efficient, and there’s so many less moving parts, that there is less maintenance and repairs of cars. The only thing that holds it back is people are afraid they can’t take long road trips. But once they’ve shorten the charge to minutes and not hours, that’s a game changer. The production costs of electric vehicles are close to those of gasoline powered vehicles, and could go even lower. However, the fast chargers can cost $100,000 each. In addition, upgrading the power grid to handle the increased demand from electric vehicles is likely to be costly.

3) Technological investments has propelled Mexico in another direction giving the country a boost to being a most promising tech scene in Latin America. In turn, the US technology industry is taking advantage of this landscape to solve its shortage of qualified technological labor. Mexico has built a ‘tech hub’ of three cities- Guadalajara, Monterrey, and Mexico City, each having its own specialties and advantages that makes them unique. Mexico has several top tech universities, which is the keystone to being a tech hub. There are a lot of advantages to hiring remote workers in Mexico in addition to the savings U.S. companies will see.

4) Stock market closings for – 8 FEB 21:

Dow 31,385.76 up by 237.52
Nasdaq 13,987.64 up by 131.35
S&P 500 3,915.59 up by 28.76

10 Year Yield: down at 1.16% up by

Oil: up at $58.05

22 June 2020

1) Oil has passed$40 a barrel, continuing a slow but steady recovery. This could be signaling a reawakening of the U.S. shale oil production. This rally allows the oil industry some breathing room with its high debt burden as the shale oil industry seeks to rebuild after the worst price collapse in a generation. This is far different than earlier this year when oil producers were paying to have their oil taken away. OPEC+ continues efforts to re-balance the global oil market, now abundantly clear that everyone loses in a price war.

2) More encouraging economic news with Ford Motor and Fiat Chrysler returning to pre-coronavirus pandemic production schedules in their American plants. Ford plans to fully return to production levels by July 6 while also ramping up their production facilities in Mexico. Although not given any firm dates, Fiat Chrysler is also returning to former production levels as rapidly as possible.

3) Experts are predicting the restaurant business, as we know it, is coming to an end because of the Convid-19 crisis. The industry generates $900 billion dollars a year, employs 15 million people, which is 15 times more than the airline business, which many are so concerned about now. Estimates vary widely of 20 to 80% of the privately own restaurants succumbing to the pandemic. The big franchise restaurant chains are expected to mostly survive and continue, but the independents are expected to fade out. One factor is change, which is coming too fast for small operations to adapt and keep pace with. The general consensus is that the business was in trouble long before the pandemic, struggling with poor working conditions, very thin profit margins, low wages and increasing competition. But it’s not just the restaurants themselves, for behind them is farming, distribution, suppliers and commercial real estate. It’s apparent that the demise of a significant number of independent restaurants will spell a significant change to the American business environment.

4) Stock market closings for – 19 JUN 20:

Dow 25,871.46 down 208.64
Nasdaq 9,946.12 up 3.07
S&P 500 3,097.74 down 17.60

10 Year Yield: unchanged 0.70%

Oil: up at $39.43

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

6 February 2020

1) For the first time in six years, the U.S. trade deficit fell as the White House’s trade war with China curbed imports. The trade deficit dropped 1.7% to $616.8 billion dollars last year with steep decline in industrial materials and supplies, consumer goods and other goods. The trade deficit for goods with Mexico jumped to a record high of $101.8 billion dollars last year, with the European Union reaching an all time high of $177.9 billion dollars.

2) The Ford Motor Company is posting a$1.7 billion dollar loss and anticipates a weak forecast for 2020. General Motors is also reporting poor performance for 2019 and anticipates flat profits for 2020. Both Ford and GM’s troubles are in part from slaking sales in China, in particular with the economic slowdown in China from the coronavirus pandemic. The major competitor to the duet auto makers, Tesla, is suffering from the coronavirus closing of its Shanghai factory which builds its Model 3 sedans.

3) Macy’s, another major world renowned retailer, is experiencing the brick-and-mortar decline of other major traditional retailers. The chain is closing 125 of its stores, in addition to the 100 stores it has already closed, and cutting about 2,000 corporate jobs. Their strategy is to exit weaker shopping malls and focus towards opening smaller format stores in strip centers. But even with these changes, the future of Macy’s is abysmal. The company has lost market share in core categories such as apparel, as fewer shoppers take trips to malls, preferring on line shopping.

4) Stock market closings for – 5 FEB 20:

Dow                 29,290.85    up    483.22
Nasdaq             9,508.68    up      40.71
S&P 500            3,334.69    up      37.10

10 Year Yield:    up   at    1.65%

Oil:    up   at    $51.17

15 January 2020

1) J. P. Morgan Chase posted profit and revenue far in excess to analysts’ expectation at the end of 2019. Fourth quarter profit was up 21% to $2.57 a share compared with $2.35 estimates of analysts. The investment bank produced record revenue for the fourth quarter. Citigroup also beat estimates for profit and revenue, their fixed income trading revenue gaining 49%.

2) Consumer prices rose at the fastest pace in eight years, in 2019. The increase was driven by higher gasoline, health care and rent prices in addition to the biggest annual advance in inflation since 2011. The consumer price index rose 0.2% in December, while economist had forecast 0.3%. The cost of living in 2019 rose 2.3% from 2.1%. Price increase for food was mild, while prices fell for used vehicles and airline fares.

3) Three of China’s automakers are considering expanding into Mexico with factories. Car makers Changan, BYD (electric cars) and Anhui Jianghuai or JAC, who already has manufacturing facilities in Mexico, but is considering expanding. The companies are considering expansion sometime this next year. No comments on if and where cars will be exported to.

4) Stock market closings for – 14 JAN 20:

Dow                   28,939.67         up    32.62
Nasdaq                9,251.33    down    22.60
S&P 500               3,283.15    down      4.98

10 Year Yield:    down   at    1.82%

Oil:    up   at    $58.14

21 October 2019

1) The mega brewers Anheuser-Busch and MillerCoors, America’s two largest brewers of beer, are embroiled in a legal battle with Anheuser-Busch claiming MillerCoors stole recipes and trade secrets. The legal conflict rose from attack ads in Super Bowl commercials last February. The legal war continues to escalate with suits and counter suits being filed by both companies. During discovery, Anheuser-Busch claims to have uncovered evidence MillerCoors had obtained trade secrets.

2) The very popular SUVs across the world has led to a nearly sixfold increase in the number of SUVs on the road since 2010, which makes them the second biggest contributor to the rise in carbon dioxide emissions. Only the generation of electrical power produces more carbon dioxide, although SUVs account for about a third of the emissions compared to power generation. SUVs are also the reason that oil demand from passenger cars has grown by 3.3 million barrels a day since 2010, while oil use has declined slightly for other kinds of cars.

3) The export of pork from America has hit an all time high. Buyers are stocking up in anticipation of a widening protein gap in China, the result of a pig killing disease in Asia. American exports jumped to 351,000 metric tons as both Mexico and China buy up future pork contracts, as well as sales of soybeans, another prime source of protein in Asia. The African swine fever has devastated pig herds causing domestic pork production to plunge.

4) Stock market closings for – 18 OCT 19:

Dow              26,770.20    down    255.68
Nasdaq           8,089.54    down      67.31
S&P 500          2,986.20    down      11.75

10 Year Yield:    down   at    1.75%

Oil:    down   at    $53.70

30 September 2019

1) The White House is considering putting limits on U.S. investment in China, which would aggravate the protracted trade dispute between the two largest economies in the world. Advisers are discussing ways to limit U.S. investors’ portfolio flows into China, including limiting all U.S. investment in China. One possible method being considered is to delist Chinese companies on the U.S. stock exchanges thereby limiting American’s exposure to the Chinese market.

2) Alexandria Ocasio-Cortex, the New York Representative, announced a comprehensive anti-poverty bill that would provide new protections for tenants, children, immigrants and other Americans who are increasingly vulnerable to the high cost of inequality. One part of the bill is a tenant rights bill which would significantly expand federal housing policy. This would include a cap on annual rent increases or rent control.

3) General Motors has reversed itself and reinstated health care benefits to its striking workers, as a result of sever criticism from politicians and social media. Normal procedure in strikes is for the cost of health care to shift from the company to the union. The strike of 49,000 GM workers has shut down 30 GM plants across the nation for nearly two weeks. The GM plant in Mexico has been forced to close due to parts shortages as a result of the strike.

4) Stock market closings for – 27 SEP 19:

Dow              26,820.25    down    70.87 
Nasdaq           7,939.63    down    91.03
S&P 500          2,961.79    down    15.83

10 Year Yield:    down   at    1.68%

Oil:    $56.18

4 September 2019

1) The ever present problem of growing student debt is being aggravated by the ever rising cost of college. This rise in cost is fueled by decreasing funding by governments, a lack of cost controls by college administrations and an emphases on plush facilities instead of real education support.

2) Manufacturing shrank in August for the first time since August 2016. The manufacturing index slid to 49.1 from 51.2 in July, where an index below 50 signals a contraction. Production declined by 1.3 percent while employment fell by 4.3 percent with new orders falling by 3.6 percent. With the trade war increasing the cost of Chinese manufactured imports, it would be expected that American manufacturing would be increasing.

3) The United Auto Workers union is targeting GM for contract talks, with the UAW approving a strike. The UAW represents nearly 150,000 hourly workers at Ford, General Motors and Fiat Chrysler with 96% of it’s workers OKing a strike. Leaders of the UAW are under investigation for corruption by the FBI who have conducted raids on key leadership members recently for mis use of monies. The union is angry at GM for layoffs and the closing of plants, plus production plants in Mexico.

4) Stock market closings for – 3 SEP 19:

Dow              26,118.02    down    285.26
Nasdaq           7,874.16    down      88.72
S&P 500          2,906.27    down       20.19

10 Year Yield:    down   at    1.47%

Oil:    down   at    $53.90

12 August 2019

1) The electric car company Tesla Inc is being sued claiming the company limited battery range of its older vehicles using software updates. The alleged intent was for Tesla to avoid costly fixes to defective batteries. The lawsuit is seeking class action status for thousands of Model S and X owners. The suit claims that older generation batteries had their range curtailed by an automatic software update. As a result of a battery fire, Tesla claims they are revising charge and thermal management settings via the software to further protect the battery and improve battery longevity.

2) The Chinese-American trade war hasn’t been bad for all nations, other nations are experiencing increase trade as a result of the war. Australia is the biggest beneficiary with exports to China of natural resources. Second is Switzerland, the third is Mexico which has replaced China as U.S. largest exporter. Fourth is Brazil who is benefitting from agricultural export to China and the fifth is Canada.

3) Malaysia is expanding its efforts to prosecute seventeen Goldman Sachs executives, who were allegedly involved in misleading investors in a $6.5 billion dollar bond sale. The bonds were for the state investment fund, 1 Malaysia Development Bhd or 1MDB. Charges include executives knowing that funds would be siphon off so Malaysia is also seeking to recoup funds and fees.

4) Stock market closings for – 9 AUG 19:

Dow             26,287.44    down    90.75
Nasdaq          7,959.14    down    80.02
S&P 500         2,918.65    down    19.44

10 Year Yield:    up   at    1.73%

Oil:    down   at    $54.27