3 April 2020

1) Unemployment claims have jumped twice the previous week’s numbers, with 6.6 million Americans filing for benefits. This brings the last two weeks total of new unemployed to 10 million. The speed and scale of job losses are unprecedented. The record for loses in a month had been 695,000 in 1982. The coronavirus has wiped out more jobs in two weeks than were lost in the worst months of the last recession. Companies based on white-collar workers, have been able to keep their people working with work at home, but as revenues dry up, it’s questionable how long before they too will be forced to start layoffs. The growing number of laid off workers unable to pay their bills could well lead to a cascade of further layoffs and business failures.

2) While the price of oil has always had an effect on the equities, the recent plunged has had a more profound effect and therefore causing the roller-coaster volatility of the markets. This dramatized how very central oil is to the entire modern world. Stabilizing the oil prices would greatly help stabilizing the markets, and therefore the whole world economic system. Central to this is for Russia and Saudi Arabia to end their price war and resume limiting production. But central to this is Russia’s desire to damage American domestic oil production by destroying the shale oil companies, which would reduced American’s influence in the world especially in the middle east where Russia is very active.

3) Already wracked by fiscal problems from decline of the milk product markets, dairymen now suffer a further decrease in their market as a result of the coronavirus crisis. This is a result of restaurants, schools and other food service outlets reduced to stopping operations and therefore not needing milk products. The dairy industry is still producing, but doesn’t have anyplace to sell their milk, so the industry is asking the government to increase its purchases of dry milk, butter and cheese.

4) Stock market closings for – 2 APR 20:

Dow 21,413.44 up 469.93
Nasdaq 7,487.31 up 126.73
S&P 500 2,526.90 up 56.40

10 Year Yield: down at 0.63%

Oil: up at $24.90

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

1 October 2019

1) The crown prince of Saudi Arabia, Prince Mohammed bin Salman, has warned of astronomical oil prices if tensions escalate in the Persian Gulf. In a ‘60 Minute’ interview, the Prince called for strong and firm action to deter Iran and lessen the threat to world interests, so as to avoid disruptions of oil exports. The attacks on Saudi oil production facilities caused Brent crude to jump 19.5%, the biggest jump on record. The Middle East provides about 30% of the world’s energy supplies constituting about 4% of world GDP (Gross Domestic Product).

2) In order to avoid a quarterly decline in U.S. retail sales, automakers are offering big discounts to maintain sales growth. For the last three months, auto sales have flattened with average incentive spending rising 6% to more than $4,110 per vehicle, which is a third quarter record.

3) The fashion retailer Forever 21 Inc. has filed for bankruptcy protection and is the latest big fashion merchant who, like many other retailer chains, is unable to cope with high rents and heavy competition from e-commerce. The chain has 800 stores across the world, selling affordable but eye-catching designs, but has falling out of favor with the generation-Z consumers who turn to e-commerce. The bankruptcy will allow the company to reorganize and gain additional capital for operations.

4) Stock market closings for – 30 SEP 19:

Dow              26,916.83    up    96.58
Nasdaq           7,999.34    up    59.71
S&P 500          2,976.74    up    14.95

10 Year Yield:    unchanged   at    1.68%

Oil:    $54.29

14 June 2019

1) Two tankers have been attacked near the Iran coast, which has caused oil prices to surge with fears that Iran may try to close the Gulf of Oman, which transports oil out of the Middle East. The choke point of the Strait of Hormuz is only 21 miles wide and handles 80% of the oil destined for Asia. Last month four other tankers were attacked near Fujairah using sabotage, which further fueled fears that Iran may become very aggressive in the region and against exports of oil.

2) With voters no longer showing a strong concern for the federal debt, the political support for reining in Federal spending and controlling the growing national debt is melting away with Republicans willing to accept a large deficit in exchange for tax cuts and Democrats making big spending promises in the 2020 campaigns. Some experts, who had once augured against the government growing debt, now say it may not be as critical a problem as they once thought.

3) The mega-retailer Target is upping the ante for e-commerce by offering same-day delivery on thousands of items for just $9.99. Using the delivery startup Shipt, which Target purchased nearly two years ago, the retailer is positioning itself to compete against Walmart and Amazon in what is becoming a ‘delivery time’ war of the major maga-retailers. The one day service will cover 65,000 items from 1,500 stores out of 1,800 stores in 47 states.

4) Stock market closings for- 13 JUN 19:

Dow               26,106.77    up    101.94
Nasdaq            7,837.13    up      44.41
S&P 500           2,891.64    up      11.80

10 Year Yield:    down   at    2.09%

Oil:    down   at    $52.11

4 December 2018

1) Qatar announced they are dropping out of OPEC to focus on natural gas production, which is what their oil fields mostly produce.  Being a small producer of oil, Qatar considered itself too small to be a part of OPEC, despite being a member for 57 years.

2) For the best bets in the stock market during this next 90 days of trade war truce, experts are saying to watch where China spends money in the US that best strengthens it’s position with America.  Look for such things as agriculture products like pork and grains, and big ticket machinery such as construction equipment and aircraft.

3) Walmart is buying robots, autonomous floor scrubbing machines, and will have 360 units in stores by end of January.  Walmart is already using robots which scan for ‘out of stock’ items on shelves. Both robots operate by themselves on the store floor while customers are present.

4) 3 DEC 18      Stock market closings:    Oil prices rise as Saudi Arabia and Russia agree to limit oil production.

Dow                  25,826.43    up    287.97
Nasdaq               7,441.51    up    110.98
S&P 500              2,790.37    up       30.20

10 Year Yield:     down   at    2.99%

Oil:    up   at    $53.22


*Photo Image: ArabianBusiness.com*

By: Economic & Finance Report

Nawah Energy Company (unit/ENEC), a unit  of the Emirates Nuclear Energy Corporation , has signed a long term joint agreement with middle east nuclear powerhouse EDF Abu Dhabi.

Nawah will operate and maintain the Barakah Nuclear Energy Plant, that is being established in Abu Dhabi, UAE. The Barakah Nuclear Energy Plant will be the first nuclear energy plant in the Arab region.

The agreement strengthens both parties; in that allows EDF to be one of the few, if not only firms to build and maintain in the energy sector, within the UAE. For Nawah it provides it strengthened position, in being allowed to continue to maintain, monitor, and operate the Barakh Nuclear Energy plant on day to day basis.  -SB

8 November 2018

1) Russia stands to be the beneficiary of the Iran oil ban from newly imposed sanctions, with Moscow taking over Iran’s customers while defying sanctions to import Iranian oil.  Although Russia-Iran trade will be by barter only, there will still be high profits for Russia.

2) The Democrats taking control of the House probably means no new consumer legislation because of expected ‘grid lock’ of the legislative branch, meaning little to no new regulation of lending, student loan debt, service and financial protection.  No new taxes are expected by business, which should therefore continue economic stimulation.

3) Price of oil sinks from the swelling of US oil inventories. There is too much supply with more oil coming into the market too fast.

4) 7 NOV 18    Stock market closings:   The Dow exploded over Tuesday’s election results.

Dow                          26,180.30     up    545.29
Nasdaq                       7,570.75     up    194.79
S&P 500                       2,813.89    up       58.44

10 Year Yield:       down   at    3.21%

Oil:     down   at    $61.73

17 October 2018

1) There were 7.14 million job openings in August, the highest ever. Job openings out paced unemployment.

2) Federal government closed its 2018 fiscal year with a $779 billion dollar deficit, the highest in 6 years. Some experts warn that the rising US debt could hamper any US fiscal response to a down turn.

3) There are fears of oil pushing to over $100, maybe even going as high as $400 if US does sanction Saudi Arabia.

4) 16 OCT 18    Stock   market   closings:   Markets leap upwards because of news about job openings.

Dow                           25,798.42             up      547.87
Nasdaq                        7,645.49             up      214.74
S&P 500                       2,809.92              up        59.13

10 Year Yield:         down   at    3.16%

Oil:     $72.26    up   from    $71.68

6 September 2018

1) The Iraq rial continues its collapse, now down to 1/4 its value from just this Saturday, a sign that Iraq’s economy is also collapsing.

2) Britain announced the identity of two Russian GRU agents who conducted the nerve gas attack earlier this year in an attempt to assassinate two soviet dissidents.

3) A large persistent red tide bloom continues to plague Florida’s beaches, resulting in 100 miles of beaches being closed with financial lost to tourism running in the millions of dollars. The toxins released by the red tide continues to kill off the aquatic wildlife, leaving additional monetary losses for the daily clean up of the beaches. Florida is also experiencing a blue-green algae bloom in fresh waters that is becoming another huge environmental problem.

4) 5 SEP 18    Stock   market   closings:

Dow                 25,974.99          up     22.51
Nasdaq              7,995.17      down   96.07
S&P 500             2,888.60      down     8.12

10 Year Yield:     no   change   at   2.90%

Oil:     down   at   $68.68

28 August 2018

1) President Truman announced that the United States and Mexico have reached a new trade agreement to replace NAFTA.  It has been difficult and complex to reach, but Canada has agreed to rejoin the NAFTA talks after the US and Mexico reached agreement.

2) Iran has brought suit against United States at the International Court of Justice claiming the US sanctions against Iran violate a friendship treaty, but America does not acknowledge the court’s jurisdiction over the matter.

3) Iran announced that it has taken control of the Hormuz straights, which they have threatened to do in order to control exports of oil.  Their intent is to counter America’s trade embargo.

4) 27 AUG 18     Stock market closings: Markets were up on announcement of Mexico and United States coming to a trade agreement, with two reaching record highs.

Dow               26,049.64            up         259.29
Nasdaq            8,017.90            up            71.92
S&P 500           2,896.74            up            22.05

10 Year Yield:    up    at    2.85%

Oil:    up    at     $68.96