1) Peloton, the exercise machine maker, has recalled pedals on 27,000 of their bikes which have caused some injuries. The 27,000 bikes were manufactured between July 2013 and May 2016. The company has received 120 reports of the pedals breaking resulting in 16 injuries to users, with 5 people requiring medical care including stitches. Peloton is one of the few companies who have benefitted from the coronavirus crisis because with people staying at home for long periods, they are purchasing home exercise machines. Their stock is up 380% a year to date, while their fitness subscribers is up 113% from a year ago.
2) The investment firm BlackRock considers China’s domestic bond market to be a good investment, offering a level of returns that may be difficult to find elsewhere in the current world economy. Economic data and continued monetary policy support, point to a sustained economic recovery, with foreign investors remaining under-invested in Chinese bonds. These investors account for only about 2% of the $16 trillion dollar market. Using diversified and resilient portfolio allows investors to avoid being exposed to risk specific for a company or sector. While there are some troubling signs, such as China Evergrande Group seeking government help in meeting its debt, looking across the whole spectrum, a fairly diversified portfolio can be built to yield a reasonable income.
3) General Motors will start operating robot cars in San Francisco without any human backups in the cars by the end of this year. The company Cruise has received a permit from California’s Department of Motor Vehicles to allow them to operate robot cars, without humans, on public highways. Other companies have gotten permits for autonomous automobile operation without humans, including Waymo, but none have set a date for autonomous ride-hailing services. Cruise will start ride-hailing service first in the surround neighborhoods, one at a time, slowly working their way into the heart of San Francisco with it’s dense traffic challenges. Progress towards fully autonomous ride-hailing services was retarded in 2018 when an Uber autonomous test car ran down a pedestrian in Temple Arizona.
4) Stock market closings for – 15 OCT 20:
Dow 28,494.20 down 19.80 Nasdaq 11,713.87 down 54.86 S&P 500 3,483.34 down 5.33
President Donald J. Trump has chosen Mr. Jerome Powell to head the US Federal Reserve Bank.
Mr. Powell is a member of the Federal Reserve Board, born in Washington DC and educated at Princeton University, with a law degree from Georgetown University.
He is a Republican and has extensive experience working within the Federal Reserve system and in the private sector, in investment banking. He has tended to be more moderate in voting on Federal Reserve monetary policies, and since becoming a Federal Reserve Governor, he has voted on every monetary policy bill that has been accounted for.
Mr. Powell will replace US Fed Chairwoman Janet Yellen in February 2018, when her four year term expires. -SB
In early months of 2018, the blossoming of a new calendar year, US President Donald Trump will be able to pick a new US Federal Reserve Chairperson. The current Federal Reserve Chairwoman Janet Yellen’s term will be up in February 2018. Having led the Fed since Feb 2014, Ms. Yellen is the first woman to be head of 103 year old monetary policy system.
The Federal Reserve was instrumental in getting the US out of recession and the 2008 financial meltdown. Various indexes have gained tremendously under the current leadership of the Fed. The S&P 500 index is currently up 45%. Stock market indexes have correlated with Fed policies for years, sometimes directly sometimes indirectly. The new Fed chair will most likely have a direct impact on the stock markets and indexes. -SB
Former Fed President of Richmond’s Federal Reserve Bank, Jeffrey Lacker has resigned today; effective immediately. Richmond’s Federal Reserve Bank had issued a statement about the resignation of Lacker. The head of Richmond’s Federal Reserve, Mr. Jeffrey Lacker had improper discussions with a financial analyst from Medley Global Advisors, on “confidential information” relating to Federal Reserve’s interest rate policy.
There was an ongoing investigation that the Federal Reserve Inspector General, Mark Bialek just concluded. No charges will be brought on Mr. Lacker, but he has lost his job as Richmond’s Federal Reserve point man. Mr. Bialek’s investigation started in 2012, when information of private Federal Reserve information had leaked.
Many members of the US Congress have been critical on the prudence of the US Federal Reserve, and this episode certainly adds fuel to the fire, members in Congress have stated on numerous occasions that there is a lack of transparency; within the Federal Reserve’s fiscal policies and initiatives. -SB
The Federal Reserve has raised important interest rates because the US economy has increased drastically. This is the second time the FED has raised interest rate benchmarks since 2008. The Fed indicated that next year in 2017, the interest rate will raise again also.
The benchmark had been 0.50%, now with the recent increase the benchmark will be 0.75%. When it comes to low rates, it helps the economy because it provides an environment for growth economically . This in turns allows businesses to borrow to finance deals, products, services, expansion, and leads toward enabling their businesses to take risk in growing their enterprises.
The interest rate being raised was on par to what many analysts and economists predicted, the economy improving as it is these days made sense for the interest rate to increase according to many experts. -SB
Malaysia is attaining strong risk because of the slowing down of the global economy, and the Central Bank of Malaysia is monitoring the situation. Malaysia Central Bank Governor Zeti Akhtar Aziz, indicated the risk ahead for the country as far as growth and economic progress. The GDP of the southeast Asian country will increase to 5% for the year, as well as for next year also (2016).
It has been difficult for Malaysia to improve their economy and financials, since oil revenues have fell rapidly. Also, the political climate has not been great as well, as the Prime Minister Najib Razak has been subject to corruption. Allegations that political donations had been disbursed into his personal bank account.
Ms. Aziz has indicated though, that the economical & montary policies set forth by the Central Bank will continue, regardless of the political climate within the county. -SB