22 March 2021

1) The U.S. Department of Justice has launched an antitrust investigation into the practices of renowned credit card company Visa regarding debit-card transactions. The DOJ is looking into the rules for routing transactions, both in stores and online. In its suit against Visa last year, the Justice Department claimed Visa already possesses monopoly power in the market for online debit-card transactions, arguing that roughly 70% of such transactions in the U.S. are routed over the firm’s network. At the heart of the Justice Department’s issues with Visa is the 2010 law known as the Durbin Amendment, which requires banks to include two networks on their debit cards. Merchants are then supposed to be given the choice of routing over a major network versus a smaller alternative such as Pulse, Star or NYCE. Those alternative networks can be cheaper for merchants.

2) The Federal Reserve stated that while the U.S. economy has been steadily rebounding from the pandemic recession, the recovery is far from complete and needs continued support from the Fed. About half the 20 million jobs that were lost to the pandemic have been recovered, and the outlook is brightening as vaccinations are more widely administered. The central bank’s policymakers forecasts are sharply upgraded, with the economy expected to accelerate quickly this year. At the same time, their forecast showed that the benchmark rate remains near zero through 2023, despite concerns in financial markets about potentially higher inflation.

3) Flipping houses in America is an easy way to make a quick buck. With the real-estate market red hot, profits on flips are at a record high, averaging some $66,000 per home. There are more than 60 banks and other financing companies catering to flippers. Memories of the 2007 real-estate bust are fading, and with interest rates on most fixed income investments still so paltry, lenders are desperate for anything that provides higher returns. The 7.9% average annual rate on a fix-and-flip loan is more than twice the 3.09% rate that a bank can earn on a 30-year mortgage. But there aren’t that many houses to purchase, the inventory of existing homes for sale is at its lowest since 1999, so now more flippers are chasing fewer transactions. Almost 68% of all home flippings last year sold for $300,000 or less.

4) Stock market closings for – 19 MAR 21:

Dow 32,627.97 down by 234.33
Nasdaq 13,215.24 up by 99.07
S&P 500 3913.10 down by 2.36

10 Year Yield: unchanged at 1.75%

6 December 2019

1) Boeing says significant additional regulatory requirements may cause additional delays in returning Boeing’s 737 MAX to commercial service and in turn may cause the company to cut or even halt production. Boeing does not expect 737 MAX order cancellations to have an impact on revenues or earnings citing the size of 737 backorder.

2) Saudi Arabia has just completed the biggest initial public offering in history, which raised $25.6 billion dollars from sales of shares in its giant state owned oil monopoly. Three billion shares were sold at $8.53 a share. Aramco is valued at roughly $1.7 trillion dollars, making it the most valuable publicly traded company in the world. Saudi Arabia plans to wean their economy off an oil only base.

3) The Dollar General retailer chain is opening almost twenty stores a week, while thousands of other retail stores are expected to close this next year. So far, the retailer has opened 925 stores this year, with 1,000 opened by the end of 2020. Presently, they have 16,000 retail outlets, and estimate that three quarters of the U.S. residents live within five miles of a Dollar General store. Revenues continue to increase with sales rising 8.9% to nearly $7 billion dollars over the last three months compared to the same period last year.

4) Stock market closings for – 5 DEC 19:

Dow           27,677.79    up    28.01
Nasdaq        8,570.70    up      4.03
S&P 500       3,117.43    up      4.67

10 Year Yield:    up   at    1.80%

Oil:    up   at    $58.33

18 January 2019

1) The question of ‘monopoly’ for the large tech companies is starting to come to light as a results of congressional questions about the power and influence of such companies as Amazon, Facebook and Google.

2) There are four major retailers on ‘death watch’ for 2019, and they are Barns & Noble, Kmart, JC Penny and Sears. This is particularly important concerning the viability of a consumer based economy.

3) There are talks circulating around Washington of easing the tariffs on China. However, there has been little progress in negotiations, in particular issues of intellectual property.

4) 17 JAN 19    Stock market closings:

Dow               24,370.10    up    162.94
Nasdaq            7,084.46    up      49.77
S&P 500           2,635.96    up      19.86

10 Year Yield:    up   at    2.75%

Oil:    up   at    $52.15