25 March 2021

1) There is a large backup of freighters parked in the San Francisco Bay and in Long Beach, which are awaiting an opening at the Port of Oakland. This is because of a trade bottleneck, a result of the COVID-19 outbreak, thereby leaving U.S. businesses anxiously awaiting goods from Asia. The pandemic has wreaked havoc with the supply chain since early 2020, because it forced the closure of factories throughout China. The problem arose last March, when Americans stayed home, thus dramatically changing their buying habits. Instead of clothes, they bought electronics, fitness equipment and home improvement products. In turn U.S. companies responded by flooding the reopened Asian factories with orders, which then lead to a chain reaction of congestion at ports and freight hubs as the goods began arriving. Ships with as many as 14,000 containers have sat offshore, some of them for over a week, with as many as 40 ships waiting.

2) The manufacturing crisis with automakers continues to grow, with the auto industry bracing for more chip shortages after a fire at a plant owned by Japanese chipmaker Renesas. The company makes chips for Toyota, Nissan and Honda, and expects production at one of the buildings at its Naka Factory in Hitachinaka to be halted for a month. Renesas said the fire started when some equipment overheated and ignited, though it isn’t known what caused it to overheat. Renesas said two-thirds of the products made in the building could be produced elsewhere, although due to the recent increase in demand for semiconductors, the situation does not allow for all products to be immediately produced alternatively. This further reduction in semiconductor production will further reduce production of automobiles worldwide.

3) North Korea tells China they should team up as ‘Hostile Forces’. North Korea’s Supreme Leader Kim Jong Un reportedly praised his country’s close ties with neighboring China, looking to boost their ties to counter the hostile policies of the United States. China and North Korea’s close ties date back to the founding of the People’s Republic in 1949, then the outbreak of the Korean War a year later. In the war, Chinese troops supported North Korean forces with the backing of the Soviet Union, against South Korea and a U.S. led United Nations coalition. However, the fighting ended in a stalemate with an armistice but no official peace, which continues to this day. The North Korea considers that the world is now undergoing transformations rarely seen in a century, which is also overlapped by the ‘once in a century’ pandemic. What this portents for China and North Korea’s future actions . . . only time will tell.

4) Stock market closings for – 24 MAR 21:

Dow Jones 32,420 down by 3.09
NASDAQ 12,962 down by 265.81
S&P 500 3,889 down by 21.38

10 Year Yields: 1.6280

Oil: up at 64.41

16 February 2021

1) General Motors is the latest automaker to report that a global chip shortage is affecting its production. Other automakers include Stellantis, Volkswagen, Ford, Nissan, Subaru, Renault, Honda, Toyota, and Mazda. Chipmakers in Asia are rushing to boost production but say the supply gap will take many months to plug. The chip shortage is expected to cut global output in the first quarter by more than 670,000 vehicles and last into the third quarter, for an estimated total production lost this year reaching 1 million vehicles. When there is a shortage of semiconductors that impacts production, GM intends to build vehicles without certain modules and will complete them as soon as possible. This will help us quickly meet strong customer demand as more semiconductors become available. The shortage is affecting production of automaker’s most profitable cars: the Chevy Equinox, Colorado, GMC Canyon, and Terrain, Ford’s F-150, and Toyota’s Camry and Tundra.

2) The Pentagon has awarded contracts to Lockheed Martin, Northrop Grumman and General Atomics to develop an air-launch, missile-packed drone. The U.S. Defense Advanced Research Projects Agency (DARPA) handed out the contracts for Phase I design work on the LongShot unmanned air vehicle (UAV). The program is designed to use UAVs to deploy multiple air-to-air weapons. LongShot is part of the effort to allow crewed planes to launch drones from a standoff range away from enemy threats and allow the drones to close the gap and take more effective missile shots. Both the Air Force and the Navy consider that UAVs are the future in attempting to broaden their crewless arsenal both to save U.S. service person lives, and to cut costs. LongShot is likely to be designed in such a way that it can be deployed under the wing of a fighter or from the weapons bay of a bomber, which would extend its range well past whatever amount of fuel the drone is able to carry.

3) SpaceX has just crashed another test rocket, the Starship, which is designed to be 100% reusable, thus drastically dropping the cost of entering space. The Starship flew 10 kilometers up into the air, turned sideways, fell 10 kilometers back down, pivoted again to attempt a vertical landing, but failed to stick the landing. Descending too fast, it touched down more diagonal than vertical, exploding in a ball of flame on impact. However, SpaceX already has a clear solution to the problem by firing three engines in the landing burn instead of two.

4) Stock market closings for – 15 FEB 21:

Dow 31,458.40 up by 27.70
Nasdaq 14,095.47 up by 69.70
S&P 500 3,934.83 up by 18.45

10 Year Yield: up at 1.20%

Oil: up at $60.19

10 February 2021

1) Fear in American society is apparent with the soaring gun sales for this last year. Measuring, by using the Federal background checks, there have been 4.3 million checks for 2021 vs. 2.7 million for 2020. About 60% of these buyers are new buyers of guns, and about 40% are women. Sales have been so heavy that gun shops are closing because they don’t have any inventory, with people buying two and three guns at a time. The high sales are driven by fear of social unrest, rioting in major cities across the country lasting weeks on end, and fears of suppression of gun ownership by the new administration. Also, people don’t feel they can rely or trust the police to protect them anymore. Additionally, ammunition of all types has been sold out across the land.

2) The global microchip shortage for automobiles continues to spread with the next victim being Ford’s most profitable truck, the F-150 pickup. Many companies have scaled back car production because of the computer chip shortage. Ford is temporarily cutting the number of shifts in its truck production plants in half. Microchip shortages has Volkswagen production limited, and Honda and GM have also had to cut back. Nissan and Toyota have had to slow their truck production lines as well. Ford has already limited production of other models, the Escapes and Lincoln Corsairs. Modern cars have computer systems for almost every component these days, from digital speedometers to vital vehicle functions like controlling emissions and emergency brake systems. The microchip shortages isn’t confined to automobiles with manufactures of telephones, computers, appliances and home entertainment systems feeling the pinch too.

3) Unemployment agencies across the country were flooded with so many claims during the pandemic that many struggled to distinguish the correct from the criminal. Some Americans are receiving tax forms saying they owe money on unemployment benefits they never received. This is an indication of the extent of identity theft in the nation’s state run unemployment systems. Unemployment benefits are taxable, so government agencies must send a tax form to people who received them, and some Americans are receiving tax forms saying they owe money on unemployment benefits they never received. State run unemployment offices are lucrative targets for fraud particularly when the agencies are swamped with applications and not having the time and resources to check. This signals that someone has likely stole personal information and used it to claim benefits, but that data may later be used to steal an identity for more fraud. Nearly 26 million people requested unemployment aid in the initial months after states began ordering shutdowns due to the pandemic.

4) Stock market closings for – 9 DEB 21:

Dow 31,375.83 down by 9.93
Nasdaq 14,007.70 up by 20.06
S&P 500 3,911.23 down by 4.36

10 Year Yield: down at 1.16%

Oil: up at $58.39

26 July 2019

1) Tesla, the manufacture of all-electric automobiles, has suffered a worse than expected loss. Additionally, there has been another major management shakeup, all of which is casting doubts on the future of the unique automaker. While Tesla delivered a record number of cars in its second quarter, its stock dropped 14% with a loss of $1.12 per share. Nevertheless, Tesla has opened twenty-five new stores and service centers.

2) Concerns grow that the trade tensions may be pushing U.S. economic growth downwards. Fears that the gross domestic product figures due out this Friday will show business investment has weakened. Additional factors stem from slow global growth and falling oil prices. The gains in jobs and wages are preventing growth from sinking. It’s anticipated that the Federal Reserve will lower interest rates by a quarter point to check softening of the economy.

3) Nissan, the world automobile manufacture, has announced the layoff of 12,500 employees worldwide, or about 10% of its work force. Nissan is striving to rein in the costs increases incurred during the former CEO Carlos Ghosn tenure and alleged financial misconduct. Japan’s number two automaker has suffered a collapse in its quarterly profits, a result of sluggish sales and rising cost. This is another indication of the world’s depressed auto market with other renowned automakers like Ford suffering similar major financial problems.

4) Stock market closings for – 25 JUL 19:

Dow             27,140.98    down    128.99
Nasdaq          8,238.54    down      82.96
S&P 500         3,003.67    down      15.89

10 Year Yield:    up   at    2.07%

Oil:    down   at    $55.91