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

6 January 2020

1) The U.S. manufacturing sector contracted the most in December, more than for a decade. Order volumes crashed to a near eleven year low with factory employment falling for a fifth straight month. The index of national factory activity fell to 47.2 last month from 48.1 for November and is the lowest reading since June 2009. A value of 50 or above indicates expansion, while below is contraction.

2) The electric auto maker Tesla sold more cars in 2019 than the two previous years combined. Tesla sold 367,500 cars in 2019, although its on the low end of the 360,000 to 400,000 cars the company estimated at the beginning of 2019. Its newly opened plant in China will sell its Model 3 automobile in China thus avoiding transport and import cost. China promises to be a major increase in Tesla sales for next year.

3) Despite worries by experts expecting a decline of spending by American consumers, many consider the consumer will keep the economy humming through the next year. This Christmas shopping season appears it will set new records in spending, despite trade tensions, Washington being absorbed in impeachment and oil prices creeping up. With the economy always on the minds of voters, a good economy bodes well for incumbents with 2020 being a presidential election year.

4) Stock market closings for – 3 JAN 20:

Dow              28,634.88    down    233.92
Nasdaq            9,020.77    down       71.42
S&P 500         3,234.85    down      23.00

10 Year Yield:    down   at    1.79%

Oil:    up   at    $63.04

27 December 2019

1) The Permian Basin continues to experience difficulties producing oil, becoming increasingly gassy as drilling slows down. This undercuts profits for producers at a time when investors are demanding better returns. The region has long been plagued with a massive glut of gas which crude producers must sometimes pay to have hauled away or burn in the open air. This problem is intensifying as wells age and fewer new wells are drilled.

2) Oil prices rise to a three month high because of optimism on supply. The stage is set for the biggest monthly gain in almost a year on speculation that supplies are shrinking. Prices are up almost 12% for this month and are now higher since the mid-September high. The U.S. stockpiles have dropped 7.9 million barrels this last week, while Russia cut their crude output with a reduction of 240,000 barrels a day for December. Oil has surged about 36% for this year.

3) American retailers continue to struggle while some are actually thriving. The once giant Sears has fallen into bankruptcy having closed over 3,000 stores. Other major retailers in decline are Blockbuster Video, Radioshack, Victoria’s Secret, the Gap, JCPenny, Toys R Us and Borders Books. Retailers such as TJ Maxx, Amazon, Walmart, Target, Dollar General, Costco and Ross have flourished in the peril waters of American consumerism.

4) Stock market closings for – 26 DEC 19:

Dow                28,621.39    up    105.94
Nasdaq             9,022.39    up      69.51
S&P 500            3,239.91    up      16.53

10 Year Yield:    down   at    1.90%

Oil:    up   at     $61.68

5 December 2019

1) The oil cartel OPEC and their allies are being called on for dramatic action to avert a crash in oil prices. They are being called on to cut production of crude oil to keep oil prices high, while the world is facing a looming flood of oil from American production. If they don’t restrict production, the world faces an oversupply of about 800,000 barrels per day in the first half of 2020.

2) Businesses are under a constant threat of ransomware attacks with increasing consequences of financial loses. Every business or organization from large corporations, health care systems, universities and small businesses are at risk. These targets must use defensive methods, but those costs time, money and resources to do. The FBI estimates there are several thousand ransomware attacks each day.

3) Stock market closings for – 4 DEC 19:

Dow             27,649.78    up    146.97
Nasdaq          8,566.67    up      46.03
S&P 500         3,112.76    up      19.56

10 Year Yield:    up   at    1.78%

Oil:    up   at    $56.32

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

17 September 2019

1) The drone attacks on two Saudi oil refineries has caused a jump in world oil prices. The strikes wiped out half of Saudi Arabia’s output capacity leading to fears of de-stabilization of the world’s crude producing region and therefore to the world’s economy. Prices for oil leaped with the opening of markets on Monday, the biggest jump in prices ever. President Trump claims that Iran was behind the attacks and that a coalition should be formed to counter the threat of Iran. The strike was made using 10 drones with the disruption surpassing the Kuwaiti invasion by Saddam Hussein in 1990.

2) UAW (United Auto Workers) workers at GM (General Motors) have gone on strike which has shut down the automakers highly profitable U.S. operations. Lost production is expected to cost GM $40 to $50 million dollars a day. There are a number of issues which GM and union officials said must be resolved before a new contract can be signed. The UAW wants to block the closing of plants engaged in manufacturing of sedans, which the company and other manufactures are discontinuing as the market goes to SUVs and crossover automobiles.

3) Gold and silver prices have surged from the global turmoil of Saudi oil attacks. Gold and silver are the traditional safe haven for investors in times of uncertainty. This gives further impetus to lower the interest rates by a quarter point to counter a slide into a recession.

4) Stock market closings for – 16 SEP 19:

Dow            27,076.82    down    142.70
Nasdaq        8,153.54    down      23.17
S&P 500       2,997.96    down        9.43

10 Year Yield:    down   at    1.84%

Oil:    down   at    $61.90

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

26 June 2019

1) President Trump’s tax cuts could be undone a little at a time. Unlikely to repel his tax cuts directly, the Democrats could slowly undo them by an ‘end-run’ with new or other tax increases. The house Democrats have a package of tax legislation to be debated Thursday which proposes changes to the estate tax which would make it apply to more people sooner and making small increases to the corporate tax rate. Also, there are proposals to raise the tax rate to 70% for those earning over a million dollars.

2) Caesars Entertainment, who’s ownership includes the famous Caesars Palace in Las Vegas, is being bought by Eldorado Resorts for about $8.5 billion dollars in cash and stock. The plan is to build up their size to compete with larger companies such as Las Vegas Sands and Wynn Resorts. Caesars Entertainment owns and operates 34 properties in nine states and three continents.

3) Shale oil producing companies are pumping lots of oil, but are making little money. The process of fracking is an expensive procedure which requires high oil prices to be viable. As oil prices have sagged over the last couple of years, the margins have narrowed, forcing shale oil companies to more tightly control their expenses, including making extensive cuts in their labor force. Many of the older wells are failing to met expectations for production and oil companies have fewer future drilling locations than they anticipated. Shale oil wells initially produce a lot of oil and gas, but quickly taper off, so more money must be spent to coax the oil out of the rock, thus narrowing the margins.

4) Stock market closings for- 24 JUN 19:

Dow             26,727.54        up       8.41
Nasdaq         8,005.70    down    26.01
S&P 500        2,945.35    down      5.11

10 Year Yield:    down   at    2.02%

Oil:    down   a   t $57.79

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

15 May 2019

1) Tensions increase in U.S. – China trade war with increasing fears that the war could be long and painful. In response to China’s new tariffs on $60 billion dollars President Trump is threatening to impose additional tariffs on $300 billion dollars worth of imports. While just a couple of weeks ago, it seemed that China and America were close to reaching an agreement, now it seems both sides have dug in their heels.

2) One military contractor is reportedly making 9,400% profit on a replacement part, a half-inch drive pin. This part should have cost $46 but the government is being charged $4,361 each. Legislation is being considered that would give contracting officers the power to demand data that would back-up billings.

3) Tensions are increasing in the middle east with Saudi Arabia claims of a terrorist drone attacks on pipeline pumping stations. The reports caused a surged in oil prices with fears of possible oil shortages if attacks on Saudi’s oil production continue.

4) 14 MAY 19 Stock market closings:

Dow            25,532.05    up    207.06
Nasdaq         7,734.49    up      87.47
S&P 500        2,834.41    up      22.54

10 Year Yield:    up   at    2.42%

Oil:    down   at    $61.32