21 July 2020

1) Another major U.S. airline, Southwest Airlines, is facing reduction in staff as the airline business continues to contract with little expectation of returning to its pre-corona days of business. About 24% of Southwest pilots and 33% of flight attendants have agreed to early retirement or long term leaves of absence. This accounts for about 4,400 employees who have decided to leave permanently with another 12,500 for extended emergency time off. Southwest is trying to avoid its first involuntary job cuts in its 49 year history. The company says that passenger numbers will have to triple by year end to eliminate the need for layoffs. There is growing evidence that the airline business is fundamentally changing.

2) The freight truck company TuSimple is building the world’s first network of self driving delivery trucks by 2024. The autonomous semi truck-trailers will operate across the America. TuSimple has partnered with UPS, Penske Truck Leasing, US Xpress and McLane for this autonomous freight network project. TuSimple is creating digital routes, terminals and a monitoring system in three phases that tracks its truck. Phase I is until end of 2021 to bring autonomous trucking services to Phoenix and Tucson in Arizona, plus El Paso, Dallas, Houston and San Antonio in Texas. Phase II, from 2022 till 2023, will expand the network coast to coast with a line from Los Angeles to Jacksonville in Florida. Finally, phase III between 2023 and 2024, will expand service nation wide to 48 states.

3) Both automakers GM and Ford have lost 27% of their market value this year, while electric car maker Tesla continues its unbelievable rise in the market. The reasons for the decline are different for the two companies. Ford sales relied too heavily on the F-150. While GM continues to sell more cars in the U.S. and worldwide, it’s hammered by the pandemic and failure in China, the world’s largest car market.

4) Stock market closings for – 20 JUL 20:

Dow 26,680.87 up 8.92 %
Nasdaq 10,767.09 up 263.90
S&P 500 3,251.84 up 27.11

10 Year Yield: down at 0.62%

Oil: up at $40.70

20 July 2020

1) The international British Airways has announced they are retiring their entire fleet of Boeing 747 jets, a direct result of the Convid-19 crisis. Once one of the biggest airlines using the iconic jumbo jet, the contraction of the airline industry and the likelihood that air travel will not return to its previous size is forcing all airlines to abandon their jumbo jets early. They are going to the more modern fuel efficient Airbus A350 and Boeing 787 in their place. British Airways now has 31 Boeing 747s, about 10% of its total fleet, with an average age of 23 years.

2) What appears to be a massive attempt to embezzle monies from the general public has come to light with the social media Twitter confirming that 130 accounts were targeted in a hack. The accounts of a handful of prominent users were compromised that allowed criminals to gain access to prominent users such as Joe Biden, Barack Obama, Elon Musk, Bill Gates and Kanye West to post solicitations for money. The attackers were able to gain control of accounts then send Tweets from those accounts asking to send money via Bitcoin to commit cryptocurrency fraud. Wire fraud is a federal felony crime, so the FBI immediately began an investigation of who and how the fraud was perpetrated.

3) Delta Airlines is proposing a 15% cut to minimum pay for pilots to avoid furloughs for a year. This would have to come after the first of October when federal aid terms expire. This is in view that a quick recovery in air travel is becoming increasingly remote because of the rise in new coronavirus cases. More than 60,000 airline employees across several carriers have been warned that their jobs are at risk, including more than 2,500 of Delta’s 14,000 pilots. As financial losses pile up, employees are urge to take early retirements, buyouts and other forms of leave in a attempt to slash cost as financial losses pile up. So far, more than 1,700 pilots have signed up for early retirements. This is just another indicator how the air travel business is probably fundamentally changing.

4) Stock market closings for – 17 JUL 20:

Dow 26,671.95 down 62.76
Nasdaq 10,503.19 up 29.36
S&P 500 3,224.73 up 9.16

Year Yield: up at 0.63%

Oil: down at $40.57

30 June 2020

1) The Boeing Aircraft Co. has started it re-certification process for the 737 MAX with the take off of a test aircraft for the first flight. An FAA (Federal Aviation Administration) pilot was on board as test flights begin, to determine if the aircraft is safe for flying with passengers. The first flight test is to fly maneuvers for about three hours, the test craft being fitted with a number of instruments and monitoring equipment to test and record how the aircraft performs. Test include the ‘wind-up turn’ which is a steep turn that essentially approaches a stall, with wings almost at 90 degrees of bank. This maneuver should trigger the Boeing software system that played a role in both crashes, which caused the aircraft design to be grounded. The software caused the aircraft’s nose to be repeatedly pointed downward at the ground until pilots lost control. These certification flights are expected to take approximately three days, and while they are an important milestone, there remains a number of key tasks to be completed.

2) According to the Bureau of Labor Statistics, 47.2% of American adults are now jobless, almost half the adult population. This is a direct result of losing 30 million jobs because of the coronavirus crisis. While there was an unexpected snap back in May, there are now signs of a slowdown in the labor market improvement because of fears of a Convid-19 resurgence increased these last few weeks. The massive loss of jobs is what is now dragging the economy down. Both Texas and Florida have paused plans for further reopening because of a record spike in coronavirus cases.

3) Lending institutions are pulling back sharply on their lending to U.S. consumers during the pandemic, because they can’t tell who is creditworthy anymore. There are millions of Americans out of work and behind on their debts, but many of these missed payments aren’t reflected in credit scores. This is a result of the government’s stimulus package which allows borrowers to defer their debt payments, but credit companies can’t report these late payments to credit reporting companies. For May, there were more than 100 million accounts with deferred debt payments. This is a sign of widespread financial distress.

4) Stock market closings for – 29 JUN 20:

Dow 25,595.80 up 580.25
Nasdaq 9,874.15 up 116.93
S&P 500 3,053.24 up 44.19

10 Year Yield: unchanged at 0.64%

Oil: up at $39.55

9 October 2019

1) The pizza giant Domino’s had been the darling of Wall Street, with its soaring sales, but its growth has gone stale. The company’s reported revenue and profit missed Wall Street’s forecast with its stock sagging. The same-store sales grew just 2.4% compared with last years 6.3%. Domino’s operates in 85 countries with 10,000 stores outside of the U.S., which generate half of its revenues.

2) Boeing aircraft has got its first 737 MAX order since the crashes forced grounding of all 737 MAX aircraft. Boeing’s net order tally, including cancellations, was a negative 84 for the first nine months of 2019. In addition, Southwest Airlines’ pilots union has filed a law suit against Boeing for damages caused by the prolonged grounding of its 737 MAX, claiming loss of pay to its pilot from canceled flights and seeing $115 million dollars in compensation.

3) Duke University professor Campbell Harvey, the father of the yield curve and pioneer of the economic forecasting model, says to prepare for a recession. He based his prediction on inverted curves, which happen when short term Treasury yields are higher than those with longer duration, which his research indicates the coming of a recession.

4) Stock market closings for – 8 OCT 19:

Dow                     26,164.04    down    313.98
Nasdaq                  7,823.78    down    132.52
S&P 500                 2,893.06    down      45.73

10 Year Yield:    down   at    1.54%

Oil:    down   at    $52.57

18 March 2019

1) A second crash of a new Boeing 737 MAX 8 airliner, in just months, is raising doubts about its safety. Speaker Pelosi is calling on Boeing to ground all 737 MAX 8 airliners. The airliner was one in Ethiopia’s airline fleet, which like the first one, crashed just after takeoff killing all onboard. Reportedly, one of the Ethiopian pilots had only 200 hours experience, while American pilots typically average about 1,500 hours. In America 200 hours is only enough to qualify for a commercial license, but doesn’t allow a pilot to fly aircraft over 12,500 pounds (airliners). General rule – that at 300 hours a pilot is considered most dangerous and overconfident, and so gets into trouble, but doesn’t have the experience to get out of trouble.

2) The sudden questions of the Boeing’s 737 MAX 8 airlines caused Boeing’s stock to drop 9%. But even with a 9% drop in Boeing stock, the rise in tech stocks pushed the overall stock markets up.

3) Facebook is facing ever increasing series of problems starting with Senator Elizabeth Warren’s proposal to break up the company, then came Facebook’s longest outage of network and services. Followed by news of a criminal investigation into data agreements with other companies, then two of Facebook’s top executives left the company. Finally, the live movies of the New Zealand’s shooting massacre focusing the growing problem of hate on social media.

4) 15 MAR 19 Stock market closings:

Dow           25,848.87    up    138.93
Nasdaq       7,688.53    up      57.62
S&P 500      2,822.48    up      14.00

10 Year Yield:    down   at    2.59%

Oil:    down   at    $58.39