16 August 2019

1) Retail giant Walmart reported a strong second quarter and raised its earnings expectations for the year. This news eases concerns about consumer demand dropping because of the trade war with China. Shoppers spent more at stores and websites, indicating the consumer economy has not lost steam. Walmart posted a 20 quarter or five years of growth unmatched by any other retailer. The retailer gets 56% of its revenues from grocery sales, so it is less vulnerable to tariffs.

2) In July, American’s spent more at retail stores and restaurants, indicating the economic growth remains healthy, despite fears of a coming global economic slowdown and possible recession. Despite such fears, consumer confidence remains steady. Most economists are not forecasting a recession, because consumer spending and the job market remains strong.

3) Saudi Arabia is ramping up its oil exports to China, with crude shipments doubled over the last year, while its oil exports to America have dropped by nearly two thirds. This shift has occurred in part from oil embargo on Iran, which has caused Asian importers to shift away from Iran to other sources, aided by U.S. growing independence of any oil imports. The U.S. is becoming the worlds largest producer of oil.

4) Stock market closings for – 15 AUG 19:

Dow            25,579.39         up    99.97
Nasdaq         7,766.62    down      7.32
S&P 500        2,847.60          up      7.00

10 Year Yield:     down   at    1.53%

Oil:     up   at    $54.70

7 June 2019

1) Years of slow economic progress, where the South nearly reach equality with northen and western neighbors, has reversed. Since 2009, the South’s growth in output and wages has slowed so the South is now receding compared with the rest of America. The twin forces of automation and globalization have wiped out millions of factory jobs where the lower wages and taxes were instrumental in the South drawing those businesses. The net result is the South’s economy is falling behind.

2) The discount retailer chain Costco announced they will be raising prices, stating the tariffs on China as the reason. Costco joins other retailers such as Walmart, Target and Macy in having to raise prices to consumers. There are fears that the wave of retail store closures will further increase as consumers retract from their spending habits.

3) Presidential candidate’s promise of free college to alleviate the growing student debt problem is facing problems of implementation. Low income students need more than just free tuition for gaining a college degree, and therefore the presidential plans will aid those who least need the financial help. The tuition accounts for half or less of college expenses. Presently, student debt stands at $1.6 trillion dollar, where presently 20 to 25% of new college graduates are unemployed or underemployed.

4) Stock market closings for 10 JUN 19:

Dow            26,062.68    up    78.74
Nasdaq         7,823.17    up    81.07
S&P 500        2,886.73    up    13.39

10 Year Yield:    up   at    2.14%

Oil:    up   at    $53.42

7 June 2019

1) The outlook for retailers continues to get grimmer with earning reports shrinking. Three major retailers, Michaels, Home Group and Zales have shown a slowdown in their sales, and these companies sell very different products, indicating this slowdown is not market specific, but rather a general economic slowdown. There is an emerging trend of decline for consumer based companies despite record unemployment.

2) Job cuts soar to 46% in May, worst than last year’s May. The tech sector and retail suffer significantly, with retail cutting more jobs than any other sector. The auto segment is also suffering as a result of lower new car sales. Since the tech sector accounts for the highest paying jobs and from some of the most sought after jobs, this doesn’t bode well for America’s economic outlook.

3) The expanding trade war may result in an 1970’s style supply shock as reliable supplies of cheap imports of manufactured goods are suddenly curtailed. In the 1970’s it was the supply of cheap oil curtailed from the 1973 oil embargo that cause a drastic economic decline. A similar sharp drop in consumer and industrial goods could have the same effect to America’s economy today.

4) Stock market closings for 6 JUN 19:

Dow             25,720.66    up    181.09
Nasdaq          7,615.55    up      40.08
S&P 500         2,843.49    up      17.34

10 Year Yield:    up   at    2.12%

Oil:    up   at    $53.03

4 February 2019

1) Amazon’s retail sales was lower than expected for the fourth quarter, although their other operations kept profits up.

2) The collapse of Sears just might be the start of a retail apocalypse. As more retailers became troubled, it may signal consumerism is slumping. Even strong retailers had a lackluster Christmas, more economist are fearing a coming recession and more retailers will be in trouble if economic growth slows.

3) Brexit has already spawned economic damages. The largest EU banks are moving out or planning to move in the near future. Britain’s Pound has fallen 10% against the Euro resulting in reduced purchasing power for the British people. There are many other sectors adversely effected.

4) 1 FEB 19 Stock market closings:

Dow               25,063.89          up    64.22
Nasdaq            7,263.87      down   17.87
S&P 500           2,706.53            up     2.43

10 Year Yield:    up   at   2.69%

Oil:    up   at    $55.37

WALMART TO HIRE CLOSE TO 1,000 TRUCKERS IN 2019

ECONOMIC & FINANCE REPORT

Walmart will be hiring close to 1,000 new truck drivers in 2019. The truckers who are seasoned throughout the year, being apart of the Walmart trucking program. Walmart drivers (whom have senority) will be attaining an increase in base salary to $90,000.

In 2018 Walmart hired 1,400 truck drivers, to stream line their trucking business. Their truck driver turnover is one of the lowest in the industry and Walmart has indicated they want it to stay that way. To increase the recruits of truck drivers, Walmart has upped the ante by improving base salary, vacation days, and onboarding systems to assist their drivers better on the job,

Truck drivers shortages seems to be the main concern in 2019, data by the American Trade Association (ATA) indicates truck drivers for the past 20 years have been hovering around the 3 million to the 3.5 million drivers mark in the USA. There has been a short fall of drivers, even though freight volume has will be increasing to over 35%, within the next decade. -SB

22 January 2019

1) The new Congress may have profound future economic impact for America. New members of the Financial Services Committee includes members of the radical left of the democratic party, with very little experience in fiscal matters, but having a strong socialist agenda for reforms to the banking system. Fears for the impact are growing as these members expound on their desire to eliminate big banks in America.

2) Brexit is having an effect on British consumer spending. Reduce retail spending with retail sales falling 0.9% over concerns for consequence of Brexit uncertainty. Consumer spending had been strong during the summer of 2018.

3) Netflix is burning through its cash at a staggering rate to pay for their blockbuster original hits, having spent $3 billion dollars for productions in 2018. Their negative cash flow is expected to accelerate in 2019, but they are still adding new subscribers. All this to remain competitive with the other subscribers of Amazon, Hulu and Google with Apple, Disney and Warner Media also entering the market.

4) 18 JAN 19 Stock market closings:    China announced spending spree of America products, bumping the markets upward.

Dow                    24,706.35      up    336.25
Nasdaq                 7,157.23      up      72.77
S&P 500                2,670.71      up      34.75

10 Year Yield:    up   at   2.78%

Oil:      down   at    $53.76

SEARS SEEMS TO BE GOING THRU BANKRUPTCY………

By: Economic & Finance Report

Sears looks as if it will be staring down the eyes of bankruptcy. They have hired M-III Partners to assist in the bankruptcy filings; that is expected to be filed later this week. The end of the second week of October.

Sears has been losing money with their brick and mortar businesses in recent years, especially as e-commerce businesses such as Amazon have been profiting from online sales for a long time.

As E-commerce ramps up sales as the holiday season approaches, Sears has needed to reevaluate their business models, while at the same time waving the white flag. -SB

BERKSHIRE HATHAWAY, JP MORGAN & AMAZON SETTING UP HEALTHCARE VENTURE………

By: Economic & Finance Report

Investment, finance/banking & retail powerhouses; Berkshire Hathaway, JP Morgan Chase & Amazon, seem to be in collaboration for a new healthcare venture that is speculated to be one of a kind in the healthcare sector. The deal seems to be under wraps.

What is somewhat known is that the venture is supposed to be beneficial to their respective employee healthcare  benefits. Perhaps making healthcare cheaper for all Amazon employees per se?

The wait and see game on this venture continues……-SB

 

CVS BUYING HEALTHCARE GIANT AETNA…

By: Economic & Finance Report

Pharmacy giant CVS is buying the third biggest healthcare company, Aetna for a reported $69 billion dollar deal, which includes cash and stock options.

This deal is coming to fruition just in time as the Senate and US House Reps each passed their version of the tax reform bill, now the two versions will go into conference with negotiators from both chambers. The end bill looks like it will be touching President Trump’s desk before Christmas, for his signature into law.

Both CVS and Aetna are power houses in their respective industries and business sectors. CVS beong one of the biggest retail and pharmaceutical chains in the US and Aetna being in the top 3, in the healthcare industry. Both companies have indicated that the merger makes sense because the consumer(s) will be the ultimate winners from the deal because they will be paying a lot less and saving alot more for medical prescription drugs in the US. -SB

FUTURE of HYPER CONSUMERISM!!!!!!!!!!!

The Real Value to Society for the Youth of America is as Consumers, But What Becomes of Them if Hyper-Consumerism Declines.

By: James Lyman BSAE, BSEE, MSSM

Economic & Finance Report

I’m old enough to remember the first oil crisis of 1973, when the Arab nations tried to punish America for her support of Israel in the Seventy-Two war by cutting off oil shipments. American manufacturing was already in decline when the economic shock of oil shortages ripped through society. Suddenly, American manufacturing started crumbling away as factory after factory closed with American business losing all interest in making their money by manufacturing. The Rust Belt was born. Confronted with a growing problem of spreading unemployment and diminishing opportunity for people, the government had to come up with a new way of doing things, a new kind of economy.

The solution was deemed to be the service economy, the hyper-consumerism where people’s value in the economy and to society was as consumers working to support other consumers, who in turn worked to support more consumers. Instead of producing real material wealth as was formally done with a manufacturing based economy, America would depend almost exclusively on the multiplying effect of money being exchanged from one person to another, a basic principle taught in any introduction course of economics.

Not long ago I wrote another article titled, “Tiny House – Tiny Future” about how the millenniums were turning away from the traditional living in large houses and instead going to homes that are one tenth the traditional size, and consequently foregoing the purchasing common to the hyper-consumerism society simply because they no longer have the room to keep stuff. This I proposed was maybe a sign that hyper-consumerism was coming to an end, that it was not sustainable. With diminishing opportunities for the young, they don’t have the monies to participate in hyper-consumerism the buying of things just to be buying and having things.

Then while checking my email, I glimpsed a banner for a news story about how some of the top ten retailers where closing stores, which instantly caught my attention. Could this be another sign that hyper-consumerism was on the decline, that the much vaunted service economy we depend on is now crumbing just as manufacturing with the rust belt did? Will the millenniums and Z Generation be less able to make substantive contributions to society? I decided to check into this and here’s a parcel list of those retailers who are contracting by closing stores:

Sears & Kmart: 43 additional stores

J.C. Penney: 138 stores

Macy’s: 68 stores

Payless ShoeSource:  512 stores and counting

Radio Shack:  1,000 stores with only 70 remaining

Staples:  70 stores

CVS: 70 stores

Neiman Marcus: number not stated

Furthermore, some of the top American retailers may be declaring bankruptcy this year. No doubt, you’ve heard the recent story of how Alfred Angelo Bridal, the national bridal gown retailer, suddenly closed their doors in bankruptcy leaving hundreds of soon to be brides with nothing to wear to their nuptials but what was already in their closets. Not only that, but they would get just a fraction of their money back  and then months or years from now at that!

So what if this is portents of things to come? So what if the youth of America doesn’t have the hyper-consumerism based economy of their parents and grandparents? Well the real question is, what do they have instead? What is in line to replace it? The answer is nothing! No one in the government is working on some alternative, just like 1973 when American manufacturing was fading. It wasn’t until the shock of the oil crisis that our government gave the situation any consideration, and then it was a quicky decision with little to no real consideration (in other words talking points), and certainly no modeling of the consequences from that decision. That time, they sort of lucked out and it’s worked for several decades, but can they luck out again?

And how do I know that no consideration is being given to a possible demise of hyper-consumerism? Because you hear virtually nothing about the obsolete people problem with the displacement of workers by technology. This is a very integral part of today’s economic problems for the millenniums, in that anytime you can reduce the intellectual-skill levels required for a job, you reduce your labor cost. Displacement by technology means that millenniums are less able to make money because machines are doing the better paying work. Without money, their value as consumers diminishes so they are less able to support a hyper-consumerism based economy. Like the washing away of sand under the foundation of a house, there just comes a time when the house can no longer stand.

Without hyper-consumerism  what will become of so many of America’s youth.