1) Monday markets opened in a steep downward spiral from sell offs, driven by the coronavirus fears, followed by the sharp drop in oil prices. The Dow dropped 2,000 points, with a massive sell off of both the S&P 500 and Nasdaq, which triggered a key market circuit breaker that halted trading for fifteen minutes. There are widespread fears over the economic impact of low oil prices, with some experts fearing oil prices down to $20 a barrel. Gold prices crossed the $1,700 dollar an ounce, hitting the highest since December 2012. The banks are hard pressed as the interest continues to sink, cutting into their margins.
2) Experts speculate that the Feds will cut the interest rate to zero in the next few months in an effort to forestall a downturn of the economy. The entire U.S. yield curve fell below 1% for the first time in history on expectations that the Federal Reserve will cut rates to zero in the next few months. Some speculate the Feds may adopt a negative rate just as some European countries have, such as Germany’s -1%.
3) While checkout-free with cashless supermarkets is now a novelty, Amazon expects this technology to spread to other retailers. Amazon has announced it plans to license its automated checkout technology to other retailers, telling of several other companies that have already signed up for the technology. The technology has been proven with cashless convenience stores across America and with Amazon’s new Go-supermarkets. The technology represents another significant step in retail automation.
4) Stock market closings for – 9 MAR 20: The stock market is like a rectal thermometer- it’s rude and crude, but surprisingly effective in showing a sick economy.
Dow 23,851.02 down 2013.76 Nasdaq 7,950.68 down 624.94 S&P 500 2,746.56 down 225.81
1) For the first time in six years, the U.S. trade deficit fell as the White House’s trade war with China curbed imports. The trade deficit dropped 1.7% to $616.8 billion dollars last year with steep decline in industrial materials and supplies, consumer goods and other goods. The trade deficit for goods with Mexico jumped to a record high of $101.8 billion dollars last year, with the European Union reaching an all time high of $177.9 billion dollars.
2) The Ford Motor Company is posting a$1.7 billion dollar loss and anticipates a weak forecast for 2020. General Motors is also reporting poor performance for 2019 and anticipates flat profits for 2020. Both Ford and GM’s troubles are in part from slaking sales in China, in particular with the economic slowdown in China from the coronavirus pandemic. The major competitor to the duet auto makers, Tesla, is suffering from the coronavirus closing of its Shanghai factory which builds its Model 3 sedans.
3) Macy’s, another major world renowned retailer, is experiencing the brick-and-mortar decline of other major traditional retailers. The chain is closing 125 of its stores, in addition to the 100 stores it has already closed, and cutting about 2,000 corporate jobs. Their strategy is to exit weaker shopping malls and focus towards opening smaller format stores in strip centers. But even with these changes, the future of Macy’s is abysmal. The company has lost market share in core categories such as apparel, as fewer shoppers take trips to malls, preferring on line shopping.
4) Stock market closings for – 5 FEB 20:
Dow 29,290.85 up 483.22 Nasdaq 9,508.68 up 40.71 S&P 500 3,334.69 up 37.10
1) The U.S. Federal Reserve elected not to raise interest rates, thereby signaling borrowing cost will most likely remain unchanged, and they expect moderate economic growth and low unemployment to continue into the presidential election year. The Feds left the benchmark overnight lending rate at its current range of 1.5% to 1.75% with 13 of the 17 fed policymakers supporting no change.
2) American consumer prices rose more than expected in November, giving credence to the Fed’s decision not to raise interest rates. The consumer price index increased 0.3% last month, in part from households paying more for gas. In the twelve months through November, the CPI (Consumer Price Index) increased 2.3% after a similar gain in October. Gasoline prices rose 1.1% after rebounding 3.7% in October.
3) China is accused of dumping cheap mattresses which is disrupting the U.S. bedding industry, in an attempt to gain a foothold in American markets. In recent years dozens of Chinese companies have been flooding the market with super low priced mattresses, selling them to retailers for as little as $18 each. In turn, the mattresses are sold under a wide range of labels at national chains, online businesses, local retailers and mattress stores. In recent years the industry has been troubled by disruption including thousands of job losses, multiple bankruptcies and hundreds of store closures. In 2018, about five million mattresses were shipped to the U.S. from China.
4) Stock market closings for – 11 DEC 19:
Dow 27,911.30 up 29.58 Nasdaq 8,654.05 up 37.87 S&P 500 3,141.63 up 9.11
1) Another wave of technology displacement is sweeping across America, with 32 stores getting rid of their cashiers and checkout lanes. For the last decade or so, there has been an increasing incident of self checkout facilities appearing in stores. Driven by Amazon’s marketing model, retailers are experimenting with ways and methods to dispense with the labor cost from check out clerks. The ‘one of a kind’ Sam’s Club Now is really an incubator to develop the technologies for automated check out systems in stores. Walmart has its Scan & Go app, Kroger its Scan Bag & Go service and fast food chains such as McDonald’s, Pizza Hut and burger King have kiosk systems for ordering.
2) California is not seeing the expected revenues for legalization of cannabis for personal use. After three years of legalization, the anticipated windfalls have failed to materialize a result of regulations and a robust black market cutting into legal sales. The legal market has produced just a fraction of what the state had anticipated, while legal growers who invested millions to cultivate the product are not seeing any profits. Growers must pay a number of fees to the government annually, which cut heavily into their profits.
3) If China signs a partial trade deal with the U.S., it will buy at least $20 billion dollars of agricultural products in a year. This would take China’s farm goods imports back to the levels of 2017, before U.S. imposed tariffs, which once removed might actually push imports up to as much as $40-$50 billion dollars a year. China has already issued waivers for 10 million tons of soybean purchases this week, and is considering an additional 4-5 million tons of grains.
4) Stock market closings for – 24 OCT 19:
Dow 26,805.53 down 28.42 Nasdaq 8,185.80 up 66.00 S&P 500 3,010.29 up 5.77
1) Many consider that it is no longer a question if the Fed will cut interest rates, but rather when. With the apparent softening of the job market, many investors firmly believe the Federal Reserve will move to cut interest rates this year possible as soon as this July. The markets bounced up on the expectation.
2) The job numbers are in for May, with job creation slowing dramatically. There were just 75,000 new jobs added to the economy, about 100,000 less than economist expected. Both March and April job numbers were lower than expected leading experts to conclude a downward trend in the American economy is beginning. There are fears that we may see a recession as early as next year.
3) The book seller Barnes & Noble has closed a deal to sell itself to Elliott Management Corp, a hedge fund based in New York. The news sent Barnes & Noble stock surging upward as much as 36%. Like many other retailers, Barnes & Noble has struggled with little success to counter the power house e-commerce giant Amazon. It’s Nook e-book device was a bust, which the company had heavily invested in. Barnes & Noble has 600 brick and mortar retail stores.
4) Stock market closings for 7 JUN 19: The Dow has had its best week since November.
Dow 25,983.94 up 263.28 Nasdaq 7,742.10 up 126.55 S&P 500 2,873.34 up 29.85
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
AMAZON (AMZN) has done it again folks!!!!!! One of the world’s largest online retailers has just bought the biggest Middle East online e-commerce retailer. Amazon has recently acquired Souq.com; the biggest ecommerce retailer in the Middle East. The company which is based in Dubai, United Emirates is the largest of its kind, in the middle east. Souq is valued at over $1 billion dollars .
Amazon has been serving customers in the Middle East for years, but wanted to expand its portfolio in the region, and they have with the purchase of Souq. It has been noted that Souq.com sells more than eight million products in the region.
Souq.com has over 3,000 employees in the Middle East and Arab countries; when the company started in Dubai, they only had five employees. Souq CEO Ronaldo Mouchawar, believed Amazon was the only choice as far as his concern, though the company had a $800 million counter offer buyout on the table; Mouchawar and his team believed Amazon was a very suitable home for Souq’s long term vision. -SB
Motif Investing has joined an exclusive alliance with J.P. Morgan. The partnership allows J.P. Morgan IPOs to be directly correlated to retail investors. This will be done through the platform contributed by Motif Investing.
Motif Investing is co founded by former Microsoft Mergers & Acquistions head honcho Hardeep Walia. Mr. Walia is also the CEO of the Motif outlet. The partnership comes at a good time in the stock market, as the stock indexes continue to rise hitting enormous highs.-SB