10 January 2020

1) HP’s board has rejected Xerox’s $33 billion dollar takeover bid, for the same reason as Xerox’s previous offer, that the proposal significantly undervalues HP. Xerox first moved to acquire HP in November, but was rejected because HP stock holders would lose much of their value in the company. HP is a 2015 spinoff of giant Hewlett-Packard who has a market value of $300 billion dollars that dwarfs Xerox’s value of 7.7 billion dollars.

2) Mack Trucks, the manufacturer of large commercial trucks, announced plans to layoff 305 employees, which is about 13% of their payroll. After two years of high volumes of production, marked demand has dropped so the company must adapt to the lower demand. There are expectations of the truck market in America being down 30% this next year.

3) The American consumer continues to shun the traditional big department stores. Despite the monster holiday shopping season, America’s biggest department stores still lost money. This is a trend that has been in progress for several years as typified by Sears’ decline. Department stores such as JCPenny, Kohl’s and Macy’s continue to decline with dropping sales and store closings. Consumers are now going to big box stores and the internet commerce to save money, signaling a fundamental change in American consumerism.

4) Stock market closings for – 9 SEP 20:

Dow              28,956.90    up    211.81
Nasdaq           9,203.43    up      74.18
S&P 500          3,274.70    up      21.65

10 Year Yield:    down   at    1.86%

Oil:    down   at    $59.59

2 January 2020

1) The ride sharing business Uber has filed a lawsuit against California, in response to a landmark gig worker law as being unconstitutional. The new law is designed to upend gig economy companies such as Uber and Lyft. Uber claims the new law unfairly targets workers and companies in the on-demand economy, treating them differently than traditional companies. The law forces on-demand companies to reclassify their independent contractors as employees, which would break up their businesses. With Uber actively researching auto-driving cars, this point may soon become mute.

2) In the wake of continual losses despite rising postal rates, America’s postal system, as a public government run entity, may be coming to a end as early as this year. New leadership is being brought into the USPS tasked with creating a package of large structural changes intent on privatizing and selling pieces of the public service off. One proposal is that the postal service stops delivering packages, since there are already several successful businesses who are already doing that.

3) Department stores and apparel retailers continue to shrink as customers continue their migration to Amazon. For the last several years, retailers such as Sears, Macy’s and the Gap have struggled to survive and prosper by closing their retail outlets with even more closures are forecast for this next year. One additional loss of retail revenues is the lost of store credit cards.

4) Stock market closings for – 31 DEC 19:

Dow                28,538.44    up    76.30
Nasdaq            8,972.60    up     26.61
S&P 500           3,230.78    up        9.49

10 Year Yield:    up   at    1.92%

Oil:    down   at     $61.21

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

15 November 2019

1) Sears is laying off a little less than 300 people in their corporate headquarters in Hoffman Estates, Illinois and company offices in San Francisco, many being informed in a company meeting. The last round of layoffs was 250 employees in September. Restructuring plans include closing 96 more Sears and Kmart stores by February leaving about 180 stores remaining.

2) Wikipedia co-founder Jimmy Wales is starting a social networking and news sharing site as an alternative to Facebook and Twitter. Called WT:Social, it will show the newest links first instead of using algorithms to bump posts with the most comments or likes to the top. Unlike Facebook and Twitter, the service will be funded by advertising. Just a month old, and it already has 50,000 users.

3) Interest in tiny houses continues with Amazon now offering prefabs from 100 square feet up to 1,500 square feet and prices from $5,000 to over $100,000. These style of houses are becoming popular with the young just starting life who don’t have the resources to buy a conventional home. However, their small size, while more friendly to the environment, set constraints on peoples lifestyles, by limiting what they can own or the number of friends they can have over at any one time. Nevertheless, tiny house continue to grow in popularity.

4) Stock market closings for – 14 NOV 19:

Dow              27,781.96     down    1.63
Nasdaq           8,479.02     down    3.08
S&P 500          3,096.63           up    2.58

10 Year Yield:    down   at    1.82%

Oil:    down   at    $56.86

30 July 2019

1) The once high flying German Deutsche Bank has run aground rapidly slashing jobs and losing a ton of money. Stock for Germany’s biggest lender is trading at a near all time low. This is a result of poor management and failing to fully clean up its crisis era balance sheet. The banks restructuring efforts have fell short coupled with countless legal black eyes that have all contributed to the bank’s financial woes.

2) The pharmaceutical companies Pfizer and Mylan have announced they are combining to create a global powerhouse in the low price drug market. Pfizer will gain most control of the company with 57% ownership, with Mylan shareholders owning the rest. Both companies lost exclusive manufacture rights from patent expirations, that were big money makers for the companies. Mylan, is the manufacturer of the emergency treatment for allergic reactions, the EpiPen. Mylan has recently been in the news for raising the price of EpiPens by 400%.

3) J.C. Penney, the 117 year old department store chain, is at risk of being de-listed from the New York Stock Exchange. To counter its downward spiral, the company has hired advisers to explore debt restructuring. Penney has $4 billion dollars in debt coming due in the next few years, while its revenues are increasingly being lost to sales on the internet and niche brands. Revenue has fallen over the last three years. The retail giant Sears has suffered similar troubles.

4) Stock market closings for – 29 JUL 19:

Dow                 27,221.35        up   28.90
Nasdaq               8,293.33   down   36.88
S&P 500              3,020.97   down     4.89

10 Year Yield:    down   at    2.06%

Oil:    up   at    $57.13

27 May 2019

1) A second major newspaper, the Reading Eagle of Pennsylvania, has been bought out and all of its 221 employees laid off, less than a month after the same thing happened to the New Orleans Times-Picayune. It is reported that within the next five years all the major newspapers will fold up, displaced by technology, because the print media is unable to compete with newer news distribution technologies.

2) Sears, after waves of closing its traditional stores, has embarked on a new marketing strategy with the opening of its first ‘Home & Life’ stores, smaller format stores selling mainly mattresses, appliances and connected home products. Sears is pinning its future on this marketing strategy to reclaim ground from the lost of their old department stores, at a time when thousands of traditional box stores are being closed across the county.

3) The motorcycle manufacture Harley-Davidson is taking a new but risky strategy to rejuvenate its sales, by using loans to reach new riders. Their revenues had been coming from the more affluent baby boomers who are better able to purchase their product. In addition to coming out with new models, including an electric bike that target the younger generation, the company will use in-house financing to make it easier for young people to purchase their product.

4) 24 MAY 19 Stock market closings:

Dow                     25,585.69    up    95.22
Nasdaq                  7,637.01    up      8.73
S&P 500                 2,826.06    up      3.82

10 Year Yield:     up   at    2.32%

Oil:    up   at    $59.02

26 April 2019

1) Stock for the company 3M took a tumble today with a 12.9% drop, the largest drop of 3M’s stock in thirty years. Their first quarter earnings were way below projected earnings, causing 3M to take measures to shore up their operations, starting with layoffs for two thousand employees.

2) Intel corporation forecasts weak second quarter revenues, and have also reduced their full year outlook from fears for an industry wide slowdown. Their 2019 forecast of $69 billion dollars is now down from their original $71.5 billion dollars estimate.

3) Sears is closing its ‘store of the future’ after just six months. Sears spent a year renovating the 56 year store in Oak Brook Illinois, which was a prototype of Sears new marketing strategy. This closing shows Sears doesn’t have a long term plan for its survival.

4) 25 APR 19 Stock market closings:

Dow             26,462.08    down    134.97
Nasdaq         8,118.68          up      16.67
S&P 500        2,926.17     down        1.08

10 Year Yield:      up   at    2.53%

Oil:     down   at    $65.10

18 January 2019

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

10 Year Yield:    up   at    2.75%

Oil:    up   at    $52.15

19 December 2018

1) Japan has embarked on a massive military buildup to counter the growing threat of China.   They are purchasing F35’s for use on their new aircraft carrier, their first since World War II.  Japan will be buying weapons from the United States, with an initial outlay of $10 billion dollars.

2) Sears, who is in bankruptcy and is closing many stores with large numbers of layoffs, plans to give out $25 million dollars in bonuses to their top executives.

3) The stock markets have had their worst December since the Great Depression.

4) 18 DEC 18              Stock market closings:

 Dow          23,675.64         up         82.66
Nasdaq        6,783.91         up         30.18
S&P 500       2,546.16         up            0.22

10 Year Yield:       down   at      2.82%

Oil:     up    at     $46.30