11 August 2020

1) Online retailer giant Amazon is considering taking over closed department stores in some malls to use as warehouses in their distribution system. Amazon is in talks with Simon Property Group, America’s largest mall owner, to convert J.C. Penny and Sears stores into distribution hubs for package delivery. Simon malls have 63 J.C. Penny and 11 Sears stores available. With many traditional brick-and-mortar stores in collapse, such a deal would make sense for both Amazon and Simon. Amazon is looking for more space closer to where customers live to help with its one day delivery strategy, while Simon needs cash rich tenants to bolster their business.

2) A report that outlines the three potential future movies in the Star Trek franchise has been released. The movies for Star Trek follow-on’s have been in limbo since the 2016’s Star Trek Beyond. There are three potential projects being considered for possible production, including a Tarantino’s Star Trek movie. The first movie by Noah Hawley (Fargo and Legion creator) is centered on a pandemic story line using a brand new cast, but is now on pause. The second is a movie by Tarantino, of Pulp Fiction fame, as writer, but not necessary directing it. Something of a take on of a prior Star Trek episode, it would be largely an earthbound 1930’s gangster setting. The third is a far more traditional Star Trek with the recent stars Chris Pine and Zachary Quinto. The next few weeks is expected to yield the fate of the Star Trek franchise.

3) Latest job numbers show 1.8 million new jobs created last month to give a 10.2% unemployment rate. This is another coming down of the rate, a good sign for the economy. This leaves 43% unemployed of the 22 million people who lost their jobs from the pandemic, so the economy is still a long way from a full recovery. Fears are that it will be a long time before full recovery, what with the large number of small businesses that have succumb to the Covid-19 crisis with subsequent loss of jobs. The continual struggling price of oil indicates a still weak international economy.

4) Stock market closings for – 10 AUG 20:

Dow 27,791.44 up 357.96
Nasdaq 10,968.36 down 42.63
S&P 500 3,360.47 up 9.19

10 Year Yield: up at 0.57%

Oil: up at $41.99

5 May 2020

1) Apparel retailer J. Crew is filing for bankruptcy, with other struggling retailers expected to succumb this year too, big retailer names like Sears and J.C. Penny. J Crew is considered to be the first retail casualty of the pandemic with others expected to quickly follow. The pandemic has caused numerous stores to be closed, laying off hundreds of thousands of employees and losing most of their sales. The big retail stores were struggling before the virus hit, with people backing away from consumerism and now after the coronavirus shutdown, people are spending little other than for groceries and daily essentials. With further declining retail revenues, more stores will close with more layoffs. Furthermore, Americans’ appetite and ability to shop continues to decline, so it looks very dismal for a major segment of the American economy, which in turn will be a burden on other segments of the economy continually pulling the rest down.

2) The service sector of the economy is also experiencing troubles in what appears to be an emerging new economy for America. Gold’s Gym International is seeking bankruptcy protection as it struggles with debt after the prolong shutdown from the virus. With the shrinking of people’s disposable income, that is the money they have left after essential spending like food, housing and transportation, the non essential businesses of the service economy are finding it harder to survive.

3) General Electric is eliminating as many as 13,000 jobs in its jet engine business, another casualty of the coronavirus devastation to the aviation segment of the economy. With airline manufactures, such as Boeing building fewer airliners, there is less demand for new jet engines. This means a 25% reduction on GE’s aviation work force with little near future likelihood of those jobs returning, indeed if the recession deepens, more jobs may be lost. Like Boeing, GE aviation was having troubles before the virus hit.

4) Stock market closings for – 4 MAY 20:

Dow 23,749.76 up 26.07
Nasdaq 8,710.72 up 105.77
S&P 500 2,842.74 up 12.03

10 Year Yield: down at 0.64%

Oil: up at $21.33

30 January 2020

1) The Federal Reserve has left the interest rates unchanged, which was widely expected as the U.S. economy continues to grow at a slow and steady pace. So the interest rate will remain in the range of 1.5% to 1.75% , thereby encouraging more lending and home buying. Presently, those in the government don’t anticipate any changes, up or down, to the interest rate this year.

2) Founded in 1893, Sears was once the world’s largest retailer with billions of dollars in profits. Ten years ago, the giant retailer had 3,500 stores, but now Sears’ and Kmart combined have just 182 locations. Sears became the first major retailer to have an IPO (Initial Public Offering) in 1906 at $97.50 a share. Originally a mail order retailer, Sears opened its first department store in Chicago in 1928.

3) The budget deficient for the Federal government is forecast to past $1 trillion dollars in 2020 from contentious spending exceeding government income. Federal borrowing is likely to continue climbing dramatically over the next decade, reaching an un-precedent $31 trillion dollars by 2030. Some say this is a poor refection on the fiscal health of the nation.

4) Stock market closings for – 29 JAN 20:

Dow           28,734.45         up    11.60
Nasdaq        9,275.16         up      5.48
S&P 500       3,273.40    down      2.84

10 Year Yield:    down   at    1.59%

Oil:    down   at    $53.15

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