1) Another indication of the contraction of the oil business is the oil services company Schlumberger who cut 21,000 jobs or about one fifth of its 105,000 global employees. This is a direct result of an expected 25% drop in the number of oil wells drilled worldwide. Revenues fell 58% from last year for north American operations. The world wide cornavirus crisis caused a massive drop in oil demand, which collapsed the price of oil.
2) Boeing aircraft is facing another trouble, this time with their older Boeing 737 jets. The FAA was warned of corrosion which could cause dual-engine failure, and has ordered inspections. The corrosion problem is a result of hundreds of aircraft now in storage that have been idled because of the drop in air travel from the virus. The order requires aircraft that have not been operated for a week or more must be inspected which will impact about 2,000 aircraft. The corrosion is in engine valves, which has caused single-engine shutdowns which resulted from engine bleed air valves being stuck open.
3) Junk bonds are back again, but are packaged in a format met to appeal to investors, avoiding their seamy 1980s era reputation. Low interest rates driven by the Federal reserve is encouraging companies to borrow, which has lead to a record $51.5 billion dollars worth of junk bonds issued in June. Junk bonds are bonds with high yields (interest rates) but having a lot higher risk. The high risk comes from companies fiscal ability to pay out the bond on maturity or dividends. In a recessionary environment awash in cheap money, a troubled company can collapse under the weight of their debt. But extensive use of junk bonds pose the same dangers of the mortgage backed securities in 2008 with massive failing of businesses pulling the already fragile economy down.
4) Stock market closings for – 24 JUL 20:
Dow 26,469.89 down 182.44 Nasdaq 10,363.18 down 98.24 S&P 500 3,215.63 down 20.03
1) The aircraft manufacturer Boeing Aircraft is discontinuing production of it’s iconic 747 jumbo jet after a fifty year run. The last 747-8 will be completed in two years. This marks the end of an era of giant airliners with Airbus also discontinuing its A380 production. The number of routes in the world which requires a jumbo jet are few, with airline companies preferring the twin engine aircraft for long range flights. The 747 made its debut in 1970, and went on to rack up 1,571 orders over its production life, a record seconded only by the wide body 777. Boeing has lost 40$ million dollars for each 747 since 2016, with production down to just 6 units a year. The last 747 for passenger service was Air Force One. With air travel curtailed by the Covid-19 crisis, air carriers don’t expect air travel to recover fully until the mid decade, so airlines are culling out aging jetliners and four engine jumbos from their fleets to limit spending.
2) With interest rates near zero, the most used tool for the Feds to stimulate a sagging economy is becoming ineffective in reversing the pandemic induced recession. Therefore, the Feds are considering using quantitative easing or large scale assets purchases. This is where the U.S. central bank buys hundreds of billions of dollars in assets, most of which are U.S. Treasury and mortgage backed securities. By taking bonds (mostly 2 and 10 year Treasuries) off the market it replaces them with cash in the system, meaning there is now more cash available for lending to consumers, businesses and municipalities.
3) The Senate is considering a bill which would punish retailers for refusing cash payments. Retailers have been pushing for electronic payments to reduce the risk of virus contamination from contact of paying cash. The objective of the bill is to prevent disenfranchise of minorities who have limited to no banking access.
4) Stock market closings for – 2 JUL 20:
Dow 25,827.36 up 92.39 Nasdaq 10,207.63 up 53.00 S&P 500 3,130.01 up 14.15
Every year there is a study of the top best stock exchanges in Africa. Last year’s (2016) study was conducted by Jamelle Cole, CFA, CPA for Relentless Investment Research.
Mr. Cole’s analysis included indicators such as trade data, historical dividends, company evaluation/information, and trading hours by their respective exchanges. Each category for each trading exchange; the highest number they could possibly accumulate was a 5.
The top 10 stock trading exchanges in Africa that made the list for 2016 (last year) in numerical order, were countries such as:
CSE (Casablanca Stock Exchange) (Morocco)
ZSE (Zimbabwe Stock Exchange) (Zimbabwe)
NSE (Nigerian Stock Exchange) (Nigeria)
LuSE (Lusaka Stock Exchange) (Zambia)
EGX (Egyptian Exchange) (Egypt)
GSE (Ghana Stock Exchange) (Ghana)
JSE (Johannesburg Stock Exchange) (South Africa)
USE (Uganda Securities Exchange) (Uganda)
BSE (Botswana Stock Exchange) (Botswana)
NSE (Namibian Stock Exchange) (Namibia)
There you have it; these are top stock and securities exchanges in Africa, for the year 2016. We shall see what the list has forthcoming in 2017…..-SB
*Study conducted by Mr. Jamelle Cole, CFA, CPA *Source: Relentless Investment Research*
If you viewers have been watching the reports of former Turing CEO Martin Shkreli, and his reported “ponzi scheme” that he has been maneuvering along securities fraud. His investors has spoken up indicating their discontent and suing him for squandering their money entirely.
On his twitter account Mr. Shkreli issued a statement indicating that the allegations brought against him by the SEC and federal prosecutors are baseless at best, and actually have no merit whatever.
Mr. Shkreli is the pharama CEO of Turing that produces drugs for HIV and Aids. He has become a villain within the past few months for raising AIDS medication Daraprim from $13.50-$750, more then 5,500% from its previous cost.
Politicians and other pharma companies, advacates and analysts have criticized Shkreli’s move in raising the price of Daraprim and he has been cast as a shrewd businessman by the international community and media.