23 March 2020

1) The shutting down of many of American service industries is having an effect on America’s hard pressed trucking industry. Suddenly, there are fewer hauling jobs, a result of the coronavirus control measures. There are 300,000 to 400,000 thousand truck drivers who own their trucks and don’t have much protection if rates or demand for their service falls. Trucking is often considered a leading economic indicator where the rest of the economy is heading, because 71% of the freight in America is moved by trucks. A downturn in freight being hauled indicates the economy is slumping.

2) President Trump says the U.S. may be headed for a recession for the first time in eleven years as the coronavirus cripples the world economies which in turn can pull the U.S. economy down despite it being strong. Experts anticipate America will enter a recession in the upcoming second quarter, from April through June, with a decline of 4% to 8% annual pace. The unemployment rate could zoom up to 6% from its current fifty year low of 3.5%, which would hinder a recovery. Typically, economic hard times opens the way for new technologies to displace workers as business strive for ways to reduce cost and remain profitable.

3) The Department of Labor reported a 30% increase in unemployment claims, which is one of the largest spikes in claims. This signals the start of feared layoffs in response to the coronavirus impact on the economy. As more businesses are vastly reducing or stopping operations, they have no real choice but to lay off workers in the hope of surviving the coming economic storm. America’s oil industry is facing massive layoffs with tens of thousands being laid off in the shale fields like the Permian Basin as oil prices drop to alarming lows. No longer profitable to pump out shale fields and strapped with high levels of debt, the oil companies are facing bankruptcy. Six years ago, a sharp price drop in oil cost 200,000 oil workers their jobs.

4) Stock market closings for – 20 MAR 20: The Dow had its worst month since 1931.

Dow 19,173.98 down 913.21
Nasdaq 6,879.52 down 271.06
S&P 500 2,304.92 down 104.47

10 Year Yield: down at 0.94%

Oil: down at $23.64

16 December 2019

1) The Trump administration has reached a trade deal in principle with China. Reportedly, the United States has offered to cut existing tariffs on Chinese goods by as much as 50%, while also suspending new tariffs that are scheduled to become effective on Sunday. This is a bid to secure a “Phase One” trade deal. The 50% tariff reduction would be on $375 billion dollars of Chinese goods, and $160 billion dollars in goods scheduled to become effective on the fifteenth of December.

2) The natural gas boom has fizzled because of a glut in U.S. gas with sinking profits. Hydraulic fracturing has uncorked a lucrative new source of natural gas supply, with billions of dollars poured into export terminals to ship gas to China and Europe. But the drop in gas prices has caused a bust with energy companies shutting down drilling rigs, filing for bankruptcy protection and slashing the value of shale fields. The supply of gas has far outstripped demand and the over-supply likely to remain for several more years.

3) The number of applications for unemployment jumped to more than a two year high last week, but experts don’t think this signals a coming round of layoffs. Claims are up by 49,000 for a seasonally adjusted 252,000 for the week ending the seventh of December. The previous week, claims had dropped to 203,000, which was a seven month low. In the same period, the government reported adding 266,000 new jobs to the economy.

4) Stock market closings for – 12 DEC 19:

Dow                   28,132.05    up    220.75
Nasdaq               8,717.32    up      63.27
S&P 500              3,168.57    up       26.94

10 Year Yield:    down   at    1.90%

Oil:    up   at    $59.48 +0.30