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

4 March 2020

1) In an emergency move the Federal Reserve has cut the interest rates by half a percent, in a effort to stem slower economic growth as a result of the coronavirus outbreak. This action was two weeks before the Fed’s scheduled meeting where business was expecting a reduction of the rate anyway, but because of the volatile stock market, it was decided to move more quickly. The announcement sent the markets into wild gyrations over fears the state of the economy is worst than feared.

2) Walmart, the retailing giant, is experimenting with a new health center. People can receive routine checkups and ongoing treatment of chronic illnesses, such as diabetes and heart disease at discount prices, with or without insurance. Services include lab work, x-rays, dental care, behavioral health counseling and eye and hearing exams. A checkup for an adult is $30, eye exam is $45 and dental exams for $25. Healthcare is 15% of the economy, and if the two test facilities prove successful, then Walmart is expected to expand the service to other stores. This service would also bring increased foot traffic to boost in-store sales.

3) The trading smartphone app Robinhood is experiencing a system wide outage on both its website and its app. Users are reporting issues on the platform, logging in and even trading. Equities, cryptocurrency and options trading are among some of the functionalities experiencing a major outage. Some users are demanding compensation for their losses during down times.

4) Stock market closings for – 3 MAR 20:

Dow 25,917.41 down 785.91
Nasdaq 8,684.09 down 268.08
S&P 500 3,003.37 down 86.86

10 Year Yield: down at 1.01%

Oil: down at $47.10

23 December 2019

1) Stock markets ended at record highs this last week, coming closer to what may well be a blockbuster year. This rally now covers four weeks, with one record closing after another, driven by easing of geopolitical worries. Trade worries have kept investors on the edge for most of 2019. The questions is, will this rally continue into next year?3) Steel maker US Steel is closing a mill near Detroit and will lay off 1,500 workers, and in addition will cut its dividend in an attempt to reverse operating losses which is forecasted for the fourth quarter. The Great Lakes Works mill, which rolls slabs into sheets of steel will close, and shift its work to three other mills. Additional cost savings measures will be implemented including a $75 million dollar reduction on capital expenditures and cutting labor cost.1) Stock markets ended at record highs this last week, coming closer to what may well be a blockbuster year. This rally now covers four weeks, with one record closing after another, driven by easing of geopolitical worries. Trade worries have kept investors on the edge for most of 2019. The questions is, will this rally continue into next year?

1) Stock markets ended at record highs this last week, coming closer to what may well be a blockbuster year. This rally now covers four weeks, with one record closing after another, driven by easing of geopolitical worries. Trade worries have kept investors on the edge for most of 2019. The questions is, will this rally continue into next year?

2) Automaker Fiat-Chrysler Automobiles is making an all out push to clear out tens of thousands of vehicles which their dealerships have not ordered, because their new data driven production strategy has swelled their inventory. The automaker is offering its most aggressive discounts since the financial crisis to sell certain 2019 models under their Dodge, Jeep and Ram brands. Their sales staff is working overtime to sell more than 70,000 unassigned cars in December to their 2,400 dealerships.

3) Steel maker US Steel is closing a mill near Detroit and will lay off 1,500 workers, and in addition will cut its dividend in an attempt to reverse operating losses which is forecasted for the fourth quarter. The Great Lakes Works mill, which rolls slabs into sheets of steel will close, and shift its work to three other mills. Additional cost savings measures will be implemented including a $75 million dollar reduction on capital expenditures and cutting labor cost.

4) Stock market closings for – 20 DEC 19:

Dow                28,455.09    up    78.13
Nasdaq             8,924.96    up    37.74
S&P 500            3,221.22    up     15.85

10 Year Yield:    up   at    1.92%

Oil:    down   at    $60.36

1) Stock markets ended at record highs this last week, coming closer to what may well be a blockbuster year. This rally now covers four weeks, with one record closing after another, driven by easing of geopolitical worries. Trade worries have kept investors on the edge for most of 2019. The questions is, will this rally continue into next year?3) Steel maker US Steel is closing a mill near Detroit and will lay off 1,500 workers, and in addition will cut its dividend in an attempt to reverse operating losses which is forecasted for the fourth quarter. The Great Lakes Works mill, which rolls slabs into sheets of steel will close, and shift its work to three other mills. Additional cost savings measures will be implemented including a $75 million dollar reduction on capital expenditures and cutting labor cost.1) Stock markets ended at record highs this last week, coming closer to what may well be a blockbuster year. This rally now covers four weeks, with one record closing after another, driven by easing of geopolitical worries. Trade worries have kept investors on the edge for most of 2019. The questions is, will this rally continue into next year?

2) Automaker Fiat-Chrysler Automobiles is making an all out push to clear out tens of thousands of vehicles which their dealerships have not ordered, because their new data driven production strategy has swelled their inventory. The automaker is offering its most aggressive discounts since the financial crisis to sell certain 2019 models under their Dodge, Jeep and Ram brands. Their sales staff is working overtime to sell more than 70,000 unassigned cars in December to their 2,400 dealerships.

3) Steel maker US Steel is closing a mill near Detroit and will lay off 1,500 workers, and in addition will cut its dividend in an attempt to reverse operating losses which is forecasted for the fourth quarter. The Great Lakes Works mill, which rolls slabs into sheets of steel will close, and shift its work to three other mills. Additional cost savings measures will be implemented including a $75 million dollar reduction on capital expenditures and cutting labor cost.

19 September 2019

1) The Federal Reserved voted for a quarter percent drop in the interest rate, bringing the ire of President Trump in a tweet, complaining the Feds lack the guts and vision to cut more. But the board surprised everyone by its divided vote, three of the members voted against a policy decision, while seven voted for it. This is considered an indication of how uncertain things are and just what the economic future holds. In response, the stock markets fell over the news of just a quarter percent rate reduction.

2) Some fear that parallels in the market signal the coming of another recession. These parallels include an inverted yield curve with the stock markets making new highs in July, followed by a correction in August, then a rally in early September. Additionally, growth is slowing. These same signs occurred in 2007 prior to sliding into a sever recession. All that is needed is a trigger such as the world oil supply.

3) As a result of the UAW (United Auto Workers) strike, GM (General Motors) announced 1,300 layoffs in their Oshawa plant in Canada. This is because GM plants in the US are shut down and unable to deliver needed parts and assemblies to the Canadian plant. This shows that the strike is spreading to other units of the automakers business.

4) Stock market closings for – 18 SEP 19:

Dow             27,147.08         up    36.28
Nasdaq          8,177.39    down      8.62
S&P 500         3,006.73          up      1.03

10 Year Yield:    down   at    1.79%

Oil:    $58.25

15 August 2019

1) Fears are growing that the world is moving towards an economic crisis, based on signs from Washington and Wall Street, starting with President Trump’s retreat from adding new tariffs. The stock market rose over the news meaning Christmas had been saved for this year’s sales. But the bond market wasn’t as optimistic, the rates dropping indicating a lack of confidence in the future economy. Called an inverted yield curve, it signals investors expect a weak growth and lower inflation over the years.

2) The troubling signals from the bond market caused the stock markets to drop, with the Dow dropping 800 points to erase all of Tuesdays gains. Worried about the state of the economy, investors are rushing to long term safe haven assets, pushing the yield on 30 year Treasury bonds to a new record low. The Cboe Volatility Index jumped to a high of 22.

3) The financial problems plaguing Boeing aircraft from the 737 MAX grounding may delay or even cancel Boeing’s next airliner design, the 797. A mid-size airplane, the aviation industry expected Boeing would go ahead with a new design, but the sever loses from the 737 MAX are now casting doubt on that happening, especially if the world economy does deteriorate. The 797 is expected to be a long range jet seating about 250 passengers. The design would make extensive use of light weight composites giving good fuel economy and range. Additionally, engineering resources are being pulled away from the 797 to work the 737 MAX problem.

4) Stock market closings for – 14 AUG 19:

Dow           25,479.42    down    800.49
Nasdaq        7,773.94    down    242.42
S&P 500       2,840.60    down      85.72

10 Year Yield:    down   at    1.58%

Oil:    down   at    $54.95

6 August 2019

1) Stock markets fell sharply over new trade war moves with the Dow dropping over 700 points and the S&P and Nasdaq also sharply dropping too. Troubles renewed with China devaluating its currency, opening at seven yuan to the U.S. dollar. In return President Trump accused China of manipulating its currency which suggests the Chinese have abandoned all hopes of resolving the trade war with America, and instead are moving in another direction for the future. Reports are that China has asked state owned companies to suspend U.S. agriculture imports. A weaker Chinese currency gives them an unfair export advantage, and so can be used as a potent weapon in the trade war.

2) Fears continue to increase over a near future recession, with bond yields giving the highest alert since 2007. The 10-year notes sank on Monday to 1.74% with fears of it sinking to a low of 1.5%. This is further pressure for the feds to further cut interest rates to starve off a recession. There are further concerns about the trade war with China that America will move to let the dollar weaken to counter China’s devaluation. Wall Street’s VIX volatility index, also know as their ‘fear gage’ rose to 21.48, its highest level since May 9, with Asian markets also plummeting.

3) Huawei, China’s manufacture of smart phones, might release a phone running the HongMeng OS by the end of the year. HongMeng OS is a competitor to Google’s Android OS, which would free Huawie paying licensing fees for other’s operating systems, allowing Huawei to undercut competition in the low end smart phone market. This is a response to President Trump’s executive order banning Google and Qualcomm from Huawei over security risks. The HongMeng OS is considered part of a long term strategy.

4) Stock market closings for – 5 AUG 19:

Dow             25,717.74    down    767.27
Nasdaq           7,726.04    down    278.03
S&P 500          2,844.74    down       87.31

10 Year Yield:     down   at    1.74%

Oil:    up   at    $55.01

22 July 2019

1) The woes of traditional American big box retailers continues with J.C. Penney seeking strategies to keep their money losing company afloat. The company is in talks with specialist on reorganizing their trouble companies debt. Dressbarn, another retailer has announced the closing of all its retail stores starting this August with the closing of 53 stores.

2) The American retiree population is running out of money too soon. Three fifths of retirees do not have any traditional pension plan. The much vaunted 401K plan for replacing retirement plans, which became popular in the last quarter of the twentieth century, is failing to provide the needed retirement income despite the soaring stock market of the last ten years. This will leave America’s young people with a massive burden who themselves are facing financial challenges with shrinking job markets and displacement by technology.

3) The renowned airline manufacture Boeing announced they are taking a $4.9 billion dollar charge in the second quarter which will wipe out all of it’s profits for that quarter. This charge is compensation to airline companies for having their aircraft grounded, resulting in loss of business and revenues. Furthermore, Boeing has cut production of their best selling product as deliveries are backed up pending acceptance of their software fix by the government.

4) Stock market closings for – 19 JUL 19:

Dow                 27,154.20    down    68.77
Nasdaq             8,146.49    down    60.75
S&P 500            2,976.61    down    18.50

10 Year Yield:    up   at    2.05%

Oil:    up   at    $55.74

24 May 2019

1) Oil prices dropped liked a brick in its worst day of trading in 2019, the result of jitters over trade with China. The price of oil serves as a barometer to the world economic outlook, with a slowing of the world economy translating into a lesser demand for oil and therefore lower oil prices. The situation is aggravated by a surprise jump in American crude stockpile, with inventories up by 4.7 million barrels. The stock market reflected the world economic situation by massive drops too.

2) Panasonic electronics is joining a growing list of firms distancing themselves from Huawei, by stopping their supplying of some electronic parts to Huawei. Companies are declining to do business with Huawei because of warnings from U.S. intelligence that Huawei presences a security risk with their new 5G technology, which will allow the Chinese military to use smart phones to gather foreign intelligence.

3) President Trump announced $16 billion dollars in farm aid to offset the losses by farmers in the ten month long trade war. Distribution of aid payments will be based on where they farm rather than what crops they till. Farmers were a key constituency that help bring victory to President Trump, and they have been the hardest hit from the trade wars with China. China used to import 60% of U.S. soy bean production.

4) 23 May 19 Stock market closings: Dow tumbles 400 points as trade war worries continue.

Dow            25,490.47     down    286.14
Nasdaq         7,628.28     down    122.56
S&P 500        2,822.24     down      34.03

10 Year Yield:    down   at    2.30%

Oil:    up   at    $58.19

21 May 19

1 ) The stock for electric auto maker Tesla fell today as the car maker faces an uphill battle to become profitable in the second half of the year. Delivery of its new cars are way down from sales forecast, with Tesla stock closing down 2.7%, the lowest in two and a half years. Additionally, Tesla may be facing severe financial consequences from a fatal crash involving their Autopilot system.

2) The fallout from Huawei being blacklisted in America has caused the stock market to fall. Huawei uses electronic components in their product line, high technology parts that can’t be procured from other vendors. The down side is these vendors have significant sales from Hauwei, which lowers their revenues.

3) The trade wars with China is threatening to close as many as 12,000 stores in America this next year. For the last two years, the closing of retail stores in America had been accelerating before the trade war started, the result of falling store traffic. Tariffs would cause price increases at a time when consumers are increasingly reluctant to spend their money. All ready, the closure of 6,400 retail stores have been announced.

4) 20 MAY 19 Stock market closings:

Dow              25,679.90    down     84.10
Nasdaq          7,702.38    down   113.91
S&P 500         2,840.23    down      19.30

Year Yield:    up   at    2.42%

Oil:   up  at  $63.30

UBER STOCK TANKED, AFTER IT’S IPO HIT THE MARKETS!!!!!!!!!!!!!!!!

By: Economic & Finance Report

Uber the rideshare tech company, its stock tanked on its first official trading day on the NYSE, Friday, May 10, 2019 will be a day of turmoil on the Uber corporate calendar. It was a horrible trading day for the mammoth ride sharing tech company.

Uber declined close to 8% during the stock market trading day. The stock plummeting so much (in which it did), is the first time any stock has come out the gates on Wall St and lost so much market share. The valuation of Uber was at $76 billion dollars, when analysts had predicted that it would be valued around $90-$100 billion dollars, well that didn’t happen. Not only that, Uber has been bleeding money and the perception is that, Uber won’t actually make any real money until the year 2024, hopefully.

Uber being one of the biggest IPO companies probably since Alibaba, Facebook and a few others. So it to falter as it did was a shocker to some and to others, not so much. Technology companies tend not to fare well in the beginning of their IPO presence. Facebook had a rocky start coming out the gates and other big tech companies before it, have gone through similar revelations.

It’s the test of time that will dictate the longevity of Uber’s existence and if they can navigate their ship in theses rough and turbulent stock market waters. -SB