28 October 2019

1) The telecommunications giant AT&T is making its belated entry into the streaming video business to compete with Netflix, Apple and Disney. AT&T plans to reach about 80 million subscribers globally, 50 million in the United States by 2025. HBO Max is expanding its customer base into the streaming market through AT&T wireless. AT&T also owns the satellite service DirecTV.

2) The UAW (United Auto Workers) has approved a new contract with GM (General Motors) which ends the six week strike. GM is calling back technicians to prepare the plants to resume production, with production resuming as early as Monday at some plants. The new contract gives workers a series of wage increases and a path for temporary workers to become permanent employees. Permanent workers can earn as much as $32 an hour.

3) The U.S. government has ended its 2019 fiscal year with the largest deficit since 2012. Gains in tax receipts were offset by higher spending and growing debt service payments. The budget deficit has widened to $984 billion dollars, which was 4.6% of the nation’s gross domestic product. Last years deficit was $779 billion dollars and 3.8% of the GDP. Defense, healthcare and social security programs are a major source for driving the deficit, with worries that these expenditures will not be sustainable.

4) Stock market closings for – 25 OCT 19:

Dow             26,958.06    up    152.53
Nasdaq          8,243.12    up      57.32
S&P 500         3,022.55    up      12.26

10 Year Yield:    up   at    1.80%

Oil:    up   at   $56.63

17 October 2019

1) GM (General Motors) and UAW (United Auto Workers) have reached a tentative agreement to end the month old strike of auto workers. This agreement doesn’t bring an immediate end to the strike, because the workers must vote on the agreement first, which means the picket lines will remain in place for at least the next few days.

 2) Weak retail sales figures are casting gloom over the future of the economy. The retail sales for America fell for the first time in seven months in September, on top of the weakness in manufacturing bringing fears of a weakening economy spreading. This is in addition to moderate job growth and weak service sector activity. This all opens the door for the Federal Reserve to cut interest rates again later this month. Consumer spending accounts for more than two-thirds of the economy, so any slowdown in this area indicates a general slow down of the economy.

3) The FCC (Federal Communications Commission) has given the go ahead for the merger of T-Mobile and Sprint. The vote was split along party lines. This merger combines the third and fourth largest U.S. wireless carriers and has been in the process for approval since April of 2018.

4) Stock market closings for – 16 OCT 19:

Dow              27,001.98    down    22.82
Nasdaq          8,124.18    down    24.52
S&P 500         2,989.69    down       5.99

10 Year Yield:    down   at    1.75%

Oil:    up   at    $52.97

15 October 2019

1) There are fears that the manufacturing segment is in trouble and may contract for the third straight month. This in turn could drag down the U.S. GDP (Gross Domestic Product) in the third and fourth quarters. Three factors are causing this down turn- the trade war with China, the GM (General Motors) strike and Boeing’s 737 MAX problems stopping deliveries and slowing production.

2) In the recent past, the online retailer giant Amazon has been unable to compete with traditional retailers when selling single items costing less than a few dollars, because the shipping cost is more than the single item cost such as toothpaste, deodorant or a simple brush. Customers had to buy these items as add-ons to make the $25 minimum for free shipping. But these items are now available for free shipping with Amazon’s Prime shipping. This could make for a significant challenge to other retailers such as Walmart, Target and CVS.

3) GM is attempting to end the month long strike of the UAW (United Auto Workers) by making direct appeal to the workers. The company has lost more than a $1 billion dollars so far, and is making several promises to the workers trying to circumvent the union’s leadership. The UAW has increased strike pay from $250 to $275 per week with union members allowed to hold other jobs as long as it doesn’t interfere with their picket duty.

4) Stock market closings for – 14 OCT 19:

Dow            26,787.36    down    29.23
Nasdaq         8,048.65    down      8.39
S&P 500        2,966.15    down       4.12

10 Year Yield:    down   at    1.73%

Oil:    down   at    $53.50

8 October 2019

1) GE (General Electric) announced they will freeze pensions for about 20,000 salaried U.S. employees in order to help the ailing conglomerate cut debt and reduce its retirement fund by $8 billion dollars. Presently, the company has $105.8 billion dollar debt. Their pension plans are among it biggest liabilities and is underfunded by about $27 billion dollars. This move will not effect present retirees who are collecting their pensions.

2) Twenty-one days into the strike, the UAW (United Auto Workers) and GM (General Motors) contract talks have taken a turn for the worse. The snag is product commitments for U.S. factories for new vehicles, engines, transmissions and other items represented by the union. GM is losing $80 million dollars a day, while striking workers are earning about one fifth their regular pay as $260 a month strike benefits.

3) The U.S. railroads slump is getting worse from the slowdown as manufacturing threatens U.S. economy. Trucking is also feeling a slowdown with less than truckload cargos decreasing, although long haul trucking seems to be holding up. Truck rates have dropped, which is pulling some freight business away from trains.

4) Stock market closings for – 7 OCT 19:

Dow                26,478.02    down    95.70
Nasdaq             7,956.29    down    26.18
S&P 500            2,938.79    down     13.22

10 Year Yield:    up   at    1.55%

Oil:    down   at    $52.80

30 September 2019

1) The White House is considering putting limits on U.S. investment in China, which would aggravate the protracted trade dispute between the two largest economies in the world. Advisers are discussing ways to limit U.S. investors’ portfolio flows into China, including limiting all U.S. investment in China. One possible method being considered is to delist Chinese companies on the U.S. stock exchanges thereby limiting American’s exposure to the Chinese market.

2) Alexandria Ocasio-Cortex, the New York Representative, announced a comprehensive anti-poverty bill that would provide new protections for tenants, children, immigrants and other Americans who are increasingly vulnerable to the high cost of inequality. One part of the bill is a tenant rights bill which would significantly expand federal housing policy. This would include a cap on annual rent increases or rent control.

3) General Motors has reversed itself and reinstated health care benefits to its striking workers, as a result of sever criticism from politicians and social media. Normal procedure in strikes is for the cost of health care to shift from the company to the union. The strike of 49,000 GM workers has shut down 30 GM plants across the nation for nearly two weeks. The GM plant in Mexico has been forced to close due to parts shortages as a result of the strike.

4) Stock market closings for – 27 SEP 19:

Dow              26,820.25    down    70.87 
Nasdaq           7,939.63    down    91.03
S&P 500          2,961.79    down    15.83

10 Year Yield:    down   at    1.68%

Oil:    $56.18

18 September 2019

1) World oil prices dropped sharply with Saudi Arabian source saying that their oil production could be fully back on line within weeks. This is far sooner than was initially assumed by world markets. Production may be back up in as little as two to three weeks. The attacks resulted in the largest single supply disruption in half a century.

2) Economists say the GM (General Motors) strike no longer has the economic impact that they once did. They assert it will take a lengthy shutdown to make a national impact. This is a result of GM’s market share shrinking while its work force is now smaller, in part because of automation. A prolonged strike could impact the economy by disrupting the supply chain effecting other industries. GM has shifted workers health care cost to the UAW (United Auto Workers) union, increasing pressure on the union for a quick settlement.

3) There are expectations that the Federal Reserve will lower interest rates on Wednesday for the second time in two months with another likely cut later this year. The consensus is the feds will drop the interest rate by about a quarter percent in an attempt to starve off the world economic slowdown from reaching America. Job growth has slowed and the index of manufacturing activity shows contraction, increasing fears that a recession will happen in the near future.

4) Stock market closings for – 17 SEP 19:

Dow                 27,110.80    up    33.98
Nasdaq             8,186.02    up    32.47
S&P 500            3,005.70    up      7.74

10 Year Yield:    down   at    1.81%

Oil:    down   at    $58.81

17 September 2019

1) The drone attacks on two Saudi oil refineries has caused a jump in world oil prices. The strikes wiped out half of Saudi Arabia’s output capacity leading to fears of de-stabilization of the world’s crude producing region and therefore to the world’s economy. Prices for oil leaped with the opening of markets on Monday, the biggest jump in prices ever. President Trump claims that Iran was behind the attacks and that a coalition should be formed to counter the threat of Iran. The strike was made using 10 drones with the disruption surpassing the Kuwaiti invasion by Saddam Hussein in 1990.

2) UAW (United Auto Workers) workers at GM (General Motors) have gone on strike which has shut down the automakers highly profitable U.S. operations. Lost production is expected to cost GM $40 to $50 million dollars a day. There are a number of issues which GM and union officials said must be resolved before a new contract can be signed. The UAW wants to block the closing of plants engaged in manufacturing of sedans, which the company and other manufactures are discontinuing as the market goes to SUVs and crossover automobiles.

3) Gold and silver prices have surged from the global turmoil of Saudi oil attacks. Gold and silver are the traditional safe haven for investors in times of uncertainty. This gives further impetus to lower the interest rates by a quarter point to counter a slide into a recession.

4) Stock market closings for – 16 SEP 19:

Dow            27,076.82    down    142.70
Nasdaq        8,153.54    down      23.17
S&P 500       2,997.96    down        9.43

10 Year Yield:    down   at    1.84%

Oil:    down   at    $61.90

10 July 2019

1) The mega giant online retailer Amazon is facing more labor problems with a strike of Minnesota warehouse workers on the first day of Amazon’s sales extravaganza. Even though Amazon has committed to pay $15 dollar an hour to all workers, the Minnesota warehouse workers plans a six hour work stoppage on July 15, the first day of Amazon Prime Day sale.

2) Cisco Systems, a major manufacture of networking gear such as servers, announced Tuesday it will acquire Acacia Communications for $2.84 billion dollars. Acacia designs and manufactures high speed optical components and is a supplier of components to Cisco. Cisco is paying $70 per share, which is 46% above Acacia’s Monday closing price.

3) The tourist spaceflight company Virgin Galactic is going public for financing by merging with the investment firm Social Capital Hedosophia. This will infuse $800 million dollars into Virgin Galactic in exchange for 49% of the company. About 600 people have spent $250,000 for a ninety minute suborbital space flight. The company has made test flights to near space and has sent its first passenger up sixty two miles near the edge of space.

4) Stock market closings for- 9 JUL 19:

Dow                 26,783.49    down    22.65
Nasdaq              8,141.73         up     43.35
S&P 500             2,979.63        up        3.68

10 Year Yield:    up   at    2.05%

Oil:    up   at    $58.50