13 January 2021

1) Reports are that Biden will unveil plans to spend trillions of dollars in pandemic and economic relief money this next week. Biden is introducing several members of his economic team, after data shows the U.S. economy has lost jobs for the first time in eight months as a resurgent COVID-19 pandemic has again shuttered restaurants and other businesses. Biden is calling for raising the minimum wage to $15, and for sending out $2,000 in direct cash payments. Biden claims that economic research confirms that with today’s crisis, especially with such low interest rates, taking immediate action, even with deficit financing , is going to help the economy. Biden also say they are looking into other economic relief actions that can be taken unilaterally, including extending a pause on repayments of federal student loans.

2) US naval aircraft carrier groups still rule the seas, but both Russia and China have plans to change that as they strive to expand their blue water navies, by developing new weapons that could threaten America’s dominance. For instance, it is reported that China launched two ballistic missiles that hit a moving target ship in the South China Sea thousands of miles from their launch sites. The Russian navy conducted its third test launch of it’s hypersonic anti-ship cruise missile that was launched from a frigate. The missile reached a speed of Mach 8 before hitting a target more than 200 miles away. These tests are the latest indication that American aircraft carriers, long viewed as kings of the seas, may soon face a real threat to their existence.

3) Iran has told South Korea not to politicize the seizure of their vessel, while demanding the release of $7 billion dollars in funds frozen amid U.S. sanctions. Additionally, Iran has denied all allegations that the seizing of South Korea’s tanker and its 20-member crew amounted to hostage taking, claiming instead it was Seoul who was holding Iran’s funds hostage. The vessel was seized based on an Iranian court order for ‘environmental pollution’, however, the ship’s Busan-based operator, said there was nothing to indicate that before the seizure of the vessel that Iranian authorities were probing possible violations of environmental rules.

4) Stock market closings for – 12 JAN 21:

Dow 31,068.69 up by 60.00
Nasdaq 13,072.43 up by 36.00
S&P 500 3,801.19 up by 1.58

10 Year Yield: up at 1.14%

Oil: up at $53.38

30 November 2020

1) Dr. Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases, warns that Americans should ‘double down’ on COVID-19 precautions as we reach the final stretch before the first vaccines. Over the past two weeks, Pfizer, BioNTech, and Moderna have released promising results from their phase 3 testing of Covid-19 vaccine candidates, so now there is the light at the end of the tunnel. Test show the vaccines are 90 to 95% effective against the Covid-19 virus. But while trials give reason for hope, case numbers and deaths from this week have been more sobering with 166,272 new cases per day plus an average of about 1,200 deaths per day. Dr. Fauci warns that across the globe, people were feeling ‘covid fatigue,’, and after months of quarantine, they are becoming tired of social distancing and other public health measures.

2) An internal government analysis warns that the U.S. government stands to lose more than $400 billion dollars from the federal student loan program, approaching the size of losses incurred by banks during the subprime-mortgage crisis. The Education Department, looked at $1.37 trillion dollars in student loans held by the government at the start of the year, then concluded that students will pay back $935 billion dollars in principal and interest, but this will still leave the American taxpayers stuck for $435 billion dollars. The losses are far steeper than prior government projections. Last year the Congressional Budget Office estimated that the student-loan program would cost taxpayers $31.5 billion dollars, including administrative costs. After decades of ‘no questions asked lending’, the government has piled up a toxic debt. By comparison, private lenders lost $535 billion dollars from subprime-mortgages of the 2008 financial crisis.

3) Metals stocks are rising with shares of United States Steel leading the sector with a 21.3% gain and steelmaker Cleveland-Cliffs up 10.1%, while Aluminum Corporation of China is up 11.3%. The rise is driven by an expected resurgence of car demand in the U.S. causing a global steel price surge at the same time as the U.S. steel market is enduring acute shortages in supply. Aluminum is a metal that automakers have been known to employ as an alternative and hence why Aluminum makers are also on the rise. Currently neither U.S. Steel nor Cleveland-Cliffs are a cash-generating enterprise, while Aluminum Corporation of China has generated a cool $1 billion dollars in real cash profit over the past year.

4) Stock market closings for – 27 Nov 20:
Dow 29,910.37 up by 37.90
Nasdaq 12,205.85 up by 111.44
S&P 500 3,638.35 up by 8.70
10 Year Yield: down at 0.84%
Oil: down at $45.29