2 October 2019

1) The retailer giant Amazon is expanding into the grocery business by leasing retail space across the Los Angeles area, signing leases for more than twelve locations. This is the first step of plans to open grocery stories across the nation. Amazon job postings are looking for people to work in retail concepts for a multiple customer experiences under one roof. Stores are reportedly to be about 35,000 square feet and intended to compete with big box stores such as Walmart, Target and Kroger.

2) The Institute for Supply Management says its manufacturing index dropped to 47.8 last month, the lowest since June 2009, below the forecast 49.1. Indexes below 50 indicate a contraction in manufacturing. Manufacturing accounts for 12% of the GDP (Gross Domestic Product), so a slowdown could effect other parts of the economy. Other indicators have shown output increased over last month.

3) Oil prices record its weakest quarter since late last year as fears over a global economic slowdown overshadowed the attacks on Saudi Arabia’s oil production facilities. Brent futures are down 8.7% since the end of June, despite the peak after the attacks. The price of oil is considered an economic indicator, since demand goes down as economies slow down, making more oil available, thus causing oil prices to decline.

4) Stock market closings for – 1 OCT 19:

Dow               26,573.04    down    343.79
Nasdaq            7,908.68    down      90.65
S&P 500           2,940.25    down      36.49

10 Year Yield:    down   at    1.64%

Oil:    down   at    $53.98

22 August 2019

1) Retailers Target and Lowe’s posted second quarter sales higher than anticipated by analyst. Target’s ‘same store sales’ is up by 3.4% compared to an expected growth of 2.9%. This news boosted Target’s stock by 16%. Lowe’s also reported better than expected second quarter earning results which pushed its stock up 10%. These big box store reports help qual fears of an approaching recession.

2) The chip maker Intel announced two new chip products for the AI (Artificial Intelligence) market, processors as part of its Nervana Neural Network Processor. This chips will accelerate training and inferences drawn from AI models. This will allow AI systems to gain inferences and insights more readily. They will help AI platforms address the crush of data being generated and ensure AI enterprises make efficient use of their data, by processing it where it’s collected.

3) Boeing, the aircraft manufacturer, is incurring additional cost from its grounded 737 MAX, by hiring hundreds of temporary workers to help maintain its growing fleet of 737 MAXs that Boeing is storing until the FAA restores its certification. These temporary workers have skills such as avionics technicians, aircraft mechanics, airframe and power plant mechanics and aircraft electricians. Once the aircraft is re-certified, these technicians will be needed to upgrade the software and prepare aircraft for delivery.

4) Stock market closings for – 21 AUG 19:

Dow            26,202.73    up    240.29
Nasdaq         8,020.21    up      71.65
S&P 500        2,924.43    up       23.92

10 Year Yield:    up   at    1.58%

Oil:    up   at    $55.85

20 August 2019

1) Fears of a possible recession were dampened as stocks rose while Treaasury yields rebounded. The U.S. decision to extend a temporary reprieve to the Chinese telecom giant Huawein is credited with the change in markets. The Treasury notes appears to have broken out of the yield-curve inversion , which is a potential signal that a recession may be coming in the near future.

2) Delivery platforms like DoorDash, Uber Eats, Postmates and Grubhub have open new opportunities for America’s fast food industries. Previously, the only fast food delivered was pizza, but these new delivery services allows a wide range of foods to be delivered to customers at home or office. While it does open new opportunities for increased sales, the down side is the service could eat into restaurant’s profits and erode customer loyalty.

3) The retail giant Target, known for being the master of private label brands, is launching it’s own new food brand called ‘Good & Gather’. Due to start on the 15th of September, it will initially have 650 products, but will eventually expand to about 2,000 products, such as coffee, milk and eggs. Target describes their product line to be affordable and will replace present brands such as Simply Balanced and Archer Farms brands, while also reducing its Market Pantry line. For Target, using private label brands have been a way to boost profit margins while maintaining affordable prices. They’re a big asset in driving traffic to their stores.

4) Stock market closings for – 19 AUG 19:

Dow           26,135.79    up    249.78
Nasdaq        8,002.81    up    106.82
S&P 500       2,923.65    up      34.97

10 Year Yield:     up   at    1.60%

Oil:    down   a   t $56.08

18 June 2019

1) Traditional retail stores, who have been suffering the ravages of e-commerce, are worried about another coming blow. The new tariffs on Chinese imports, which President Trump threatens to impost, could have a disastrous effect on retailers such as Walmart and Target. These next round of tariffs will be specific to consumer goods, which these retailers sell, and will start to force price increases and so most likely will result in decline of sales revenue.

2) While President Trump has been pressing for a cut in the interest rate, the U.S. Federal Reserve is expected to defer and leave the interest rates unchanged. However, the board may possibly lay the groundwork for a rate cut later this year. While the economic outlook has become less clear, there still isn’t sufficient indication of a slow down to warrant cutting interest rates yet.

3) The Pfizer pharmaceutical company is buying Array BioPharma for $10.6 billion dollars for a price 62% above the company’s closing price this last Friday. Pfizer will gain medical technology for new drugs to treat cancer that limit or suppress the effects of chemotherapy. The drugs target a mutation that’s found across many tumor types in those patients who carry the mutation. Two of Array BioPharma drugs have been FDA approved for use in advanced melanoma. There are other drugs which are in the development pipeline.

4) Stock market closings for- 17 JUN 19:

Dow               26,112.53    up    22.92
Nasdaq             7,845.02    up    48.37
S&P 500            2,889.67    up      2.69

10 Year Yield:    down   at    2.09%

Oil:    down   at    $51.90

14 June 2019

1) Two tankers have been attacked near the Iran coast, which has caused oil prices to surge with fears that Iran may try to close the Gulf of Oman, which transports oil out of the Middle East. The choke point of the Strait of Hormuz is only 21 miles wide and handles 80% of the oil destined for Asia. Last month four other tankers were attacked near Fujairah using sabotage, which further fueled fears that Iran may become very aggressive in the region and against exports of oil.

2) With voters no longer showing a strong concern for the federal debt, the political support for reining in Federal spending and controlling the growing national debt is melting away with Republicans willing to accept a large deficit in exchange for tax cuts and Democrats making big spending promises in the 2020 campaigns. Some experts, who had once augured against the government growing debt, now say it may not be as critical a problem as they once thought.

3) The mega-retailer Target is upping the ante for e-commerce by offering same-day delivery on thousands of items for just $9.99. Using the delivery startup Shipt, which Target purchased nearly two years ago, the retailer is positioning itself to compete against Walmart and Amazon in what is becoming a ‘delivery time’ war of the major maga-retailers. The one day service will cover 65,000 items from 1,500 stores out of 1,800 stores in 47 states.

4) Stock market closings for- 13 JUN 19:

Dow               26,106.77    up    101.94
Nasdaq            7,837.13    up      44.41
S&P 500           2,891.64    up      11.80

10 Year Yield:    down   at    2.09%

Oil:    down   at    $52.11

7 June 2019

1) Years of slow economic progress, where the South nearly reach equality with northen and western neighbors, has reversed. Since 2009, the South’s growth in output and wages has slowed so the South is now receding compared with the rest of America. The twin forces of automation and globalization have wiped out millions of factory jobs where the lower wages and taxes were instrumental in the South drawing those businesses. The net result is the South’s economy is falling behind.

2) The discount retailer chain Costco announced they will be raising prices, stating the tariffs on China as the reason. Costco joins other retailers such as Walmart, Target and Macy in having to raise prices to consumers. There are fears that the wave of retail store closures will further increase as consumers retract from their spending habits.

3) Presidential candidate’s promise of free college to alleviate the growing student debt problem is facing problems of implementation. Low income students need more than just free tuition for gaining a college degree, and therefore the presidential plans will aid those who least need the financial help. The tuition accounts for half or less of college expenses. Presently, student debt stands at $1.6 trillion dollar, where presently 20 to 25% of new college graduates are unemployed or underemployed.

4) Stock market closings for 10 JUN 19:

Dow            26,062.68    up    78.74
Nasdaq         7,823.17    up    81.07
S&P 500        2,886.73    up    13.39

10 Year Yield:    up   at    2.14%

Oil:    up   at    $53.42

29 May 2019

1) Reports continue of a General Motors and Ford merger in the near future, both are in deep financial trouble. The proposed merger would make the new company the third largest in the world, behind Toyota and Volkswagen. Car sales have flattened in the U.S. and are dropping in China, which are the two largest car markets in the world. There are also questions of how successful Ford can enter the electric and hybrid car markets.

2) Amazon, the worlds largest retailer, is starting to purge many of its small vendors, and concentrate on large major brands like Lego, Procter & Gamble and Sony to better compete with the large traditional retailers such as Target and Walmart. This will be one of the biggest shifts in Amazon’s strategy since it started using independent sellers, and is scaring the daylights out of many smaller companies.

3) The prices for homes is rising at its slowest pace in six years, down 2.7% from last year’s 3%. Price gains in hot cities like San Francisco have cooled, which is causing sellers to pull in their price increases. The home and auto segments of the economy constitute one half of the U.S. economy.

4) 28 MAY 19 Stock market closings:

Dow              25,347.77    down    237.92
Nasdaq           7,607.35    down      29.66
S&P 500          2,802.39     down     23.67

10 Year Yield:    down   at    2.27%

Oil:    down   at    $59.06

29 March 2019

1) The Democrats have introduced HR1644 or ‘Save the Internet Act’ reportedly to restore their Net Neutrality Rules, although the text of the bill has not be released as yet. These FCC rules were rescinded by the Trump administration. There are rumors that the bill will lump data communications (internet) into voice (telephone) communications which will then allow the internet to be taxed. Some consider this an attempt to circumvent the Internet Tax Freedom Act of 1998, which explicitly exempted the internet from any taxation by any American government.

2) Bayer AG has lost a second trial over cancer causes by their major herbicide Roundup, resulting in a $80 billion dollar award. The jury found defect in Roundup, citing that Bayer failed to warn of product’s risk, but Bayer plans to vigorously defend Roundup in the future, and to also appeal the decision.

3) More retail stores are closing in 2019. In the first weeks of 2019, 23% more stores closed than the start of 2018. Expectations are for 5,000 stores to close in 2019, by 27 different retailers including Kohl’s, Target, Macys, Winn/Dixie and JC Penny.

4) 28 MAR 19 Stock market closings:

Dow           25,717.46    up    91.87
Nasdaq        7,669.17    up    25.79
S&P 500       2,815.44    up    10.07

10 Year Yield:    up   at    2.39%

Oil:    up   at    $59.51

29 January 2019

1) Brexit, now on going for 2 ½ years, is dividing the British people in strife, the debate impacting and dividing family relationships across the country. The web site eHarmony reports one and a half million relationships have broken up over Brexit.

2) American retail workers face mass layoffs. In addition to the traditional after Christmas layoffs of seasonal workers, many permanent workers face significant reduction in work hours per week, if not actual layoffs in retail giants such as Amazon, Target and Walmart.

3) Stocks close lower because of Caterpillar and Nvidia announcing significantly lower profits than was expected. Caterpillar was down 9% and Nvida down 13.8%, with expectations of further poor performance in 2019. Caterpillar is considered a economic bellwether, and together with the IMF, is warning of international economies slowing down faster than expected.

4) 28 JAN 19 Stock market closing:

Dow                 24,528.22    down    208.98
Nasdaq              7,085.68    down      79.18
S&P 500             2,643.85    down       20.91

10 Year Yield:     down   at    2.74%

Oil:    up   at    $52.04