9 September 2020

1) General Chuck Yeager, died at age 97, was remembered Monday as America’s greatest Pilot in a tweet attributed to his wife, Victoria Scott D’Angelo. After breaking the sound barrier, Yeager continued to break records and returned to combat. He was a double ace with 11.5 aircraft shot down and became an ‘ace in a day’ by shooting down 5 or more aircraft in a single day. After World War II, in 1947, he became the first man to fly faster than the speed of sound by flying the Bell X-1. In 1953 he flew more than 1,600 mph in the Bell X-1A. He also flew combat missions in both the Korean and Vietnam wars. Chuck Yeager had flown 361 different types of aircraft and flew 10,131.6 hours during his career, retiring from the Air Force in 1975.

2) With just 24 days to make a deal, the Brexit negotiators are finding the situation very gloomy for a trade deal, with talks now on a ‘knife’s edge’ again. The British and European teams are struggling to craft a free-trade agreement so the two sides can continue the orderly movement of goods and services across the English Channel. Otherwise, Britain and Europe will enforce new customs duties, tariffs, border checks, and quotas on goods, therefore increasing prices and fully ending the era of the free and frictionless trade. The major obstacle is the European access to fish in British waters, despite the fisheries accounting for just a small fraction of Britain’s gross domestic product. The Europeans are also pressing to maintain a “level playing field,” to keep Britain from undercutting worker protections or granting large state subsidies to British businesses, thus giving the U.K. firms unfair advantages.

3) Oil prices fell from a 9-month high while the dollar strengthened. Consumption in Asia remains robust, while other markets are soft or declining. Crude oil prices now look to be heavily dependent on how quickly Covid-19 vaccines can be rolled out. OPEC+ is facing more potential supply challenges, with Libya continuing to ramp up production while Iran prepares to raise oil exports with expectations that America will ease some sanctions under a Joe Biden presidency.

4) Stock market closings for – 8 DEC 20:

Dow 30,173.88 up by 104.09
Nasdaq 12,582.77 up by 62.83
S&P 500 3,702.25 up by 10.29

10 Year Yield: down at 0.91%

Oil: down at $45.60

12 November 2020

1) Biden said he’ll forgive $10,000 in student debt for all borrowers. Will it actually happen? During his campaign, Biden advocated forgiving a large portion of outstanding student loan debt. Now that Biden is the President-elect, the 42 million Americans with education loans may be wondering, will it really happen? Biden’s proposal is a scaled-down version of plans that his rivals to the left in the Democratic primary campaigned on. Sen. Elizabeth Warren, wants to cancel up to $50,000 in student debt for individuals with household incomes under $100,000, while Sen. Bernie Sanders, said he’d erase all of the country’s outstanding education debt.

2) The European Union will impose tariffs on $4 billion dollars of U.S. goods starting Tuesday. This is a tit-for-tat escalation of a transatlantic fight over illegal aid to aircraft manufacturers Boeing Co. and Airbus. The EU tariffs will be on various Boeing models of airliners with a 15% duty, as well as other goods ranging from spirits and nuts to tractors and video games, which will be subject to a 25% levy. The move comes at an awkward moment for the EU, which is contending with a surge of Covid-19 cases and its worsening recession. For the last 13 months, the EU has faced U.S. tariffs on $7.5 billion dollars of European goods after Washington won a WTO (World Trade Organization) case against market-distorting aid. In a parallel lawsuit, the EU received final WTO permission to hit $4 billion dollars of American products with duties because of unfair subsidies to Boeing.

3) EU (European Union) regulators announced antitrust charges against Amazon. The European Commission considers Amazon’s collection of non-public data on its platform is then used to benefit its own retail business because sales of third-party retailers is then used to launch Amazon’s own products and undercut its competition. This complaint is one of the most common charges against Amazon as an anti-competitive outfit. About 2.3 million third-party sellers do business on the Amazon marketplace. The EU also has a second formal investigation which has officially been opened.

4) Stock market closings for – 11 NOV 20:

Dow 29,397.63 down by 23.29
Nasdaq 11,786.43 up by 232.58
S&P 500 3,572.66 up by 27.13

10 Year Yield: down at 0.96%

Oil: down at$41.62

1 September 2020

1) In its quest to deliver packages to customers, Amazon has received FAA (Federal Aviation Administration) approval for its Amazon’s Prime Air, an aerial package delivery system using drones. This allows Amazon to operate unmanned aerial drones in the US on a trial basis. This means the aerial robots can deliver packages outside the operator’s visual line of sight. Amazon announced it’s aerial drone plans in 2013, but hardware and safety issues have been major challenges for the company, with the first successful drone delivery in 2016. The robot aircraft are helicopter like machines that can hover and fly forward powered by electricity with a range of 15 miles. They can deliver packages weighing under five pounds in 30 minutes or less.

2) United Airlines is abandoning its domestic flight change fees forever, so if you have to change your plans and need to change your flights, it no longer will cost you. Previously, a change fee cost the consumer $200 for all economy and premium cabin tickets within the U.S. Furthermore, there’s no limit on how many times you can adjust your flight for free. Additionally, customers can get same day standby for free, which had cost $75, starting on January 2021.

3) As trade relations with China worsen, large companies are pulling out of Red China. These are big name companies known to virtually everyone such as Hasbro, Nike, Apple, Google/Alphabet, Dell, HP, Samsung, LG Electronics, Stanley Black & Decker, Zoom, Intel, Old Navy/Gap, Sharp, Adidas, Puma, Kia Motors, Sony, Nintendo and Hyundia Motors as well as lesser know companies. Reasons cited are the disrupted supply chains, the ongoing US-China trade war with little resolution in the near future, tariffs on Chinese exports so companies are moving to other Asian countries to export from there under a different country name. Also fears of inadvertently using slave labor (political reeducation inmates) leaving a company embroiled in political controversy domestically, with adverse effects on their sales.

4) Stock market closings for – 31 AUG 20:

Dow 28,430.05 down 223.82
Nasdaq 11,775.46 up 79.82
S&P 500 3,500.31 down 7.70

10 Year Yield: down at 0.69%

Oil: down at $42.82

10 February 2020

1) China has announced a 50% cut in its tariffs on $75 billion dollars worth of imports from America. This is in response to last months U.S. tariff cuts on $120 billion dollars on China imports to America. This is all part of the ‘phase one’ trade deal between China and the U.S. to normalize trade between the two nations.

2) The Department of Transportation (DOT) and the National Highway Traffic Safety Administration (NHTSA) have approved a regulatory exemption for Nuro’s next generation of self driving delivery vehicles they call R2. This exemption will allow testing on public roads for deliveries to customer’s homes. The R2 is a zero occupant vehicle. After public road testing, Nuro will begin the first driverless deliveries in Houston with partners Walmar and Domino’s.

3) The internet retail giant Amazon will hire 15,000 new employees in Seattle to work in a new 43 story tower now being planned, with construction expected to be completed by 2024. Amazon now has 789,000 workers in the world, a 23% increase from a year ago. Amazon has also expanded in New York City by leasing 335,000 square feet of office space, and in northen Virginia’s Crystal City they’re building a second headquarters.

4) Stock market closings for – 6 FEB 20: All three markets set record highs as fears of coronavirus fears subside.

Dow 29,379.77 up 88.92
Nasdaq 9,572.15 up 63.47
S&P 500 3,345.78 up 11.09

10 Year Yield: unchanged at 1.64%

Oil: down at $51.09

23 January 2020

1) Present Trump has renewed his threats to impose tariffs on imported cars from Europe, citing that the European Union is even more difficult to do business with than China. His comments signals he is turning his attention to renegotiating trade deals with the bloc. Automobiles have been at the center of trade tensions for the past couple of years.

2) The millennials own just 4% of American real estate by value, much less than the 32% which baby boomers owned. This comparison is with approximately the same media age of the two groups, meaning the millennials are far behind the baby boomers economically. While millennials may close that gap in the next four years, it’s unlikely they will reach 20% ownership, still far behind the baby boomers.

3) There is a rash of retail store closings after the holiday season, due to sales slump. Fashion retailer Express is closing 91 stores, Bed Bath & Beyond is closing 60 , Schurman Retail Group is closing its Papyrus and American Greeting stores for a total of 254 locations in the next four to six weeks. Express is the latest in a serious of fashion retailers to close, part of the struggle of malls to compete in the new retail arena. Last year, retailers Forever 21 filed for bankruptcy, with Charlotte Russe and Payless ShoeSource going out of business.

4) Stock market closings for – 22 JAN 20:

Dow            29,186.27    down       9.77
Nasdaq         9,383.77          up     12.96
S&P 500        3,321.75          up       0.96

10 Year Yield:       unchanged   at    1.77%

Oil:         down   at    $56.17

17 January 2020

1) The trust funds for Social Security are in trouble and will run dry by 2035. But Social Security is not going bankrupt because the program’s primary source of revenue is payroll taxes, which at present is 12.4% of pay. So even if the trust fund should run out, Social Security still would have the money to largely keep up with benefits. A much greater danger for retirees is high inflation, for historically the first to suffer from a collapsing economy are those on fixed incomes.

2) The recently signed phase one agreement with China made for a cease-fire in the trade, but leaves the tariffs largely in place, with some considering the tariffs to be the new norm in international trade. China has committed to making $200 billion dollars in purchases from America. The agreement does not address the intellectual property issues, both the forced intellectual transfers and out right theft.

3) Claims for unemployment benefits fell more than expected last week, indicating a sustained strong labor market. Claims dropped 10,000 last week to 204,000 with the labor market remaining on a solid footing, the unemployment rate holding near a fifty year low of 3.5% for December. Layoffs were in manufacturing, transportation and warehousing.

4) Stock market closings for – 16 JAN 20:

Dow              29,297.64    up    267.42
Nasdaq          9,357.13    up      98.44
S&P 500         3,316.81    up      27.52

10 Year Yield:    up   at    1.81%

Oil:    up   at    $58.59

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

25 October 2019

1) Another wave of technology displacement is sweeping across America, with 32 stores getting rid of their cashiers and checkout lanes. For the last decade or so, there has been an increasing incident of self checkout facilities appearing in stores. Driven by Amazon’s marketing model, retailers are experimenting with ways and methods to dispense with the labor cost from check out clerks. The ‘one of a kind’ Sam’s Club Now is really an incubator to develop the technologies for automated check out systems in stores. Walmart has its Scan & Go app, Kroger its Scan Bag & Go service and fast food chains such as McDonald’s, Pizza Hut and burger King have kiosk systems for ordering.

2) California is not seeing the expected revenues for legalization of cannabis for personal use. After three years of legalization, the anticipated windfalls have failed to materialize a result of regulations and a robust black market cutting into legal sales. The legal market has produced just a fraction of what the state had anticipated, while legal growers who invested millions to cultivate the product are not seeing any profits. Growers must pay a number of fees to the government annually, which cut heavily into their profits.

3) If China signs a partial trade deal with the U.S., it will buy at least $20 billion dollars of agricultural products in a year. This would take China’s farm goods imports back to the levels of 2017, before U.S. imposed tariffs, which once removed might actually push imports up to as much as $40-$50 billion dollars a year. China has already issued waivers for 10 million tons of soybean purchases this week, and is considering an additional 4-5 million tons of grains.

4) Stock market closings for – 24 OCT 19:

Dow           26,805.53    down    28.42
Nasdaq        8,185.80          up    66.00
S&P 500       3,010.29          up      5.77

10 Year Yield:    up   at    1.77%

Oil:    up   at    $56.15

11 October 2019

1) Social Security recipients will receive a 1.6% cost of living increase in 2020, up from the average of 1.4%. This is less than the pervious two years, 2.8% for 2019 and 2.0% for 2018, but still it’s better than the zero increases of 2010, 2011 and 2016.

2) Because of a pig killing disease in China, the U.S. could see tightening supplies of pork products this next year. With China’s supply of pork decreasing, the Chinese may be forced to import significant pork supplies from the U.S. because pork is a major source of protein in the Chinese diet. This is despite the high tariffs China has imposed on U.S. pork imports. American pork exports to China will see about a 12% increase for 2019 and 13% for 2020.

3) Democratic presidential candidate Elizabeth Warren is causing concerns among businessmen with her promises to remake capitalism from the ground up. Now in the front ranks of Democratic contenders, her plans are now viewed with more concern. Warren would drastically cut back on the amount and influence of big business, push private companies from parts of the economy altogether and shift power to government and labor. The presidential contender has blamed big business for a wide range of social problems.

4) Stock market closings for – 10 OCT 19:

Dow             26,496.67    up    150.66
Nasdaq         7,950.78     up      47.04
S&P 500        2,938.13    up       18.73

10 Year Yield:    up   at    1.66%

Oil:    up   at    $53.94

4 October 2019

1) MGM Resorts has reached agreement with families of victims who were killed in the October 2017 mass shooting in Las Vegas. The settlement for the 2,500 family victims will be almost $800 million dollars with the agreement that all pending litigation against MGM will be dismissed. The shooting left 58 dead while wounding hundreds of others.

2) Soon to be implemented, tariffs will make imports more expensive for Americans, such as Scotch and Irish whiskies, Parmesan cheese and French wine. The tariffs will be on $7.5 billion dollars of European imports. Further tariffs are threaten over aircraft subsidies by the European Union, coming at a time when economies have been hurt by the US-China trade war. The World Trade Organization has ruled America can impose tariffs because the European Union has failed to abide by earlier ruling of Airbus subsidies.

3) The service-sector activity in the U.S. slowed to its weakest pace in three years this September. This is another sign that the U.S. economy may be weakening where the services sector accounts for more than two thirds of economic activity. The non-manufacturing index fell to 52.6 last month, which was the lowest reading since August 2016 and far below the 55.3 expectations.

4) Stock market closings for – 3 OCT 19:

Dow                 26,201.04    up    122.42
Nasdaq              7,872.26    up      87.02
S&P 500             2,910.63    up      23.02

10 Year Yield:    down   at    1.54%

Oil:    down   at    $52.34