1 July 2019

1) Consumer spending increased in May as well as prices creeping up too. Both point to a slowing economic growth and benign inflation pressures. These two facts gives the Federal Reserve more reason to cut interest rates next month. Inflation is under the 2% target for this year with a projected 1.5% verses 1.8% originally expected. Consumer spending is about two thirds the U.S. economy.

2) Consumerism is changing fast, with a push to ‘no cashier checkouts’. Amazon Go stores are pushing the technology where sales payment is made automatically just by picking out items and walking out the door. E-commerce and on-line shopping continue their assault on traditional brick and mortar stores. Another strategy is showrooms in place of stores that allow the customer to try out products prior to purchasing them. Finally, drone delivery allows getting your purchases at home in less time than it takes to drive to and from a store. All these new technologies are coming together with increased profits by reducing labor cost.

3) The weekly jobless claims has increased more than expected, although there is no sign of significant layoffs as the economy slows down. Unemployment claims were 227,000 up by 10,000. The economy is slowing with manufacturing sliding down and the trade deficient widening as consumer confidence ebbs.

4) Stock market closings for- 28 JUN 19: Results from bank stress test edged markets up. Best June performance since 1938.

Dow            26,599.96    up    73.38
Nasdaq         8,006.24    up    38.49
S&P 500        2,941.76    up    16.84

10 Year Yield:    down   at    2.00%

Oil:    down   at    $58.20

24 June 2019

1) Gold, which is known as a ‘panic’ investment to guard against economic collapse, is passing $1,400 an ounce for the first time since 2013. Fueled by the fears of an international economic downturn and possible military action between Iran and the U.S., coupled with the large buying of gold by China, experts say that prices could reach $1,500 to $1,600 per ounce in the next year. Gold has historically been seen as a guard against devaluation of currencies.

2) Slack, the workplace messaging software used in tech and media companies, may be breaking the grip Wall Street has on Silicon Valley. The IPO’s of tech companies have been the controlling link of Wall Street on tech companies, but Slack used direct listing of its stock instead of the traditional IPO, thus cutting Wall Street out of the equation. This means that Wall Street isn’t able to tell companies what to do in becoming a public company.

3) Automation continues to cut into the job market with these ten career fields declining because of technology. The Telemarketer jobs are down 52%, followed by File clerks down 46%, Sorters of mail at 44%, Bill collectors down 39%, Data entry 36%, Order clerks 36%, Chief executives at 35%, Production worker helpers 30%, Installation, maintenance and repair helper 30% and finally Telecommunication line installer/repairers down 30%.

4) Stock market closings for- 21 JUN 19:

Dow                    26,719.13    down    34.04
Nasdaq                 8,031.71    down    19.63
S&P 500                2,950.46    down      3.72

10 Year Yield:    up   at    2.07%

Oil:    up   at    $57.60

17 June 2019

1) Citizens of Hong Kong have started moving assets offshore amid fears of a China takeover. China’s demand to extradite criminal suspects to face trial in China is seen as a political move to be able to more tightly control the population politically, by eliminating dissidents and political opposition. People of money are also fearing that China will clamp down on moving money out of the reach of the Chinese government. This move is heightening the tensions of China and western nations.

2) As a result of its legal entanglements from lawsuits alleging Roundup herbicide is a carcinogen, Bayer AG plans to invest almost $6 billion dollars in developing new chemical products to combat weeds over the next decade. Roundup is a product inherited by Bayer in its takeover of Monsanto Co. last year, which has driven its stock down by 50%.

3) The trade war between China and U.S. is having unexpected results of other countries taking up the manufacturing slack. This runs the risk of China permanently losing market share to America as well as China failing to archive its goal of becoming the worlds top global manufacturing base. This decreases China’s chances of becoming a technologically advance and innovative economy. China’s loss of their once famed ‘low pay for unskilled labor’ is further increasing the flight of factories to other countries.

4) Stock market closings for- 14 JUN 19:

Dow               26,089.61    down    17.16
Nasdaq            7,796.66    down    40.47
S&P 500           2,886.98    down      4.66

10 Year Yield:    unchanged   at    2.09%

Oil:    unchanged   at    $52.51

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

U.S. FORMALLY CHARGES HAUWEI TECH. LTD WITH MULTIPLE BANKING & THEFT INDICTMENTS

*Image Credit: Marketwatch.com*
Economic & Finance Report

On Monday, January 28, 2019, the United States Attorney General Department, indicted Hauwei Technologies with 13 counts of banking fraud, wire transfer fraud, and violating Iranian sanctions imposed by the United States.

Hauwei Technologies Ltd. (the biggest global telecom equipment maker and provider) have been accused of misleading authorities of its relationship with subsidiary banks that had connections with Iran, as well as stealing technology trade secrets for USA companies, such as T-Mobile. The charges were filed in the state of Washington.

US authorities have accused the CFO of Hauwei, Weng Wanzhau as being the mastermind of the schemes that have played out in the federal indictment charges.

Weng & Hauwei Technologies Ltd deny the charges put forth by the US. -SB

7 December 2018

1) The arrest of a top Chinese executive of Huawei, a major Chinese high technology company, caused world markets, including the Dow, to fall.  The Dow dropped 777 points before news that the Feds planned to slow down on increasing the interest rate was announced.

2) Research finds that millennials don’t have the money to spend that previous generations had.  The assumption has been a shift in spending habits, but with a millennial male making $6,600 dollars less than 1978 men, it appears they just don’t have the disposable income.  Working women haven’t made up the difference, opening the question about the future viability of our hyper-consumerism economy.

3) The EPA is expected to rollback back emission standards allowing coal fire powerplants to operate again without having to remove the carbon dioxide from burning coal.

4) 6 DEC 18     Stock market closings:

Dow                24,947.67         down      79.40
Nasdaq             7,188.26               up      29.83
S&P 500            2,695.95          down        4.11

10 Year Yield:     down   at   2.88%

Oil:    up   at     $51.52

6 December 2018

1) President Trump continues to play hardball with China to hammer out a trade agreement more favorable and equitable to the United States.  But he did praise China for taking new measures to control addictive drugs into America.

2) Facebook finds itself under the gun for giving personal data to select users. New documents have surfaced showing that Facebook intended for these select users to have wide spread access to data in exchange for advertising on Facebook. Facebook is adamant they didn’t sell any personal data to any third parties, but nevertheless, they profited from providing data.

3) Price increases are spreading broadly through the economy, driven by tariffs and the trade war.  Furthermore, the interest rate is expected to rise again in December, which may put further pressure to raise prices.  Chinese tariffs have had a very adverse effects on American agriculture.

4) 4 DEC 18     Stock market closings:     Markets closed.

5 December 2018

1) World stock markets fell dramatically, the Dow down 800 points, a result of uncertainty about China and American trade war.  There wasn’t any signing of agreements at G20, nor has China made any public statements about resolving the conflict since then, adding to the uncertainty.  Also contributing are fears of the American economy sliding downward in the near future.

2) A recall of 12 million pounds of beef because of salmonella outbreak, has stretched across the country.  So far, there has been 240 cases of infection in 6 states.

3) New carbon taxes in France aimed at reducing global warming effects has resulted in extensive riots forcing France to back off the taxes.

4) 4 DEC 18    Stock market closings:    The stock market is like a rectal thermometer- rude and crude, but surprisingly effective in showing sickness.

Dow                           25,027.07          down       799.36
Nasdaq                        7,158.43          down       283.09
S&P 500                       2,700.06          down          90.31

10 Year Yield:     down   at    2.92%

Oil:      down   at    $52.61

4 December 2018

1) Qatar announced they are dropping out of OPEC to focus on natural gas production, which is what their oil fields mostly produce.  Being a small producer of oil, Qatar considered itself too small to be a part of OPEC, despite being a member for 57 years.

2) For the best bets in the stock market during this next 90 days of trade war truce, experts are saying to watch where China spends money in the US that best strengthens it’s position with America.  Look for such things as agriculture products like pork and grains, and big ticket machinery such as construction equipment and aircraft.

3) Walmart is buying robots, autonomous floor scrubbing machines, and will have 360 units in stores by end of January.  Walmart is already using robots which scan for ‘out of stock’ items on shelves. Both robots operate by themselves on the store floor while customers are present.

4) 3 DEC 18      Stock market closings:    Oil prices rise as Saudi Arabia and Russia agree to limit oil production.

Dow                  25,826.43    up    287.97
Nasdaq               7,441.51    up    110.98
S&P 500              2,790.37    up       30.20

10 Year Yield:     down   at    2.99%

Oil:    up   at    $53.22

3 December 2018

1) President Trump has signed USMCA, the new trade agreement with Mexico which will replace the NAFTA, the current agreement.

2) Microsoft has been awarded a $480 million dollar contract from the military to adapt their HoloLens for virtual reality training and combat.  This could mean sales of up to 100,000 units.

3) Microsoft surpassed Apple as the most valuable publicly traded company, closing with a total stock value of $851.2 billion compared to Apple’s value of $847.4 billion.  Apple’s stock dropped 20% last month.

4) 30 NOV 18    Stock market closings:    Ninety day truce of American-China trade war is expected to boost markets.

Dow                     25,538.46      up      199.62
Nasdaq                  7,330.54      up        57.45
S&P 500                 2,760.17      up        22.41

10 Year Yield:    down    at    3.01%

Oil:    down    at    $50.72