14 December 2020

1) Database-software giant Oracle is moving its headquarters out of California (Silicon Valley) to Austin Texas making Oracle the latest tech giant to flee California. The software company had been based in Silicon Valley since it was founded in 1977. High technology industries have a long history in Austin, with IBM, Dell Technologies, and Samsung setting up shop in the city. Depending on their job, many of Oracle employees can choose their office location, as well as continue working from home part- time or full time. This is yet another account of technology talent packing up and leaving the famous tech capital of Silicon Valley for Texas, with Austin, in particular, being a popular destination for relocation. Other tech companies like Hewlett Packard Enterprise, are moving to other cities in Texas, who is relocating their headquarters from San Jose, California to Houston.

2) The Senate has unanimously passed a stopgap funding measure Friday, to avoid a government shutdown for one week, while lawmakers work to close a deal on government funding. Friday evening President Trump then signed the spending bill into law, which keeps the government open at current funding levels. The longest government shut down was for 35 days in 2018, which was the longest-ever shutdown in modern U.S. history. The nonpartisan CBO (Congressional Budget Office) estimates tax revenue is down $2 billion in 2019 because the IRS had halted some operations during the 2018 shutdown.

3) The $908 billion dollar coronavirus relief proposal is going to be split into two packages by lawmakers. The plan will have a $160 billion dollar part that ties together the two most controversial elements, which is more money for state and local governments and protections against coronavirus-related lawsuits. The second part is $748 billion dollars including another round of Paycheck Protection Program funding for small businesses, unemployment benefits, and more money for vaccine distribution, testing and schools. Splitting off the two most controversial items makes it easier to at least pass a smaller coronavirus agreement as part of a government funding deal. Congress is quickly running out of time to cut a big deal on coronavirus relief, the bipartisan group having been negotiating for weeks, to try to finalize its bill after announcing a framework earlier this month.

4) Stock market closings for – 11 DEC 20:

Dow 30,046.37 up by 47.11
Nasdaq 12,377.87 down by 27.94
S&P 500 3,663.46 down by 4.64

10 Year Yield: down at 0.89%

Oil: down at $46.56

UBER SELLS ITS SELF-DRIVING UNIT TO AURORA….

By: Economic & Finance Report

Technology ride hailing company Uber has sold off its self-driving unit (ATG) to Aurora. Aurora is backed by investors such as Amazon. The sale is an all stock sale, which will make Aurora worth around $10 billion dollars.

ATG (Uber) will be worth around $4 billion dollars from the sale. Collectively ATG and Aurora will have a work force of over 3,000 employees worldwide. Uber sold ATG in order to focus on their core business models and focus on generating profits, which the tech giant has yet to achieve. -SB

13 November 2020

1) Joe Biden will immediately face several major problems and hard decisions upon assuming the Presidency. 1) Containment of the coronavirus that has killed close to a quarter-million Americans and shows no signs of abating. 2) Addressing the nation’s bitter political divide as the divide deepens with no apparent end. 3) Regrowing a devastated economy with millions out of work and no real relief in sight. 4) The threat of growing civil unrest and open conflict as people are pushed further out of the social economic system by technology. 5) China’s growing aggressiveness, both domestically and internationally, coupled with China’s goal to be the dominate world power by 2050, making China a tender box for world conflict. 6) Russia and Iran’s trouble making in world activities, especially in the middle east, also could mean serious military conflict problems for America and the West.

2) In September, NTT announced its plan to buy out the remaining shares in NTT Docomo, in a potentially record-breaking deal. NTT currently holds 66 percent of NTT Docomo’s shares, and its chief executive argues the buy would enhance competitiveness and growth. But 28 Japanese telecom companies, including rivals SoftBank Corp and KDDI, have sent a joint letter to the communications minister protesting the purchase. Their fears of making Docomo a wholly owned company will create a powerful force that dominates the market, so they’re challenging the $40 billion dollar NTT takeover bid. The takeover of the country’s biggest mobile carrier would prevent fair competition, therefore the opposition wants to set up measures to protect an environment of fair competition and ensure compliance and implementation. With the sale, NTT may be able to push down prices quickly, forcing competitors to follow suit.

3) China’s repression of its peoples has taken another step forward with Hong Kong’s opposition lawmakers expected to formally tender resignations in protest of the oustings of four fellow supporters of pro-democracy. Their dramatic departure removes dissent in Hong Kong.
The Chinese parliament passed a resolution allowing Hong Kong authorities to expel legislators deemed a threat to national security or for not holding allegiance to Hong Kong, and without having to go through the courts. The fate of the opposition in Hong Kong has been in doubt since the government postponed September’s legislative elections by a year, in a move which critics have said was aimed at killing the pro-democracy camp’s momentum.

4) Stock market closings for – 12 NOV 20:
Dow 29,080.17 down by 317.46
Nasdaq 11,709.59 down by 76.84
S&P 500 3,537.01 down by 35.65
10 Year Yield: down at 0.88%
Oil: down at $40.92

26 October 20

1) The renewable energy industry is possibly getting a boost from New York’s East River, which is set to become the testing ground for a technology that generates electricity from the tides by using tiny turbines. Verdant Power, a New York based marine energy technology company, is installing three small underwater turbines in the river that will generate electricity from the actions of the tide. The test system will feed power to Consolidated Edison Inc.’s grid. For years there has been other attempts to draw power from marine energy, but its adoption has been stymied by high costs and mechanical issues. The turbines use 16 foot diameter rotors which are expected to have 35 kilowatts of capacity each, about four times more than a typical U.S. residential rooftop solar system. The key to success is reducing the cost, but at 10 cents a kilowatt-hour, it’s still more than twice the cost of wind and solar power.

2) The oil giant Exxon Mobil, is still reeling from the massive oil bust, and so is now having to lay off workers after all. When the rounds of layoffs in the oil industry started last May, Exxon had no plans to lay off employees. But economic realities have force a reversal of that position, because other measures to control operating cost have not been sufficient to weather the downturn. Exxon’s market value has dropped by 66 percent from $418 billion dollars and has recently been removed from the Dow Jones Industrial index, a group of 30 key stocks that serves as a benchmark indicator of the U.S. stock market. Fears that the oil and gas industry will never recover fully from the pandemic are dismissed, the company saying that developing countries around the world will continue to rely on affordable and abundant fossil fuels for decades to power their economies. It’s projected that oil and gas will make up about 50 percent of the global energy mix by 2040, down from around 60 percent today.

3) China shows increasing aggressiveness with threats of retaliation, if U.S. arms sale to Taiwan proceed, sales worth more than a billion dollars. Failure to do so would “compel the Chinese side to fight back resolutely,” a Chinese statement said. America is selling 135 precision land attack missiles, plus associated equipment and training to Taiwan to improve its defense capabilities. Taiwan isn’t the only pacific neighbor fearing China’s belligerent stance, for Japan is planning to build a missile defense system at sea despite facing mounting costs. Japan’s Aegis Ashore systems is meant to intercept missile strikes from westward. Japanese officials are considering several proposals, including putting Aegis on platforms resembling oil rigs, or on converted merchant ships or naval vessels because of safety issues for civilians. Japan has also launched its first high technology submarine, one of a coming fleet, to protect Japan from China’s aggressive threats.

4) Stock market closings for – 23 OCT 20:

Dow 28,335.57 down 28.09
Nasdaq 11,548.28 down 42.28
S&P 500 3,465.39 down 11.90

10 Year Yield: down at 0.84%

Oil: down at $39.78

21 September 2020

1) Michael Farr of CNBC claims the problem with the U.S. economy is there are too many poor people, that the poor and middle class don’t have enough money. His contention is that until employment and wages increase, the U.S. economy will remain bogged down or worst . . . digging a deeper hole. The American economy is the world’s largest with nearly 70% driven by consumer spending. With the vast majority of consumers in the lower middle class and poor, it stands to reason that with more money in their hands, it would make for a more viable economy. He contends that until their lot is improved by having more money, the economy will remain sluggish. But as is often the case, he ignores the ‘obsolete people’ problem of machines with technology displacing those workers. The pay of people reflects the value of people to society, and as technology continues to lower their real value it makes it hard to increase their wages.

2) Wayfair, the giant on-line home furnishings retailer, has announced they are launching two new credit cards while retiring their Comenity Bank card. There will now be the Wayfair Mastercard and the new Wayfair Credit Card. These cards will have no annual fee and offer the choice of earning rewards on spending or receiving no-interest financing for up to 24 months. Wayfair is partnering with Citi Retail Services for the two credit cards.

3) Facebook, the social media giant, is searching for a director of remote work as part of its plan for a more permanent shift of working from home. The company has been making a major shift towards permanent remote work and now needs management dedicated to permanently establishing this method of work in the corporate structure. Facebook is expecting as much as half of its 48,000 workforce to be working at home in the next ten years. Several other large companies are exploring the work-at-home strategy as a way of reducing cost of labor as well as allowing a larger pool of workers to draw upon, since home workers can be thousands of miles away from the home office. There are many consequences to the economy from a large work force working at home, the first is reducing spending on automobiles and service, plus sales of clothing.

4) Stock market closings for – 18 SEP 20:

Dow 27,657.42 down 244.56
Nasdaq 10,793.28 down 117.00
S&P 500 3,319.47 down 37.54

10 Year Yield: up at 0.69%

Oil: up at $40.98

2 September 2020

1) Five American companies make up 24% of the S&P 500 Index, the big high tech companies Apple, Amazon, Microsoft, Facebook and Alphabet. These five companies made up 17% of the index at the start of the year. This makes a significant part of American net worth and security for retirement dependent on just a handful of stocks, which makes some financial advisers nervous having their eggs in too few baskets. One hiccup in the technology sector could mean major losses across the board.

2) Another shooting of a young black man Monday in South Los Angeles has sparked more protest that could lead to more city rioting. The man was stopped for violating vehicle codes, but then ran, with the police in hot pursuit. When police caught up with him, he punched one policeman in the face at which time a semiautomatic pistol dropped out causing both policemen to open fired. Since the victim didn’t have the weapon in hand, nor was it ever pointed at either police officers, so there are questions about the shooting. So far, protests have been peaceful.

3) The U.S. Justice Department is investigating the protest leaders and their funding in Portland and other cities for possible criminal activity. With riots and civil unrest now at a hundred days, and significant monetary loses have been occurred, questions are being raised about who is behind the well organized protesters seemingly intent on violent confrontation. Of especial interest is the loosely organized far left Antifa and the Black Lives Matter, and who is ultimately controlling their operations through funding and why.

4) Stock market closings for – 1 SEP 20:

Dow 28,645.66 up 215.61
Nasdaq 11,939.67 up 164.21
S&P 500 3,526.65 up 26.34

10 Year Yield: down at 0.67%

Oil: up at $43.01

MICROSOFT TALK HEATS UP IN PURCHASING TIK TOK APP!!!!!!!!!!!!

By: Economic & Finance Report

Say it ain’t so….. Well there is a lot of chit chat and jibber jabber that Mr. or Ms. Internet Explorer (however you want to look at it); Microsoft Inc is exploring acquiring the famous social media app Tik Tok from China based ByteDance.

Talks began as the White House and President Trump are seriously considering banning the mega app, for US national security protocols and reasons. Analysts have indicated that Microsoft buying Tik Tok would be beneficial to the software conglomerate; allowing it to enter the social media space which Microsoft has dabbled in the past.

Experts have indicated that Tik Tok’s valuation seems to be exploding toward the upside and the purchase of Tik Tok by Microsoft or another tech company would make a lot of $en$e and $cent$. -SB

Image Source: News18.com

22 July 2020

1) China, with the second largest economy in the world, is steadily developing into a technological powerhouse that could upend the status quo. China’s ten year plan called “Made in China 2025”, has a principle goal for China to catchup, then surpass the West in various technological fields. Some consider this not only threatens the U.S. economy, but the world economy too. China has already declared they intend to be the dominate power in the world by 2050, and having the high ground in technology development is a key milestone in that quest.

2) Some consider that the stock market will likely head upwards to a new high, fueled by borrowing and money printing. With another stimulus package in the near future, it is ‘out of fashion’ to consider how the borrowed money will be paid back. The central banks, who are not elected, stand ready to print as much money as is wanted, no matter that historically this is how inflation is created and fuel. Example is the Weimar Republic (Germany) who induced their great wave of hyper inflation by printing massive amounts of money in the 1920’s, that lead the way for the Nazi’s to ascend to power. Other problems stemming from printing too much money is currency depreciation, difficulties borrowing, higher interest rates and social unrest. With other investments limited, the excess of money goes to the stock market, thus pushing the market up, and possibly into a bubble just waiting to pop!

3) The Congress remains busy crafting a second stimulus package with lots of debates what should and shouldn’t go in it, intending on having a deal worked out by the end of next week. However, this could go into August before a bill is ready to sign. A major point of contention is checks vs taxes. Should stimulus be checks like the $1,200 checks given out a few months?. If checks, then who gets them this time and how much? The other strategy is reducing payroll taxes, but this only helps those who are working. The Republicans are proposing a $1 trillion dollar relief strategy, while the Democrats propose a sweeping $3.5 trillion dollar plan. This would add to the $2.9 trillion dollar package already implemented early this year. As usual, everything is being done will little to no real analysis, instead relying on gut feelings of lawmakers in making the future of America.

4) Stock market closings for – 21 JUL 20:

Dow 26,840.40 up 159.53
Nasdaq 10,680.36 down 86.73
S&P 500 3,257.30 up 5.46

10 Year Yield: down at 0.61%

Oil: up at $41.58

12 June 2020

1) The markets took a sharp drop over fears of another shutdown as the number of Convid-19 cases began rising from states starting to opening up for business. The Dow Jones dropped over 1,800 points, closing on the worst day sell-off since March. It appears that this pandemic is going to linger longer than was anticipated. Texas has reported three consecutive days of record breaking Covid-19 hospitalizations. Nine counties in California are reporting spikes in hospital admissions from the virus. The U.S. now has topped 2 million cases in this pandemic. Also, oil prices have taken a sharp downward slide.

2) Inventories of unsold diamonds are increasing, with the five largest diamond producers having stockpiled excess inventories of about $3.5 billion dollars and could go as high as $4.5 billion dollars. World wide demand for diamonds has plummeted, with the renowned diamond supplier De Beers reporting diamond sales in May of about $35 million dollars, compared to last year’s $400 million dollars. The world wide lock down has closed jewelry stores across the world thereby reducing sales to a small fraction of normal. The diamond market resembles the diamond slump of the 2008 financial crisis.

3) More than 1.5 million Americans filed new jobless claims for the first week of June, again decreasing from the previous week of 1.9 million. This is in contrast to the 6.9 million claims in April, with a stead decline each week since then. There was 2.5 million jobs added to the American economy, largely due to 2.7 million workers returning from furloughs. Still, more than 40 million Americans have lost their jobs because of the pandemic forcing shutdowns of so many businesses across America. But the gradual improvement of employment is boosting hopes for a quick economic recovery, however, there remains the problem of technology displacement of jobs. In times of economic stress, businesses are seeking ways and means to cut operating cost, and that gives a niche for entry of new technologies that eliminate the human. Experts in Artificial Intelligence estimate that as much as 50% of the jobs will disappear in 15 to 25 years.

4) Stock market closings for – 11 JUN 20: The stock market is like a rectal thermometer- it’s rude and crude but surprisingly effective at showing sickness.

Dow 25,128.17 down 1861.82
Nasdaq 9,492.73 down 527.62
S&P 500 3,002.10 down 188.04

10 Year Yield: down at 0.65%

Oil: down at $36.17

29 May 2020

1) Another 2.1 million Americans are unemployed as the economy begins its reopening with restriction on economic activity easing in some parts of the country. One bright spot is the number of continued claims (people remaining on unemployment) dropped slightly from people returning to work. While the number of new claims continues to drop each week, it still remains at a record high, with the drop in new claims remaining higher than anticipated. The continued elevated number of claims isn’t a good sign, showing that we are not through the business shutdowns and possible closures yet, with some furloughs shifting over to permanent layoffs. The unemployment in America is now at 40.7 million workers.

2) Boeing aircraft manufacturer may be starting its recovery announcing the resumption of limited production of its 737 MAX after a five month halt. The 737 MAX has been grounded since March of 2018 because of software problems resulting in two airliners crashing. While the FAA has not cleared the airplane for return to passenger service, Boeing expects the 737 MAX to fly again in mid 2020.

3) The millennials and generation-Z are worst off economically than any previous generation, they are experiencing slower economic growth since entering the workforce than any other generation in U.S. history. It’s not just that it’s a bad recession, or that it’s hitting young people more, but rather that it’s hitting people who have already been hit by the Great Recession. Millennials have experienced slower economic growth since entering the workforce than any other generation in U.S. history, and they will bear these economic scars throughout their lives, with lower earnings, lower wealth and delayed milestones, such as home ownership. The old adage of ‘just work harder, sink or swim by your own effort’ no longer applies, because many millennials are now having to swim upstream against a much stronger current . . . from the forces of automation and technology displacement.

4) Stock market closings for – 28 MAY 20:

Dow 25,400.64 down 147.63
Nasdaq 9,368.99 down 43.37
S&P 500 3,029.73 down 6.40

10 Year Yield: up at 0.70%

Oil: down at $33.68