18 October 2019

1) New home construction has dropped from a twelve year high in September, although single home construction rose for a fourth straight month. This indicates the housing market remains supported by lower mortgage rates even as economy slows. Housing starts declined 9.4% last month as construction in the volatile multi-family housing segment dropped.

2) The Prime Minister of the United Kingdom announced a great new Brexit deal. The proposed exit plan goes before the U.K. parliament this Saturday, the EU (European Union) claimed the deal was a fair and balance one. Parliament must vote approval before the deal can be accepted, however, this time the Conservative party is now committed to this deal and not a ‘no-deal’ and so will campaign for a majority support.

3) The employees for the bank Goldman Sachs will receive the lowest pay in the last ten years. This is a result of software systems doing more and more of the company’s business, another example of technology displacement. The bank set aside 35% of its revenues for staff compensation and benefits this year, the lowest rate since 2009, with an average employee earning of $246,000 less than half of the $527,000 from last year.

4) Stock market closings for – 17 OCT 19:

Dow           27,025.88    up    23.90
Nasdaq        8,156.85    up    32.67
S&P 500       2,997.95    up      8.26

10 Year Yield:    up   at    1.76%

Oil:    up   at    $54.05

2 August 2019

1) Goldman Sachs, the investment bank, is starting a three year, $100 million dollar plan to overhaul its stock trading platform. The project, which is named Atlas, is aimed at the world’s largest quant hedge funds with the intent of shaving milliseconds off trades. The quantitative hedge fund investment has become a cutthroat business as other firms have been winning a larger share of a shrinking pie, and Goldman Sachs realizes they have been falling behind the technology race. They must make a strong effort to push forward the technology of electronic trading to maintain their market position.

2) As trade talks continue in Shanghai between China and America, President Trump has imposed an additional 10% tariff on $300 billion dollars worth of Chinese imports. These imports are due to start on the first of September. This does not include the $250 billion dollars already tariffed at 25%. The President blames the Chinese for imposing the tariff, saying China is not following through their promise to buy more American agricultural products and not doing more to stem sales of synthetic opioid fentanyl.

3) Lowe’s, the home improvement retailer, has told thousands of its workers that their jobs are being eliminated. The company will out source the jobs of maintenance and assembly workers to third party companies. These workers assembly products such as wheelbarrows and grills, claiming this will allow store associates to spend more time on the sales floor serving customers. Lowe’s employs 190,000 full time and 110,000 part time workers.

4) Stock market closings for – 1 AUG 19:

Dow           26,583.42    down    280.85
Nasdaq         8,111.12    down      64.30
S&P 500        2,953.56    down      26.82

10 Year Yield:    down   at    1.89%

Oil:    up   at    $54.49

24 July 2019

1) Technology displacement is graphically illustrated by the print news media with over 2,000 newspapers having closed in the last fifteen years. Once among the largest employers in America, new technologies have continually reduced the work force of newspapers, especially after World War II with the rapid expansion of the electronic news media. Almost all the newspapers in America have financial troubles leaving their future in doubt. The electronic news media has also suffered massive loss of jobs over the decades as new technologies allow operations with fewer people.

2) Over production of eggs has created an oversupply of the food stuff, forcing prices down until producers are losing money. Exports have been down 12% further aggravating the oversupply situation, with the average cost for a dozen eggs now $1.20, which is 26% lower than a year ago. But experts consider the price has reached its low and will soon start creeping up.

3) California’s wine industry is suffering from the trade war with China imposing a 93% tariff on American wine products. This tariff has pushed the price of wine out of reach for most of China’s population, thus drastically reducing exports. This has dropped U.S. wine exports to China by 25% in 2018 with California accounting for more than 90% of America’s wine sales overseas. China is America’s fifth largest market.

4) Stock market closings for – 23 JUL 19:

Dow              27,349.19    up    177.29
Nasdaq           8,251.40    up      47.27
S&P 500          3,005.47    up      20.44

10 Year Yield:    up   at    2.07%

Oil:    up   at    $57.17

18 July 2019

1) News for budding entrepreneurs. Each year, roughly 30,000 new consumer products are introduced to the market place, but 95% of them fail. The primary reason for failure is lack of preparation, of not understanding the ‘product life cycle’. The life cycle is the time from inception to obsolescence the product experiences. As a product goes through its life cycle, the sales and profit margins will fluctuate, so you must adjust your marketing mix accordingly. The subject is complex and extensive, and a new entrepreneur should spend time researching and understanding the topic before investing in a new product venture.

2) AT&T and Microsoft announced they have agreed on a cloud deal worth more than $2 billion dollars. AT&T will use Microsoft’s Azure cloud service for its computing needs and Office 365 software for its 268,000 people. Additionally, the two companies will work together on edge computing with Microsoft technology deployed alongside AT&T’s up coming 5G network and applications requiring extremely small delays in passing data back and forth such as real time control systems applications.

3) The debt of America is about to hit a record high, a result of cheap money and soaring debt, which has fueled the decade long economic expansion and bull market. There are raising fears of what could happen if there is a shift in the fragile economic balance. The total American debt, both public and private amounts to nearly $70 trillion dollars, with the economy about $21 trillion dollars in size. Difficulties could arise if America should experience a recession with both government and private sectors having trouble meeting their repayments.

4) Stock market closings for – 17 JUL 19: Disappointing quarterly reports pulled the markets down.

Dow                   27,219.85    down    115.78
Nasdaq                8,185.21    down      37.59
S&P 500               2,984.42    down      19.62

10 Year Yield:    down   at    2.06%

Oil:    down   at    $56.58

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