24 May 2019

1) Oil prices dropped liked a brick in its worst day of trading in 2019, the result of jitters over trade with China. The price of oil serves as a barometer to the world economic outlook, with a slowing of the world economy translating into a lesser demand for oil and therefore lower oil prices. The situation is aggravated by a surprise jump in American crude stockpile, with inventories up by 4.7 million barrels. The stock market reflected the world economic situation by massive drops too.

2) Panasonic electronics is joining a growing list of firms distancing themselves from Huawei, by stopping their supplying of some electronic parts to Huawei. Companies are declining to do business with Huawei because of warnings from U.S. intelligence that Huawei presences a security risk with their new 5G technology, which will allow the Chinese military to use smart phones to gather foreign intelligence.

3) President Trump announced $16 billion dollars in farm aid to offset the losses by farmers in the ten month long trade war. Distribution of aid payments will be based on where they farm rather than what crops they till. Farmers were a key constituency that help bring victory to President Trump, and they have been the hardest hit from the trade wars with China. China used to import 60% of U.S. soy bean production.

4) 23 May 19 Stock market closings: Dow tumbles 400 points as trade war worries continue.

Dow            25,490.47     down    286.14
Nasdaq         7,628.28     down    122.56
S&P 500        2,822.24     down      34.03

10 Year Yield:    down   at    2.30%

Oil:    up   at    $58.19

21 May 19

1 ) The stock for electric auto maker Tesla fell today as the car maker faces an uphill battle to become profitable in the second half of the year. Delivery of its new cars are way down from sales forecast, with Tesla stock closing down 2.7%, the lowest in two and a half years. Additionally, Tesla may be facing severe financial consequences from a fatal crash involving their Autopilot system.

2) The fallout from Huawei being blacklisted in America has caused the stock market to fall. Huawei uses electronic components in their product line, high technology parts that can’t be procured from other vendors. The down side is these vendors have significant sales from Hauwei, which lowers their revenues.

3) The trade wars with China is threatening to close as many as 12,000 stores in America this next year. For the last two years, the closing of retail stores in America had been accelerating before the trade war started, the result of falling store traffic. Tariffs would cause price increases at a time when consumers are increasingly reluctant to spend their money. All ready, the closure of 6,400 retail stores have been announced.

4) 20 MAY 19 Stock market closings:

Dow              25,679.90    down     84.10
Nasdaq          7,702.38    down   113.91
S&P 500         2,840.23    down      19.30

Year Yield:    up   at    2.42%

Oil:   up  at  $63.30

17 May 2019

1) The worst case for China in the trade war is slow growth, rising debt with companies exiting. If China’s growth should tumble, her debt would surge resulting in foreign companies fleeing a worsening business environment. The escalating economic clash with America is exacerbating the existing economic jitters across the world.

2) In the worsening trade war China, the largest owner of US debt, is selling off it’s Treasury holdings at the fastest rate in the last two years. China holds $1.12 trillion dollars, or about 7% of America’s total debt. China has been threatening to either not buy additional Treasury bonds or even selling off its holdings in retaliation for US actions in the trade war.

3) Pinterest Inc. stock has dropped more than 15% after it released its first earnings report. This is just twenty trading days after their IPO (Initial Public Offering). Pinterest explained the earnings drop as a result that the reported period was before the IPO, plus an increase in cost as a result of hiring of new employees.

4) 16 MAY 19 Stock market closings: Third day of across the board of stock rises.

Dow            25,862.68    up    214.66
Nasdaq        7,898.05    up      75.90
S&P 500       2,876.32    up       25.36

10 Year Yield:    up   at    2.41%

Oil:    up   at    $63.18

15 May 2019

1) Tensions increase in U.S. – China trade war with increasing fears that the war could be long and painful. In response to China’s new tariffs on $60 billion dollars President Trump is threatening to impose additional tariffs on $300 billion dollars worth of imports. While just a couple of weeks ago, it seemed that China and America were close to reaching an agreement, now it seems both sides have dug in their heels.

2) One military contractor is reportedly making 9,400% profit on a replacement part, a half-inch drive pin. This part should have cost $46 but the government is being charged $4,361 each. Legislation is being considered that would give contracting officers the power to demand data that would back-up billings.

3) Tensions are increasing in the middle east with Saudi Arabia claims of a terrorist drone attacks on pipeline pumping stations. The reports caused a surged in oil prices with fears of possible oil shortages if attacks on Saudi’s oil production continue.

4) 14 MAY 19 Stock market closings:

Dow            25,532.05    up    207.06
Nasdaq         7,734.49    up      87.47
S&P 500        2,834.41    up      22.54

10 Year Yield:    up   at    2.42%

Oil:    down   at    $61.32

13 May 2019

1) Trump’s tariffs went into effect today, at first driving the markets down, but then they recovered to all close high. Trumps statement that talks with China will continue pushed the markets up, while also leaving open the possibility that the tariffs may be soon removed. The tariffs went from 10% to 25% on $200 billion dollars of Chinese imports.

2) With the new tariffs on China, there are concerns for the U.S. economy and that the threat of an increased trade war between China and U.S. will cause a drop in both China’s and American’s GDP (Gross Domestic Product). Declines in GDP is not expected to be limited to America and China, but the global GDP could also suffer too.

3) The apparent contraction of consumerism continues with more than 6,200 stores to close this year. For the last couple of years, the retail industry has been rocked by the number of store closures. The list of retailers include such big names as Payless ShoeSource, Family Dollar, Gap, Victoria’s Secret, Office Depot and OfficeMax, Kmart, CVS, Pier 1 Imports, Bed and Bath, Lowe’s, JC Penny’s and even Walmart.

4) 10 MAY 19 Stock market closings:

Dow               25,942.37    up    114.01
Nasdaq           7,916.94    up        6.35
S&P 500          2,881.40    up      10.68

10 Year Yield:    unchanged   at    2.46%

Oil:    up   at    $61.71

8 May 2019

1) Tomato prices could raise 40% from U.S. withdrawing from trade pact with Mexico, called the Tomato Suspension Agreement which expires this Tuesday. This will trigger duties of more than 17% on tomatoes coming from Mexico. Tomatoes from Mexico are selling below domestic production cost.

2) The Dow Jones slid down 648 points, before rising to 473 points on closing, over news that America will impose higher tariffs on Chinese goods late this week. The Nasdaq and S&P 500 also experienced similar significant drops over fears of a full blown trade war with a down turn in global growth and a drop in China’s GDP.

3) Analyst say that a breakdown in the semiconductor field is a warning sign that a trade war with China is coming. This industry is more sensitive to U.S. – Chinese trade tensions. Watch the Philadelphia Semiconductors SOX index, for if the index falls below about the 1,430 level, that indicates trouble.

4) 7 MAY 19 Stock market closings:

Dow             25,965.09    down    473.39
Nasdaq         7,963.76    down    159.53
S&P 500        2,884.05    down      48.42

10 Year Yield:    down   at    2.45%

Oil:    up   at    $61.44

27 March 2019

1) British parliament voted to take control of Brexit for one day this Wednesday, to try their hand at resolving Britain’s dilemma of departing the European Union. If the division running through the British public is any indicator, then it’s rather unlikely parliament will reach any consensus on a solution.

2) Airbus of France announced a $35 billion dollar sale to China for 290 of their A320 airliners plus another 10 of their A350 wide body airliners. This is another blow to Boeing in addition to the grounding of their best seller, the 737 MAX 8, which is comparable to the A320. The grounding of the 737 MAX 8 coupled with the fallout from the US-China’s trade war is a serious impediment to Boeing. China is the world’s largest aviation market.

3) Apple sales in China has declined due to demand for domestic products. Apple products have become too expensive, so the Chinese people are turning to domestic products which now have most of the same features as Apple for much less.

4) 26 MAR 19 Stock market closings:

Dow         25,657.73      up    140.90
Nasdaq       7,691.52      up       53.98
S&P 500      2,818.46      up      20.10

10 Year Yield:     down   at    2.41%

Oil:     up   at    $60.04

5 March 2019

1) Shale oil companies are adding even more new wells, but that is threatening the future of the US oil boom. Their strategy of drilling more wells chose to old wells has backfired because the new wells not only have lower outputs than the old wells, but the production of the old wells also declines.

2) Again, there are reports that the US-China trade talks are still progressing well and soon may end with an agreement to end the trade war tariffs.

3) 4 MAR 19   Stock market closings:

Dow             25,819.65    down    206.67
Nasdaq          7,577.57    down      17.79
S&P 500         2,792.81    down      10.88

10 Year Yield:    down   at    2.72%

Oil:    down   at    $56.45

12 February 2019

New article posted below titled, “Failings of the Fourth Estate!”

1) Civil unrest continues to spread across Europe, from France, to Italy and Serbia. The yellow vest protesters in France tried to cross from France into Italy to join with the Italian protesters. Also, the protest by the separatist continues in Spain.

2) Generation-Z is doing the least preparations financially of the previous generations, only 16% doing any financial planning what so ever. They have higher credit card debt, spend big on nonessential things and have little savings.

3) The Chinese stated that trade talks are going remarkably well, giving hope that the trade war may yet be alleviated. Presently, there is a 10% tariff on $200 billion dollars, nearly half of China’s imports to the US, which will increase to 20% next week.

4) 11 FEB 19 Stock market closings:

Dow           25,053.11      down     53.22
Nasdaq       7,307.90           up        9.71
S&P 500      2,709.80           up        1.92

10 Year Yield:    up   at    2.66%

Oil:    up   at    $52.45

8 February 2019

1) The EU (European Union) has declared they will not negotiate the Brexit deal with Britain. There are only fifty days remaining before Brexit automatically happens.

2) Optimism fades over China-US trade talks stalling, which caused domestic market to dip down. The administration is considering another tax cut this next year for middle American’s.

3) The growth forecast for the EU is down because of the trade war and global tensions plus the slowdown of China’s economy.

4) 7 FEB 19    Stock market closings:

Dow                  25,169.53    down     220.77
Nasdaq              7,288.35    down       86.93
S&P 500              2,706.05   down       25.56

10 Year Yield:     down   at    2.65%

Oil:    down   at    $52.54