1) As part of its restructuring plan, HP announced they will cut about 7,000 to 9,000 jobs, resulting in an estimated savings of about $1 billion dollars. While HP expects to incur labor and non-labor cost of about $1 billion dollars, they expect to generate at lease $3 billion dollars of free cash flow. As of 31 October 2018, HP had world wide employment of about 55,000 workers.
2) Consumer spending has been the bright spot in an economy showing signs of weakening on multiple fronts, in particular manufacturing. Economists worry if consumer spending will continue to prop up the economy, saying that the up coming Christmas season will be a test. Issues such as trade, interest rates, global risk factors and political rhetoric are where confidence can be eroded by deterioration of these items.
3) The new Costco in Shanghai China reports membership of more than 200,000 as compared to an American average of 68,000 per store. Costco will open a second Shanghai location in early 2021. The first day opening, the store was so swamped with customers, that the doors had to be closed for four hours to limit the number of people inside to safe limits.
4) Stock market closings for – 4 OCT 19:
Dow 26,573.72 up 372.68 Nasdaq 7,982.47 up 110.21 S&P 500 2,952.01 up 41.38
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
1) There are expectations that global growth will slow this year to a rate that can become a financial crisis. The Organization for Economic Cooperation and Development claims new data showing the US-China trade dispute is increasingly threatening the outlook of the two largest economies as well as others. Furthermore, the uncertainty from the Brexit and a possible crash out would further aggravate economic growth in the European sector.
2) Saudi Arabia is avoiding a global oil crisis by using the crude it holds in reserve until production can be fully restored. The Saudi’s claim necessary repairs will be completed in two to three weeks, thus restoring production levels prior to the attack. However, oil experts are skeptical that these repairs can be done in such a short period of time. This uncertainty is due in part from Saudi Arabia’s lack of transparence of their oil operations.
3) Good news for home owners, sales of used homes rose to its highest in more than a year, with the median price up 4.7% from last year to $278,200. This home sale bonanza is fueled in part by the low interest rates now available and by income gains. However, there are fears of a global economic slow down darkening this rosy picture in the near future. Presently, it would take 4.1 months to sell all the available houses, with realtors considering anything below a five month supply a tight market.
4) Stock market closings for – 19 SEP 19:
Dow 27,094.79 down 52.29 Nasdaq 8,182.88 up 5.49 S&P 500 3,006.79 up 0.06
1) The Exxon Mobil oil giant agreed to sell its Norwegian oil and gas assets for as much as $4 billion dollars. The U.S. firm is exiting from production in the country after more than a century doing business there. In 2017, Exxon produced 170,000 barrels of oil per day from its Norwegian operations. The shares in Exxon, the world’s biggest publicly traded oil company, rose 1.7% on the news.
2) The announcement that China and America would resume trade talks pushed the price of oil up from optimism of an improving world economy. Chinese trade negotiators will come to Washington in early October for talks. Gasoline and distillate supplies fell, as well as stockpiles in storage.
3) Alan Greenspan, former Federal Reserve Chairman, forecast that negative rates will soon spread to the U.S. Negative rates are now in Belgium, Germany, France and Japan with $16 trillion dollars in negative yielding debt instruments around the world. Ten year sovereign bonds are trading with a negative rate. The thirty year U.S. rate is trading at 1.95% reaching an all time low.
4) Stock market closings for – 5 SEP 19:
Dow 26,728.15 up 372.68 Nasdaq 8,116.83 up 139.95 S&P 500 2,976.00 up 38.22
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
Wrap up of 2018 episode, Sammy BE (Bizman Bassey), James Lyman &
on the boards, magic Jon Don Sterling. The trio discussed topics and
issues ranging from economy, business, trade, and a little politics, for
the year of 2018.
Sammy and James spoke on the trade policies
with China, the new USMCA Trade Agreement between USA, Mexico, &
Canada (replacing of NAFTA). Problems that may have handicapped General
Motors (GM); Saudi Arabia policy & reporter death of Jamal
Khashoggi. The gentlemen ended of the 2018 year speaking of the
improving US economy (GDP) and the new Congress (Democratic House,
Republican led Senate), that will be entering in January 2019.
This a mouthful that you don’t want to miss, ending of 2018 wrap up episode…. Happy New Year… See You In 2019
New article posted below, titled “Recession Worries?”
1) China-United States APEC summit ends without a joint statement, a result of US-China tensions. US warns other Asian nations about investing in Chinese infrastructure, specifically China’s ‘Belt and Road’ project, and becoming overwhelmed with debt.
2) Survival of four major retailers may be determined by sales this Christmas season. Sears, JC Penny and Barnes & Noble, and while Toys-‘R’-Us has already closed all its stores, it is trying to capitalize on its name brand.
3) The volatile stock markets give fears among older retirees of a possible crash, resulting in lost of their savings. The baby boomer’s savings have not recovered from the 2008 crash.
4) 19 NOV 18 Stock market closings: Stock market dragged down by major losses of five large technology companies.
Dow 25,017.44 down 395.78
Nasdaq 7,028.48 down 219.40
S&P 500 2,690.73 down 45.54
1) Because of the trade war, General Motor’s third quarter sales in China has dropped.
2) China Markets continue to drop, in part, because China has allowed its banks to reduce their cash reserves in order to inject cash into China’s economy, over worries about China’s economy.
3) UN releases report warning of dire consequences by 2040 from global warming. They warn of increases in world water levels, storms and drops in food production if CO2 levels continue to increase. Revolutionary changes by the industrial countries are required to lower carbon output, which in turn means monumental changes to economies with their energy, transportation and food production.
4) 8 OCT 18 Stock market closings:
Dow 26,486.78 up 39.73
Nasdaq 7,735.95 down 52.50
S&P 500 2,884.43 down 1.14
New posted article below titled “SIRIUS XM TO BUY PANDORA”
1) Today, consumers are in better shape with their debt. Current policy suggests further near-term improvement, but at a price. Increasing the federal debt risk precipitating a new crisis.
2) The China tariffs could hit U.S. consumers with such products as computers, furniture, seats, lamps, luggage, agricultural and food products, vacuum cleaners, cooking appliances and refrigerators among other products.
3) At the start of the trade war, China looked tough on trade, but now its options appear to be dwindling.
4) 25 SEP 18 Stock market closings:
Dow 26,492.21 down 69.84
Nasdaq 8,007.47 up 14.22
S&P 500 2,915.56 down 3.81
1) The Bank of Japan is holding steady amid economic uncertainty, signaling confidence in Japan’s future economy.
2) China announced it will not devalue its currency to boost its exports. Analysis forecast China’s GPD dropping this next year.
3) Janet Yellen suggested the Fed should act ahead of the next recession, by keeping interest rates low until the next downturn is fully offset. This is a significant change from how monetary policy is currently conducted.
4) 19 SEP 18 Stock market closings:
Dow 26,405.76 up 158.80
Nasdaq 7,950.04 down 6.07
S&P 500 2,907.95 up 3.64