1) The Money market mutual funds have traditionally been the ultimate haven for investors wanting to preserve capital, but this is increasingly difficult in a zero interest rate environment. The problem centers on having twice as much cash as typical. The money market funds have soared with assets at a record high of $4.77 trillion dollars because of the flight to safety this year by investors. Of that, about 75% of those assets are in Treasury and other government funds perceived as the lest risky and therefor least likely to actually lose value. The U.S. Treasury has issued in excess of $1.5 trillion dollars to fund the stimulus program and the loss of tax revenues. With interest rates near zero, some fund companies are waving management fees in order to preserve returns for clients, otherwise their clients would actually be losing money.
2) The rural department chain store Stage Stores, who predominantly caters to the rural areas and small to mid-size markets, is also experiencing the crunch on retailing. The company’s owners are preparing for bankruptcy , another casualty of the coronavirus pandemic. The chain has about 700 department stores in small towns and rural communities with about 13,600 full and part time employees. The classic retailer JC Penny is reportedly preparing to also file for bankruptcy including plans to permanently close a quarter of its 850 stores. The company missed a $17 million dollar debt payment and is going into default. The cruise ship line Norwegian Cruise Line in Miami has warned the company could go out of business because of the pandemic. The company has $6 billion dollars in long term debt, plus it’s faced with a huge number of clients demanding their money back for cruises already booked.
3) The U.S. Postal Service is reporting a huge loss, a direct result of the coronavirus crisis. The government owned corporation reported a $4.5 billion dollar loss for the first quarter. The USPS anticipates losses for the next 18 months amid steep declines in revenues. They have warned congress that government assistance is required if they are to continue delivering the mail. The congress has authorized the Treasury Department to lend the USPS up to $10 billion dollars as part of the $2.3 trillion dollar stimulus package, but President Trump has threaten to block that aid.
4) Stock market closings for – 8 MAY 20:
Dow 24,331.32 up 455.43 Nasdaq 9,121.32 up 141.66 S&P 500 2,929.80 up 48.61
1) Fears of a possible recession were dampened as stocks rose while Treaasury yields rebounded. The U.S. decision to extend a temporary reprieve to the Chinese telecom giant Huawein is credited with the change in markets. The Treasury notes appears to have broken out of the yield-curve inversion , which is a potential signal that a recession may be coming in the near future.
2) Delivery platforms like DoorDash, Uber Eats, Postmates and Grubhub have open new opportunities for America’s fast food industries. Previously, the only fast food delivered was pizza, but these new delivery services allows a wide range of foods to be delivered to customers at home or office. While it does open new opportunities for increased sales, the down side is the service could eat into restaurant’s profits and erode customer loyalty.
3) The retail giant Target, known for being the master of private label brands, is launching it’s own new food brand called ‘Good & Gather’. Due to start on the 15th of September, it will initially have 650 products, but will eventually expand to about 2,000 products, such as coffee, milk and eggs. Target describes their product line to be affordable and will replace present brands such as Simply Balanced and Archer Farms brands, while also reducing its Market Pantry line. For Target, using private label brands have been a way to boost profit margins while maintaining affordable prices. They’re a big asset in driving traffic to their stores.
4) Stock market closings for – 19 AUG 19:
Dow 26,135.79 up 249.78 Nasdaq 8,002.81 up 106.82 S&P 500 2,923.65 up 34.97
1) The electric car manufacturer Tesla has been getting significant revenues by selling credits to other car makers who need to offset sales of polluting vehicles. General Motors and Fiat-Chrysler disclosed that they have reached agreements to buy federal greenhouse gas credits from Tesla. These companies want to bank their green credits for use later when emission rules get tougher, especially if democrats regain the White House.
2) Bond yields are dropping at the fastest rate since th 2008 global financial crisis, in anticipation that the Federal reserve will cut interest rates to counter the fallout from the trade tensions. The two year Treasury yield has fallen for five straight days. This is likely to have damaging effects on business confidence as businesses become more concerned with future growth.
3) The U.S. Manufacturing Purchasing Managers’ Index fell by more than 2 points in May, the lowest level since September 2009, 6 points over the last year. This index reflects a drop in new orders or postponement of orders due to the uncertainty of the economic future. Manufactures are having to hold selling prices lower because of diminished sales, which in turn is squeezing profits.
4) 3 JUN 19 Stock market closings:
Dow 24,819.78 up 4.74 Nasdaq 7,333.02 down 120.13 S&P 500 2,744.45 down 7.61
We’rrreeeeeeee back new episode of the EFR Podcast with your hosts Businessman Bassey (Sammy BE) @Ecofiretv, James Lyman @ObsoletePeople (finally getting a twitter handle), and on the engineering boards Jon “The Don” Sterling @TheDramaBlock.
trio discussed the tax season in the U.S. of A, month of April, as well
as topics ranging from President Donald J. Trump’s tax returns,
American citizen having to pay taxes (or if you don’t want to, face the
penalty & consequences), @ YOUR OWN RISK, of course.
as topics, such as Herman Cain & Stephen Moore possibly being
nominated for the prestigious Federal Reserve Board; then both gentlemen
dropping out from the nomination process; and plenty of more economic,
financial and business discussion topics…..
President Donald J. Trump has chosen Mr. Jerome Powell to head the US Federal Reserve Bank.
Mr. Powell is a member of the Federal Reserve Board, born in Washington DC and educated at Princeton University, with a law degree from Georgetown University.
He is a Republican and has extensive experience working within the Federal Reserve system and in the private sector, in investment banking. He has tended to be more moderate in voting on Federal Reserve monetary policies, and since becoming a Federal Reserve Governor, he has voted on every monetary policy bill that has been accounted for.
Mr. Powell will replace US Fed Chairwoman Janet Yellen in February 2018, when her four year term expires. -SB
Mr. Steven Mnuchin was confirmed and sworn in as the new US Treasury Secretary Monday evening, February 13, 2017. Secretary Mnuchin who takes the helm of the Treasury Dept from his predecessor Mr. Jack Lew, was a former executive at Goldman Sach’s (which seems to be a prerequisite in attaining the Treasury post; past Goldman Sach alum who have garnered at the helm of Treasury have been people such as Robert Rubin, and Henry Paulson).
Secretary Mnuchin was also a Hollywood financier in the past, helping to assist in financing big blockbuster movies; as well as taking conservatorship of IndyMac, turning the loan entity, which happened to go bankrupt into a profit, before selling it for billions. -SB
President Elect’s Donald Trump’s Treasury Secretary nominee, Mr. Steven Mnuchin was on the HILL today, being grilled by senators, on his various role(s) in US housing forecloseres, off shore investments, and banking regulations. Mr. Mnuchin is seeking to be the new Trump’s Treasury Secretary, and such is the case for candidates for any US secretary position, Mr. Mnuchin took the mound on Capitol Hill (Capital Hill), no pun intended.
Mnuchin answered questions on his numerous roles in housing foreclosures, banking investment and regulations; and how he managed to be appropriated upon all these different type of managerial skill sets, one may add? He answered all questions by senators and gave his opinion on what his duties as Treasury Secretary; under a Trump Administration would entail. -SB
P.s. Donald J. Trump gets inaugurated as the 45th US President on January 20, 2017 at around noon 12pm est.
The Federal Reserve has raised important interest rates because the US economy has increased drastically. This is the second time the FED has raised interest rate benchmarks since 2008. The Fed indicated that next year in 2017, the interest rate will raise again also.
The benchmark had been 0.50%, now with the recent increase the benchmark will be 0.75%. When it comes to low rates, it helps the economy because it provides an environment for growth economically . This in turns allows businesses to borrow to finance deals, products, services, expansion, and leads toward enabling their businesses to take risk in growing their enterprises.
The interest rate being raised was on par to what many analysts and economists predicted, the economy improving as it is these days made sense for the interest rate to increase according to many experts. -SB