20 December 2019

1) Timothy Litzenburg, a Virginia lawyer involved in litigation over the health risks of Monsanto’s roundup weed killer product, has been arrested. He is charged with interstate intentions to extort an unnamed company into a $200 million dollar consulting fee for his firm. Litzenburg threatened to find people who he would advise to sue companies for exposing them to the chemical, but that he would cease searching for potential plaintiffs in exchange for a multi million dollar consulting agreement.

2) Freddie Mac has offered early retirement to about 25% of its staff in a drive to overhaul its workforce, as a result of the Trump administration’s reforming the housing finance giant. There are 1,650 eligible employees being offer the early out, with about one quarter expected to take the buyout. This will be about 6% of Freddie Mac’s workforce.

3) The number of Americans filing applications for unemployment benefits dropped from more than a two year high, decreasing 18,000 to 234,000. This points to a sustained labor market strength, another sign of a strong American economy. Despite trade tensions and slowing global growth with a weighing down on manufacturing, the economy is on a moderate growth path.

4) Stock market closings for – 19 DEC 19:

Dow                    28,376.96    up   at    137.68
Nasdaq                 8,887.22    up   at      59.48
S&P 500                3,205.37    up   at       14.23

10 Year Yield:     down   at    1.91%

Oil:    up   at    $61.03

16 December 2019

1) The Trump administration has reached a trade deal in principle with China. Reportedly, the United States has offered to cut existing tariffs on Chinese goods by as much as 50%, while also suspending new tariffs that are scheduled to become effective on Sunday. This is a bid to secure a “Phase One” trade deal. The 50% tariff reduction would be on $375 billion dollars of Chinese goods, and $160 billion dollars in goods scheduled to become effective on the fifteenth of December.

2) The natural gas boom has fizzled because of a glut in U.S. gas with sinking profits. Hydraulic fracturing has uncorked a lucrative new source of natural gas supply, with billions of dollars poured into export terminals to ship gas to China and Europe. But the drop in gas prices has caused a bust with energy companies shutting down drilling rigs, filing for bankruptcy protection and slashing the value of shale fields. The supply of gas has far outstripped demand and the over-supply likely to remain for several more years.

3) The number of applications for unemployment jumped to more than a two year high last week, but experts don’t think this signals a coming round of layoffs. Claims are up by 49,000 for a seasonally adjusted 252,000 for the week ending the seventh of December. The previous week, claims had dropped to 203,000, which was a seven month low. In the same period, the government reported adding 266,000 new jobs to the economy.

4) Stock market closings for – 12 DEC 19:

Dow                   28,132.05    up    220.75
Nasdaq               8,717.32    up      63.27
S&P 500              3,168.57    up       26.94

10 Year Yield:    down   at    1.90%

Oil:    up   at    $59.48 +0.30

4 December 2019

1) Volkswagen’s diesel emissions scandal raised it’s ugly head again with the German public prosecutors raiding VW Wolfsburg headquarters looking for documents. The scandal broke in 2015, but there are still questions about newer engines which succeeded the diesel engines with fraudulent testing for emissions. So far, Volkswagen’s cheating test has cost the company about $33 billion dollars in fines, vehicle refits and legal costs.

2) Richmond California is moving to ban the export of coal through their port facilities citing coal dust pollution in parts of the town. Coming from western states such as Wyoming, the coal is shipped to China, India and other far east countries still making heavy use of coal fired electric generation plants. However, the city may be facing legal challenges against the city ban. Richmond, Stockton, Los Angeles and Long Beach are now the only major west coast ports that handle coal.

3) President Trump has suggested that the trade war with China could drag on for some time, that it might be better to wait until after the 2020 election to sign a trade agreement. The next deadline is 15 December when 15% levies on an additional $160 billion dollars in Chinese goods. The news cause another drop in the stock markets, in addition to the drop from news about metal tariffs on Brazil and Argentina.

4) Stock market closings for – 3 DEC 19:

Dow              27,502.81    down    280.23
Nasdaq           8,520.64    down      47.34
S&P 500          3,093.20    down      20.67

10 Year Yield:    down   at    1.71%

Oil:    up   at    $55.99

3 December 2019

1) President Trump has imposed tariffs on metal from Brazil and Argentina in response to currency manipulation which hurt American farmers. The tariffs is on steel and aluminum imports. Additionally, Trump has called on America’s central bank to take action to prevent other countries from devaluing their currencies. Brazil and Argentina had been exempt from tariffs imposed in March 2018.

2) The factory sector in the U.S. shrank again in November, the fourth straight month as new order volumes slid back to around their lowest level since 2012. The index of national factory activity fell to 48.1, a reading below the expectations of 49.2, a reading above 50 indicates expansion while below indicates contraction.

3) The auto makers Nissan Motor Co., Renault SA and Mitsubishi Motors Corp. have formed an alliance in the form of a new company to do research and development of advance automotive technologies. The new venture also aims to strengthen the alliance which has been worn thin since the arrest and ouster of former supremo Carlos Ghosn. The formal plans will be announced in January.

4) Stock market closings for – 2 DEC 19:

Dow           27,783.04    down    268.37
Nasdaq        8,567.99    down      97.48
S&P 500       3,113.87    down      27.11

10 Year Yield:    up   at    1.84%

Oil:    unchanged   at     $55.42

26 June 2019

1) President Trump’s tax cuts could be undone a little at a time. Unlikely to repel his tax cuts directly, the Democrats could slowly undo them by an ‘end-run’ with new or other tax increases. The house Democrats have a package of tax legislation to be debated Thursday which proposes changes to the estate tax which would make it apply to more people sooner and making small increases to the corporate tax rate. Also, there are proposals to raise the tax rate to 70% for those earning over a million dollars.

2) Caesars Entertainment, who’s ownership includes the famous Caesars Palace in Las Vegas, is being bought by Eldorado Resorts for about $8.5 billion dollars in cash and stock. The plan is to build up their size to compete with larger companies such as Las Vegas Sands and Wynn Resorts. Caesars Entertainment owns and operates 34 properties in nine states and three continents.

3) Shale oil producing companies are pumping lots of oil, but are making little money. The process of fracking is an expensive procedure which requires high oil prices to be viable. As oil prices have sagged over the last couple of years, the margins have narrowed, forcing shale oil companies to more tightly control their expenses, including making extensive cuts in their labor force. Many of the older wells are failing to met expectations for production and oil companies have fewer future drilling locations than they anticipated. Shale oil wells initially produce a lot of oil and gas, but quickly taper off, so more money must be spent to coax the oil out of the rock, thus narrowing the margins.

4) Stock market closings for- 24 JUN 19:

Dow             26,727.54        up       8.41
Nasdaq         8,005.70    down    26.01
S&P 500        2,945.35    down      5.11

10 Year Yield:    down   at    2.02%

Oil:    down   a   t $57.79

18 June 2019

1) Traditional retail stores, who have been suffering the ravages of e-commerce, are worried about another coming blow. The new tariffs on Chinese imports, which President Trump threatens to impost, could have a disastrous effect on retailers such as Walmart and Target. These next round of tariffs will be specific to consumer goods, which these retailers sell, and will start to force price increases and so most likely will result in decline of sales revenue.

2) While President Trump has been pressing for a cut in the interest rate, the U.S. Federal Reserve is expected to defer and leave the interest rates unchanged. However, the board may possibly lay the groundwork for a rate cut later this year. While the economic outlook has become less clear, there still isn’t sufficient indication of a slow down to warrant cutting interest rates yet.

3) The Pfizer pharmaceutical company is buying Array BioPharma for $10.6 billion dollars for a price 62% above the company’s closing price this last Friday. Pfizer will gain medical technology for new drugs to treat cancer that limit or suppress the effects of chemotherapy. The drugs target a mutation that’s found across many tumor types in those patients who carry the mutation. Two of Array BioPharma drugs have been FDA approved for use in advanced melanoma. There are other drugs which are in the development pipeline.

4) Stock market closings for- 17 JUN 19:

Dow               26,112.53    up    22.92
Nasdaq             7,845.02    up    48.37
S&P 500            2,889.67    up      2.69

10 Year Yield:    down   at    2.09%

Oil:    down   at    $51.90

3 June 2019

1) The rife between China and America stands to grow deeper with less chance of resolving relationships, with China threatening a hit list of ‘unreliable’ foreign firms. These are individuals and groups who they consider harm the interest of Chinese companies. The threat is retaliatory tariffs on U.S. goods imported into China. These last two weeks have been a war of words as the nations exchange economic threats.

2) Chicago based nursing home chain collapses leaving the federal government on the hook for millions of dollars. First sign was when the owners stop making mortgage payments in 2014. Reportedly, money meant for the thirteen nursing homes were diverted to prop up another investment. This failure is revealing the problems that HUD is having in helping obtain facilities for the elderly by providing affordable loans.

3) Trade wars may expand again with threats by President Trump to impost a 5% tariff on goods imported from Mexico, if Mexico doesn’t do more to stop the flow of illegal immigrates. Tariffs are due to start on 10 June, and will increase in 5% increments until the flow halts. This is coming at a time when more Mexican immigrates are returning to Mexico than are coming, highlighting that the immigration is from other South American countries.

4) 31 MAY 19 Stock market closings: Oil prices sink toward worst May in 7 years from trade war fears.

Dow           24,815.04    down    354.84
Nasdaq        7,453.15    down    114.57
S&P 500       2,752.06    down      36.80

10 Year Yield:    down   at    2.14%

Oil:    down   at    $53.36

31 May 2019

1) Cattle producers are now using DNA testing to develop higher prime herds that produce a higher quality of beef. DNA testing allows predicting which bulls and cows have the characteristics that will improve herds to produce higher quality meat products. Where once there was only the ‘practiced eye’ of the stockman to judge which cattle would produce the product with breeding, the DNA techniques has vastly accelerated the process, with the expectation that the vast majority of U.S. herds will become high quality beef in just a few years.

2) The nation wide bus coach service Greyhound is up for sale. The holding company FirstGroup is facing demands for strategic changes by investors for a return on their investment. Greyhound is the only remaining nation wide intercity bus carrier, which carries about seventeen million passengers a year.

3) An executive order being issued by President Trump will require greater price transparency in the health-care industry, is encountering stiff industry opposition. One point of contention is a provision to slow the consolidation of medical facilities thereby maintaining competition resulting in lower cost. Health insurers and hospitals don’t want to publicly share the rates they have agree to amongst themselves.

4) 30 MAY 19 Stock market closings:

Dow           25,169.88    up    43.47
Nasdaq        7,567.72    up    20.41
S&P 500       2,788.86    up      5.84

10 Year Yield:    down   at    2.23%

Oil:    down   at    $56.51

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

9 May 2019

1) An experiment in four cities is giving four hundred mothers $4,000 dollars per year to test the effects that an infusion of money has on children. The study hopes to answer questions, for children in low income families, about the development of a child’s well being, how their brains work and their behavior.

2) China has promised retaliation if promised tariffs are imposed after mid-night this Thursday. President Trump is tweeting optimism over the coming deal with China, in contrast to China’s threats to retaliate for imposing any tariffs, leaving markets jittery over what may happen.

3) The Public Service Loan Forgiveness program is for relieving people of massive student loan obligations in exchange for working in professions of public service such as teaching, nursing or public-interest law. However the program is in disarray with more than 73,000 people having applied for debt forgiveness. The applicants are frustrated by the poorly written legislation, mismanagement by contractors to process application for forgiveness, and general apathy.

4) 8 MAY 19 Stock market closings:

Dow            25,967.33         up      2.24
Nasdaq         7,943.32    down    20.44
S&P 500        2,879.42    down      4.63

10 Year Yield:    up   at    2.48%

Oil:    down   at    $61.99