3 September 2020

1) Major American companies are extending their ‘work from home’ policy, such as Google, Uber and Airbnb, until the summer of next year. The companies Zillow, Twitter, Facebook and Square have announce that employees can work from home indefinitely. Some companies are also offering stipends to employees for home office equipment as well as a $500 quarterly credit to use specifically on Airbnbs. This at home work policy remains in effect even after offices start reopening. The work at home is even spreading across the international scene with electronic giant Hitachi having 70% of its employees work permanently from home. Nationwide Insurance plans to downsize from 20 physical offices to just four with the majority of its employees continuing to work permanently from home. It’s looking more and more like working at home is becoming the norm for the future in America.

2) In a bid to counter the competition of e-commerce, the traditional department store giant Macy’s has started opening new, smaller stores away from the malls, reflecting a growing trend in the retail industry. The retail giant will test small-format Macy’s and Bloomingdale’s stores outside of underperforming malls, joining a growing trend in retail. The test stores will begin operation the fourth quarter of 2021 in Dallas, Atlanta and Washington DC. Many other major retailers are turning away from the mall format of retailing, leaving many malls withering on the vine, with foot traffic on the decline even before the Convid-19 crisis. This is another indication of a shift in American culture and society.

3) Fashion retailer Old Navy has announced they will pay their employees to work at polling stations comes election day. Each employee will be paid a full days wages for their poll work. Furthermore, store employees will have up to three hours of paid time-off on election day to vote. Old Navy joins other retailers such as Patagonia, PayPal and Levi Strauss & Co. to help in the national elections.

4) Stock market closings for – 2 SEP 20:

Dow 29,100.50 up 454.84
Nasdaq 12,056.44 up 116.78
S&P 500 3,580.84 up 54.19

10 Year Yield: down at 0.65%

Oil: down at $41.78

21 August 2020

1) A controversy has arisen on the national political scene about removal of mail sorting machines in the USPS (United States Postal Service), some charging this is an attempt to interfere in the up coming national elections. Having already removed hundreds of machines, the USPS is poised to decommission 671 of the massive sorting machines, which is roughly 10% of its inventory. This represents the sorting ability of 21.4 million pieces of paper mail per hour. Presently, the USPS processes up to 500 million items each day. The removal is part of a long range plan, in response to American’s diminishing use of traditional letters.

2) The ride sharing services Uber and Lyft are preparing to shut down in California because of a new law that reclassifies their drivers from contract workers to employees. Under an order issued ten days ago for their drivers to be employees with state mandated pay, benefits and taxes, the two service providers have threaten to suspend services if the order is not resended until an up coming referendum in November to exempt them is held. This is a major case for the growing on-demand economy and what its future in America’s economy will be. Being forced to use employee drives would fundamentally change their business, making them far less competitive with traditional taxi services.

3) The woes of America’s airline industry continues with the announcement that American Airlines is suspending service to 15 U.S. cities this fall. The move comes in response to declining demand and as a federal requirement to service those locations comes to an end. This is the latest step taken by American Airlines to cut costs amid airlines racking up billions in losses during the pandemic. The company will slash 30% of its management and administrative jobs with about 25,000 of their workers furloughed by October. They have reached a deal with their pilots union to offer more leaves and early-retirement packages. Estimates are that domestic airlines will lose more than $20 billion dollars in revenue this year, while globally the industry could lose up to $84 billion dollars this year.

4) Stock market closings for – 20 AUG 20:

Dow 27,739.73 up 46.85
Nasdaq 11,264.95 up +118.49
S&P 500 3,385.51 up +10.66

10 Year Yield: down at 0.64%

Oil: down at $42.78

7 July 2020

1) Research by the Wall Street firm UBS, predicts that as many as 100,000 brick and mortar retail stores in the U.S. will close by 2025. Because of the pandemic, retailers are closing store locations permanently at an un-precedent rate. But this closure was going on before the coronavirus shutdown, with shoppers embracing other ways to buy such as e-commerce and picking up products at stores purchased online. This is in addition to large traditional retailers going into bankruptcy. This prediction is in keeping with the 9,800 stores already closed this year, with 25,000 stores predicted to close by the end of 2020. The retail sector has already lost 1.2 million jobs between March and June. This opens questions if the present hyper-consumerism economy can continue.

2) With the continued threat of the pandemic and a slowdown of reopening of economies in states, evictions are likely to skyrocket as jobs remain scarce. This is because a backlog of eviction cases is beginning to move through the court system. Millions of people had been counting on federal aid and eviction moratoriums to remain in their homes, but now fear of being thrown out is mounting. This situation is further aggravated as the enhanced unemployment benefits run out at the end of July. The enhanced unemployment and $1,200 stimulus payment had been supporting households this spring. There are 110 million people living in rental households with 20% at risk of eviction by the end of September.

3) The food delivery service Uber has acquired rival Postmates, despite Uber not having become a profitable enterprise yet. This should make Uber a stronger competitor to its main rival Doordash. The food delivery sector is undergoing a major consolidation this year, people jumping from service to service to find the best deal. With this acquisition, Uber gets a bigger share of the market with 31% of the business with DoorDash the largest at 44%.

4) Stock market closings for – 6 JUL 20:

Dow 26,287.03 up
Nasdaq 10,433.65 up
S&P 500 3,179.72 up

10 Year Yield: 0.68%

Oil: up at $40.59

20 May 2020

1) Just three months after filing for bankruptcy, the Pier 1 retail chain is closing down all its retail store outlets as soon as possible. This drastic action is blamed on store closure from the pandemic and failure to find a buyer. After modeling several options for remaining in business, they found liquidation was the best option to maximize Pier 1’s assets. Plans are to sell its remaining inventory, website and intellectual property. Once a large seller of home goods, the company has suffered severely from online retailers such as Amazon and Wayfair, while big box stores such as Target and Walmart have increased their marketing of home goods products. The fifty-eight year old retailer joins several other big name store chains now in bankruptcy, in what appears to be a fundamental change in consumerism.

2) The damage to employment continues to spread, starting with 1 million public sector workers possibly losing their jobs. All governments are seeing a drop in revenue from businesses being shut down because of the coronavirus. With limited money- cities, counties and states are facing layoffs of their workers until things improve. Restaurants have loss 417,000 jobs to closure. The low wage workers account for 86% of job losses, while over two hundred hospitals have laid off staff because of elective procedures being suspended to accommodate Covid-19 patients, because hospitals have experienced cash crunches.

3) The ride sharing service Uber has had steep revenue losses from the pandemic shutdown, and so announced another 3,000 layoffs to bring their total layoffs to 6,700 or 25% of its workforce. It’s anticipated this action will save the company more than $1 billion dollars annually. Additionally, the company is reorganizing into transportation (Uber Works) and food delivery (Uber Eats).

4) Stock market closings for – 19 MAY 20:

Dow 24,206.86 down 390.51
Nasdaq 9,185.10 down 49.72
S&P 500 2,922.94 down 30.97

10 Year Yield: down at 0.71%

Oil: down at $31.86

28 February 2020

1) Many on Wall Street are betting the Federal Reserve Bank will again reduce the cost of borrowing in light of the coronavirus economic threat. Futures contract traders consider there is nearly a 60% chance of a rate cut this March, when the Feds meet, in an effort to counter the effects of the virus on America’s economy. While it appears the spread of the pathogen is declining in China, elsewhere in the world it’s on the rise.

2) Oil prices continue its downward spiral with a twelve month low for U.S. crude. The drop in oil prices is in anticipation of slowing of the U.S. and world economies, a direct result of the spreading coronavirus threat. China, a major world importer of oil, has cut back purchases as it containment policies reduces oil consumption from limited travel to and from major cities, as well as travel within those cities.

3) The home food delivery business continues to grow with DoorDash filing the paperwork with the SEC (Security and Exchange Commission) to start the IPO (Initial Public Offering) process to offer stock to the public. The IPO process has met with poor results from unprofitable companies like Lyft Inc. and Uber Technologies Inc. while WeWork was forced to abandon its IPO last year because of a poor showing of its stock. DoorDash faces the same challenges as Lyft and Uber..

4) Stock market closings for – 27 FEB 20: This is the worst point decline ever for the three markets. The Dow has dropped 3,000 points since Monday.

Dow 25,766.64 down 1190.95
Nasdaq 8,566.48 down 414.30
S&P 500 2,978.76 down 137.63

10 Year Yield: down at 1.30%

Oil: down at $46.34

2 January 2020

1) The ride sharing business Uber has filed a lawsuit against California, in response to a landmark gig worker law as being unconstitutional. The new law is designed to upend gig economy companies such as Uber and Lyft. Uber claims the new law unfairly targets workers and companies in the on-demand economy, treating them differently than traditional companies. The law forces on-demand companies to reclassify their independent contractors as employees, which would break up their businesses. With Uber actively researching auto-driving cars, this point may soon become mute.

2) In the wake of continual losses despite rising postal rates, America’s postal system, as a public government run entity, may be coming to a end as early as this year. New leadership is being brought into the USPS tasked with creating a package of large structural changes intent on privatizing and selling pieces of the public service off. One proposal is that the postal service stops delivering packages, since there are already several successful businesses who are already doing that.

3) Department stores and apparel retailers continue to shrink as customers continue their migration to Amazon. For the last several years, retailers such as Sears, Macy’s and the Gap have struggled to survive and prosper by closing their retail outlets with even more closures are forecast for this next year. One additional loss of retail revenues is the lost of store credit cards.

4) Stock market closings for – 31 DEC 19:

Dow                28,538.44    up    76.30
Nasdaq            8,972.60    up     26.61
S&P 500           3,230.78    up        9.49

10 Year Yield:    up   at    1.92%

Oil:    down   at     $61.21

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

12 April 2019

1) The ride service Uber’s long awaited IPO (Initial Public Offering) filing is being watched for. The IPO is coming just two weeks after Lyft’s IPO. Uber and Lyft have been running neck and neck in competition in the rider market.

2) Signs that the US economy is strengthening is indicated by the number of new jobs rebounding from February with 196,000 new jobs in March. The unemployment rate held steady at 3.8%, while consumers spending is also accelerating, another sign that the US economy is regaining momentum..

3) Disney corporation is entering the streaming competition against Netflex. The streaming service will be called Disney Plus. Right now, Disney also owns 60% of the Hulu streaming service. Disney Plus is coming out just when Netflix announced its price increases plus it’s the lowest cost of any of the streaming services.

4) 11 APR 19 Stock market closing:

Dow           26,143.05    down    14.11
Nasdaq        7,947.36    down    16.88
S&P 500       2,888.32          up      0.11

10 Year Yield:     up   at    2.50%

Oil:      down   at    $63.71

1 April 2019

1) Britain’s Prime Minster’s third try to get her Brexit plan voted through Parliament has failed, even though it was a stripped down version. This time the vote was by the narrowest margin. It’s now two weeks remaining to draw up a new plan and try again before the crash out. There is growing dissatisfaction with British people over Brexit with increasing numbers of demonstrations for and against. Also, there are growing calls for a general election, with the Labor party apparently using the Brexit issue to force a general election.

2) Lyft, the competitor to Uber, goes public with stock going for about $10 more than anticipated. Initially priced at $72, the stock opened at $87.24 per share and closed 8.7% higher. The company anticipates to raise $29 billion dollars in it’s offering. The stock is a two tier stock with one tier having one vote per share and the other having 20 votes per share.

3) 29 MAR 2019 Stock market closings:

Dow         25,928.68    up    211.22
Nasdaq     7,729.32    up      60.15
S&P 500     2,834.40    up     18.96

10 Year Yield:    up   at    2.41%

Oil:    up   at    $60.18

25 March 2019

1) The English pound has had its biggest single day drop because of Brexit. Brexit will be delayed until May the twenty-second if the British Parliament passes the exit deal.

2) Boeing has experience its first cancellation of its 737 MAX with Indonesia canceling a huge order of 49 aircraft. Boeing is rushing to complete its new warning system since the 737 MAX is its biggest seller.

3) Pinterest files for its IPO, releasing its prospectus this last Friday showing a $53 million dollar loss. Presently, the software has about 265 million users. Uber also plans to list its IPO on the New York Stock Exchange, the largest so far this year.

4) 22 MAR 19 Stock market closings: Dow dropped over fears of a global slowdown.

Dow                 25,502.32       down     460.19
Nasdaq              7,642.67       down     196.29
S&P 500             2,800.71       down       54.17

10 Year Yield:     down   at    2.46%

Oil:      down   at    $58.97