10 February 2021

1) Fear in American society is apparent with the soaring gun sales for this last year. Measuring, by using the Federal background checks, there have been 4.3 million checks for 2021 vs. 2.7 million for 2020. About 60% of these buyers are new buyers of guns, and about 40% are women. Sales have been so heavy that gun shops are closing because they don’t have any inventory, with people buying two and three guns at a time. The high sales are driven by fear of social unrest, rioting in major cities across the country lasting weeks on end, and fears of suppression of gun ownership by the new administration. Also, people don’t feel they can rely or trust the police to protect them anymore. Additionally, ammunition of all types has been sold out across the land.

2) The global microchip shortage for automobiles continues to spread with the next victim being Ford’s most profitable truck, the F-150 pickup. Many companies have scaled back car production because of the computer chip shortage. Ford is temporarily cutting the number of shifts in its truck production plants in half. Microchip shortages has Volkswagen production limited, and Honda and GM have also had to cut back. Nissan and Toyota have had to slow their truck production lines as well. Ford has already limited production of other models, the Escapes and Lincoln Corsairs. Modern cars have computer systems for almost every component these days, from digital speedometers to vital vehicle functions like controlling emissions and emergency brake systems. The microchip shortages isn’t confined to automobiles with manufactures of telephones, computers, appliances and home entertainment systems feeling the pinch too.

3) Unemployment agencies across the country were flooded with so many claims during the pandemic that many struggled to distinguish the correct from the criminal. Some Americans are receiving tax forms saying they owe money on unemployment benefits they never received. This is an indication of the extent of identity theft in the nation’s state run unemployment systems. Unemployment benefits are taxable, so government agencies must send a tax form to people who received them, and some Americans are receiving tax forms saying they owe money on unemployment benefits they never received. State run unemployment offices are lucrative targets for fraud particularly when the agencies are swamped with applications and not having the time and resources to check. This signals that someone has likely stole personal information and used it to claim benefits, but that data may later be used to steal an identity for more fraud. Nearly 26 million people requested unemployment aid in the initial months after states began ordering shutdowns due to the pandemic.

4) Stock market closings for – 9 DEB 21:

Dow 31,375.83 down by 9.93
Nasdaq 14,007.70 up by 20.06
S&P 500 3,911.23 down by 4.36

10 Year Yield: down at 1.16%

Oil: up at $58.39

26 January 2021

1) Amid rising doubts, both with the Republicans and Democrats, of passing President Biden’s $1.9 trillion dollar coronavirus relief package, some economists call the bill a good step that will help America’s struggling economy and warning that if not passed, then the nation would likely reverted to a recession in early 2021. The $1.9 trillion dollar coronavirus stimulus proposal is designed to jump-start the nation’s sputtering economy as well as accelerate vaccine distribution to control the deadly pandemic. Presently, the plan calls for a one-time $1,400 direct payment to eligible Americans, which would be in addition to the $600 check sent out this month, making a total payment of $2,000. Additionally, there is a supplemental unemployment benefit of $400 a week, up from the present $300 a week.

2) It’s considered that President Biden’s early actions in office will have effects on oil’s outlook, both short and long term. The first actions were revoking approval of the Keystone XL oil pipeline and rejoined the Paris climate agreement. Biden administration’s aim is to reduce long-term oil demand as the move away from fossil fuels accelerates. But if all the promises made by the President this first year are kept, oil demand in 2021 is expected to get a 350,000 barrel-per-day boost. The cancelling of the Keystone pipeline is likely to be muted as other world markets take up the production, because Iran and Venezuela have removed about three million barrels per day production from the current market, with other middle east producers are also cutting back on their production.

3) As the demand for fossil fuels is being limited, people are wondering if the electric car’s moment has arrived at last? While rapid advancement in electric cars and batteries is evident, a shortage of electric car chargers is one of the hurdles EVs face to displace the gas-powered vehicles. Presently, transportation accounts for more than a quarter of U.S. greenhouse gas emissions. Still, the popularity of EVs and hybrid vehicles is already surging. Yet, despite an avalanche of promising news, the shift away from gas-fueled cars remains stubbornly marginal with green vehicles being just 2 percent of the cars sold in the United States. There are electric Hummers, an electric Mustang, and an electric Harley-Davidson motorcycle, with car manufacturers planning to triple the number of non-gas-powered models by 2024 to 203. Ford Motor Co. plans an electric version of its popular F150 pickup. Still roughly 1.5 billion gas-powered cars and trucks are still in operation.

4) Stock market closings for – 25 JAN 21:

Dow 30,960.00 down by 36.98
Nasdaq 13,635.99 up by 92.93
S&P 500 3,855.36 up by 13.89

10 Year Yield: down at 1.04%

Oil: up at $52.88

5 January 2021

1) Because of the very rapid spreading of the new coronavirus variant, England will enter its toughest nationwide lock down since March. For at least six weeks schools will be closed and people can leave home only once a day for exercise. Because of the number of people in hospitals reaching a new height the British threat level has been raised to its highest level of 5. People must now only leave home for work, if it is impossible to work from home, and for essential food and medicine. School study will be online until mid-February. All non-essential retail and hospitality businesses are closed, but restaurants and other premises will continue delivery of takeaway food but not alcohol. Places of worship can remain open, including communal worship, subject to social distancing.

2) The first stimulus payments from new the coronavirus relief bill are now on the way. However, the aid won’t suffice for many. The $300 check additions to unemployment are half the amount of the old Federal Pandemic Unemployment Compensation pay outs, which lapsed in late July. Since then, aid recipients have been getting by on state unemployment assistance, which can pay less than the minimum wage when calculated on an hourly basis. But workers will receive just over a third of last spring’s CARES package, which paid out $600 per week for four months compared to $300 for 11 weeks now.

3) Google workers have formed their first-ever union, a rare step for the tech industry that also represents the biggest and most organized challenge yet to the company’s executive leadership. This is the first union at a major tech company and it’s for and by all tech workers. So far, 226 workers have signed union cards with the Communications Workers of America (CWA), one of the country’s largest labor unions. While the pandemic made it more challenging to hold those meetings face-to-face, the shift to remote work, in some ways, made it easier to organize. The workers could theoretically mount a strike, though that would be a challenge and there are no current plans to do so. The union’s formation comes after years of rising employee tensions over the company’s business and operational decisions, such as work with the defense sector, plans for a censored search engine in China, and the company’s handling of sexual misconduct claims.

4) Stock market closings for – 4 JAN 21

Dow 30,223.89 down by 382.59
Nasdaq 12,698.45 down by 189.83
S&P 500 3,700.65 down by 55.42

10 Year Yield: unchanged at 0.92%

Oil: down at $47.34

30 December 2020

1) With President Trump signing the COVID-19 relief bill into law, millions of Americans will again have pandemic-related benefits. The COVID-19 relief bill gives those who depend on unemployment benefits some amount of relief. In addition to enhancing unemployment benefits, there is also a $600 check for every adult making less than $75,000 a year.

2) To add to the economic woes of many Americans this year, for a second consecutive week, a massive winter storm is sweeping across the north and east. A new storm system brought heavy rain, gusty winds and thunderstorms to Southern California and will move across the country this week. The new storm system will move across the US during New Year’s Eve leaving heavy snow, winds, severe thunderstorms.

3) With President Trump’s veto of the annual military bill, the House voted to override President Trump’s veto, mustering bipartisan support to enact the legislation over the president’s objections and handing him a rare legislative rebuke in the final days of his presidency. The defense bill also takes steps to slow or block President Trump’s draw down of American troops from Afghanistan. The 322 to 87 vote is the first time a chamber of Congress has overridden one of Trump’s vetoes. The bill also authorizes a pay raise for the nation’s troops. However, the Senate, which must also get a two-thirds vote of its chamber to override vetoes, will take up the legislation later in the week. But the vote is complicated by another separate bill that would increase the size of individual stimulus checks to $2,000. For 60 years, lawmakers have used the annual military bill to bring home wins to their constituents. So far, the Congress has failed to over ride any of President Trump’s vetoes. But for the Senate to gain the two thirds vote to over ride, twelve Republicans must cross over. Other provisions of the bill are new benefits for tens of thousands of Vietnam-era veterans who were exposed to Agent Orange, a 3% increase in pay for service members and a boost in hazardous duty incentive pay. The bill also requires all federal officers enforcing crowd control at protests and demonstrations to identify themselves and their agencies, as well as directing the Pentagon to rename military bases which are named after Confederate leaders.

4) Stock market closings for – 29 DEC 20:

Dow 30,335.67 down by 68.30
Nasdaq 12,850.22 down by 49.20
S&P 500 3,727.04 down by 8.32

10 Year Yield: unchanged at 0.93%

Oil: up at $48.25

24 December 2020

1) Just went everyone thought the second stimulus was a done deal, President Trump has made vague threats not to pass it. The President is asking Congress to amend the bill that has passed both chambers, with Trump decrying the bill’s $600 payments and its failure to properly support small businesses. He is now urging lawmakers to boost the $600 check to $2,000 for every American earning less than $75,000 per year. Furthermore, a veto would leave the threat of a government shutdown and expiring Covid-19 protections looming over the holiday season. The President said the bill contains too many provisions unrelated to the pandemic.

2) Threats of a second stimulus bill veto was reinforced with Trump’s veto of the defense bill, in part because of the requirement for renaming bases honoring Confederates and restrictions on the executive’s ability to bring troops home from overseas. Both the House and the Senate are already making plans for a post-Christmas session during which lawmakers plan to override the veto. Congress has until noon on January 3 to do so.

3) There are emerging new signs of economic distress. With the fate of a federal aid package suddenly thrown into doubt by President Trump, economic data on Wednesday shows why the help is so desperately needed. Personal income fell in November for the second straight month, and consumer spending declined for the first time since April, with a worsening pandemic continuing to take a toll on the U.S. economy. Applications for unemployment benefits remained high last week and have risen since early November. Experts know that things are going to get worse, the question is how much more worse. Many economists view direct payments to people as among the least effective measures, because much of the money goes to households that don’t need it. Spending on restaurants and hotels fell with transportation, clothing and gasoline also in declined. The decline in spending is spilling over into the labor market, with about 869,000 people filing new claims for state jobless benefits last week. The relief bill is smaller than many economists say is needed to carry the economy through the pandemic and ensure a robust recovery.

4) Stock market closings for – 23 DEC 20:

Dow 30,129.83 up by 114.32
Nasdaq 12,771.11 down by 36.80
S&P 500 3,690.01 up by 2.75

10 Year Yield: 0.96%

Oil: up at $48.06

23 December 2020

1) The sailing of a Chinese aircraft carrier group, led by the country’s newest carrier, through the sensitive Taiwan Strait, caused Taiwan’s navy and air force to deploy. While this isn’t the first time China’s carriers have passed close to Taiwan, it comes at a time of heightened tension between Taipei and Beijing, which claims the democratically-ruled island as its territory. China says such trips by carriers through the strait are routine, often on their way to exercises in the disputed South China Sea. Taiwan said it sent six warships and eight military aircraft to monitor the Chinese ships’ movements. China has little experience with naval air operations compared to the United States, which has operated integrated carrier battle groups with multiple vessels for decades.

2) Steven Mnuchin, the Treasury Secretary, said that millions of Americans could begin seeing stimulus payments as soon as next week. The stimulus measure is combined with other bills into a giant piece of legislation to include money to fund the government through September 2021 as well as the extension of various tax cuts. The stimulus has $600 direct payments to people as part of the bill, plus $300 in weekly unemployment benefits for 11 weeks.

3) The Justice Department has filed suit against Walmart, alleging they unlawfully dispensed controlled substances through their pharmacies thereby fueling the nation’s opioid crisis. Claims are Walmart pressured its pharmacists to fill opioid prescriptions quickly, thus denying pharmacists the ability to refuse invalid prescriptions. Therefore those pharmacists were knowingly filled thousands of prescriptions that came from ‘pill mills’. The government charges Walmart with failing to detect and report suspicious prescriptions to the U.S. Drug Enforcement Administration, as the law requires, so for years Walmart has reported virtually no suspicious orders at all. Walmart has more than 5,000 pharmacies around the country, but Walmart contends that bad doctors are to blame. Therefore, Walmart filed its own preemptive suit against the Justice Department, Attorney General William Barr and the Drug Enforcement Administration saying the Justice Department’s investigation has identified hundreds of doctors who wrote problematic prescriptions. The company is asking a federal judge to declare that the government has no basis to seek civil damages.

4) Stock market closings for – 22 DEC 20:

Dow 30,015.51 down by 200.94
Nasdaq 12,807.92 up by 65.40
S&P 500 3,687.26 down by 7.66

10 Year Yield: down at 0.92%

Oil: down at $46.80

17 December 2020

1) North Dakota, a state with an early shale oil boom, expects oil production growth to stall in the next two years because of the market crash and higher environmental standards. The problem is investment money because Wall Street is showing no signs to invest in a shale boom. Investors have grown wary of the poor cash flow even before the crash, and institutional investors are shunning oil because of climate change concerns. North Dakota has limited excessive natural gas flaring from oil wells, intending to control greenhouse emissions at the expense of production. The state is expecting output to decline in November and December because of a lack of oil well completions. Oil markets are shrinking due to the loss of demand, while growth in shale oil depends on investments to replace wells that decline rapidly.

2) The Federal Reserve shifts its focus to fighting climate change, with average temperatures climbing and severe weather events happening more frequently. The Fed’s recent financial stability report includes a section on climate change, signaling a risk that climate change could pose to the financial system. Federal Reserve supervisors expect banks to identify, measure, control, and monitor all material risks, which for many banks are likely to extend to climate risks. Therefore if those dangers aren’t considered, hazards such as storms, floods, droughts or wildfires could change the value of assets suddenly, causing a shock to the system.

3) The more a person understands interest rates, inflation, risk diversification and other financial concepts, the less likely they show signs of financial fear and distraught at times of serious economic troubles. At the start of the pandemic in March, 40% of households was making under $40,000 per year lost their jobs. By April, the jobless rate had soared to 14.7% while the $1,200 direct checks and supplemental $600 federal-unemployment benefits started. Researchers asked people if they could cover a $2,000 unexpected emergency expense, and18.9% said they couldn’t meet the expense. In a test, the survey of ‘at risks participants’ correctly answered about half of the three questions about how interest rates are calculated, inflation and risk, while people in better money condition answered almost all three (2.5 on average) correctly.

4) Stock market closings for – 16 DEC 20:
Dow 30,154.54 down by 44.77
Nasdaq 12,658.19 up by 63.13
S&P 500 3,701.17 up by 6.55
10 Year Yield: down at 0.92%
Oil: up at $47.88

7 December 2020

1) Denmark has announced it will stop offering new oil and gas licenses in the North Sea and will phase out oil production all together in 2050 as part of the country’s goal to become fossil free. The Social Democrat government reached a deal with a majority in parliament to drop Denmark’s 8th licensing round plus any future exploration plans. Conditions for the oil and gas companies currently operating in Danish waters will remain unchanged until production stops in 2050. The decision will cost the country about $2.1 billion dollars a year. Production for 2020 is 83,000 barrels of oil plus natural gas equivalent of 21,000 barrels. With Denmark being the European Union’s largest oil producer, this decision will resonate around the world.

2) Reports are that a $908 billion dollar stimulus plan has gained the support of top congressional Democrats and several senior senate Republicans, that combines many of the central priorities of congressional leaders of each party, as well as those of President-elect Joe Biden. There is funding for health officials to help with the distribution of the coronavirus vaccine, as well as aid for hospitals, the hungry, and the U.S. Postal Service. The most expensive item in the bipartisan plan is $288 billion in assistance for U.S. businesses, with lawmakers insisting that funding is geared primarily toward assisting small firms, including continuation of the Paycheck Protection Plan. There is also a range of funding for smaller measures aimed at meeting other critical needs facing the country such as schools and education funding, transportation systems, agriculture, housing and rental assistance, the vaccine program, and the U.S. Postal Service.

3) Employment picture is darkening, with the U.S. economy adding in November the fewest workers in six months, hindered by a resurgence in new COVID-19 cases that, together with a lack of more government relief money, threatens the recovery from the pandemic recession. The Labor Department reported the addition of 245,000 jobs in November, much less than the 440,000 expected, and far less than the 610,000 in October. The unemployment rate slipped from 6.9% down to 6.7%, but that was because fewer people were looking for work. With bipartisan consensus, there is hope of the $908 billion dollar aid package passing before Congress breaks for the holidays.

4) Stock market closings for – 4 DEC 20:

Dow 30,218.26 up by 248.74
Nasdaq 12,464.23 up by 87.05
S&P 500 3,699.12 up by 32.40

10 Year Yield: up at 0.97%

Oil: up at $46.09

4 December 2020

1) Exxon has announced that it will dramatically mark down the value of its natural gas properties, a result of the slow oil price recovery. The plan is to take a non-cash charge of $17 to $20 billion dollars, which is a massive hit for a company who has long opposed to taking writedowns. Exxon erred when it acquired XTO Energy, a natural gas giant, for $41 billion dollars in late 2009. Now, about half of that purchasing value has now been erased. The natural gas market is depressed with the price of gas now less than half of what it was when Exxon purchased XTO Energy. Other oil companies such as Chevron, BP and Shell have also taken massive write downs. This write down also means that Exxon will limit its near term capital spending in gas

2) Failed talks have exposed a dangerous fissure at OPEC’s core, which its partners are quietly working to repair. Diplomatic efforts center around Saudi Arabia and the United Arab Emirates on how much crude oil to pump in the coming new year. OPEC rescued the oil market this year, after an unprecedented slump in oil prices, by slashing production to compensate for the demand decline because of the pandemic. But with oil prices down for so long, many OPEC member countries life blood revenues are down which impairs operations of those governments. This puts a lot of pressure on individual countries to break away and pump without any restrictions or quotas to get the monies they need. Privately, some OPEC members are talking about even leaving the cartel and going their own way with oil.

3) During the Thanksgiving holiday week, fewer Americans applied for unemployment benefits, thereby reversing an uptick in jobless claims over the previous two weeks. But still unemployment claims remain historically high, indicating many companies are continuing to lay off workers, despite the economy recovering from the impact of the coronavirus. Some 712,000 people applied for unemployment benefits, a drop of 75,000 from the week before. Another 288,000 applied for Pandemic Unemployment Assistance, a special program for self-employed and gig workers, as well as others who don’t qualify for regular state unemployment. In addition, millions are struggling to find work during the pandemic. All told, about 20 million people are now receiving some type of jobless aid, with 12 million set to lose their benefits the day after Christmas unless Congress agrees to extend funding.

4) Stock market closings for – 3 DEC 20:

Dow 29,969.52 up by 85.73
Nasdaq 12,377.18 up by 27.82
S&P 500 3,666.72 down by 2.29

10 Year Yield: down at 0.92%

Oil: up at $45.64

19 November 2020

1) A crew of three astronauts went into space aboard a Crew Dragon spacecraft atop a SpaceX Falcon 9 booster. Not since the end of the Space Shuttle program in 2011 has America launched humans into orbit from American, to docked with the International Space Station. The Crew Dragon carried an international assembly of astronauts, three Americans and one Japanese, who are expected to spend the next six months in the station. The launch is another milestone in the commercialization of space. Previously, NASA was purchasing flights on the Russian Soyuz spacecraft but with SpaceX, NASA will save about $25 million per seat.

2) There are growing fears that tourism may not fully recover in New York city until 2025, another result of the coronavirus pandemic. New York city may only get one-third as many visitors as it did last year, a city that is one of the world’s most popular destinations. Forecasters predict that tourism will not fully rebound for at least four years, where in recent years tourism has been a vital part of the city’s economy, that supports hundreds of thousands of workers from hotels to restaurants to Broadway. New York had a record 66.6 million visitors in 2019 and drew $46 billion dollars in annual spending. The collapse of tourism has been a key reason that New York’s economy has been hit harder than most other major American cities. The city’s unemployment rate is 14.1 percent, more than double the national rate.

3) Experts predict that Boeing’s 737 MAX debacle could be the most expensive corporate blunder ever. The 20-month grounding of the 737 MAX could end very soon, but Boeing’s mounting costs have soared to tens of billions of dollars, which may rank among the most expensive corporate mistakes in history. Financially, Boeing continues to pay a high cost to ensure the safety of future 737 MAX passengers, with about $20 billion dollars in direct costs from the grounding, then $8.6 billion dollars in compensation to customers, $5 billion for costs of production, and $6.3 billion for increased costs of the 737 MAX program. Also, Boeing is spending $600 million for jet storage, pilot training and software updates that are not included in the company’s overall cost estimate. Finally, the company has established a $100 million dollar victim compensation fund, which also is not included in Boeing’s $20 billion dollars in estimated costs. Not included is the cost of legal liability which may add another $500 million. Boeing has had to borrow billions of dollars at a roughly 5% interest rate adding more money to be paid out over the 737 MAX. There is also the cost of opportunity lost from the lost of sales with 448 canceled orders for the MAX this year, compared with only nine for its other models. In addition Boeing has dropped another 782 orders from its backlog of orders believed to be no longer certain enough to rely on. In at least some cases those uncertain plane orders are jets airline customers have said they no longer want.

4) Stock market closings for – 18 NOV 20:

Dow 29,438.42 down by 344.93
Nasdaq 11,801.60 down by 97.74
S&P 500 3,567.79 down by 41.74

10 Year Yield: up at 0.88%

Oil: up at $41.62