24 September 2020

1) California’s annual bout of fires has just added a new dimension to the state’s history. The Creek Fire has become the state’s single most massive wildfire in history by burning 286,519 acres in Fresno and Madera counties. Ignited on September the fourth, it has so far destroyed 855 structures and damaged 71 others. There are now 50 major fires across the West coast this week, so far claiming 26 fatalities, while consuming 2.2 million acres. There are forty crews with 3,100 personnel who are fighting the fires, but only about 32% of the Creek fire blaze has been contained. No estimates yet of just how much monetary damages the state has suffered.
2) As the remnants of Sally continue moving across the southeastern United States, the first estimates are in for the damages. Sally made landfall as a category 2 storm near Gulf Shores, Alabama bringing a storm surge that caused major flooding in places like Pensacola with several feet of water. Damages are expected to cost upwards of $2 billion dollars. NOAA’s aerial imagery is being evaluated to more accurately determine the extent of flooding and damages in Florida and Alabama. Major beach erosion is also apparent too.
3) Tesla’s much touted Battery Day appears to have disappointed most of the average people, with Tesla (TSLA) stock tumbling down 8.6% in midday trading, on track for its lowest close in two weeks. Investors fear that promised new batteries will take years to fully develop and be available for automobiles. Tesla unveiled a new battery design that is 56% cheaper and more efficient for use in automobiles, which should be a big step towards the viability of fully electric cars. Additionally, the company announced a future robot car for $25,000 that will be fully autonomous, and available in the next three years. The new battery technology will enable sleeker affordable cars that can travel much longer distances on a single charge. Investors had expected announcements of two big innovations, the first one is a ‘million mile’ battery that would be good for ten years or more, as well as a cost reduction, a target specified as dollars per kilowatt-hour, which would finally drop the price of an electric vehicle below that of a gasoline car.
4) Stock market closings for – 23 SEP 20:
Dow 26,763.13 down 525.05
Nasdaq 10,632.98 down 330.65
S&P 500 3,236.92 down 78.65
10 Year Yield: up at 0.68%
Oil: up at $39.59

AMERICANS THAT ARE WEALTHY; ARE CLOSELY MONITORING THEIR FINANCES UNDER TRUMP PRESIDENCY OR BIDEN PRESIDENCY

By: Economic & Finance Report

Wealthy Americans are monitoring their finances and tax proposals from both candidates as the 2020 presidential election gets closer.

Money managers, financial advisors and accountants across the United States spectrum, have been advising their wealthy clients about what they may expect from either a Trump reelection presidency or a Biden presidency.

Some experts have advised their clients on what they will be paying in taxes under a Biden Democratic Presidency and Congress; what to expect with the current Trump Presidency and a full Republican Congress.

Things may be mightly different in comparison, opposed to exemptions and what the rich/wealthy will have to shell out and what they will save in either presidency. -SB

12 May 20:

1) Economic advisers are urging the reopening of the economy as quickly as possible to reduce unemployment rates, which they fear are already above 20%. But despite the risk of permanent economic damage, public health experts warn that reopening nonessential businesses could lead to a flare up of the pandemic. This could mean unemployment worst than the 1930’s great depression with a true unemployment rate reaching 25%. However, there are early reports that China is experiencing a recurrence of the coronavirus after they’ve started their reopening process, so the warnings of health experts isn’t to be taken lightly. While some officials state that 80% of the unemployment is from furloughs and expect very rapid re-employment with the ending of the shutdown, there remains the very real problem of how fast they can be rehired. With a large portion of businesses now strapped for cash, they will have to restart slowly as money permits. No doubt, many will have gone bust during the shutdown, having already run out of money, while many more will be cash starved for weeks, months or even years, teetering on the brink of bankruptcy.

2) Toyota Motor company plans to cut North American production by about a third before October, with expectations that it will be some time before production is restored to present levels. The company will build about 800,000 vehicles in the United States, Canada and Mexico, a number which is down 29% from the same time last year.

3) The electric automaker Tesla, controlled by Elon Musk, has filed a federal lawsuit Saturday against Alameda County in California to reverse the closing of the auto plant. The Tesla’s plant in Fremont, California was closed by health orders from the county and remain closed for social distancing reasons. Additionally, Musk is threatening to move the manufacturing plant to a more business friendly state such as Texas or Nevada, considering the regulation to be the last straw. In the last few years, California has faced a ‘business drain’ as significant number of businesses and skilled/educated workers move out of California for states offering more opportunity.

4) Stock market closings for – 11 MAY 20:

Dow 24,221.99 down 109.33
Nasdaq 9,192.34 up 71.02
S&P 500 2,930.32 up 0.52

10 Year Yield: up at 0.73%

Oil: at up at $25.38

12 March 2020

1) The WHO (World Heath Organization) has declared the coronavirus to be a pandemic, which in turn has cause the markets to make another plunge after its apparent recovery on Tuesday. The number of coronavirus cases world wide is now in excess of 100,000 with more than 1,000 in the U.S. The central banks in other western nations are cutting their interest rates in an attempt to minimize the effects of the virus and avoid a world wide economic slowdown. At present, there doesn’t seem to be an end to the markets volatility.

2) The United Kingdom is levying an additional 2% tax on big high tech companies starting the first of April. Call the ‘digital services tax’, it will levy a tax on the revenues from search engines, social media services and online marketplaces used by British citizens, but it only applies to companies making more than $650 million dollars and derive more than $35 million dollars revenue from UK users. This will encompass companies like Amazon, Apple, facebook and Google. The EU (European Union) is considering a similar tax, but with a 3% rate.

3) Oil production in the U.S. is expected to drop as a result of the dramatic collapse in oil prices. This would be the first decline in output since 2016 as drillers are cutting back on capital spending. Oil prices are below $35 a barrel, well below the breakeven price for most American shale fields. Oil prices have been pushed down by the economic impact of the coronavirus plus Saudi Arabia and Russian failing to agree on limited oil production.

4) Stock market closings for – 11 MAR 20 Stocks down 20% from their high.

Dow 23,553.22 down 1464.94
Nasdaq 7,952.05 down 392.20
S&P 500 2,741.38 down 140.85

10 Year Yield: up at 0.82%

Oil: down at $33.12

US-CHINA PHASE 1 TRADE AGREEMENT : SIGNED……

By: Economic & Finance Report

On January 15, 2020 (Wednesday), the USA and China signed the first phase of the US-China Trade Agreement. The first phase of the agreement, has China purchasing 200 billion dollars worth of goods and services, within the next 2 years from the United States .

The United States will then reduce the tariffs of $120 billion dollars worth of Chinese products, which is currently at 15% to be reduced to 7.5%. Chinese exports will then achieve over $260 billion dollars in the 2020 fiscal year.

The agreement provides more and better protection for American companies. American companies have discontent in China stealing intellectual property and trade stipulations. Phase 1, allows US banks to operate in China, while also enabling penalties for bad business and financial practices; instituted by US banks while operating in China.

So far the Phase 1 deal; seems to be a success as global markets have reacted positively to the signing of the USA-China Phase 1 Agreement. -SB

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

20 November 2019

1) There are fewer international students coming to America, which is hurting American universities and the economy. International student enrollment has been declining since the fall of 2016 which is estimated to cost the economy $11.8 billion dollars and more than 65,000 jobs. There is a perception among students that getting a visa for the United States is more difficult and it’s increasingly unsafe in the U.S.

2) National retailer Kohl’s posted quarterly sales that was lower than analysts’ projections, and has fallen the most in almost three years. This raises further concerns about the future of department stores, a market segment that has been struggling to adapt to broad changes in consumer habits. Kohl’s shares fell as much as 18%, the biggest one day tumble since January of 2017. Other department store chains such as Macy’s and Nordstrom have seen declines too.

3) Home Depot shares fell after reporting a third quarter earnings below Wall Street expectations, and the company cut its full year outlook for the rest of 2019. Like so many other traditional retailers, Home Depot is struggling to adapt to the online market place. While they are spending a lot of money to become a bigger online player, the company hasn’t seen the results they expected. The home improvement retail landscape is getting tougher.

4) Stock market closings for – 19 NOV 19:

Dow                27,934.02   down   102.20
Nasdaq            8,570.66          up     20.72
S&P 500           3,120.18    down        1.85

10 Year Yield:    down   at    1.79%

Oil:     down   at    $55.15

PRESIDENT TRUMP GOES AFTER GENERAL MOTORS FOR DWINDLING U.S. WORKFORCE!!!!!!!!!

By: Economic & Finance Report

President Trump is not a happy camper. The president recently gave GM a scathing tweet on Friday, about their diminishing workforce presence in the United States.

General Motors (GM), the Detroit based automaker had once been the country’s biggest auto manufacturer, and it has been apparent since 2009, their workforce has constantly been decreasing.

GM has countered those claims of a diminishing workforce, and has insisted they have invested billions of dollars in U.S. based manufacturing operations for the past 10 years. -SB

CHINA PLACES RATE REFORMS FOR COMPANIES………

By: Economic & Finance Report

The Central Bank of China instituted key interest rate reforms on Saturday, August 17, 2019. The China’s Central Bank did this to help companies and corporations with borrowing costs.

China has been suffering from the trade war with the US. The lower interest rates could help companies with lowering their borrowing costs. The central bank will be trying to improve thier interest rates, which will then assist these companies in borrowing costs that would be minimal.

China’s State Council indicated they want the country to focus on market based reformation, which will then lower real interest rates significantly. -SB

26 June 2019

1) The problem of student loan debt is becoming more acuate. The effects of the $1.6 trillion dollar student loan debt, which represents about 8% of national income, is a massive burden, which has doubled since the mid 2000s. The consequences for massive student loans is that young people are delaying marriage and family formation, hampering the growth of small businesses, delaying the purchases of first homes, saving for retirement and in general reducing the discretionary income of young people. For a consumer based economy, all these spell an adverse overall effect on America’s economy.

2) The consumer confidence has fallen to its lowest level in 21 months with people more pessimistic about business and labor market conditions. Worries about recent increase in trade tensions between China and the United States further erodes consumer confidence. The consumer confidence index dropped 9.8 points to 121.5 for this month, the lowest since September 2017. While the index remains high, the drop has fueled fears of a continual downward slide reflecting a reluctance for consumers to make purchases other than essentials.

3) The British fund manager H2O, which had stellar returns with surging assets from clients buying in, last week clients starting pulling their money out. The investment manager lost $3.4 billion dollars in just three days. H2O is fighting back taking measures to assure investors the company can meet redemptions, but also making it more adverse for getting out. Their goal is to avoid fund freeze that has thrown other fund managers into chaos.

4) Stock market closings for- 25 JUN 19: Stocks decline after weak consumer confidence report.

Dow                 26,548.22    down    179.32
Nasdaq             7,884.72    down    120.98
S&P 500            2,917.38    down      27.97

10 Year Yield:    down   at    1.99%

Oil:    up   at    $58.77