24 March 2021

1) The CLEAN Future Act, a nearly 1,000-page piece of legislation, is meant to curb greenhouse gas emissions and air pollution that’s emitted from the petrochemical facilities that produce plastics or the raw materials used to make plastics. More significantly, the bill would impose a temporary pause on air pollution permits needed for approval of new plastics production facilities. But Republican lawmakers are raising concerns that provisions in the sweeping climate bill from top house democrats would stifle the plastics industry. The EPA regulations also require any permit for a plastics production facility to be accompanied by an ‘environmental justice assessment’, which would include consulting with the people living in the region where the facility is located.

2) Canadian Pacific Railway announced its plan to acquire the Missouri-based Kansas City Southern Lines rail company, which operates railroads in Mexico, Panama, and the United States. The new agreement will result in the first ever rail network to span the length of the North American continent to create the first rail network spanning from Canada to Mexico.
The CP values KCS at $29 billion dollars and agrees to assume $3.8 billion in outstanding debts as part of the agreement. The deal awaits final approval from the U.S. Surface Transportation Board.

3) President Biden’s economic advisers are preparing to recommend spending as much as $3 trillion dollars aimed at boosting the economy, reducing carbon emissions and narrowing economic inequality, including a giant infrastructure plan that may be financed in part through tax increases on corporations and the rich. Rather than trying to push a mammoth package through Congress, Biden has separated his plan into legislative pieces. The bill includes money for rural broadband, advanced training for millions of workers and 1 million affordable and energy efficient housing units. Additionally there is nearly $1 trillion dollars in spending on the construction of roads, bridges, rail lines, ports, electric vehicle charging stations and improvements to the electric grid and other parts of the power sector. But Republican support will depend in large part on how the bill is paid for.

4) Stock market closings for – 23 MAR 21:

Dow Jones 32,423 down by 308.05
NASDAQ 13,228 down by 149.85
S&P 500 3,911 down by 30.07

10 Year Yield: unchanged at 1.69%

Oil: down at 60.62

19 March 2021

1) American military officials are warning that, in the next few years, China could invade Taiwan. The island nation has long been a sore subject of U.S.-China relations. China’s rapid military build-up, are recent indications that Taiwan could unilaterally declare its independence from the mainland. An invasion could throw the whole region into chaos and potentially culminate in a shooting war between China and the United States, who is treaty bound to help Taiwan defend itself against Beijing. The Chinese army’s capabilities have matured to such a degree that this is no longer a dilemma we can afford to brush off. The Biden administration must signal its willingness to ‘go to the mat’ for Taiwan and help ensure the island can defend itself, but without further spooking Beijing. China has commissioned 25 advanced new ships, including cruisers, destroyers and ballistic missile submarines, with capabilities designed to keep America and its allies, who might interfere on Taiwan’s behalf, at bay. Meanwhile, China is integrating its new equipment into an increasingly sophisticated force

2) Production at U.S. manufacturers unexpectedly declined in February, representing a pause in recent momentum as factories were beset by severe winter weather and supply-chain challenges. The 3.1% decrease in output was the first since April, following an upwardly revised 1.2% gain in January. Total industrial output reflected a 7.4% surge at utilities, that was the largest advance since March 2017, also driven by increased demand for heating. Manufacturers continue to battle supply shortages and shipping challenges, but lean business inventories, steady demand from consumers and solid capital spending should push manufacturing back up.

3) A Tesla Model Y electric car, with its Autopilot engaged, crashed into a Michigan police car that had pulled over with its lights on. The driver was using Tesla’s Autopilot system when he crashed into the police vehicle, but there were no injuries, according to police. The 22-year-old driver was issued citations for failure to move over and driving with a suspended license. Tesla’s Autopilot system allows the car to brake, accelerate, and steer automatically. The electric car maker also sells its full self-driving software as a $10,000 one-off add-on and plans to release it as a subscription model this summer.

4) Stock market closings for – 18 MAR 21:

Dow 32,862.30 down by 153.07
Nasdaq 13,116.17 down by 409.03
S&P 500 3,915.46 down by 58.66

10 Year Yield: 1.73%

Oil: down at $59.53

NEW WTO DIRECTOR GENERAL IS OKONJO-IWEALA!!!!!!!

By: Economic & Finance Report

Former Finance Minister of Nigeria, Ms. Okonjo Iweala has emerged as the first woman and African, to lead the World Trade Organization (WTO).

She was confirmed as the director of the organization on Feb. 15, 2021 (Monday). Ms. Iweala has worked for the WTO in the past and is considered a top advisor within the organization, having been in senior positions within the WTO in the past.

She will be leading the WTO which is revitalizing it’s organizational apparatus and leadership. The former Nigerian finance minister was one of the final picks along with South Korea’s trade minister, Ms. Yoo Myung-Hee to lead the over 25 year old trade organization. -SB

15 February 2021

1) The Colt Manufacturing Company is ending 175 years as an American gunmaker with the purchase by the Czech firearms company CZG. Colt, a financially troubled company, that with its new Czech owner, is now expected to generate $500 million in revenue. Colt was an early innovator of interchangeable parts on the assembly line, and helped to define the growth of precision manufacturing. In addition to guns, Colt made gauges, sewing machines, printing presses and other products. The manufacture became the first school of applied mechanics in the United States, and was a fountainhead of mass production. But Colt filed for bankruptcy protection in June 2015, despite the booming sales in small arms. Like so many other manufactures, Colt was plagued by the high cost of capitalization and low return on investment that is systemic to all types of manufacturing. CZG acquires significant production capacity in the United States and Canada and substantially expand its global customer base.

2) American steelmakers’ reluctance to resume full production after pandemic shutdowns are threatening to undercut President Biden’s push to reshoring domestic industries. Producers shut furnaces down in response to falling demand from the coronavirus and now are operating well below pre-pandemic levels, even as recovering economies and tight supplies drive prices higher. The benchmark price for American steel is at an all-time high. Companies have kept blast furnaces idled on expectations that prices are likely to recede at some point, which would squeeze margins and potentially force expensive shutdowns again at those furnaces. But customers in industries from automobiles to appliances to machinery say they can’t get enough metal. This undermines the idea of supporting U.S. manufacturing. American plants are running at about 75% of their maximum potential, well down from the peak of 83% in 2019.

3) President Biden has ambitious plans when it comes to addressing climate change, by eliminating net carbon emissions from the energy sector by 2035, and the entire U.S. economy by 2050. Such a big shift away from the burning of oil, gas and coal will put many Americans out of work. Biden claims the net effect of switching from fossil fuels to clean energy in the coming years will result in more jobs, not fewer. In his first few weeks in office, Biden has taken a number of actions on climate change such as rejoining the Paris climate agreement and directing agencies to procure zero-emission vehicles, while pausing on existing leases for fossil fuel development on public lands. The Trump administration had promised to bring back jobs in areas reliant on fossil, but jobs still declined.

4) Stock market closings for – 12 FEB 21:

Dow 31,458.40 up by 27.70
Nasdaq 14,095.47 up by 69.70
S&P 500 3,934.83 up by 18.45

10 Year Yield: up at 1.20%

Oil: up at $59.73

8 February 2021

1) Ford Motor Company reports quarterly loss of $2.8 billion dollars, amid increases in investment in electric vehicles. This is a larger than expected quarterly loss, but Ford’s stock traded higher as Wall Street focused on the auto maker’s renewed push toward autonomous and electric vehicles. Their sales fell to $36 billion from $39.7 billion a year ago. Ford increased its commitment to invest in growth, with plans to spend more than $22 billion dollars in electric vehicles and $7 billion in autonomous vehicles. This investment in EVs is nearly double an earlier allocation. In the fourth quarter, Ford began U.S. sales of its all-electric Mustang, the Bronco Sport and 2021 F-150 pickup. These vehicles, alongside the return of the Ford Bronco this summer, are expected to be significant contributors to 2021.

2) Another looming uncertainty for the world automotive industry is the global shortage of automotive microprocessors. Subaru has already suspended operations for two days because of shortages. The company expects to lose 48,000 units of production in this fiscal year to March 31 because of the electronic shortages. The semiconductor shortage is bad! Subaru said that they don’t know how long this impact will last. Also Fiat Chrysler and Jeep are also limiting production because of the chip shortage and weak demand. German car makers (Mercedes-Benz maker Daimler and Volkswagen’s Porsche) are considering building up semiconductor stockpiles, to prevent a repeat of the crippling chip shortages that brought assembly lines to a standstill and stalled the production of hundreds of thousands of vehicles worldwide. A few weeks after a German official sent the Taiwanese government a letter asking for help on the semiconductor issues, Taiwan claims to have not received it.

3) China’s unconventional weapons are reportedly winning the Middle East. China has mastered the art of slowly and meticulously shaping the conditions for its interactions with the United States, gaining an advantage. From a military perspective, the Chinese have diagnosed America’s strategic reliance on conventional overmatch in order to deter major conflict. Instead, they have sought to achieve their objectives through unorthodox approaches that limit the effectiveness of our preferred conventional toolkit.

4) Stock market closings for – 5 FEB 21:

Dow 31,148.24 up by 92.38
Nasdaq 13,856.30 up by 78.55
S&P 500 3,886.83 up by 15.09

10 Year Yield: up at 1.17%

Oil: up at $57.07

27 January 2021

1) There are growing fears that the long running bull market is about to crumble and collapse. The biggest sign is there are fewer stocks helping to drag benchmarks toward fresh records. When the underlying momentum wanes then we see weaknesses developing under the surface, which is what’s happening now. Fewer stocks are managing to end above their short-term moving averages even as indexes show record closing highs and yet fewer than 45% of their stocks managed to close above their 10-day moving averages.

2) China is working to overtake America by leading the global recovery from the pandemic thereby becoming more influential on the world stage than ever before. And China just might have the momentum and confidence to pull it off. As the world’s second largest economy shrugs off much of the Covid-19 pandemic this last year, China’s economy continues growing while the world crashes into recession. This could mean China’s GDP will exceed the United States later this decade, which will be years earlier than expected. China has outpaced the United States in attracting foreign direct investment for the first time, signing a trade agreement with the European Union giving European companies greater access to China’s1.4 billion consumers. Furthermore, China’s starts the new year without one of its most aggressive political adversaries, the former President Trump. China has sent help to other countries and in the process left many third world countries deeply in debt to China, claiming they are injecting more momentum into growth. But a host of geopolitical challenges, including the clashes over Hong Kong and alleged human rights abuses in China’s Xinjiang region, taking control of islands in the South China Sea and threats to Taiwan have all exacerbated tensions with the West and may stymie efforts to foster multilateral cooperation. These actions are unacceptable to the democratic nations, who are pulling away from China despite its attractiveness as a market.

3) There are fears that Biden’s executive order will aggravate America’s food crisis, by signing an executive order that addresses America’s most pressing economic needs. This order includes measures to blunt the meteoric rise in food insecurity during the pandemic. The order calls on the U.S. Department of Agriculture (USDA) to expand three key food assistance programs, which are the Pandemic Electronic Benefits Transfer (P-EBT), SNAP, and the Thrifty Food Plan.

4) Stock market closings for – 26 JAN 21:
Dow 30,937.04 down by 22.96
Nasdaq 13,626.06 down by 9.93
S&P 500 3,849.62 down by 5.74
10 Year Yield: unchanged at 1.04%
Oil: down at $52.75

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

20 January 2021

1) There are growing fears of another stimulus package as the national debt grows. One measure of unemployment suggests Biden’s $1.9 trillion dollar stimulus plan may do more harm than good. The U-6 unemployment rate, a less popular reading than the commonly cited U-3, suggests additional fiscal support could be unnecessary. The gauge (which includes those only partially participating in the labor force) currently is at 11.7%. Five of the past six recessions saw higher readings. The coronavirus pandemic initially pushed the U-6 rate to a record-high of 22.9% in April, but easy monetary conditions and the $2.2 trillion dollar stimulus package brought the rate down in a matter of months. Still, there are serious questions about the long term stability of the world economics as nations struggle to pay off these huge national debts.

2) A new Covid-19 variant has been discovered in Brazil adding to the two newly emerged variants from the United Kingdom and South Africa. Brazil is one of the worst affected countries by the virus, where more people have died of the virus than anywhere else outside the United States. An urgent COVID warning says the worst months are still ahead, and is expected to get more people sicker faster. Infections and deaths are expected to continue increasing.

3) President-elect Joe Biden has an ambitious environmental agenda, with a principle goal of transitioning away from using fossil fuels. There are many questions just how this climate plan could affect the oil and gas industry in America. The new requirements include disclosure of climate risks from public companies, a commitment to end new drilling permits for federal lands, and to eliminate tax subsidies for the oil and gas industry. Tougher methane regulations to give incentives for Americans to buy cars that do not run on gasoline. It’s not just the big oil companies which can be hurt, for there are thousands and thousands of small companies making up the supply chain businesses, as well as the small independent wildcatters who are producing oil. But while oil is slowly recovering with prices above $50 a barrel, it is all in jeopardy if these proposals go into effect. Biden’s proposals could face stiff challenges from Texas officials and the oil and gas industry itself.

4) Stock market closings for – 19 JAN 21:

Dow 30,930.52 up by 116.26
Nasdaq 13,197.18 up by 198.68
S&P 500 3,798.91 up by 30.66

10 Year Yield: down at 1.09%

Oil: up at $53.17

11 January 2021

1) Boeing Aircraft Co. has reached a $2.5 billion dollar agreement to settle the criminal charge that it defrauded the U.S. government by concealing information about the troubled 737 MAX. This is the ill-fated jet airliner involved in two fatal crashes that killed 346 people. The airline manufacturer entered into a deferred prosecution agreement and in turn, the Justice Department will dismiss the charge against Boeing. This settlement caps a two-year criminal investigation into the two MAX crashes. This settlement will have no bearing on any pending civil litigation. In addition, Boeing will pay a $243.6 million criminal penalty. With the penalty and the fund for relatives, Boeing says it expects to pay an additional $743.6 million dollars for the fourth quarter of 2020.

2) The cryptocurrency Bitcoin is at an all-time high in 2021, one coin now worth $36,000. It has doubled its value in 30 days. Bitcoin is the first and biggest cryptocurrency, which started up in January 2009, and eleven years after its invention, the total value of all Bitcoins in the world is around $359 billion. The Bitcoins are long, unbreakable codes stored in clouds or computers. Bitcoins were invented at the height of the 2008-9 financial crisis. The idea is a type of money that didn’t depend on the traditional banking systems. Cryptocurrency is popular in countries with inflation.

3) Venture capital backed companies in the United States raised nearly $130 billion dollars last year, setting a record despite the COVID-19 pandemic, up 14% from 2019, while the number of deals is down 9% to 6,022. The so-called mega-rounds, which are deals that are $100 million dollars or higher, also hit a record amount and number, with $63 billion dollars raised in 318 deals. However, there is a big drop in the very early stage investment called the seed money stage. The trend of big investments doesn’t look like it will slow in 2021 as there is a lot of capital chasing investments. It’s expected that 2021 is going to be a banner year for many tech companies.

4) Stock market closings for – 8 JAN 21:

Dow 31,097.97 up by 56.84
Nasdaq 13,201.98 up by 134.50
S&P 500 3,824.68 up by 20.89

10 Year Yield: up at 1.10%

Oil: up at $52.73

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