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
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
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
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
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
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
1) The $800 billion dollar trucking industry is in a slowdown as retailers and manufacturers are shipping less. Freight rates have declined for the last six months with the spot market dropping 62.5% for May verses last year. Already, a few major trucking firms have gone bankrupt, with one laying off 550 employees. Even the major trucking companies FedEx, UPS and J.B. Hunt have experienced declines sparking fears of a slowdown of the economy.
2) Harley-Davidson is making good its promise to build more motorcycles outside the United States by partnering with China’s Qianjiang Motorcycle to produce smaller motorcycles. The new bike will have a 338 cubic centimeter engine verses the 601 cc engine for its domestic motorcycles. Harley-Davidson is trying to boost its overseas sales as its domestic market shrinks.
3) Expectations for future global growth and corporate profits have shrank as investor confidence continues to decline amid the trade war. Concerns of an economic slowdown further fuel fears of investors for the demise of global growth, despite America’s stock market now trading near its record high. Global profit expectations fell by the second largest amount on record. The giant retailer Walmart announced they will be laying off nearly 600 employees later this year.
4) Stock market closings for- 19 JUN 19:
Dow 26,504.00 up 38.46 Nasdaq 7,987.32 up 33.44 S&P 500 2,926.46 up 8.71
1) The United States announced that economic exemptions for Iran oil will be invalid starting the second of May. There are eight countries with exemptions, Asian nations who would suffered hardships from the oil sanctions, but some have already foregone their exemption status. China and India will be the hardest hit from no longer being exempt from Iranian oil sanctions.
2) The Trump administration is cracking down on zero-down home loans from the national affordable housing programs. Fears are mounting over the $1.3 trillion dollar Federally insured home mortgages, stemming from the 2008 housing crash which cost $17 billion dollars from defaults.
3) Executives of automotive manufactures are very concerned about new car sales, considering that at best, stagnation will occur in 2019. For the first three months, new auto sales have been down, they considering that the auto industry having reached a plateau. With half the new auto sales being SUV’s and crossovers, verses only one third for traditional sedans with many models being phase out, there are concerns over the typical new auto costing $34,000 to $35,000. Rising high prices are increasing putting new cars out of the reach of the average American.
4) 22 APR 19 Stock market closings:
Dow 26,511.05 down 48.49 Nasdaq 8,015.27 up 17.20 S&P 500 2,907.97 up 2.94
1) The IMF (International Monetary Fund) has reduced their forecasted for world economic growth from 3.5% to 3.3%, which is the third reduction since last October. It forecasted 2.3% growth for the US economy, as well as reduced growth forecast for Germany and Great Britain.
2) Walmart is rolling out thousands of robots for use in their retail stores across America. These robots will automatically scan shelves and clean floors. With a million employees, Walmart is seeking ways to keep labor cost down.
3) Bank of America is raising it’s minimum wage to $20 an hour over the next two years. Starting the first of May, the rate will increase to $17 per hour. The bank has 205,000 employees.
4) 9 APR 19 Stock market closings: Markets pulled down by industrial sector.
Dow 26,150.58 down 190.44 Nasdaq 7,909.28 down 44.61 S&P 500 2,878.20 down 17.57