1) Ford Motor Company’s sales in China has declined for the third straight year, falling by 26.1%. The company has been trying to revive sales in China after the decline started in 2017 and plans to introduce thirty new models in the next three years, with a third being electric models. General Motors has also experienced a decline in sales of 15% this last year.
2) One of the largest suppliers of parts to Boeing’s 737 MAX, Spirit AeroSystems, is laying off 2,800 workers. Based in Wichita Kansas, will eliminate 20% of its workforce. Smaller layoffs will happen at its facilities in Tulsa and McAlester, with half its annual sales from parts for the 737 MAX. Since last February, Spirit’s stock has fell from a high of $100 a share to $71.50 on news of the layoffs.
3) Expectations are that the U.S. will remove China from its list of currency manipulators two days before the signing of initial U.S. – China trade agreement. Part of the agreement is that both nations will not devalue its currency to gain a competitive advantages of exports. Labeling China a currency manipulator was viewed largely as a symbolic action.
4) Stock market closings for – 13 JAN 20: Stocks are up 495% in the past decade.
Dow 28,907.05 up 83.28 Nasdaq 9,273.93 up 95.07 S&P 500 3,288.13 up 22.78
1) Another wave of technology displacement is sweeping across America, with 32 stores getting rid of their cashiers and checkout lanes. For the last decade or so, there has been an increasing incident of self checkout facilities appearing in stores. Driven by Amazon’s marketing model, retailers are experimenting with ways and methods to dispense with the labor cost from check out clerks. The ‘one of a kind’ Sam’s Club Now is really an incubator to develop the technologies for automated check out systems in stores. Walmart has its Scan & Go app, Kroger its Scan Bag & Go service and fast food chains such as McDonald’s, Pizza Hut and burger King have kiosk systems for ordering.
2) California is not seeing the expected revenues for legalization of cannabis for personal use. After three years of legalization, the anticipated windfalls have failed to materialize a result of regulations and a robust black market cutting into legal sales. The legal market has produced just a fraction of what the state had anticipated, while legal growers who invested millions to cultivate the product are not seeing any profits. Growers must pay a number of fees to the government annually, which cut heavily into their profits.
3) If China signs a partial trade deal with the U.S., it will buy at least $20 billion dollars of agricultural products in a year. This would take China’s farm goods imports back to the levels of 2017, before U.S. imposed tariffs, which once removed might actually push imports up to as much as $40-$50 billion dollars a year. China has already issued waivers for 10 million tons of soybean purchases this week, and is considering an additional 4-5 million tons of grains.
4) Stock market closings for – 24 OCT 19:
Dow 26,805.53 down 28.42 Nasdaq 8,185.80 up 66.00 S&P 500 3,010.29 up 5.77
1) China has announced they are ending caps to foreign financial ownership, allowing foreign firms to have full ownership of financial services companies. Starting in 2020, overseas institutions can apply for total control of onshore ventures. China has been opening its financial sector at an unprecedented pace to lure financial giants such as Goldman Sachs, JP Morgan Chase and Morgan Stanley into greater participation in China’s economy.
2) Investors are retracting the fastest since the collapse of Lehman Brothers. In the past six months, money market funds have attracted billions of dollars of inflows, the largest flight to safe assets since the second half of 2008, with investors raising their cash holdings despite falling interest rates. This is being driven by unresolved issues of the trade war, Brexit and the domestic political turmoil mixed with fears of a recession.
3) The U.S. and China have reached a partial agreement Friday which would broker a truce in the trade war. This will lay the groundwork for a broader deal later with Presidents Trump and Xi Jinping. News to the agreement cause the markets to shoot up over 300 points. Part of the agreement is for China to make agricultural concessions and the U.S. provide some tariff relief.
4) Stock market closings for – 11 OCT 19:
Dow 26,816.59 up 319.92
Nasdaq 8,057.04 up 106.26
S&P 500 2,970.27 up 32.14
1) GE (General Electric) paid $1.5 billion dollars civil penalty for sub-prime house loans prior to 2007, to resolve claims over residential mortgage loans made by their WMC Mortgage unit, a company purchased by GE during the boom prior to the economic collapse in 2008. Their lending activities concealed the poor quality of the loans being made.
2) The Chevron oil company is buying the Anadarko Petroleum Corporation for $33 billion dollars which will put Chevron Corporation in the top ranks of energy companies. Chevron will be the third largest oil producer behind Exxon and Shell.
3) The GE20 group announced the global economy is slowing down faster than was expected, with an anticipated global growth of 3.3% for this next year. This is the lowest expansion since 2016, which may become worst if US-China trade tensions should increase.
4) 12 APR 19 Stock market closings: JP Morgan-Chase and Disney pushed stocks up.
Dow 26,412.30 up 269.25 Nasdaq 7,984.16 up 36.80 S&P 500 2,907.41 up 19.09
1) Shale oil companies are adding even more new wells, but that is threatening the future of the US oil boom. Their strategy of drilling more wells chose to old wells has backfired because the new wells not only have lower outputs than the old wells, but the production of the old wells also declines.
2) Again, there are reports that the US-China trade talks are still progressing well and soon may end with an agreement to end the trade war tariffs.
3) 4 MAR 19 Stock market closings:
Dow 25,819.65 down 206.67 Nasdaq 7,577.57 down 17.79 S&P 500 2,792.81 down 10.88
New article posted below titled, “NIGERIADECIDES: BABA MUHAMMADU BUHARI REELECTED AS NIGERIA’S PREZ.”
1) The takeover of Time Warner by AT&T, an $81 billion dollar acquisition, has been cleared by the US Appeals Court. This acquisition will bring Warner Brothers, HBO and Turner to AT&T’s video, mobile and broadband services.
2) US farm debt soars to levels that haven’t been seen since the 1980’s farm crisis. The debt has risen from $385 billion dollars to $409 billion dollars which indicates a high strain on the US farm belt, a result of commodity prices, storm damage and loss of key exports principally China. The present day situation is similar to 1980’s financial collapse of American farms.
3) China-US are making real progress in trade talks, but the talks are far from being completed. US is taking a tougher stand by insisting on an all or nothing agreement.
4) 27 FEB 19 Stock market closings:
Dow 25,985.16 down 72.82 Nasdaq 7,554.51 up 5.21 S&P 500 2,792.38 down 1.52
1) Germany’s business outlook falters amid Brexit concerns of potential US tariffs, especially on their car exports in addition to uncertainty of the German people. Germany has the largest European economy.
2) The father of Reaganomics says it’s time to get out of the market. He cautions that the end of easy money policies, the huge deficit and a near record economic expansion are all signs of a pending market collapse.
3) Trade talks continue between China and US as tariff deadline nears causing worries of talks failing. But after meeting with his advisers and Chinese officials, President Trump has extended that deadline citing the talks are going so well. Negotiators have reached a compromise on key issues, such as China’s requirement that American companies give intellectual property and technology to do business in China, more purchases of agriculture and energy products such as liquid natural gas. But so far, there hasn’t been a signing of an official agreement.
4) 22 FEB 19 Stock market closing:
Dow 26,031.81 up 181.18 Nasdaq 7,527.54 up 67.84 S&P 500 2,792.67 up 17.79
The US Supreme Court in the first week of October, will be hearing an important case on insider trading. The case is important because it will limit prosecutors setting out on litigation against hedge fund managers and their hedge funds.
The case that the justices will hear is one of Bassam Salman, an Illinois investor who accumulated $1.2 million dollars from inside trading, because his brother in law had insider trading information on Citigroup Inc clients. Salmon’s brother worked for the Citigroup as well.
In over 20 years the Supreme Court has never once decided an insider trading case, most times cases were handled in lower courts and were defined by the SEC to pursue litigation. This case is one of its kind for the financial regulatory body.
It is noted that the outcome and decision of this particular case could have an enormous effect in the investment and trading community; and better be sure the financial watch dogs will be monitoring the outcome of this definitive case. -SB
US Federal Reserve may be raising interest rates as early as the first week of September. The Federal Reserve just completed their annual retreat in Jackson Hole, Wyoming. The interest rate hike coming, has seen a surge of the dollar against it’s Asian market counterparts.
The Financial sector has been the leading sector leading the stock market, and probability of an interest rate hike sooner then later, seems to be paramount. This seems to have a very formal effect on how the 3rd quarter will develop. Stocks have been rebounding and gaining in the last couple of weeks, because of a possibility of a interest rate hike, and it certainly seems to be heading in that direction… -SB
China’s institutional buyers are closely intertwined in global real estate markets. China’s investors have long been focused on long term investments, particularly in real estate assets. China’s largest real estate investor CIC (China Investment Corporation) has been investing in large real estate assets since 2013. They poured in over 5 billion dollars in financing real estate purchases.
China collectively has spent over $300 billion on real estate in the US. In 2015 Chinese investors surpassed Canadian investors for the very first time, in purchasing USA real estate. Chinese buyers purchased close to 100 billion dollars worth of real estate in 2015 in the US, and the trend does not seem to be slowing down. Chinese President XI Jinping has indicated that he world put in place more supply side reforms and increase the Chinese middle class because of the recent slowdown; in the Chinese economy during 2016. -SB