15 August 2019

1) Fears are growing that the world is moving towards an economic crisis, based on signs from Washington and Wall Street, starting with President Trump’s retreat from adding new tariffs. The stock market rose over the news meaning Christmas had been saved for this year’s sales. But the bond market wasn’t as optimistic, the rates dropping indicating a lack of confidence in the future economy. Called an inverted yield curve, it signals investors expect a weak growth and lower inflation over the years.

2) The troubling signals from the bond market caused the stock markets to drop, with the Dow dropping 800 points to erase all of Tuesdays gains. Worried about the state of the economy, investors are rushing to long term safe haven assets, pushing the yield on 30 year Treasury bonds to a new record low. The Cboe Volatility Index jumped to a high of 22.

3) The financial problems plaguing Boeing aircraft from the 737 MAX grounding may delay or even cancel Boeing’s next airliner design, the 797. A mid-size airplane, the aviation industry expected Boeing would go ahead with a new design, but the sever loses from the 737 MAX are now casting doubt on that happening, especially if the world economy does deteriorate. The 797 is expected to be a long range jet seating about 250 passengers. The design would make extensive use of light weight composites giving good fuel economy and range. Additionally, engineering resources are being pulled away from the 797 to work the 737 MAX problem.

4) Stock market closings for – 14 AUG 19:

Dow           25,479.42    down    800.49
Nasdaq        7,773.94    down    242.42
S&P 500       2,840.60    down      85.72

10 Year Yield:    down   at    1.58%

Oil:    down   at    $54.95

7 May 2019

1) The jobs report Friday was better than expected, up from last months 190,000, with 263,000 jobs reported and unemployment down again to 3.6%. This underscores the economy’s vigor with unemployment at half the century low. This may eliminate the markets fears of a recession.

2) This Friday, just after midnight, China will have an additional 25% tariffs imposed. However, there are fears that domestic Chinese politics may cause the ploy to backfire, from the Chinese people seeing their government backing down to America. Therefore, the Chinese government may not be able to respond as Washington is expecting.

3) Fears of the consequences of more tariffs on China caused a slight downturn of today’s market closings.

4) 6 MAY 19 Stock market closings:

Dow             26,438.48    down    66.47
Nasdaq          8,123.29    down    40.71
S&P 500         2,932.47    down    13.17

10 Year Yield:    down   at    2.50%

Oil:    down   at    $62.04