TESLA PURCHASES $1.5 BILLION DOLLARS WORTH OF BITCOIN……….

By Economic & Finance Report

Tesla boss Elon Musk put his money where his mouth is, literally. Tesla in SEC regulatory filing; indicated that the company invested $1.5 billion in bitcoin on January 2021 (last month). The company also indicated they will be accepting bitcoin as a payment option, for their products and services in the future.

The announcement puts Tesla as one of three major tech companies collecting bitcoin as a form of currency in the upcoming future. The other two technology companies that accept bitcoin are Paypal and MicroStrategy.

The $1.5 billion dollar bitcoin amount purchased by Tesla is approx. ten percent of the company’s financial reserves; which indicates that Musk and Tesla are in the long haul when in comes to cryptocurrency. It also indicates that Musk values crypto as an alternative to the standard USD dollar. Bitcoin (BTC) leaped upward 14% on Tues Feb. 8, 2021; from the news that Tesla invested $1.5 billion in bitcoin. -SB

Image Credit: GulfNews.com

3 February 2021

1) Robinhood day traders are suing over trading limits are finding themselves facing a high legal bar. Online brokerage firms halted trading on several companies whose stocks were being heavily trading short, because frenzied trading on the internet brokers caused their price to skyrocket, therefore earning millions of dollars in profits, but causing billions in losses to hedge funds that were shorting the stocks. These companies are GameStop, BlackBerry Ltd., Nokia Oyj and AMC Entertainment Holdings Inc. But legal experts say brokerages have broad powers to block or restrict transactions, which are spelled out as part of customer agreements that everyone signs to gain access to the services.

2) Eastman Chemical Company’s CEO Mark Costa announced the company plans to build one of the world’s largest plastic-to-plastic molecular recycling facilities. Eastman will build a $250 million dollar facility which will convert polyester waste into durable products. The facility will convert polyester waste, that often ends up in landfills and waterways, into durable products. More than 100,000 metric tons of plastic waste, that cannot be recycled by current mechanical methods, are used to make premium, high-quality specialty plastics made with the recycled content. This process reduces the company’s use of fossil (oil) feedstocks thereby reducing its greenhouse gas emissions by 20 to 30 percent. This facility is due to be completed by end of 2022. Eastman goal is to recycle 250 million pounds of plastic waste annually by 2025 and more than 500 million pounds of plastic waste annually by 2030 using molecular recycling technologies.

3) The long-awaited law that allows low-volume car makers to build cars with complete drivetrains in them is finally ready. The NHTSA has completed a regulation that permits low-volume motor vehicle manufacturers to begin selling replica cars that resemble vehicles produced at least 25 years ago. Previously, automakers producing low volumes were not allowed to manufacture their cars with an engine and power train, which instead had to be installed by third parties. These low volume automakers manufacture old-car replicas of models twenty five or more years old, such as the 1932 Ford Roadsters or DeLoreans, Allards or the J2X MkIII, a modern hand-crafted version of the famed British competition roadster. These replicas are still required to meet pollution standards of today’s automobiles. At this time, there are no engine packages available for use in replica cars, so manufacturers who wish to supply engines to the replica car builders will have to be certified just like other light duty manufacturers.

4) Stock market closings for – 2 FEB 21:

Dow 30,687.48 up by 475.57
Nasdaq 13,612.78 up by 209.38
S&P 500 3,826.31 up by 52.45

10 Year Yield: 1.10%

Oil: up at $55.02

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

7 January 2021

1) Chinese stocks listed in the U.S., including China Telecom Corp. and Pinduoduo Inc., fell on the prospect of further American sanctions. This decline was led by a group of Chinese telecommunications stocks after the New York Stock Exchange said it will delist three companies to comply with a U.S. executive order. While the companies are mostly traded in Asia, their stocks are also traded domestically. But an order from President Trump barred American investments in China-based firms that are affiliated with the military. However, there is now talk of the order being modified or even rescinded.

2) Reportedly, Chinese cities are going dark as the country faces shortages of coal, which is a major Australian export, as authorities limit power usage, citing the shortage of coal. Analysts said prices of the commodity in the country have shot up due to the reported crunch with some tying the shortages and blackouts to the unofficial ban on Australian coal. In turn, prices of the commodity have shot up due to the reported crunch. The reports also follow rising trade tensions between Beijing and Canberra, leading some analysts to tie the coal shortages and blackouts to the unofficial ban on Australian coal. Relations between the two nations have soured since last year because Australia supported an international inquiry into China’s handling of the coronavirus pandemic. Coal is just one in a growing list of Australian goods that China is targeting. China is the world’s largest coal consumer and its greatest source of coal imports was Australia.

3) Shale oil needs more than $50 a barrel to be profitable, something that is now a possibility because of Saudi Arabia’s pledge for a big supply cut in their oil production. But Joe Biden wants to ban new fracking in New Mexico, an area that has emerged as the ‘go-to’ spot for drillers desperate to squeeze as much crude from the ground without bleeding cash. The price was above $50 before the pandemic sent oil markets crashing, forcing over 40 explorers into bankrupt. It will take at least three months for shale producers to ramp up production, because that would involve decisions on new drilling and getting well-completion crews together, which puts their operations well into the new Biden administration.

4) Stock market closings for – 6 JAN 21:
Dow 30,829.40 up by 437.80
Nasdaq 12,740.79 down by 78.17
S&P 500 3,748.14 up by 21.28
10 Year Yield: up at 1.04%
Oil: up at $50.48

21 December 2020

1) There is a move in congress, lead by Rep. Ayanna Pressley, urging President-elect Joe Biden to cancel up to $50,000 per person in federal student debt. Supporters of the move consider the student debt crisis as a racial and economic justice issue encompasses the kind of bold, high-impact policy that the broad and diverse coalition, which elected Joe Biden and Kamala Harris are expecting them to deliver. The mounting student debt problem has 45 million Americans owing a total of about $1.6 trillion dollars in student loans, with one in 10 loans in delinquency or default. The typical monthly payment is between $200 and $299, with minorities experiencing the most difficulties with student debt.

2) A massive heavy snow storm continues to cross the Northeast as the season’s first major winter storm slowly moves off the East Coast, leaving as much as 4 feet of snow. There has been hundreds of vehicle crashes with some of them being deadly. The storm has left more than 50,000 customers without electricity mainly in Virginia and New York state. The interior of Pennsylvania and New York state took the brunt of the storm, the storm setting a new two-day snowfall record in Binghamton. The previous record was recorded March 2017 with 35.3 inches of snow. Airlines have canceled more than 600 flights because of the snow.

3) President Trump has issued an executive order prohibiting Americans from investing in companies tied to China’s military complex. U.S. investors are bared from buying into 35 Chinese companies the Pentagon has classified as aiding China’s defense, intelligence and security apparatus. The executive order has sparked sell offs of Chinese stocks and bonds, forced index firms to drop companies from marquee benchmarks, and pushed Wall Street to reassess risks from investing in China. There are questions at the state department whether the blacklist should include subsidiaries of the companies, or if affiliates should be included. Asset managers are now reaching out to the Biden transition team to glean how the new administration will interpret the executive order. Starting on January 11, U.S. investors are barred from the purchase or investment in stocks, with investors having until November 2021 to get rid of their Chinese securities.

4) Stock market closings for – 18 DEC 20:

Dow 30,179.05 down by 124.32
Nasdaq 12,755.64 down by 9.11
S&P 500 3,709.41 down by 13.07

10 Year Yield: up at 0.95%

Oil: up at $49.08

18 November 2020

1) Crude oil prices and energy stocks aren’t the only things that have fallen during this oil downturn, land prices with potential oil shale have also plummeted. The average price of U.S. oil shale acreage has fallen by more than 70 percent in two years, falling from $17,000 per acre in 2018 to $5,000 per acre in 2020. The value of oil and gas assets has plunged because of the coronavirus pandemic sending crude oil demand down globally, consequently most energy companies are slashing their costs instead of purchasing new land for oil and gas drilling. Oil and gas companies are forced to sell assets to make up money lost on deals.

2) On January the first of next year, President Trump’s pause on student loan payments for 33 million Americans is set to expire, just three weeks before President-elect Joe Biden is slated to take over. The Education Department is warning borrowers this week that their monthly payments will resume. For the incoming president, the economic and administrative mess could take months to untangle, consuming the early days of his Education Department. The student loan system was not designed to start and stop at any time for 30 million borrowers. This became apparent in March when loan payments were suspending and problems for borrowers quickly arose. This is just one facet of the economic problems facing the new president in just a few months, that not only must be addressed, but addressed correcting if problems are not to get worst.

3) The United States has surpassed 11 million coronavirus cases , that’s 1 million new infections in just one week, or 2 million since the beginning of the month. Consequently, hospitals are reaching a breaking point trying to treat nearly 70,000 Covid-19 patients. Medical workers are tired . . . mentally, physically and emotionally exhausted. The stress is being felt around the nation, with the virus spreading like wildfire and the medical system having no backup. If you act early, you can save lives, but if you don’t, you’ll be swamped by a tsunami of this virus. But a Covid-19 vaccine may be in the making with Moderna announcing it has developed a vaccine that’s nearly 95% effective, capable of preventing severe illness, and it could start giving vaccinations to high-risk patients and health care workers as soon as December. A week before, drugmaker, Pfizer announced that its human trials suggest its coronavirus vaccine is more than 90% effective.

4) Stock market closings for – 17 NOV 20:

Dow 29,783.35 down 167.09
Nasdaq 11,899.34 down 24.79
S&P 500 3,609.53 down 17.38

10 Year Yield: down at 0.87%

Oil: down at $41.40

JACK MA’S ANT GROUP DOES NOT GET PUBLIC IPO… YET..STOPPED BY CHINA

By: Economic & Finance Report

Jack Ma’s Ant Group IPO was supposed to be going public on the Shanghai Stock Exchange recently, but has been halted by the Chinese government for disagreements between the Chinese government and Jack Ma (AliBaba/Ant Group’s co founder).

The IPO was listed to raise over $37 billion dollars USD, making it the biggest share sale in the history of the global stock markets. Saudi Arabia’s Aramco holds the biggest share offering title; currently with its share offering last December 2019, raking 29.4 billion dollars USD. The spectators will have to wait and see, if or when the IPO will go public -SB

Image Credit: MoneyControl.com

2 September 2020

1) Five American companies make up 24% of the S&P 500 Index, the big high tech companies Apple, Amazon, Microsoft, Facebook and Alphabet. These five companies made up 17% of the index at the start of the year. This makes a significant part of American net worth and security for retirement dependent on just a handful of stocks, which makes some financial advisers nervous having their eggs in too few baskets. One hiccup in the technology sector could mean major losses across the board.

2) Another shooting of a young black man Monday in South Los Angeles has sparked more protest that could lead to more city rioting. The man was stopped for violating vehicle codes, but then ran, with the police in hot pursuit. When police caught up with him, he punched one policeman in the face at which time a semiautomatic pistol dropped out causing both policemen to open fired. Since the victim didn’t have the weapon in hand, nor was it ever pointed at either police officers, so there are questions about the shooting. So far, protests have been peaceful.

3) The U.S. Justice Department is investigating the protest leaders and their funding in Portland and other cities for possible criminal activity. With riots and civil unrest now at a hundred days, and significant monetary loses have been occurred, questions are being raised about who is behind the well organized protesters seemingly intent on violent confrontation. Of especial interest is the loosely organized far left Antifa and the Black Lives Matter, and who is ultimately controlling their operations through funding and why.

4) Stock market closings for – 1 SEP 20:

Dow 28,645.66 up 215.61
Nasdaq 11,939.67 up 164.21
S&P 500 3,526.65 up 26.34

10 Year Yield: down at 0.67%

Oil: up at $43.01

3 August 2020

1) Another sign of how badly the pandemic has wrecked the world economy is the huge losses that Exxon Mobil and Chevron have reported for the second quarter. The losses were even worst than Wall Street expected. Both stocks were the biggest losers in the Dow. Exxon lost $1.1 billion dollars with Chevron losing $8.3billion dollars. Oil is a principle component in a modern economy, and therefore a strong indicator of how an economy is doing.

2) Another internet satellite system has been approved by the FCC (Federal Communications Commission). Amazon’s Project Kuiper is a network in the sky of 3,236 satellites which will provide broadband internet access with the restriction that it doesn’t interfere with previously authorized satellite ventures. Amazon plans to invest $10 billion dollars in the project to compete with SpaceX, OneWeb and Telesat systems. Service will begin once the first 578 satellites have been launched. It’s expected service will begin sometime before 2026.

3) High tech giant Google has announced they are formally extending work from home until the summer of 2021. The extension will affect about 200,000 employees to include contractors and full time workers, including operations off shore. Most of the other tech companies have set at home working until the end of this year, but Google’s announcement fuels speculation if other companies will follow suit and extend their at home work schedule. Google was one of the first companies to implement work at home policy in an effort to prevent the spread of the coronavirus.

4) Stock market closings for – 31 JUL 20:

Dow 26,428.32 +114.67 +0.44%
Nasdaq 10,745.28 +157.46 +1.49%
S&P 500 3,271.12 +24.90 +0.77%

10 Year Yield: 0.54% -0.00 —

Oil: down at $40.43

17 JUL 2020

1) Looming in the wings of the pandemic crisis is another major crisis . . . and epidemic of evictions. With the unemployment rate still more than 10% and eviction protections lapsing across America, housing experts expect millions of Americans to lose their homes in the coming months. For millions of Americans, the housing situation was already precarious before the pandemic. Many are paying large percentages of their monthly incomes toward rent, but don’t have enough to cover an unexpected expense of just a few hundred dollars. With insufficient money from unemployment, people are facing living on the streets during 100 degree plus temperatures, hurricane season and possibly freezing weather if the problem continues. This would also mean increased exposure to the Convid-19 virus.

2) A bright spot in the economy is that retail sales rose again for the second straight month as shoppers slowly trickle back into stores. But with conronavirus cases on the rise, this could be short lived. Sales increased 7.5% for June, from May, better than the 5% estimated by economists. Sales were driven by clothing, electronics and appliances as well as home furnishing. Still, foot traffic through stores is way down, people coming in with specific items to consider buying instead of just browsing. So far this year, 4,000 stores are closing permanently with as many as 25,000 expected by the end of the year. Last year, there were 9,302 store closing.

3) The traditional investing axiom of 60/40 portfolios is coming into question. This is the mix of 60% stocks and 40% bonds, which is generally considered the best risk minimizing strategy for individuals to use in building their fortune. But with Treasury yields now hovering around zero, and expected to stay there for years, those gains are in doubt. For decades, this strategy has given the best returns with the least risk in times of volatile markets. Consequently, investors are scrutinizing the strategy as maybe out of date in a changing economy.

4) Stock market closings for – 16 JUL 20:

Dow 26,734.71 down 135.39
Nasdaq 10,473.83 down 76.66
S&P 500 3,215.57 down 10.99

10 Year Yield: down at 0.61%

Oil: down at $40.80