US adds 266k jobs in November

CNBC Article

The US economy added 266,000 jobs last month, exceeding expectations by over 70k. Unemployment also dropped from 3.6% back down to 3.5%, which is the lowest in 2019 and since 1969. This is helped by the end of the GM strike which added 41,300 jobs on its own. This is really great news contradicting so far some opinions that we might head into a recession, and more good news like this might help stem that looming possibility even longer. Bad news on some other economic news of late, but this is reassuring.

Global Economy Will Recover

https://www.cnbc.com/2019/12/05/global-economy-will-recover-in-the-second-half-of-2020-says-ubs.html

Global growth will recover in the second half of 2020 as the trade war between Washington and Beijing eases and central banks’ monetary policies come into effect said Adrian Zuercher, APAC head of asset allocation at UBS Global Wealth Management’s Chief Investment Office. Tensions are already smoothing with the first phase of the trade deal having taken place in October. The second phase is set to take place on December 15. Do you think these trade deal will continue to succeed and do you think we will avoid entering a recession in 2020?

Saudi Aramco Raises $25.6 Billion in the World's Largest IPO

Saudia Arabia's giant state-owned oil monopoly, Saudi Aramco raised $25.6 billion dollars at IPO. The deal raised more than Alibaba's in 2014, and is valued at half a trillion dollars higher than Apple. While it does look like a can't miss opportunity, I believe there will be some uncertainty in the future due its connection with climate change. Not only has the threat of climate change been an issue for the company already, but it most will loom larger in the future.

https://www.cnn.com/2019/12/05/investing/saudi-aramco-ipo-price/index.html

OPEC meeting ends with market expecting deep production cut

OPEC members are getting closer to a deal with cutting oil production. Official numbers will be released Friday, but estimates seem to be higher than expected, around a 500,000 barrels per day cut. This would bring daily production down to  1.7 million barrels per day which is a 23% decrease. With the US drilling more and more oil markets are flooded with American oil decreasing prices further. A cut was expected, but it is not clear what magnitude of an effect this will have on prices as many OPEC countries are already under-producing.

With the trade war having no end in sight do you think we should expect more cuts to oil production in order to support prices with the slowing global trade?





https://www.cnbc.com/2019/12/05/opec-december-meeting-opec-production-cuts-in-question.html

Can Christmas Save the US Economy?

Due to the recent rise of uncertainty within the Us economy coming from factors such as the trade war, impending impeachment hearings, as well as the question of who will be in office in little over a year from now. With the holiday shopping season now here, many are relying on consumer spending to be the life ring of the US economy. However, many experts believe that relying on consumer spending as an underlying indicator of growth is not sustainable and can only carry the economy so far. What do you for-see happening in the coming months with the US economy? After the holiday season will consumption still be so strong?

This startup pays crypto holders interest on bitcoin

There is a new company named BlockFi that is rolling out a new trading platform that allows users to trade, borrow, and earn interest on their crypto currencies. I found this article interesting due to the fact that most of buzz surrounding crypto currencies has died down for the most.  After reading this article, Im curious of two things. Will this become a popular platform, and it this really the future of finance/economics. If this new platform proves that there is some serious money to be made through lending crypto, how long will it take until major banks offer loans in these types of currencies.

The US-China trade and its impact on a potential recession

"According to a recent survey by the National Association for Business Economics, seven out of 10 economists expect a recession by the end of 2021."

We are nearing the end of 2019 and there has been little resolution to our trade war with China. Trump has actually renewed trade tensions recently. He has even stated there is "no deadline" for the trade war and claims that he wants to wait till after the 2020 election to fix this problem. This may be in response to some economists beliefs that Trump is waiting ease tensions with China right up until the election. 

However, our domestic and global economies will not go on pause until he is ready to end this war. As we learned in class, imposing tariffs raises interest rates and lowers the amount of overall trade. If action is not taken soon, business investment may drop further due to trade uncertainty. And since investment is very volatile, GDP can decrease significantly, potentially contributing to a recession

https://www.washingtonpost.com/news/powerpost/paloma/the-finance-202/2019/12/04/the-finance-202-trump-could-spark-a-global-recession-if-he-imposes-more-china-tariffs-economists-predict/5de6e17688e0fa652bbbdbac/

Why US Garlic Farmers are fans of Trump

Garlic farmers in the USA seem grateful to Donald Trump for sanctions on China which has reduced imports of garlic into the USA. This has brought joy to farmers and is boosting the sales of locally grown garlic and is allowing their garlic to thrive especially in the large USA market.

The 25% tax put on garlic imports from China seems to be doing a whole lot of good for local USA farmers.

https://www.bbc.com/news/av/business-50493488/why-us-garlic-farmers-are-fans-of-trump-s-tariffs?intlink_from_url=https%3A%2F%2Fwww.bbc.com%2Fnews%2Ftopics%2Fc1038wnxypvt%2Fus-economy&link_location=live-reporting-map

Ford's Global Job Cut by end of August

About 7000 jobs are set to be cut in the global workforce of American automotive giant Ford. The carmaker will reduce its US workforce by 2,300 as it seeks to save $600m (£470m) per year. Most of these jobs are in management positions according to Ford. some of these job losses will be as a result of voluntary redundancies and compulsory redundancies. Chief executive, Jim Hackett said, “To succeed in our competitive industry, and position Ford to win in a fast-changing future, we must reduce bureaucracy, empower managers, speed decision-making and focus on the most valuable work, and cost cuts,” 

https://www.independent.co.uk/news/business/news/ford-job-cuts-global-us-car-industry-a8922301.html

Mid-sized American companies are already moving away from China

         As the Chinese-American trade war continues, American corporations and mid-sized firms face an increasingly uncertain economic future in China. Mid-sized firms, fearing the prolonged impact of these trade tensions, have realized the need to diversify away from China to protect their interests. Mid-sized firms have pursued the diversification of their corporations by shifting “their supply chains to other parts of Asia and by selling more to other countries to make up what they can’t sell to China.” To make up for some of their economic losses, the article notes that mid-sized firms in America have specifically sought new markets in Europe, other parts of Asia, and Latin America. The article also notes that the increasing cost of domestic labor in China has also played an essential role in the diversification of mid-sized firms.

https://www.cnn.com/2019/12/04/investing/midsized-companies-china-survey/index.html

US service sector slows more than expected in November

Trade tensions and worker shortages has caused the U.S. services sector to slow more than expected for November. Manufacturing activity contracted for the fourth straight month since 2012 according to the ISM. The non-manufacturing activity index decreased to 53.9 in November compared to 54.7 in October. These manufacturing slumps have also countered growth expectations for the fourth quarter, which had been increased by a "rush of upbeat reports on the trade deficit, housing and business investment. Do you think the service sector will keep slowing because of this trade war with China?
https://www.cnbc.com/2019/12/04/november-ism-non-manufacturing-index-comes-in-at-53point9-vs-54point5-estimate.html

U.S. Private Sector Added 67,000 Jobs in November

The U.S. nonfarm private sector added 67,000 jobs in November, missing economists’ expectations by a wide margin. It was expected that the ADP National Employment Report to show an addition of 150,000 jobs. Mark Zandi, chief economist at Moody’s Analytics, said "“The job market is losing its shine... Job openings are declining and if job growth slows any further unemployment will increase". There were a lot of job gains in the service-providing sector, which added 85,000 jobs. The education and health sector added 39,000 jobs, the most added in a category on the services side. The worst industry performer in the services group was trade, transportation and utilities, which lost 15,000 jobs.

Referring back to the economic outlook conference, Mark Schweitzer talked about how even though job openings have slowly been declining, job hires have still been increasing. Do you believe this still holds true? Are we closer to large unemployment than we really think?

Hit hard by the trade war, China’s economic outlook is uncertain – except for one thing: growth is sure to decline

This article talks about China's side of the trade war. It's main focus is on how the Chinese economy, which is based on the amount of trade they have, has slowed drastically in the past year, from 6.8% to 6%. While that may not sound like a large number, when you put into perspective with how large the China economy is, the entire global economy has been slowing down as a result. The article also talks about when their economy does get below that 6% number, this will impact consumer confidence so it will likely slow down at an even harsher rate if nothing is done to fix it. What could the Chinese do in order to prevent this from happening? Or if it does happen, what will they have to do in order to get back on track?

US consumer confidence falls for fourth consecutive month

According to this article, consumer confidence decreased for the fourth straight month. The Conference Board shows that the consumer confidence index dipped to 125.5 in November. It was expected to rise- economists polled by Dow Jones expected the index to rise to 126.6 from 126.1 in October.
The article also states that the situation index also fell from 173.5 to 166.9. These numbers suggest that economic growth in the final quarter of 2019 will remain weak. One of the last things the article states is that expectations for the holiday shopping season are strong. The National Retail Federation expects sales to grow by about 4% from last year.
If this is the case, my question is, how much does a drop in CPI impact holiday spending? Could CPI be very low and holiday spending still be very high?

US Consumer Confidence Falls

Consumer confidence has been hurting as a result of economic pressures around the world. It has dipped for the fourth straight month contrary to expectations. The Conference Board expected the index to rise to 126.6 yet it fell to 125.5. Recent data is pointing at slower growth and a weaker economy as the years end approaches. Lynn Franco, senior director of economic indicators of The Conference Board still suggests, Overall, confidence levels are still high and should support solid spending during this holiday season.” Expectations for spending in the holiday season are strong and projected to help sales grow 4% in this coming period. Hopefully the upcoming holiday season will help curtail this fall in consumer confidence as we approach the new decade. 

December could be a good month for the stock market, but there’s one big risk

In previous years December has been one of the best months for stocks performance wise. The S&P, which is up more than 25% on the year, can grow more in December. Historically, stocks have rose 1.6% in the final month of  the year. In the coming weeks, investors focus will be on the trade war, and depending on the trade war news will have a big impact on how the month of December is for stocks. December is also the least volatile month but could see some bumps due to the trade war. Will the stock market do as well as it has previously in the month of December or will the trade war slow it down?

https://www.cnbc.com/2019/11/29/december-could-be-good-for-the-stock-market-but-theres-one-big-risk.html

Consumer Confidence Decline

Recently, the Conference Board did a consumer confidence index and saw a decline in confidence for the month of November. This would mark the third month in a row in which we have seen this decline. The reason for this decline is coming from fear from a global shutdown and a continued trade war. If these trade wars are not solved in the near future and we continue a decline of consumer confidence, how detrimental do you think this will be in the grand scheme of our economy?

https://www.wsj.com/articles/u-s-consumer-confidence-declined-in-november-11574782427

Two months on, tax rate hike leaves patchy impact on Japanese economy

The Japanese government has released some new economic indicators since the new tax hikes have decreased overall consumption in the Japanese GDP.  In order to stimulate the Japanese economy, aimed at increasing overall consumption, Aeon Retail Co. had a four-day sale similar to that of the U.S "Black Friday".  Overall retail has declined significantly since the Tax rate hike and as a result of this, the Japanese government will also enact fiscal policy to battle this, A new budget for 15 months to help support the economy starting in early December and will end in Late 2020.








https://www.sfchronicle.com/news/article/Two-months-on-tax-rate-hike-leaves-patchy-impact-14872802.php