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

German car industry reels as Daimler cuts 10,000 jobs

Mercedes-Benz owner Daimler announces that it will cut up to 10,000 jobs in the next 2 years. This is a reflection of the losses across the German car industry sector, with Audi also announcing job cuts close to 9500 by 2025. Primary reason cited for doing so is due to the cost of investing in electric vehicles. The EU has imposed strict carbon emission targets in order to climate change, which although much needed, pose these negative consequences. However, as an alternative, Daimler is willing to offer current employees reduced hours and voluntary redundancy packages for those nearing retirement. I think climate change is such an important issue today, however, this article raises a valid issue in combating climate change and shows the flip side of the coin. The government needs to bridge this gap and allow firms to cut back personnel costs so they can shift gears as well as making sure making sure those job cuts don't significantly affect the economy, perhaps creating jobs in another way. What do you think is a good solution?

https://www.ft.com/content/e2e7ddaa-129a-11ea-a225-db2f231cfeae

Consumer confidence dipped for a fourth straight month in November as economic conditions weaken towards the end of 2019. The Conference Board shows that confidence index dipped to 125.2 this month. That's down from 126.1 in October, which was expected to rise to 126.6. The present situation index also fell to 166.9 from 173.5 in November, which suggests that economic growth in the final quarter of 2019 will remain weak. Will the strong expections of the holiday season be able to maintain the economic growth and bring the last quarter to be strong in terms of consumer confidence?



https://www.cnbc.com/2019/11/26/us-consumer-confidence-for-november-comes-in-at-125point5-vs-126point6-estimate.html

Fed Officials cut rates

Once again the Fed cut interest rates this previous month marking the third time they have done this since July. The reason for the cut is their worries of weakness in manufacturing, trade, and business investment could threaten economic expansion. This seems to be quite a bit amount of cuts in such a short period of time, are their worries justified or do you think this will lead to a larger economic problem with all of these interest rate cuts?

https://www.wsj.com/articles/fed-officials-cut-rates-amid-worries-on-trade-global-growth-11574276730

US Housing Starts Rebound

Building permits are at their highest level that we have seen in over 12 years. This is very big news because even though the mortgage rates are still low, this points to strength in the housing market. There has been an increase in home completion and also, and increase in the stock of homes under construction. This is thanks to the feds monetary policy stances, we have seen as decrease in the mortgage rate. This is so important because the housing industry is one that relies heavily on interest rates. Residential investment has rebounded for six straight quarters which is the longest stretch since the recession. Do you think that this trend will continue along the path that it is going down?


https://www.cnbc.com/2019/11/19/us-housing-starts-total-1point314m-in-october-vs-1point320m-expected.html

US GDP rose a better-than-expected 1.9% in the third quarter as consumers continued to spend

US GDP was expected to slow down significantly in the third quarter. In the second quarter, the growth rate was at 2%, and for the third quarter it grew at an annualized rate of 1.9%. Many economists predicted that the growth rate was going to drop at a much larger rate than what it did. They expected third quarter growth to come down to about 1.6%. Economists are stating that the "better-than-expected" data was as a result of continued consumer spending as well as government expenditures. Many economists predict a recession and a dramatic slow down of the economy, the economy has continued to show the opposite. What are your opinions on the recession? Do you think it is bound to happen? Do you think it will be in the near future?

Tesla Gigafactory in China

https://www.cnn.com/2019/10/24/tech/tesla-gigafactory-china-europe/index.html

Tesla has put a gigafactory in China. The company claims that if all goes well, the company will triple its output. In addition,  Tesla is able to produce cars in China 65% cheaper than the US. In our conference last week we learned that cars are one of the biggest markets between US and China. But Ian mentioned that Tesla would likely only be able to sell cars to some wealthy people. How do you think tesla will perform?

Hikes in the cost of petrol are fuelling unrest in Iran

As the cost of gas is rising in Iran, the government has cracked down on citizen protests for stability.  Irans oil prices are heavily subsidized by the government and the recent 50% increase in price has been caused by a reduction in subsidized.  This has resulted in dramatic instability for its citizens as they cope to deal with cost increases.  Will the government cave to its citizens protests over keeping oil prices artificially low or will prices continue to rise for the Iranian citizens?



https://www.economist.com/middle-east-and-africa/2019/11/17/hikes-in-the-cost-of-petrol-are-fuelling-unrest-in-iran