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

Global Debt Increasing

Global debt has hit an all time high at $250 trillion in the first half of 2019. It is projected to reach $255 trillion by the end of the year. The first half of 2019 has generated $7.5 trillion. This increase in global debt is due to the borrowing in the U.S and China. In the article "Global Debt surged to a record $250 trillion in the first half of 2019, led by the US and China" by Spriha Srivastava said "China and the U.S. accounted for over 60% of the increase." With the global's debt increasing, it raises concern with investors. The increase in the global's debt might be detrimental to the stock market. 

https://www.cnbc.com/2019/11/15/global-debt-surged-to-a-record-250-trillion-in-the-first-half-of-2019-led-by-the-us-and-china.html

China Diversifying Reserves

In a response to trade tensions with the US, China has began to diversify it's investments of their currency. This move reduces their risk of being hurt by a financial decoupling, which would result in a decrease of investment return. China's decision to move investments to other countries shows that they are less reliant on the US economy, in hopes of gaining leverage on trade negotiations. Aside from this economic factor, I believe it is wise for China to move some of its investments elsewhere, as when investing it is smart to have diversification among investments.

https://www.cnbc.com/2019/11/18/china-diversifying-fx-reserves-assets-to-counter-us-dollar-exposure.html

Weekly Jobless Claims Fall More Than Expected

      The amount of people that are filling applications for unemployment claims have fell which is a very good thing for the workforce. This shows that the workforce is stronger and is growing more than analysts expected or forecasted it to be. The number dropped by a very large 8,000 applications that were filled out. It dropped by more than half of what was forecasted, this can also be due to the strong job market conditions. They also cut interest rates for a third time so that this strong growth in the economy would be supported. My question is, do you expect this number to keep on decreasing?


https://www.cnbc.com/2019/11/07/weekly-jobless-claims.html