Tuesday, April 30, 2019

Minor Market Notes -- April 30, 2019

GE: slows cash burn as it shrinks -- WSJ. Guides that 2Q19 will show negative cash flow but stick to 2019 forecasts. Grounding of Boeing's 737 Max 8 airline will make things challenging.

GM loses ground to Ford. The WSJ.

Disruptor? Walmart or Amazon?
  • Motley Fool: Walmart is the real disruptor. 
  • Consumer spend, pymnts, November, 2018:
    • Walmart: accounts for 8.9% of consumer retail spending in the US; 2.8% of all consumer spending in the US
    • Amazon: 6.4%; 2.1% for comparable figures
  • on-line retailers:
    • Amazon -- #1 by a long shot
    • eBay -- #2
    • Walmart -- #3 -- "leapfrogging" over Apple
    • Apple -- #4
Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here and what you think you may have read here.

Economic Indicators

Odds and ends:
  • no "major wars": and an-volunteer military
  • jobs: initial unemployment claims -- at 50-year record
  • jobs: full employment -- unemployment well under 4%
  • jobs: employers looking to hire more "seniors"
  • jobs: huge source of potential low wage "southern surge" employees 
  • inflation: tame; no wage inflation; CPI below Fed goal
  • workforce participation: increasing; a record?
  • GDP: first reading, first quarter -- 3.2% vs 2.7% forecast
  • WTI: in the sweet spot at $60 
  • gasoline demand: busting out
  • energy: an American glut -- solar, wind, natural gas, nuclear, coal
  • trade: irrelevant; US economy is 2/3rd consumer-drive;
  • trade: China culling swine; will need US farm products;
  • trade: China won't come close to its natural gas production goals; will need foreign supplies
  • US Fed: there are indications that "rates" won't be raised this year; even talk of a possible 50-bp cut
  • established, mature companies are blowing away earnings: Ford, Amazon, Apple
  • P/E's: neither historically high, nor historically low; average at 16 -- Schwab advisor
  • "money remains cheap"
  • Americans have money to spend: Avengers: Endgame with $1.2 billion opening weekend
  • personal tax rates cut; refunds down: only one explanation 
  • corporate tax cuts still working their way through the system:  
  • $1,000-smart phones for $35/month (iPhone 10R, Sprint) 
  • it's crawfish season here in the south
  • and, then this, in the late edition of  The Wall Street Journal -- so, it must be true -- 

Market futures (8:38 p.m. CT):
  • Dow: up 70 points
  • Nasdaq: up 45 points
  • S&P 500: up 7.50 points
On that list above, the one that should be most bullish:
  • Americans have money to spend: Avengers: Endgame with $1.2 billion opening weekend

For me, this is the #1 song I associate with southern California ...

Spirit In The Sky, Norman Greenbaum

Released in late 1969; Spirit in the Sky played through those 18 months, late 1969 to early 1971. I took a road trip from South Dakota to California in late 1969. First trip ever for me out of the midwest as an adult. Three of the six on that road trip were Californians; three of us were midwesterners (Iowa, South Dakota, and North Dakota). We must have heard this song on the radio a hundred times on that road trip but it was most incredible when it came on just as we entered the San Diego metropolitan area. We came as close to Tom Wolfe's The Electric Kook-Aid Acid Test without realizing it. That book came out in 1968; don't remember when I first read it, but the book wouldn't have meant as much without that road trip.

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