Trading at new 52-week highs: DVN, EPD, ERF, PSXP, TRGP,
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AAPL is moving back up after yesterday's incredible WWDC announcements. I thought the presenters' narratives were often a bit cheesy and unnecessary, but the software was incredible. Steve Jobs would have been a better pitchman. May he RIP.
AAPL will soon execute its announced 7-1 stock split. Just looking at the graphs of a number of energy stocks it looks like there may be a number of other companies that may be split 3-2 or 2-1 before the end of 2015.
Car company news I heard on the radio sounded good. So let's check.
Ford: May sales rose 3.0% year/year to 254,084 vehicles: Retail sales set several model records with 174,889 vehicles sold - an increase of 6 percent.
Data points:
- Fusion: best month ever
- Escape: best month ever
- Explorer: best month in 10 years
- Lincoln MKZ: best May ever
Ford sales in India? Up 105%. Most of the probably run on gasoline.
Comment: this certainly doesn't sound like a bad economy despite all the bad mainstream news. No wonder the president is not worried about jobs.General Motors: same with GM -- a huge month. General Motors delivered 284,694 vehicles in the United States in May, up 13% compared to a year ago.
Data points:
- company's best May in seven years
- best total sales since August 2008
- sales to individuals up 10 percent
- fleet sales up 21 percent
Comment: this certainly doesn't sound like a bad economy despite all the bad mainstream news and the lawsuits. No wonder the president is not worried about jobs.Gold his a four-month low, longest losing streak in seven months.
T is getting a lot of press today: the company raised revenue guidance, but lowered earnings guidance. Maintains #1 position among Dow dividend payers.
I see the city of Seattle increased its minimum wage to $15/hour.
This may be one of the more interesting "local" stories to watch. If the entire state went to $15/hour minimum wage, that's one thing, but the city is awash with suburbs just outside city limits. It doesn't take a Ronald McDonald clown to figure out where Burger King will expand.
Inner city folks will note it first. In Seattle it may not be a big deal, the inner city is probably not as poor as the inner cities of Detroit, NYC, Boston, and Atlanta. But stereotypically, inner city residents will have more difficulty paying higher prices for commodities (fast food, gasoline, everything in Wal-Mart) than the folks in the suburbs.
I saw a great example of this in Belmont, a suburb of Massachusetts, during the four years our younger daughter and her family lived there. Not quite the same story, but a great analogy.
Belmont is a prosperous suburb (home of Mitt Romney). A lot of rich folks live there. The not-so-rich represent the spectrum: well-to-do to lower middle class homeowners. It's a big suburb, population: 24,000.
But over the four years I visited there I noted there were no restaurants to speak of (except pizzarias). I did not notice any nice restaurants. Finally, I asked about that, curiosity getting the best of me.
It turns out Belmont was a "dry" city up until very recently: no alcohol allowed to be served in any restaurants. So, no restaurants. But plenty of nice restaurants in the city of Boston and all the surrounding suburbs. So, I suspect the same thing will happen in Seattle and other cities who unilaterally raise the minimum wage to double the state minimum wage: new retail stores will build on the other side of the street, just outside the city limits. Gradually, over time, the existing retail base will gradually melt away. The city will lose its tax base, and its poorer citizens will lose access to less expensive alternatives. The inner city workers -- bankers, brokers, lawyers, pharmacist, physicians -- might work in the inner city during the day, but they will go home to their suburbs on evenings and weekends.
It will be interesting to watch this play out. I may be wrong. Inner city folks may get used to paying higher prices for McDonald's, along with their higher electricity bills, and earning $15/hour will allow them that luxury.With regard to the "Suicide-in-Seattle" a reader raised a couple of issues:
- customers willingness to tip "high-paid" Starbucks baristas?
- 7.65% for social security from both employer and employee
- grocers to benefit as more folks brown-bag it, rather than stop at fast-food restaurant for lunch
, Soundtrack
on cnbc this afternoon about 2.15 mst. they were discussing this with a Seattle council member, after some discussion She ( council member said,,( well they do not have any choice. it is the law..)
ReplyDeleteWell they do..some business owners will move across the street. or retire.. one always has choices.. don
Employers will try to do the best they can. For those employers on the margin, who are already there, the first thing they will do is cut back on raises, delay promotions, etc. Most minimum wage jobs (certainly at McDonald's, Wal-Mart) are entry level (sort of like "probaton"). If the employee works out well, they quickly advance. Advances will slow down; that's the first thing employers can do easily to cut costs without the consumer noticing. In some job markets, it is almost impossible to leave a job to look for another better-paying job, and that's certainly true in the Pacific Northwest.
DeleteThe next thing employers will do is simply delay hiring.
The military successively uses both techniques to manage personnel roles. The US Navy has a slightly fast advancement rate that the US Army, and both are faster than the US Air Force. Pay is low when one first enters the military, but one can advance quickly.
And, of course, it goes without saying, even the military cuts back on hiring when personnel costs get too high.
This is pretty much a no-brainer. I have no dog in the fight. I find it an interesting social experiment. We used to do similar experiments in college (Biology 101) with fruit flies. It was pretty much a bell curve.