Dow Futures at Record High
All is well in the boom economy, so sayeth the equity markets. Dow Futures this morning have surpassed the intraday highs of yesterday at 26,824.78. Futures are at 26,852, indicating another record day is in front of us. Good thing that the Dow Jones committee took out General Electric (NYSE:GE) from the index and replaced it with Walgreens Boots Alliance (NASDAQ:WBA), because otherwise the Dow would not be at record highs. On that topic, GE is higher today on the news that the company is replacing its CEO amid the threat of a credit downgrade from Moody’s.
Worker Shortage Looming? Only if the Boom Continues
There’s nothing like extrapolating from current trends and assuming they will continue on forever. It happens that way in Newtonian physics, but never in the science of human choices, AKA economics. The Korn Ferry Institute has come out with a study that estimates a shortage of 85 million workers by 2030, which should push up wages much higher according to the Institute. The shortfall could cause companies to shell out a total of $2.5 trillion more in employment costs. Countries that could be affected include China, Japan, Brazil, the United Kingdom, and Germany. Unless we enter a recession again and unemployment skyrockets as it did 10 years ago. The current boom is already close to 10 years old and 2030 is 12 years away. We could even enter two recessions before then.
Let’s Hope No Corners Were Cut at Tesla
Tesla (NASDAQ:TSLA) surprised to the upside slightly insofar as production targets, putting together roughly 53,000 Model 3’s and a total of just over 80,000 vehicles. Its target was between 50 and 55,000 Model 3’s. Let’s hope there will be no callbacks. Shares are wiggling around $300, down yesterday but up in the premarket today. Investors may be waiting on news as to what happens with these cars, as the fact that Tesla is under extreme pressure to hit its production targets is no secret.
Facebook Sued for Not Warning That Sex Traffickers Exist On the Site
Criminals are everywhere and it’s not a good idea to go to the house of a stranger, especially if that stranger is an older man and the other person a younger female. Nevertheless, Facebook (NASDAQ:FB) should have warned about this, since it’s not a given anymore that people understand this, so says a lawsuit against the social media giant. The lawsuit claims that Facebook was negligent in its efforts to verify the user’s identity and that the plaintiff was never warned that sex traffickers exist on Facebook. Facebook did not return request for comment, but a warning is probably in a disclaimer somewhere that you have to accept the terms of before you register as a Facebook user.
Chief Economist at PIMCO Warns On Italy
It’s not quite Greece, but in many ways it’s worse, says Chief Economic Advisor at PIMCO, Mohamed El-Erian. In an article at Bloomberg, El-Erian writes, “It is no exaggeration to say that, if it were to stumble very badly, the southern European country could present an existential threat for the euro zone (sic)” Italian bond spreads have been gyrating like crazy off the news that a prominent politician has suggested that Italy have its own currency so it can inflate to its heart’s desire, which of course leads to even worse problems. What started the latest round of volatility was the Italian government’s targeting of a 2.4% deficit in GDP terms through 2021, which won’t exactly get Italian debt down, so it started selling off. The problem is, the Italian government’s buddies, the banks, have tethered themselves to a sinking ship and bought a bunch of Italian government paper, which is fast losing value, drowning the banks along with the government. After 10Y yields spiked to new highs yesterday, the Italian government pulled back a bit and promised a deficit of only 2% of GDP instead, which still won’t bring down Italian debt. Let’s see if it keep selling off anyway this week. If it does, the Eurozone could already be in existential danger.