Monthly Archives: May 2016

American Oil Prices Rise as Summer Driving Season Commences

OILSummer is here, not only causing the temperatures outside to rise, but also the price of oil. The warmer months mean vacations and increased driving, which in turn drives up oil prices as demand climbs. The rise is for American oil; internationally prices were kept down by increased output in the Middle East, which caters to customers in Asia.

West Texas Intermediate (WTI) crude oil futures were up 17 cents/barrel to reach $49.50 on Tuesday.

“Investor positioning points to further support for commodity prices as bearish bets continue to be reduced,” ANZ bank said on Tuesday.

Middle Eastern crude exports increased, causing prices to decline. Brent crude futures lost 11 cents from their last close, closing at $49.65 per barrel.

HP Enterprise Spinning Off Business Services Division to Computer Sciences Corp


Meg Whitman speaks at the Tech Museum in San Jose, CA February 17, 2009. Photo by Max Morse

As Hewlett Packard Enterprise continues to re-structure its operations to state competitive in the world of high-tech, it has decided to sell off its business services division to its competitor Computer Sciences Corp.

HP Enterprise will earn about $8.5 billion for its shareholders from the deal. The unloading of the business division will allow HP Enterprises, one of two companies formed last year after the computer giant formed two companies, to better concentrate on selling data-center hardware, software, and other commercial tech supplies for large organizations. The outsourcing business that it is spinning off includes operations which the old HP acquired when it purchased Electronic Data Systems Inc., in 2008. That deal cost HP $14 billion.

Meg Whitman, CEO of HP Enterprise, explained that despite the fact that the business services division helped to bring in more customers, it was growing at a slower pace than other divisions of HP Enterprises in terms of both growth and profits. Experts said that some of the operations HP acquired from EDS were not state of the art.

Retail Sales Up in April in the US


his is a row of Cash Registers at a Target store in the US. Photo by   Marlith

his is a row of Cash Registers at a Target store in the US. Photo by Marlith

Good news for the economy: The overall sales rate grew fastest since March 2015, showing a gain of 1.3 percent this month compared to last month. Car sales also improved, surging by 3.2 percent; an excellent performance coming off of last month’s drop of 3.2 percent.

Total retail sales in March were even better than what was previously reported; falling by only 0.3 percent instead of the predicted 0.4 percent.

“The numbers came in much stronger than we expected,” said Peter Cardillo chief market economist at First Standard Financial. “That will help alleviate the market’s concerns over retail. The number also puts the rate hike back on the table,” he added.

Online stores and catalogue shopping have eaten away at the profits from brick and mortar shops, up by 2.1 percent. Clothing sales rose by 1 percent. The slight improvement comes only a week after the news of the closing of four department stores; Macy’s, Kohl’s,  Nordstrom and JC Penney.

Also eating away at profits is the trend to buying more expensive products such as electronics, household goods and cars.

US Businesses Find it Hard to Get Behind Trump

Donald Trump. Photo by Michael Vadon

Donald Trump. Photo by Michael Vadon

The Republican party has traditionally been the political home of business in America. This usual refuge of the wealthy and small-government minded electorate are having their presumptions stood on their heads as Donald Trump appears likely to be the Republican nominee for president in the upcoming election.

Just as mainstream Republican party supporters have watched in horror as Trump won state after state in the primaries, ousting such traditionalist Republicans as JEB Bush, Ted Cruz and John Kasich; so to traditionally conservative businessmen have been shaking their heads and wondering how the whole fiasco will end.

Some of Trump’s policies are seen as bad for business by most businessmen, such as his threat to revoke trade deals and impose punishing tariffs on imports. He has threatened to target US companies with off-shore operations, like computer giant Apple, and Mondelez, the Oreo manufacturer, with fines and presidential name-calling.

Head of the US Chamber of Commerce, Tom Donohue, has strongly disagreed with Trump’s position on trade, saying: “It’s just pretty sort of stupid.”

A spokesman for the Chamber of Commerce said the group does not want to talk about Trump and his particular personality. He did say that companies have come up against “extraordinary political and geopolitical uncertainty” and added that: “Politicians should think twice before bashing business.”

Buffet Says Neither President Can Stop US Economy

Portrait of Warren Buffet from Insider Monkey

Portrait of Warren Buffet from Insider Monkey

Warren Buffet, a financial guru for many in the US, says the US economy will continue to grow whether Hillary Clinton or Donald Trump wins the Presidential election.

Though neither candidate is yet officially running for president, by the end of the summer, after the Republican and Democratic conventions choose their candidates, the most likely choice will by Clinton versus Trump.

“If either Donald Trump or Hillary Clinton becomes president, and one of them is very likely to be, I think Berkshire will continue to do fine,” Buffett, 85, said. Buffet is the chairman and CEO of Berkshire Hathaway, and investment firm.

Buffet added that the US is now a “remarkably attractive place in which to conduct a business,” where companies have experienced “terrific” returns on their investments despite the prolonged extremely low interest rates.

Buffet is a Clinton supporter, giving her his backing at a rally in Omaha in December. When asked what might happen to Berkshire’s business if Trump became president, Buffet answered, “That won’t be the main problem.”

Buffet is the son of a former Republican congressman. Democrats are happy to have him as a way to boost the credibility of the Democratic party with the economic elite of the country, especially when they advocate for the middle class and poor.

“Twenty years from now, there’ll be far more output per capita in the United States in real terms than there is now. In 50 years, it’ll be far more,” Buffett said. “No presidential candidate or president is going to end that. They can shape it in ways that are good or bad, but they can’t end it.”