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The Best of What They Said and I Read Week Ending 12/8/2019

Short excerpts from articles I found interesting.  I may not agree with the author and the following material is not intended as investment advice

  The Wall Street Journal – December 7, 2019 – FedEx Goes Deep Into Mississippi Delta to Find Workers – Paul Ziobro

  •  “…Ms. Harris will drive an hour northwest to Cleveland, Miss., from where she will make three four-hour round trips curled up on a bus to Memphis, Tenn. In Memphis, she will do two overnight shifts and one day shift—each five hours long—helping to move and sort millions of packages at FedEx’s primary air hub.  FedEx has tapped deep into the Mississippi Delta to find workers for the largest facility in its world-wide supply chain. Lured by the chance to work for a global company and earn hourly wages starting at $13.26, some 200 workers gather in a Walmart parking lot in Cleveland, Miss., five nights a week to board buses bound for Memphis.”
  •  “…The busing program, which runs year-round and is nearing its first anniversary, highlights the lengths delivery giants have to go to staff their operations at a time when unemployment is low, especially around the largest hubs. In Memphis, the unemployment rate is 3.8%, just above the 50-year low of 3.5% nationwide. In Louisville, Ky., where United Parcel Service Inc. runs its main air hub, the unemployment rate is 3.2%…In Bolivar County, where Cleveland is, the unemployment rate stands at 6.8%.”
  •  “The situation drew FedEx to host a job fair in Cleveland in November 2018, just ahead of the busiest period for the shipping industry. The city has a population of 12,000…FedEx expected not much more than a few dozen attendees. Instead, about 500 people showed up…FedEx later staged a hiring center in a church fellowship center, where it did drug screening and orientation.  A major hurdle was how workers would get to Memphis, 115 miles away. Many didn’t have cars.   FedEx committed to providing free bus rides for the workers…”
  •  “…Kinyuna Cannon, 25 years old, has been working for FedEx for the past four months. The starting wage was well above the $7.85 an hour she earned at her last job at a nursing home. “It is the transportation and the pay,” she said of the appeal of the FedEx job, which are part-time positions that provide health and retirement benefits.”
  • “Two hours later, the buses pull into an employee parking lot across from the Memphis International Airport. The workers disembark, cross a covered overpass and traverse the security checkpoint. They blend in among the 7,000 workers that night, helping to unload 150 cargo planes, sort their packages and reload them to the next destination.”

 The Kiplinger Letter – December 6, 2019 

  •  “…What to expect from North Korea heading into 2020? More trouble. U.S. “maximum pressure” will continue to see diminishing returns, with sanctions on Pyongyang already ratcheted up about as far as they can go and the North Koreans nowhere near abandoning their nuclear program. The few options President Trump has for strengthening U.S. sanctions…including tougher secondary sanctions that target Chinese firms and banks…run afoul of other foreign policy goals, such as a trade deal with China. North Korea has little interest in returning to the negotiating table. It will demand ever greater concessions from the U.S. to do so. U.S. efforts to revive talks have fizzled as Pyongyang continues to conduct missile tests.  Don’t be surprised if North Korea sparks some sort of crisis in 2020, perhaps during the Summer Olympics in Tokyo. It used the Winter Olympics in South Korea to make a major gesture for peace last year. It may do the opposite this time. Kim Jong Un is also warning of a “Christmas present” for the U.S.”

 Barron’s – December 6, 2019 – The Jobs Numbers Were Great.  The Dow Still Finished Down for the Week. – Ben Levisohn

  •  “U.S. payrolls grew by a whopping 266,000 in November, the most since January…the Dow adding more than 337 points after the report’s release…although the Dow finished the week off 36.35 points, or 0.1%, to 28,015.06. The S&P 500 index rose 0.2%, to 3145.91, on the week, and the Nasdaq Composite declined 0.1%, to 8656.53.”
  •  “…the market is betting that the slowdown in economic growth that occurred in 2019 will end in 2020…Almost no one expects another interest-rate cut, but everyone will be examining the changes in the central bank’s statement and parsing every word uttered by Fed Chairman Jerome Powell on Wednesday. “The FOMC will hold steady next week and is likely to hold steady for the next 12 months,” writes Jefferies economist Ward McCarthy.”
  •  “…If the economy really is picking up steam, then the 10-year Treasury should rise meaningfully, says John Kolovos, chief technical market strategist at Macro Risk Advisors. “I want to see it get to 2% and stay above it…“If, at the end of the year, the market is at 3200, and the U.S. 10-year hasn’t done much, I’d be worried.”

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