Toyata Motor Corp and Mazda Motor Corp are expected to announce plans on Friday to build a $1.6 billion assembly plant in the US that would create 4,000 jobs and be up and running y 2021. The new factory's location has not been decided. Once built, it would produce 300,000 vehicles a year with half being the Toyota Corolla and rest an unspecified Mazda model. The two Japanese car makers also will form a joint venture to co-developing electric vehicles, safety features and connected car technologits. Mazda had previously operated with Ford Motor Co in a joint venture in the US Toyota has worked with Sabaru and others


The announcement could hand a victory to President Trump who took aim at Toyota earlier this year for its plans to build a $1 billion assembly plant in Mexico rather than the US. Toyota said the auto maker's board is considering the joint venture proposal and pointed to an agreement in May 2015 between Toyota and Mazda  to explore various areas of collaboration Mazda's board will also review the proposal at a meeting Friday in Japan Toyota, the world's largest auto maker, already has a major manufacturing presence in the Midwest, and South with factories in Indiana, Kentucky  Mississippi  and Texas. For Mazda, the plant's opening would mark the first time it is building cars in the US since it stopped making vehicles with Ford in 2012

​CURRENT STATUS

​TESLA CASH FLOW TIGHT

The US economy is hitting a sweet spot seldom seen in past expansions posting in July a record 82nd straight month of job creation and an unemployment rate at a 16 year low, despite slow growth in output. Economic growth has been stuch stubbornly near a 2% annual rate, the weakest expansion in output since World War ll, but by as range of measures the economy is pushing into new territory, including record stock price highs, improving consumer confidence and rising corporate profits. Even wages, though rising slowly are advancing at a healthy pace when adjusted for exceptionally low inflation.  The latest evidence was a Labor Department report Friday that showed US employment added 209,000 jobs to payrolls in July and the unemployment rate fell to 4.3% With the July increase in hiring the record stretch of monthly hiring is equivalent to six years and 10 months, almost three years longer than the second best streak from 1986 to 1990.

​Tiger Woods is tied for sixth at the PGA Championship. In his first year back from injuries, he is in contention once again. He has done so well the TV coverage does not have to move back to the middle of the pairings to show him play, hours before the leaders come through the final holes. He has often been within a few groups of the lead which usually finishes between 5 PM and 6 PM on Sundays. Although Woods and his legacy are the primary beneficiaries of his return to golf, his sponsors are a close second

Most of his major sponsors left him after his well-publicized personal problems in 2010 when he was in his prime. A number of injuries pushed him out of contention. Over these periods, the only major sponsor who stayed with him was Nike, Inc. (NYSE: NKE). Founder Phil Knight was said to be the final decision maker about this, as loyalty overcame concern.

Woods had dropped to the No. 898th player in the world after all his troubles and an inability to play golf because of injuries, He had spent a record 683 weeks at No.1. Even when his ranking was at or near its bottom, several new sponsors joined him. Among these were Taylor Made, one of the world’s large golf equipment makers, energy drink company Monster Beverage Corp (NASDAQ: MNST), Japanese tire and golf ball maker Bridgestone, and some obscure ones which include golf simulator company Full Swing, pharma company Kowa, and sports memorabilia company Upper Deck. Most of these are a far cry from those who left him–AT&T Inc (NYSE: T), consultancy Accenture PLC (NYSE: ACN), Gillette, and Gatorade.

For the time being, Nike is the most visible sponsor, often on the front of his hat. Woods gets hours of television coverage when he is among the leaders. Nike made a gamble and has paid off handsomely

Woods is currently the 51st ranked golfer in the world. A win at the PGA would propel him toward the top 25, at age 42M. The only person much older than Woods at that level is Phil Mickelson, a fan favorite and winner of 43 PGA events, which puts him on the all-time wins list. Woods is second at 79, just shy of Sam Snead who has 82. Snead played for 30 years. Woods has played for 18.

Back at the center of the golf world, Woods is bound to pick up more sponsors. If he stays in his current form, they will get their money’s worth.

INVESTING 

​MORTGAGE MISTAKES

HITTING ON ALL CYLINDERS

TOYOTA

There is more evidence that the Chinese economy is slowing. According to MarketWatch:

Business activities in China cooled further in July, with investment slowing to a near two-decade low, official data showed, suggesting the Chinese economy is facing increased headwinds amid rising trade tensions with the U.S.

Fixed-asset investment in China’s non-rural areas climbed 5.5% in the January-July period from a year earlier, the National Bureau of Statistics said Tuesday. That’s the slowest level since end-1999, according to Wind Information.

Elon Musk has met with Saudi investors about taking Tesla Inc. (NASDAQ: TSLA) private. According to The Wall Street Journal:

Elon Musk said Saudi Arabia’s sovereign-wealth fund has approached him several times over nearly two years about providing financial support to take Tesla Inc. private, as the chief executive sought to explain his claim to have funding for a possible deal.

Mr. Musk’s blog post on Tesla’s website Monday provided new information about what led to his surprise tweet last Tuesday announcing the possible transaction. But the new post also left unanswered a host of big questions including how much capital would be required and whether the Saudi fund is indeed able and willing to provide it.Sponsored by AllstateWhere's the gas tank?
Apple Inc. (NASDAQ: AAPL) parts supplier Foxconn posted poor results. According to The Wall Street Journal:

Foxconn Technology Group posted a surprise 2.2% decline in second-quarter profit, even after its biggest customer Apple Inc. said recent demand for iPhones remained resilient.

Taiwan-based Foxconn said Monday that its net profit for the quarter ended June 30 was 17.5 billion New Taiwan dollars ($566.7 million). That compared with the NT$20.2 billion average estimate of analysts polled by S&P Capital IQ. Its net profit in the year-earlier quarter was NT$17.9 billion.

Carl Icahn will not oppose a Cigna Corp. (NYSE: CI) M&A deal. According to The Wall Street Journal:

Carl Icahn no longer plans to solicit votes from Cigna Corp. shareholders against the health insurer’s $54 billion deal to buy Express Scripts Holding Co. after two proxy-advisory firms recommended shareholders support the deal, the billionaire activist investor said in a statement Monday.

Significant shareholder overlap between the two companies, which he initially hoped had decreased since the deal was announced, was also a factor in his decision, he said.

The price of bitcoin continues to collapse. According to CNBC:

Bitcoin fell below $6,000 late Monday — for the first time since June — against a backdrop of cryptocurrencies declining in value.

The world’s largest digital currency by market value tumbled as low as $5,900 at around 10 p.m. ET, and was down around 4 percent, according to CoinDesk index data, which tracks prices from several exchanges.

The cryptocurrency’s price is close to its lowest point of the year. The lowest level of 2018 was reached in June 18, when it retreated to $5,785.

Tariffs on certain metals have earned the United States over $1 billion. According to CNBC:

In less than five months, the Trump administration has collected more than $1.4 billion in new revenue from steel and aluminum tariffs, according to a recent report prepared for members of Congress.

The Congressional Research Service estimated that, between March 23 and July 16, the U.S. reaped $1.1 billion and $344.2 million from levies on foreign steel and aluminum, respectively.I'm interested 


IMAGE

IBM (NYSE: IBM) has had a habit of putting out large numbers of press releases which say little or nothing about the company’s prospects. At times, it will post these more than one a day. With its future as a viable large tech public corporation in doubt, the practice has become more and more bizarre.

Most recently, IBM posted this news about itself on August 4:

IBM today announced that Codify Academy, a San Francisco-based developer education startup, tapped into IBM Cloud’s cognitive services to create an interactive cognitive chatbot, Bobbot, that is improving student experiences and increasing enrollment.

Using the IBM Watson Conversation Service, Bobbot fields questions from prospective and current students in natural language via the company’s website. Since implementing the chatbot, Codify Academy has engaged thousands of potential leads through live conversation between the bot and site visitors, leading to a 10 percent increase in converting these visitors into students.1

IBM Cloud with Watson provided Codify Academy with the speed and scale needed to immediately start building with cognitive intelligence. Bobbot can answer more than 200 common questions about enrollment, course and program details, tuition, and prerequisites, in turn enabling Codify Academy staff to focus on deeper, more meaningful exchanges. For example, students can ask questions such as “What kind of job will I be able to find after I complete the program?” or “How do I apply, and what are tuition rates?”

Codify Academy does not appear to be an even modest sized start up

On July 27:

IBM announced today that it has been selected as the strategic partner of Bank of Cyprus, the leading banking and financial services Group in Cyprus, for the implementation of the Bank’s digital transformation.

Bank of Cyprus provides a wide range of financial products and services to individuals and businesses in Cyprus, holding significant market shares across all business segments. The Bank is committed to implementing a modernization agenda that is designed to transform its business model to ensure that it can compete efficiently and better serve the needs of its customers. To facilitate momentum in delivering these changes through an accelerated multi-year Digital Transformation Program, Bank of Cyprus has selected IBM as a strategic partner.

The Bank’s Digital Transformation Program is designed to create a more modern and efficient IT platform, supported by streamlined processes. Improving the customer experience through visible and positive changes to how the Bank interacts with its customers is a key deliverable for this program.

In the world of global banking, Bank of Cyprus is barely on the radar

None of this “news” can distract investors from IBM’s ongoing disastrous financial results and the stock market’s reaction. Its shares have dropped 17% in the last six months to $145 against a 52-week high of $182.  IBM can’t turn itself around, but it is good at press releases

​AUGUST NEWSLETTER 5

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Daniel Cullinane CPA

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Copyright ©​ Daniel Cullinane CPA.

Janet Yellen's days as Federal Reserve chair are numbered. Her term expires in Feb, and although President Trump has recently shown signs of support for her policy of keeping interest rates low, he will likely tap someone else to replace her. Trump criticized Yellen during the presidential compaign and she has little backing from the Republican senators who will confirm whoever the president nominates. The best bet to replace her: Gary Cohn. A former Goldman Sachs president, Cohn currently serves as director of the White House's National Economic Council He is a trusted Trump confidant and if he wants the fop Fed job, he stands to get it.


A Fed led by Cohn likely would not deviate sharply from its present policy of gradually raising rated while watching carefully for any slowing the economy. He would probably push for financial deregulation, which would arouse the ire of congressional Democrats. Cohn is a Democrat but also a Wall Street advocate.

RECALL

​ON THE RISE

​Screwing up the courage–not to say amassing a big pile of cash for a down payment–to apply for a mortgage is a daunting task. First-time buyers often rightly pause as they begin to grasp the meaning of the phrase, “mortgaging your future.”

If you can get over that hurdle, you could be well on your way to the seven out of eight mortgage applications that get approved. A pessimist might observe that that means the application has a one-in-eight chance (12.5%) of being rejected.

True enough, but you can reduce the chance of rejection by avoiding a handful of mistakes that have a virtually immediate negative impact on your credit score. The experts at Realtor.com have come up with a list of five mistakes you can easily avoid to make sure that your application is one of the seven that gets approved and not the one that gets rejected.

Use your credit cards
One way to establish creditworthiness is to use the credit you have. That doesn’t mean to pile it on, but use the cards you have and pay them on-time to build up a credit history. If you really don’t want to do that, some lenders will look at your history of rent payments and other regular bills that you have.

Don’t open new credit cards near the time you are applying for a mortgage
According to Realtor.com, opening a new credit card account can cost you up to five points on your credit score. That may be enough to disqualify you for a mortgage. Also, don’t spend a lot of cash (or use credit on existing cards) before you get the mortgage and moved in.

Don’t miss a payment on a medical bill
If you’ve run up some big medical bills, work with the doctor or hospital to develop a payment plan you can live with. Defaulting on a medical bill typically results in the provider referring your account to a collection agency and the agency can refer your status to the credit reporting agencies.

Don’t change jobs
Most mortgage lenders want to see at least two years of consistent income before approving a loan. There are exceptions, of course, but sticking with the job you have until the mortgage is approved is a better choice if at all possible.

Don’t lie on the mortgage application
This should be obvious. In the first place, if you do stretch the truth, it can be prosecuted as mortgage fraud, a federal crime. Second, mortgage lenders do their homework and chances are you’ll get found out, and there goes the mortgage. While it might seem quaint these days, honesty is the best policy when it comes to getting a mortgage.

​THE FEDERAL RESERVE

SIGNIFICANT EVENTS

Tesla Inc's version of production "hell" apparently means the Silicon Valley electric car maker will run low on cash later this year as it embarks on an ambitious plan to build its first automoble for mainstream consumers. Chief Executive Elon Musk reiterated on Wednesday after announcing a better than expected second quarter loss, that the 14 year old auto maker faces challenges in learning to manufacture the new zModel 3 sedan at much higher volumes than previous vehicles. "When I said manufacturing hell, I meant it" Mr Musk told analysts on a conference call "But we know this, signed up for it, not blamin hell because we bought the ticket.


Tesla is no stranger to capital crunches as it rolled out ambitious timelines for the production of its vehicles and spent heavily on research and development, equipment and factories in California and Nevada. The company has typically raised equity or issued debt offerings to replenish its stockpile and Mr Musk on Wednesday suggested he is thinking about tapping the debt market The company finished the latest quarter with $3 billion in cash and plans to spend $2 billion in the second half to make way for the Model 3. While Tesla said its cash and increased revenue during the second half should cover all of the spending projects, analysts raised doubts about that cash cushion. Tesla in the past has suggested the company should always have a minimum of $ 1 billion on hand at the end of each quarter. During Wednesday call, Ryan Brinkman, an analyst for JP Morgan asked if Tesla expected to generate enough cash to meet such a goal at year's end. Mr Musk replied that Tesla has negotiated better payment terms with suppliers and aims to build the Model 3 faster than previous models so the company can sell the vehicles before having to pay bills for parts. He noted that having a cash cushion for unexpected events is wise

​General Motors Co. (NYSE: GM) has initiated a recall on nearly 800,000 model year 2014 Chevrolet Silverado 1500 and GMC Sierra 1500 pickup trucks to repair a defect that may cause a temporary loss of electric power steering assist followed by a sudden return of power, especially during a low-speed turn. About 690,000 of the trucks were sold in North America and the rest we sold internationally.

The repair involves a reflash of the power steering module software, and the company said it will reimburse owners who paid for the repairs. Vehicles produced after September 11, 2017, will have the proper software installed.

GM did not report any accidents or injuries related to the defect. The company estimates that 2% of the recalled vehicles will have been affected by the defect.

GM will notify vehicle owners of the recall program but has not provided a notification date. The repair will be made free of charge to owners.

The company issued a stop-shipment notice to dealers on June 29.

​Apple (AAPL) CEO Tim Cook on Tuesday had a lot to say about the company's solid second-quarter earnings, but he didn't quite know how to respond when he was asked about President Donald Trump's comments last week. Cook and other Apple executives held a call with investors late Tuesday to go over the second-quarter earnings report. UBS analyst Steven Milunovich asked about Trump's remark that Cook had personally promised to build "three big, beautiful plants" in the U.S. Trump told the Wall Street Journal that he wouldn't consider his administration an "economic success" unless Cook committed to construct facilities on U.S. shores.Apple is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells APPL? Learn more now.

Milunovich asked Cook whether the factories might be a possibility "either directly or indirectly." The Apple chief initially responded to the question by focusing on Apple's job creation in the U.S.Watch: Apple Just Made This Fictional Character Incredibly Rich"We have created 2 million jobs in the U.S. and we're incredibly proud of that," Cook said. "We do view that we have a responsibility in the U.S. to increase economic activity including increasing jobs. Because Apple could have only been created here." Cook went on to explain the other strategies that Apple is deploying to foster job creation in the U.S., including its educational initiatives like teaching kids how to code, buying more goods and services from U.S.-based suppliers and noting that roughly two-thirds of its employees are based in the U.S. 


​So far, Apple has declined to provide a statement on Trump's comments to the Journal.Cook's final comment seemed to refer to Apple's $1 billion investment in an advanced manufacturing fund in the U.S., which was announced in May. He said he believes there's more room for investment in manufacturing.Watch: Apple Is Just a Stone's Throw Away From Becoming a $1 Trillion Company"We think there is more of these that we can do," Cook said. "I think there's probably several plants that can benefit from having some investment to grow or even may set up shop in the U.S. for the first time. So we're very excited about that." The remarks come just a few days after iPhone maker Foxconn Technology Co. (FXCOF) said it would build a new $10 billion factory in southeastern Wisconsin. The 20 million square-foot facility will make flat-screen displays and is expected to employ up to 13,000 people.

Apple shares rose 0.6% to $156.49 early Friday afternoon.