Quarter 3 Year 2019

ECONOMIC NEWS:

A major 7.5 earthquake rumbled along the Mississippi fault line September 30th 2019.  Damage was extensive with several dams failing.  Power disruptions extend over most of the states in the center of the United States.  The quake set off a series of 5.0 to 6.5 quakes along two major fault lines on the West Coast, causing considerable damage to homes and businesses.  Of major concern was the loss of critical bridges on major transportation corridor.  Interstate 80, Interstate 5 and Interstate 10 are all closed and will be for weeks.  Interstate 80 through the Sierra mountain range, along with the major east-west rail line may be closed for months. 

 

The loss of life is considerable along the Mississippi river and its tributaries.  West Coast casualties are unknown as we go to press.  Hours after the quake a major tsunami struck the state of Hawaii causing major damage to some ports but due to early warnings, no deaths are reported.  Japan, China and Russia received the impact of the tsunami which due to early warnings, were minor in nature. The President has control of the situation and on meeting with state governors has ordered national guard units and military units to the most critical areas. 

 

Economic growth in Q3 was solid and stable.  The EU should be minimally affected in Q4 by the earthquake.  Impact will be mainly related to tourism from the United States and shipment of products between the two trading partners.  Economic activity in the United States and thus NAFTA, will be enhanced as billions of dollars are unleashed first to aid the victims, then to recover infrastructure.  The nature of the economic activity will be to pull attention from the consumer area into the needs of the greater society.

 

Interest rate held steady.  The equity markets fell sharply as investors wait to determine the extent of the damage overall and also to specific firms.