In all businesses, it is desirable to have the goodwill of senior members of the government. The reason is government controls many levers of influence and budgets that can ensure the government helps the company both directly and indirectly. The downside of being too close to one side of the government is all those who do not support the government may not be customers.

In an article by Chris Megerian of the Associated Press, there was something a little different than normal. President Trump had 4 Tesla vehicles on the front lawn of the White House and bought 2 cars from Elon Musk. In the past, companies have shown their products at the White House, but the President never directly bought anything.

The reason for the show of support for Tesla was the owner Elon Musk has been running DOGE, either directly or highly indirectly, to try to find waste, abuse and fraud in government spending. For political parties it is easy to find waste – both parties have things they favor over the other party, so one party’s good is another party’s waste. Abuse is close to the waste, but fraud means to convict someone in court, or the burden is much higher. However, most people believe in government there is some waste, abuse and fraud in the files as people like the government for some things and not others.

Linking to dividend paying stocks, all profitable companies will have interactions with the government, mostly to ensure the government’s regulations do not hurt them and hopefully protects them from competition or make it harder for the competition. If the company has the goodwill of the politicians, then the multiple agencies that interact with the company will tend to work together and not target the company. Working with the government is a good thing.

There are more questions than answers, till the next time – to raising questions.

When Joe Biden was President, he was able to navigate the House and Congress to have a number of large bills passed. The bills included the Infrastructure Act and CHIPS Act.

In an article by Tripp Mickle and Ana Swanson of the New York Times News Service, the CHIPS Act was to give money to semiconductor companies to make chips in the US. The bill offered $50 billion in federal subsidies to the industry, and $36 billion has been approved to Samsung Electronics, Intel, Micron Technology, TSMC (Taiwan Semiconductor Manufacturing Company). The plants are going up in Arizonia, New York and Ohio.

All politicians say they want semiconductor chips to be made in the US as the majority are made in Taiwan, Korea, Singapore, and Japan. There are multiple reasons why this is the case, but it started in the 1980’s. The politicians began pushing for more chips to be made in the US during COVID which because of high demand caused a shortage of chips.

At the joint address to Congress, President Trump attacked the CHIPS Act as bad and he said to Speaker Johnson he should get rid of it. What does that mean?

Chip company executives are worried that funding could be clawed back, are calling lawyers to ask what wiggle room the administration has to terminate signed contracts.

Senator Todd Young, who championed CHIPS, said he reached out to the White House to seek clarity.

In March, President Trump met with the CEO of TMSC C.C, Wei to announced plans for a $100 billion expansion of their Phoenix site as Apple and Nvidia committed to buying more American made chips, part of the expansion was based on the CHIPs Act which the President wants to stop.

Linking to dividend paying stocks, all companies have the ability to take advantage of grants and low interest loans or subsidies for business. They are offered because businesses have choices and they do not automatically have to invest in their present location. As an investor you want to have choices, what to do with your dividends – buy more, buy something else, build up cash and the list goes on.

There are more questions than answers, till the next time – to raising questions.

At the moment, one of the biggest demands is data centers. The big tech companies of Amazon, Alphabet, Microsoft all have announced they will continue to spend billions of dollars on chips and data centers to bring AI to everyday items. While the capital expenditures or capex spending is very good, one of the requirements for data centers is relatively low cost electricity and lots of it.

In an article by Marc Levy of the Associated Press, there are many actors in the demand sphere including big tech arranging its own power projects.

Todd Snitchler, President and CEO of Electric Power Supply Association, which represents independent power plant owners, agrees there is big spike in demand.

President Trump has passed legislation that makes it easier to use fossil fuels in power plants either oil, gas or LNG. The other side is the states.

The people that greenlight power plants are largely state regulators and regional grid operators. Governors are doing their bit by seeking action to make it easier and faster to build power plants.

States including Pennsylvania want to fast track the approval process and dangle hundreds of millions of dollars in tax breaks for projects providing electricity to the grid.

Indiana, Michigan and Louisiana are exploring ideas to attract nuclear power.

With every increase in demand, comes many projects out of the woodwork, some which are beneficial to the consumer, some which need taxpayer dollars to justify and others that would have been built to satisfy demand anyways and receive additional tax breaks.

Linking to dividend paying stocks, in many dividend stock portfolios are utility companies because they are regulated which tends to ensure projects get built to meet demand; every year prices rise at or above inflation and given everyone needs electricity, the companies make a profit and continue to pay dividends.

There are more questions than answers, till the next time – to raising questions.

A number of years ago, one of my aunts said we should boycott Nestle because of their dumping practices in Africa in regard to children’s baby formula. With all retail companies, there is likely one division or another that someone does not like their policies. However, with a conglomerate, there are plenty of other people that do like the company. Every company which has a retail presence at one time or other will have people that do not like it for some reason or another. Many times, the reasons are valid, but there are enough other customers, so boycotts are difficult.

In the last 15 years, most of the world has heard about Elon Musk with his brands of Tesla, X formerly Twitter and Space X. The companies have been leaders in design and innovation and many people around the world have a good rating for Mr. Musk. Then Elon became involved with President Trump’s administration. From the outside looking at the methods Mr. Musk has used it seems chaotic at best and producing few results. It is noted Mr. Musk has successfully navigated US government grants for his companies, however, how the apparatus of government works he seems to have overlooked that part.

In an article by Eric Reguly of Reuters, the fact that Mr. Musk has associated himself with President Trump’s policies and many seem chaotic, particularly across the board tariffs on the US’s neighbors. The rationale is that President Trump is using tariffs for over purposes, although it is very hard to figure what those purposes are and if the purposes could be done in a different manner. The public does seems not to like Tesla at the moment.

The critical aspect for Telsa is do the people who can afford to buy and actually buy the cars, are they mad at Mr. Musk? If they are, sales drop.

According to analysts such as Dan Ives of Wedbush Securities, the reason why you want to own Tesla stock is the future of the driver less cars. If you believe that soon all taxi or uber services will be driver less, then Telsa is one of the world’s leaders and growth will be coming very soon. If you think driver less cars are still into the future, then the company has problems.

In terms of sales, China is the world’s largest car market and Tesla used to be a leader. According to the China’s Passenger Car Association, Telsa’s sales in February fell 49% from a year earlier to 30,688 vehicles. It tells you the luxury market in China is beginning to be dominated by Chinese carmakers such as BYD. If Chinese luxury EV cars come into the US, Telsa’s sales are likely to fall.

In Europe, sales are down by 45% and the company’s share of the car market dropped from 1.8% to 1%. In Germany, where Tesla has a plant to make cars, the German Association of Automotive Industry said sales are down 76%. In France they are down 26% and in Norway where the highest EV penetration is located, sales fell 50%.

Linking to dividend paying stocks, some of these companies have a global reach to the public and there are reasons why active members of the senior levels take low profiles in the media. They take a high profile behind the scenes, but the focus is on the brand and selling it. There are many reasons why people may not like a brand, it is important to keep those to a minimum or they will affect sales which affects profits which affects dividends.

There are more questions than answers, till the next time – to raising questions.

If you listen to President Trump and as President of the world’s most powerful country, you should listen to him. One of the things he wants to do is shift the US from being the policeman of the world. Ever since WW II, the US took the role of policeman of the world and benefited from it so it kept doing it. After WW II, both Germany and Japan ability to have a defense industry was limited and the US took positions in Germany and located military basis. It encouraged Japan to shift to consumer products and for a while Japanese companies were world leaders, some still are. You may recall, the Japanese introduced relatively inexpensive cars with limited quality, but over the decades the quality improved and soon the biggest sellers of cars in the US were the Japanese. It is not hard to see Japanese cars on the roadways.

In many ways, the US has dominated the world economy for decades, President Trump talks about other countries paying their fair share and doing more, that means the US doing less. In the last month, the EU has stepped up, if the US wants to do less, Europe will do more.

In an article from Eric Reguly from the Globe and Mail, Italy’s Leonardo and Turkey’s Baykar have formed a giant venture to develop drones. Leonardo is one of Europe’s largest defence companies and Baykar is a drone giant.

The tragic part of the Ukraine and Russia war is a change from traditional weapons on the ground to a drone extensive warfare. Both sides need drones and the ability to shoot down drones.

Leonardo CEO Roberto Cingolani said the European drone market will be worth $100 billion over the next decade and will see the launch of sensor- and weapons-laden machine that will essentially evolve into unmanned fighter jets.

EU leaders met in Brussels to discuss way ways to boost their militaries and support Ukraine, as the US suspended, or put on a pause, weapon deliveries and sharing US intelligence.

If the US will not spend, and most of the money went to military contractor companies, then the European companies will spend money on defense.

Leonardo, which is 30% owned by the Italian government, makes military and civil helicopters, aircraft, defense electronics, satellites and drones. It is also a supplier to both Boeing and Airbus. In 2023, sales were $23.5 billion. Share prices are up this year.

Baykar is co-owned by Chairman Selcuk Bayraktar, the son-in-law of President Recep Tayyip Erdogan. The company is a leader in AI-enabled drones and is the world’s largest exporter of military drones. One model, the Akinci, can carry about 3,000 pounds of bombs, rockets or missiles and stay in the air for over 24 hours.

The new drones to be built in Turkey will contain the latest technology from Leonardo.

Linking to dividend paying stocks, for consumers they have options to buy from whoever they want to. As prices go up, the number of options fall because there are limited number of suppliers that would stay in business. In the military, all the major players are known to each other, but the bulk of the spending was in the US. If the President wants to cut spending to Europe, then European players will make up the difference. The big question is will the government cut $800 billion dollar budget of the pentagon? Which defense companies will lose funding? For investors, perhaps if you have defense contractors in your portfolio, you might start looking at foreign companies.

There are more questions than answers, till the next time – to raising questions.

When you think about the US economy you have to remember 66% is related to consumer spending. How is the consumer doing and what the large retailers are doing in relationship to ensuring the consumer spends at their stores?

In an article by Siddharth Cavale and Juveria Tabassum of Reuters, the second largest retailer after Walmart is Target. CFO Jim Lee said the company was moving away from giving quarterly forecast figures for sales and profit because it expected more volatility in its business.

Consumer spending trends are yet back to normal today.

Sticky inflation and tariffs on imports is expected to temper demand for non-essential categories such as home furnishings and electronics that make up more than 2/3’s of Target’s sales.

Prices were expected to increase for groceries because the supply lines are short for seasonal produce and much of the produce comes from Mexico. A 25% tariff across the board means higher prices.

Target said it would invest about $5 billion in stores and technology this year.

Beauty, apparel, toys and sporting goods were the top performers during the holiday quarter while home decor and finishing sales were negative.

Target was aggressive with its marketing and merchandising strategies as consumers spent selectively on popular projects during the holidays. One bright spot was the Target partnered exclusively with pop star Taylor Swift and sales increased.

For the holiday sales, sales were up 1.5% but were offset by heavy discounts and promotions. Earnings fell to $2.41 a share, but it still beat estimates of $2.27.

Linking to dividend paying stocks, for large companies they have access to a great many options and abilities to maintain and drive market share. Most of the time they do not use all the options, but they are there. One of the reasons you want to buy larger profitable stocks is they have options to use.

There are more questions than answers, till the next time – to raising questions.

Sometimes global politics works in favor of companies, sometimes it works against and all companies have to adjust or learn to live with the tea leaves and hopefully not leave money on the table. An example is President Trump and the Panama Canal.

The history of the Canal was it was necessary because going around the tip of Chile is very dangerous and long, a short cut was needed for global shipping. In the early 1900’s, the French government tried but failed. The US using many engineering innovations built the canal and then decided to keep the lands within the canal as a “US lands”. It was not until December 31, 1999, the US officially gave the lands back to Panama.

In an article by Didi Tang and Alex Veiga of the Associated Press, the Hong Kong conglomerate has agreed to sell its stake in a subsidiary that operates ports near the Panama Canal. The consortium includes BlackRock Inc., BlackRock’s subsidiary Global Infrastructure Partners and Terminal Investment Ltd. BlackRock is the world’s largest asset manager having $11.6 trillion assets under administration.

CK Hutchison Holding said it will sell all shares in Hutchison Port Holdings to the group for $23 billions including $5 billion in debt. The consortium will have control over 43 ports in 23 countries including Panama, Mexico, Netherlands, Egypt, Australia, Pakistan and elsewhere.

The transaction does not include the ports in China and Hong Kong.

70% of the sea traffic that crosses the Panama Canal goes to and from US ports.

Frank Sixt, co-managing director of CK Hutchison said the transaction was the result of a rapid, discrete but competitive process which numerous bids and expression of interests were received. It was purely commercial in nature and unrelated to political events.

Given that CK Hutchison recently received a 25 year extension to run the ports, you can judge whether you believe the above statement or not.

Linking to dividend paying stocks, global politics plays a role in business, Whether the government wants companies to be involved or not involved in companies in the world. Business plans are adjusted for action or delay. It is the nature of the beast.

There are more questions than answers, till the next time – to raising questions.

Every country around the world has tariffs on something, it is used to protect domestic companies and to ensure the economy of the country is not overrun by the biggest countries in the world. Most tariffs are aimed at specific industries and leave a wide open berth for the rest of the economy. It is good to have goods and services moving around the world, it makes everyone better and it makes everyone dependent on each other. President Trump seems to want to put broad across the board tariffs on everything. Invariably it means higher prices for anything that is imported. If you go to your favorite store and check out what is domestic and what is import, it turns out many things will be imported, for a variety of reasons.

In an article by Daisuke Wakabayashi, Alexandra Stevenson, Danielle Kay and Eli Tan of the New York Times News Service, the tariffs that President Trump imposed will have significant effect on small businesses and raise prices for consumers.

For decades, American firms have designed products in the US and turned to Chinese factories to produce the goods efficiently and inexpensively. It is how Apple works, it outsources the work to Chinese firms and also how many small businesses work.

The New York Times has heard from nearly 100 companies that import from China about how the tariffs would affect them. Several themes emerged, American businesses, not Chinese suppliers were shouldering the costs of tariffs. Many companies said they would have to raise prices to offset the extra cost of tariffs.

Another theme is a feeling of business paralysis: they were afraid to make plans amid the unpredictable stream of new tariffs, fear of moving productions out of China since no country seemed immune. Most of the goods would not come from the US because the goods were inferior, more expensive and fewer options. Also to do so would be to reinvent their supply chains requiring time and expense they cannot afford.

A 10% tariff imposed on China is whether the components that are assembled in the US or finished products from China that are imported to the US. The tariff is either in a bill when they receive the item or added to shipment costs. Either way the money is coming from the US business.

Some companies have increased their inventory, but then there is a cost to holding extra inventory. If a company has been a customer for years, there may be a little wiggle room, but someone has to pay for the inventory. Often times while there may be other options, because of how the businesses in China has evolved, the best machinery, the best expertise to produce quality goods at a good price is located in China.

Linking to dividend paying stocks, large companies have or should have many options. They should be able to adopt the latest technology using AI to determine the best routes forward. Medium sized companies are next and small business because of fewer people tend to be last. The effects of tariffs will hurt small businesses first because they have less options to deal with the tariffs. Raising prices no matter what size of company is tough, but larger companies tend to do it better because there are fewer options not to deal with them. Those fewer options are good reasons to invest in them.

There are more questions than answers, till the next time – to raising questions.