The Christmas season which runs from Thanksgiving to Christmas Day and on to the new year is the most important season on the shopping calendar. The season can count for 50% of profits for the year, as the January and February months typically are the slowest months. The above means much rides on the season. This year the big concern is COVID, how will shopping happen when the country is going through a second wave, knowing the good news in the new year, sometime, vaccines will be available.

In England, Pan Pylas of the Associated Press noted the lights were turned on at Oxford Street but there was little celebrating for many shops have been ordered to close till December 3. During the first lockdown shops were closed nearly 3 months till mid June.

If the lockdown lasts to December 2, Helen Dickinson the chief executive of the British Retail Consortium represents nothing less than a nightmare before Christmas.

Britain has already recorded the most virus-related deaths in Europe with nearly 47,000. The decision has dashed the British economy might recoup by the end of this year a large proportion of the near 25% of output lost in the spring. The British economy is expected to contract a further 10% in November.

The Bank of England has increased its bond buying program by at least L100 billion ($130 billion) to keep a lid on borrowing rates in the markets and to ensure money keeps flowing through the financial system.

Linking to dividend paying stocks, we all follow traditions and expectations in order to make sense of the world. There are things that happen in the economy similar to the world of nature every month and quarter, if they happen as what is considered normal, we all follow the patterns and live life what is considered normal. When there is a only going threat, most of the population will react slowly but eventually they will adjust, when they adjust changes will be made until the next time things are not normal. With dividend paying stocks, we want normal to happen so there are few surprises, this means continually doing homework if alternatives need to be changed in your portfolio.

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

In China livestreaming or selling goods online is expected to reach $210 billion, which is propelling more and more merchants to sell in this manner. It helps that most people in China have a Smartphone with apps which makes shopping and spending more very easy. Livestreaming is similar to the Home Shopping Network without the TV studios.

In an article by Nathan Vanderklippe of the Globe and Mail. In China, not all regions of the country are doing well or have done well economically but people are people and they are will to try something new. Small shopkeepers are being offered the ability to livestream in the evening hours their goods and some will sell things. It is noted that many shopkeepers open during the day and then livestream in the evening makes for an even longer day. However similar to most things, it depends on how many people watch and whether they will buy or not.

In the northeast of China, in the Wu’Ai business zone of Shenyang, some of the economic planners of China are hoping livestreaming will help the local economy. The area around Shenyang was once the 4th richest area of China but has fallen to the 15th with a GDP per capita of $11,000.

The area used to have steel mills or what are now considered rust belt industries and officials acknowledged they falsified data to artificially inflate the provinces performance. All the provinces were falsifying the data that Beijing cracked down on provinces which falsify data.

To ensure merchants can livestream, the local government has pressed for better internet speeds and lower fees, built studio space for the many small merchants and offering support for small shopkeepers and mall owners. In the studio space, the government has set up incubators with instructors to help shape online and livestreaming.

Linking to dividend paying stocks, there is no magic formula when an area goes into economic decline but a lot of help does wonders. For dividend paying stocks there are tax advantages to access, for small business they want a reasonably level playing field, although most of the businesses will remain small. If it works at the small business level, expect the larger business to copy and continue to put on pressure on the small business to stay small.

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

Prior to November there was big excitement with the world’s largest IPO in Shanghai and Hong Kong with the expected IPO of Ant Group. The company is a financial technology firm founded by Jack Ma who became a billionaire with the number one shopping company of Alibaba. In China instead of Amazon people use Alibaba. The issue is whether the financial tech company should be treated as a tech company or a regulated financial institution such as banks.

In an article by Julie Zhu, Meg Shen and Greg Roumeliotis of Reuters, according to to Francis Lun, chief executive of GEO Securities, The Communist Party has shown the tycoons who is boss. Jack Ma maybe the richest man in the world, but that does not mean a thing. This has gone from the deal of the century to the shock of the century.

To revive its listings, Ant is trying to establish if it needs to disclose more information to the Shanghai exchange about its relationship with regulators or if the exchange expects Ant to resolve on its issues with regulators before going ahead.

Ant Group is a financial technology firm which people use to bank, invest and make loans. The Chinses regulators are worried about underwriting loans amid fears of rising defaults, who is responsible? Ant originates demand from retail consumers and small businesses and passes that on to about 100 banks for underwriting, earning fees from the lenders with minimal risk to its own balance sheet.

Ant’s consumer lending was 1.7 billion yuan (or $254 billion) at the end of June or 21% of all short term consumer loans issued by Chinese deposit-taking institutions. Only 2% of its loans that it had facilitated were on the balance sheet.

Under draft rules published by China’s central bank and banking regulators. small on line lenders must provide at least 30% of any loan they fund jointly with banks.

The reporters interviewed a banker from Hong Kong with close ties to other Chinese fintechs said the the new rules were tailored made for Ant. The banker said Ant may have to split into a number of companies – payments, mico-lending, and wealth management.

Linking to dividend paying stocks, this was a huge blow to Ant Group because the IPO has taken a number of years and had the blessings of the government till in did not. One expects companies in the marketplace for a number of years would have built up the relationships with regulators and government to ensure they have rulings before the action. There are always competing interests and and always other methods to do things including for politicians doing nothing. In business you wish to do something, but it is important to understand how government can and does affect your investment.

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

If there is one thing everyone around the world can agree on is there is greater debt than there was before COVID, governments around the world have increased their debt levels. Bondholders of the debt will have an increasingly large say about the activities of many countries, unless the world comes together to repay the debt.

In an article by Rodney Muhumuza of the Associated Press, one of the countries in Africa is Zambia and it is important to the world because it is one of the world’s top producers of copper. If you remember early in the year, the Group of 20 said public debt would not have to be paid for a while and freed up $20 billion for low income countries. The countries are seeking an extension of paying debts.

However, $3 billion in debt held by investors including China is coming due and what will the G20 do? In the past few years, China has been increasing its presence in the African economy including raw materials and holds about 1/3 of the sovereign debt and the world is wondering what influence will China have. According to Nathan Hayes, an analyst with the Economics Intelligence Unit in 2021, $20 billion in private obligations as well as $14 billion in bilateral debt is coming due.

Linking to dividend paying stocks, for generations American and European investors have counted on their governments to the backstop to their investing outside of their countries and institutional solutions have evolved. China is the new player and they have different interests, although everyone follows the same formula Good Sold – Costs equals Profits. If there are profits then dividends can be paid and all is good.

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

Not long after John D Rockerfeller formed Standard Oil it became the largest energy company in the world and the US. Standard Oil was so big and powerful, Congress broke in up and eventually Exxon became number one energy company. Throughout its existence, Exxon has been the number one energy company, but COVID happened and demand for gasoline dropped which has resulted in Exxon no long being the number one energy company. Who is first? NextEra Energy the world’s largest producer of wind and solar energy. Exxon and Chevron bounce between 2nd and 3rd largest.

In an article by Jennifer Hiller of Reuters, Exxon will be cutting 14,000 jobs because of weak demand but the dividend which is yielding near 10% due to the 50% drop in the price of the shares is questionable. If you own an energy stock, it likely was Exxon but if oil remains below $45 a barrel, Exxon will loses its cash balance. To maintain the dividend, it might have to sell assets.

Darren Woods spent heavily to boost output and turn around sagging profits by buying land in the US share oilfields, global refining, plastics and offshore Guyana where it struck one of the biggest discoveries in a decade.

In 2020, Exxon has cut spending plans by $10 billion to $23 billion as debt has risen 60% since 2017.

Linking to dividend paying stocks for all its existence Exxon has been a great stock to hold and collect a dividend. The total return had been wonderful and it looked like it was going to last forever or as long as we had internal combustion engine vehicles. Something changed rapidly and commodity prices went lower, it was a double whammy. In 2021, we expect the economy will have shaken the COVID but would you wait or find an alternative. With dividend stocks, it often takes multiples changes before you need to find alternatives, but it is good to know them just in case.

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

If you think about the auto industry after COVID, likely your first reaction is stay away from investing in the sector. Highways are less busy, people are using less gasoline, the normal commuting to downtowns or work is less and if people are staying home more there should be less demand on new vehicles.

Ford surprised everyone when it announced its latest quarter, it made money on strong demand for pickups and SUVs. Ford reported a net income in the third quarter of $2.4 billion or 60 cents a share versus $400 million or 11 cents a share a year earlier.

In an article from Reuters Ford’s profit was $3.6 billion or 65 cents a share, analysts had expected 19 cents a share.

The company repaid a $15 billion in revolving credit loans and ended the quarter with nearly $30 billion in cash and more than $45 billion in liquidity.

The company’s adjusted EBIT margin in the quarter was 9.7% with a full year target of 8%.

Fiat Chrysler also made a operating profit of $4 billion on margins of 13.8%.

Linking to dividend paying stocks, the automobile companies are often counted out because there is great change in the industry, however there are good margins and even if sales are slower, once they pick up profits are to made. If you read about the industry and the electronics in the vehicles, one day we can set the car on the highway and have a nap, vehicles are not going away. Too many people need vehicles to move around the neighborhoods where they live. The auto industry will continue to change and as long as margins are good, they will survive and grow.

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

In Europe the airlines often have direct government support or ownership, in the case of KLM-Air France two countries own the airlines. When times are good it is easy to share ownership, when times are tough such as the COVID situation, it is not easy. Both governments want their airlines to continue and have spin off jobs at the airports and economic development. In Europe, many industries have unions and stronger unions which the government either supports or does not oppose. However, in economics in order to stay in business, someone should make money or at least try to keep costs low.

In the KLM case it is the government who is management, and Dutch Finance Minister Wopke Hockstra said he was disappointed with the pilot union who rejected a wage freeze until 2025. The union said it has agreed to a wage freeze until March 2022 and would not extend it. The government had been stressing that KLM would receive a bailout of E 3.4 billion ($5.2 billion), if the pilots agreed as the other unions of ground and cabin crews (who make less money) had agreed to the extension in exchange for no loss of jobs.

According to a report in Reuters, KLM-Air France reported a drop of 67% in third quarter revenue to E 2.52 billion. The airline’s debt has risen by E 3 billion to E 9 billion.

Linking to dividend paying stocks, in all companies while everyone has the same end interest not everyone has the same vested interest. Some groups have more control than others and when you invest you need to know who the players are to know which groups have a say and which groups raise concerns which only need to be listened to.

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

In politics, words are flung around sometimes to get votes but words eventually matter. President Trump on the campaign trail, often says China will pay and then goes on to another subject. The issue with the President is he is not a very detailed person, he shouts from the rooftops and then goes to another roof to shout again. Sometimes you might like what he says, sometimes you dismiss him. But what if a target of what he says or tweets can fight back? China is the world’s second largest economy and has very distinct ideas of where it wants to be and is going. Every time the US has dropped from its normal response to anything which happens around the world as it does an inward US first policy, China sets in and takes the US’s place. We have seen China expand its relationships across the Asia (examine You Tube videos on the new Silk Road) and Africa (new ports for Chinese goods have been established and China has lent money to countries) and they will not step back when a new administration is in power in the US.

China is setting the stage for what it will do every time President Trump says China will pay. In an Associated Press article China passed a law restricting sensitive exports to protect national security. The law will apply to all companies in China and take affect December 1. The law in China will apply to civilian, military and nuclear programs, as well as goods, technologies and services related to national security. In simple terms just about everything.

The law is designed if other countries around the world including the US block Chinese communications gear supplier Huawei Technologies, Tencent Holdings’ We Chat, ByteDance Ltd.’TikTok app and others China will have a response. It is noted China has some of the most restrictive controls on its own people through facial recognition programs it can and does scan all the people at sporting events and find those who needed to be arrested. It is both interesting and scary at the same time.

In a related story, China is blaming the US for climate change getting worse. It is true the US has not signed onto the Paris Accord and President Trump’s administration cut regulations for clean air and clean water, but blaming the US without examining the face in the mirror is a little much.

Linking to dividend paying stocks, words from the President of the US or President of the company which you have investments matter. When the words are directed at the competition, expect the competition to have an ability to push back. If you think about the physics notion – for every action there is an equal and opposite reaction; not to expect reaction is foolish. Why would the competition roll over, particularly if they feel you are vulnerable? Measured words are sometimes boring, but measured words tell you about the long term plans, as opposed to what is happening today.

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

If you watched the Presidential debate, Vice President Biden said to battle climate change, the US needs to go green in terms of vehicles and saving of energy through retrofits. If Biden wins and the polls suggest he will, Wall Street firms are analyzing which green companies to own.

In an article by David Randall of Reuters, portfolio managers from Gabelli, Fairpointe Capital and Eaton Vance (soon to be a subsidiary of Morgan Stanley) are buying shares of companies ranging from semiconductors to industrial equipment to utilities.

Mr. Biden has proposed a $2 trillion spending including installing more than 500,000 electric vehicle charging stations by 2030.

The Invesco Solar ETF has risen 20% in October, the VanEck Vectors Low Carbon Energy ETF is up 11.3% and the iShares Global Clean Energy ETF is up 14.4%.

Chris Dyer, director of global equity at Eaton Vance is buying companies such as Schneider Electric SE. Eaton Vance is looking at companies that are particularly geared to energy efficiency.

Cheryl Smith at Trillium Asset Management is looking at semiconductors and automotive components that would benefit from a push to electric vehicles.

The Global X Autonomous and Electric Vehicles ETF is up 5.7%

President Trump loves to talk about the oil industry however Exxon Mobil and Chevron has shed 51 and 40% respectively.

Linking to dividend paying stocks, the oil companies have been great dividend payers for generations but things change and it is always important to remember the top 10 companies of the 1980’s is not the top 10 companies of the 2010’s. Companies are still making money but the economy or alternatives come up. Change will happen, hopefully it happens over time and you can adjust to it and continue to earn dividends from profitable companies.

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