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Wall Street Bloodbath Continues into Thursday

Highly volatile U.S. equity markets plunged for the second straight day in a continuation of the bloodbath on October 10 that later savaged world markets.

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Arthur J. Villasanta – Fourth Estate Contributor

New York, NY, United States (4E) – Highly volatile U.S. equity markets plunged for the second straight day in a continuation of the bloodbath on October 10 that later savaged world markets.

Investors are fleeing riskier assets like stocks and piling onto traditional safe havens like bonds and gold. They now turn for some succour to corporate earnings reports — which are widely expected to be on the upside — to be released Friday. A market correction is now a distinct possibility.

And all this is taking place in October, a month notorious for its long list of painful sell-offs in the past.

Stocks fell sharply Thursday in a second straight day of fear and angst on Wall Street. Analysts said investors are ditching equities worldwide because of fears of rapidly rising interest rates and a possible global economic slowdown due to Trump’s trade war.

The blue chip Dow Jones Industrial Average closed 545.91 points lower at 25,052.83, bringing its two-day losses to more than 1,300 points. The combined loss wiped-out the Dow’s gains for the entire year.

The S&P 500, the large-company stock index, fell 2.1 percent to 2,728.37 and posted its sixth straight decline. The NASDAQ Composite retreated 1.3 percent to 7,329.06. It did, however,briefly enter correction territory at its lows on Thursday. The broad index also closed below its 200-day moving average for the first time since April.

The Dow fell as much as 698.97 points at its lows during the day. The indices temporarily recovered after a report said President Donald Trump and Chinese President Xi Jinping planned to meet at next month’s G-20 summit, instilling a fleeting hope the full-blown trade war between both countries might not worsen any further.

The S&P 500 has lost 6 percent during so far this month and is now higher by just 2 percent for 2018.

Tech stocks, the long-time market leaders, have been hit hard in the latest rout as Chinese tariffs and security concerns over Made in China tech products have put these companies in a bad light. The NASDAQ, however, performed better than both the Dow and the S&P 500 on Thursday.

Despite this, the NASDAQ is still 9.6 percent off its all-time high in late August. FAANG stocks took a beating. Amazon fell 2.04 percent; Apple stood 0.88 percent lower; Netflix gave up 1.47 percent while Google tripped by 0.18 percent. Facebook, however, ended higher.

The Russell 2000, an index of small-company stocks, fell into official correction territory after sliding nearly 2 percent in Thursday’s bloodbath. The index is now 11.2 percent below its August 31 record high.

“This is another bad day,” said Brad McMillan, chief investment officer at Commonwealth Financial Network. “One of the discouraging things is the market really tried to rally during the day and it couldn’t hold on to it.”

“Is this the big one? Is it 2008? I think the better comparison is where we were at the end of January,” said McMillan.

Investors remain antsy over tariff concerns and a recent jump in interest rates. Trump added fuel to the fire by blasting the Federal Reserve for continuing to increase a benchmark rate affecting both business and consumer loans.

“It’s a momentum correction, not a portfolio correction,” said Joe Terranova, chief market strategist at Virtus Investment Partners. “While we have a bias to believe 2008 could happen again, I don’t think this is the case.”

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Finance

Nike Unveils ‘Nike Adapt BB’ Self-Lacing Shoe

Nike has unveiled its second-generation “self-lacing shoe” that adapt to a wearer’s foot at the touch of a button or an app.

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Arthur J. Villasanta – Fourth Estate Contributor

Washington County, OR, United States (4E) – Nike has unveiled its second-generation “self-lacing shoe” that adapt to a wearer’s foot at the touch of a button or an app.

“Nike Adapt BB” pairs a smartphone with the self-lacing shoe to adapt to a wearer’s foot at the touch of a button. BB stands for basketball and it identifies who this shoe was developed for.

Nike will begin offering the Adapt BB in February for $350, or less than half the Hyperadapt’s original price of $720.

“Say goodbye to the shoelace,” said Michael Donaghu, Nike’s director of global footwear innovation.

Donaghu said the new shoe is all about fit and is targeted directly at basketball players.

Nike explains Adapt BB has a near-symbiotic relationship with its digital app thanks to opt-in firmware updates. It explained that when a player steps into the Nike Adapt BB, a custom motor and gear train senses the tension needed by the foot and adjusts accordingly to keep the foot snug.

The tensile strength of the underfoot lacing can generate 32 pounds of force to secure a foot throughout a range of movement. FitAdapt tech, the shoe’s “brain” then kicks-in. A user can input different fit settings depending on different moments of a game by manual touch or by using the Nike Adapt app on a smartphone.

For example, a player can loosen the shoe before tightening it up as he re-enters the game after a time-out. Nike said varying the fit is necessary because a foot can expand almost a half-size during play over the course of a basketball game. A level of fit that’s comfortable at one point might feel constrictive 20 or so minutes later.

Adapt BB enables these minute changes in tightness using the companion app, leading to 40% more “lockdown” for feet.

The app also lets users change the color of the glowing twin dots on the midsole of the shoe to 14 different colors. Adapt BB comes with a wireless charging mat that can charge the shoes in three hours for two weeks of wear time. The new shoe is also connected.

It can send data about usage and analytics back to Nike, should users allow that. The data might also eventually be used to track athletes’ movement and performance, which Nike says can help it offer new products or services to customers.

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SpaceX will Fire 577 Employees as Launch Business Sours

SpaceX will fire 577 employees over the next few days in an effort to stay lean as it anticipates fewer launches and higher expenses this year.

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Arthur J. Villasanta – Fourth Estate Contributor

Hawthorne, CA, United States (4E) – SpaceX will fire 577 employees over the next few days in an effort to stay lean as it anticipates fewer launches and higher expenses this year.

The total of those being let go represents close to 10% of the company’s total workforce of some 6,000 employees. Most of those to be fired work at the company’s headquarters and rocket factory located at Hawthorne, California.

SpaceX President and CEO Gwynne Shotwell in late 2018 warned there might be a slowdown in orders from the geo-telecommunications industry, which is the lifeblood of SpaceX.

“Next year you won’t see as many launches as you see in 2018,” said Shotwell. “2019 is a lower-cadence year.”

Ironically, Space X had its best year in 2018. It successfully launched 21 times, giving it the U.S. record for most launches in a year.

In a statement about the firings, SpaceX said that to “continue delivering for our customers and to succeed in developing interplanetary spacecraft and a global space-based Internet, SpaceX must become a leaner company.”

It said the mass firing “is taken only due to the extraordinarily difficult challenges ahead and would not otherwise be necessary.”

“It’s always unfortunate when there are large layoffs,” said Jan Vogel, executive director of the South Bay Workforce Investment Board.

“We’re in touch with SpaceX and we’re to provide transitional services to impacted employees. There are a lot of aerospace companies in the Los Angeles area. We’re ready to help people.”

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PG&E will File for Bankruptcy to Avoid $30 Billion in Lawsuit Damages

Pacific Gas & Electric Corporation (PG&E), parent company of the utility that provides electricity and gas to most of Northern California, has announced its intention to file for Chapter 11 bankruptcy protection to stay alive amidst billions of dollars worth of lawsuits associated with the catastrophic wildfires that occurred in 2017 and 2018.

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Arthur J. Villasanta – Fourth Estate Contributor

San Francisco, CA, United States (4E) – Pacific Gas & Electric Corporation (PG&E), parent company of the utility that provides electricity and gas to most of Northern California, has announced its intention to file for Chapter 11 bankruptcy protection to stay alive amidst billions of dollars worth of lawsuits associated with the catastrophic wildfires that occurred in 2017 and 2018.

PG&E’s liability could exceed $30 billion should it be found legally responsible for some or all of the costs connected with the 2017 and 2018 Northern California wildfires. These catastrophes include the Camp Fire in November 2018, which is the deadliest and most destructive wildfire in California history to date.

PG&E stands on precarious legal grounds. Cal Fire, California’s fire agency, determined in June that PG&E equipment ignited 17 wildfires across Northern California in 2017. In 12 of these fires, the agency’s findings were referred to the appropriate county District Attorney’s offices for potential violations of state law.

California law says utility companies can be held liable for fire damage caused by their equipment, even if they weren’t negligent in maintenance.

State regulators are also investigating PG&E’s potential culpability in the Camp Fire that killed some 86 people; destroyed more than 18,000 structures and inflicted damage worth over $16.5 billion.

“We believe a court-supervised process under Chapter 11 will best enable PG&E to resolve its potential liabilities in an orderly, fair and expeditious fashion,” said interim CEO John Simon. “We expect this process also will enable PG&E to access the capital and resources we need to continue providing our customers with safe service and investing in our systems and infrastructure.”

Shares of PG&E Corporation plummeted more than 51 percent on Monday afternoon. The company has lost more than two-thirds of its market value since the Camp Fire.

The Calaifornia Legislature, however, might still take action to protect the company from 2018 fire liabilities between now and when PG&E actually files for Chapter 11.

Democratic state Sen. Jerry Hill, a longtime critic of PG&E, said that if Monday’s bankruptcy announcement is a company tactic to pressure the Legislature for a bailout, it won’t work.

The company’s already considrable financial problems only worsened following the Camp Fire. This would be the company’s second bankruptcy since it first filed for bankruptcy in 2001.

The company was convicted of felonies in a deadly gas line explosion, and now faces those potentially crippling wildfire liabilities and safety lawsuits.

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