Week VI: 50,000, Jobs, What is a BYD, and Home Court Advantage
The Economy – Week VI
The headline news was that the Dow Jones Industrial Average – DJIA - finished above 50,000 for the first time.
The DJIA is an index of 30 large U.S. companies that is weighted by the price of the stock, not the value of the company.
Goldman Sachs, at $890/share, has a bigger impact on the movement of the DJIA than Verizon at $47/share.
When I got into banking in 1988, the DJIA was at 2000, and the companies in the DJIA included Bethlehem Steel, Eastman Kodak, Sears Roebuck, Westinghouse Electric, Woolworth, and 8 others that are mostly no longer around. Boomer alert!
The jobs data for the week:
The ADP new jobs report showed 22,000 new jobs, vs. 37,000 the previous month and 45,000 expected.
Initial jobless claims increased to 231,000 from 209,000 against expectations of 212,000.
Job openings dropped from 6,900,000 to 6,500,000
I’m not happy with the trend.
The ISM:
The Institute for Supply Management’s survey of manufacturing jumped to 52.6% in January from 47.9% in the prior month.
This was the highest since June 2022.
Any number above 50% indicates business is growing, and that’s good.
Finally, consumer credit outstandings increased $24,000,000,000. That’s a big number on its own, but incredibly, it’s only 2.4% of the total consumer credit out there.
What is a BYD?
It is the largest electric vehicle manufacturer in the world, passing Tesla, and it’s based in China.
The letters are the initials of the company’s Chinese name. They have also used them to market the theme “Build Your Dream.”
Fun Facts:
In 2023, China passed Japan as the world’s largest automobile exporter. That is worth noting. And the cars are pretty good.
While China has the capacity to produce 46,000,000 vehicles annually, its current run rate is 30,000,000. That’s a lot of capacity.
The second largest Chinese car manufacturer is Geely.
And they are thinking about building a factory in the U.S.
BYD had 284 dealerships in Europe in 2024. They are targeting 2000 in 2026.
I guess everyone has stretch goals.
Berkshire Hathaway was an early investor, but it has since sold its stake.
Things that make you go ‘hmmm’.
A model it sells in Mexico is the Dolphin Mini. More fun facts:
$22,000 base price
30% to 80% recharge in 30 minutes.
186 to 236 mile range.
The wheelbase is similar to that of a Mini Cooper.
That same Mini Cooper is $30,000 in the U.S., but it’s gas-powered.
They have a pickup hybrid that sells for about $51,000 in Mexico.
Overall BYD sales in Mexico are said to exceed those of Ford or Honda, but not quite Stellantis yet.
More to come…
The Olympics and the Home Crowd
What is the power of playing at home? Home field, home ice, home stadium.
How about on your birthday? It makes a difference.
Francesca Lollobrigida, an Italian speed skater, turned 35 on Saturday. She was also competing in the women’s 3000-meter speed skating that same day, an event historically dominated by the folks in orange – the Netherlands.
She had thought about not even competing; she had her son in 2023 and, as a mom, thought about hanging up the skates.
She won silver and bronze in 2022, and she really was not in the conversation for 2026.
Athletes compete two at a time in 10 pairs, racing against the clock over 3000 meters, and the one with the best time wins; it’s not like there are 19 of your closest competitors looking to bump you off the track all at once, like short track.
In the 8th pair, she started slow; not much off the pace, but the Canadian she was racing against was doing well. Then she found her stride, and the home crowd noticed, and they started cheering. With each lap, she got faster and finished smokin’, with a new Olympic record.
But there were two Dutch skaters left to race.
They weren’t even close.
Francesca was the first Italian to win a gold medal in that event. It’s even better when it’s your birthday and your little boy is watching.
That’s the way to start two weeks of Olympic events.
Don’t underestimate the power of being the home team. If you are bidding for a job, writing a proposal, or submitting a resume, and you are in the same hometown or area as the company you are proposing to, make a point of mentioning it. “We are local” has an impact, just as being Italian and competing in Italy at the Olympics does. The advantage can be huge; Italy has 9 medals, the best of any country after two days in any winter Olympics. Home ice, baby!
And throw in some references. If you don’t have any, start now.
On to Week VII.
