By: Economic & Finance Report
Major technology companies such as Spotify, Apple, BarStool Sports, and Amazon, are racking up their check books in investing in podcast shows and networks.
Amazon is utilizing Audible to attain podcast shows, while Apple is using its Apple TV shows and other Apple products for podcasting viability. BarStools Sports which began as a sporting blog, has utilized its strong sports platform in the podcasting space.
Over 100 million people in the United States listen to podcast shows, one way or another. The number seems to be increasing on rolling average basis according to analysts estimates. The way that traditional radio has been digressing, don’t be surprised as podcasting surpassing the new normal. -SB
_Listen to the #EFRPodcast & #TheCastPodcast shows on the cloud, soundcloud.com/Economic-FinanceReport
1) The numbers are in for the weekly jobless claims, with another 3.84 million people losing their jobs. This brings the total to over 30 million in the past six weeks. Expectations were for about 3 million, so the news was not upsetting. The claims peaked at 6.87 million so officials feel the worst is over with declines each week since, but still this has been the worst employment crisis in U.S. history. While some states are starting to bring their economies back on line, much of the key American infrastructure remains on lockdown. Predictions are for the second quarter to decline worse than anything America has ever seen. The unemployment rate is anticipated to be about 15.1%.
2) The crash of the oil market continues across the globe, with the American shale or fracking oil industry being hit the hardest. The shale oil industry had been fueled by lots of easy money, almost unlimited borrowing allowing companies to dramatically ramp up production, despite what the market demand was. Many companies had been in trouble before the coronavirus hit, and that combined with the Russian and Saudi Arabia oil dispute, oil prices have dropped by three-quarters since early January. There is $43 billion dollars of energy junk bond defaults coming in 2020 with hundreds of oil companies facing bankruptcy. The problem isn’t just American, with Shell Oil Co. announcing a cut in their dividends for the first time since World War II. Finally, the pandemic appears to be making fundamental changes to the oil market and consumption so the oil market may never fully recover.
3) The virus pandemic has adversely affected more than just traditional businesses, large and small. Dirty money from the illegal drug business is piling up in Los Angeles because the money laundering systems has also been put on hold by ‘closing orders’ of non-essential businesses. The businesses used by the drug trade to launder their money have been forced to close up, thereby ceasing operations leaving the drug dealers with growing stacks of cash that cant be used until cleaned.
4) Stock market closings for – 30 APR 20:
Dow 24,345.72 down 288.14
Nasdaq 8,889.55 down 25.16
S&P 500 2,912.43 down 27.08
10 Year Yield: down at 0.62%
Oil: up at $18.64
1) People are tantalized by the incredibly low oil prices, thinking only of lower gas prices. But economically, there is much more to oil and its low price. First, there is the destruction of America’s shale oil (fracking) industry, which has made us independent of foreign oil. There are fears that if oil doesn’t pick up, then the world could see a major shift in global power. The economies of several nations are very dependent on oil sales, the revenue being the bulk of their GDP. For instance, Saudi Arabia’s oil revenues account for 60 percent of its GDP (Gross Domestic Product), two-thirds of its budget, and nearly three-quarters of its exports. For Russia, one-third of its GDP is petroleum, half its budget, and two-thirds of its exports. The turbulent Middle East has states with greater dependence on oil: including Iran, Iraq, Qatar, and Kuwait. For America, oil accounts for only 8% of our GDP. The coronavirus pandemic has drastically reduce oil consumption world wide, and if it’s slow in returning to pre-pandemic levels, some countries could find themselves in serious financial and geopolitical trouble, with their influence waning and other nations displacing them in the world pecking order. It’s anyone guess how things could settle out and in whose favor.
2) Amazon has been using data about independent sellers on its platform to develop competing products, which their stated policies forbid. Such practices would give the online retailer tremendous advantage in competing against similar products, but is using proprietary information. Information includes total sales, vendor cost for Amazon’s marketing and shipping, and how much Amazon made on each sale, and other non-public information.
3) President Trump stated he would veto an emergency loan for the U.S. Postal Service if the USPS didn’t immediately raise its prices for package delivery. The President considers package delivery prices need to be four times the present charges. He has been critical of the USPS for years, considering the postal service problems are a result of mismanagement.
4) Stock market closings for – 24 APR 20:
Dow 23,775.27 up 260.01
Nasdaq 8,634.52 up 139.77
S&P 500 2,836.74 up 38.94
10 Year Yield: down at 0.60%
Oil: up at $17.18
1) Jerome H. Powell, the Federal Reserve Chair, said the U.S. economy is in an emergency, which is deteriorating with alarming speed. His remark comes after unveiling over $2 trillion dollars in new loans to keep the economy afloat, a result of the coronavirus shutdown. America is moving from the lowest unemployment in fifty years to a very high unemployment in just weeks. Claims for unemployment aid is now up to 17 million and still climbing as more businesses fight to survive. It is expected the U.S. economy may shrink by more than 30% between April and the end of June. The Fed will soon begin purchasing up to $750 billion dollars in corporate loans from big businesses who have a low investment grade, in the hopes of preventing their bankruptcy bringing further damage to the American economy. The Feds are making a wide range of loans to various size businesses which it doesn’t expect to get paid for. No one is making estimates on how extensive this will ultimately be to the American economy.
2) Although Saudi Arabia and Russia have reached an agreement on limiting oil production, it’s not yet known just how large those reductions are going to be, so oil prices had turned negative while awaiting details of OPEC+ cuts in oil production. The general consensus is each nation will cut production by 10 million barrels a day, but with world oil consumption way down because of the pandemic, it’s not certain if the OPEC+ cuts will have much effect, especially for U.S. domestic oil production (shale oil).
3) The Treasury Secretary Steven Mnuchin considers it may be possible for the U.S. to be open and back to business next month, considering it’s just a matter of medical considerations. The administration is doing everything possible for business to resume as soon as the ‘all clear’ is sounded and they have the necessary liquidity to operate. The president is forming a second taskforce charged with addressing the economic devastation which the virus has wrought and take measure to resume economic activity as soon as possible.
4) Stock market closings for – 9 APR 20:
Dow 23,719.37 up 285.80
Nasdaq 8,153.58 up 62.67
S&P 500 2,789.82 up 39.84
10 Year Yield: down at 0.73%
Oil: down at $23.19
1) Across the world, truckers are having a difficult time in their role of delivering food stocks to the people. In America, truck drivers are finding it more difficult to operate, unable to find places to eat, with restaurants shut down and their rigs too big to go to the drive-thru lanes. They are unable to find places to sleep, shower or even clean toilet facilities. Nevertheless, the food supply chain continues to struggle to get the necessary food to the people.
2) With the government announcement that we are now in a recession, questions abound how long will it last? For the ‘08 recession, it took more than a decade to recover. One major obstacle facing a recovery, from a near total shutdown of the economy, is the small businesses. Half the businesses in the American economy are classed as small businesses, and half of those have less than fifteen days cash reserves, which means a significant number of American businesses will not survive the virus shutdown. This will leave millions of workers scrambling to find work and therefore will greatly hinder a recovery.
3) Oil prices have rallied from news that the Saudi Arabia – Russia price war may be coming to an end with agreements to cut back oil production by ten million barrels a day. Oil is the keystone to economic vitality with oil prices needing to be above about $40 a barrel for shale oil to be profitable so America can remain oil independent.
4) Stock market closings for – 3 APR 20:
Dow 21,052.53 down 360.91
Nasdaq 7,373.08 down 114.23
S&P 500 2,488.65 down 38.25
10 Year Yield: down at 0.59%
Oil: up at $29.00
1) Unemployment claims have jumped twice the previous week’s numbers, with 6.6 million Americans filing for benefits. This brings the last two weeks total of new unemployed to 10 million. The speed and scale of job losses are unprecedented. The record for loses in a month had been 695,000 in 1982. The coronavirus has wiped out more jobs in two weeks than were lost in the worst months of the last recession. Companies based on white-collar workers, have been able to keep their people working with work at home, but as revenues dry up, it’s questionable how long before they too will be forced to start layoffs. The growing number of laid off workers unable to pay their bills could well lead to a cascade of further layoffs and business failures.
2) While the price of oil has always had an effect on the equities, the recent plunged has had a more profound effect and therefore causing the roller-coaster volatility of the markets. This dramatized how very central oil is to the entire modern world. Stabilizing the oil prices would greatly help stabilizing the markets, and therefore the whole world economic system. Central to this is for Russia and Saudi Arabia to end their price war and resume limiting production. But central to this is Russia’s desire to damage American domestic oil production by destroying the shale oil companies, which would reduced American’s influence in the world especially in the middle east where Russia is very active.
3) Already wracked by fiscal problems from decline of the milk product markets, dairymen now suffer a further decrease in their market as a result of the coronavirus crisis. This is a result of restaurants, schools and other food service outlets reduced to stopping operations and therefore not needing milk products. The dairy industry is still producing, but doesn’t have anyplace to sell their milk, so the industry is asking the government to increase its purchases of dry milk, butter and cheese.
4) Stock market closings for – 2 APR 20:
Dow 21,413.44 up 469.93
Nasdaq 7,487.31 up 126.73
S&P 500 2,526.90 up 56.40
10 Year Yield: down at 0.63%
Oil: up at $24.90