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TOGETHER WITH
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Good morning. On
International Nurses Day, we want to dedicate this newsletter to nurses
around the world for taking care of people when they most need it. From
the entire Brew team, thank you.
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NASDAQ
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9,192.34
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+ 0.78%
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S&P
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2,930.19
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+ 0.01%
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DJIA
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24,221.99
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- 0.45%
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GOLD
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1,701.10
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- 0.75%
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10-YR
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0.714%
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+ 2.50 bps
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OIL
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24.48
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- 1.05%
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*As of market close
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Energy: Saudi Arabia said it would cut oil production by an additional 1 million barrels per day beginning June 1. That’s on top of the historic cuts already put in motion by OPEC+.
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Markets: The Nasdaq gained for the sixth consecutive day as investors continued to bet on tech stocks.
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Francis Scialabba
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When an
athlete gets hurt, all they think about is the timeline for getting back
on the field. The same goes for an injured economy: How long will it
take to recover?
Probably years
Economists were hoping for a V-shaped economic recovery: a rapid slide down followed by a quick climb back. But many are scaling expectations back to a Nike swoosh-shaped recovery in which output may not return to pre-pandemic levels until late 2021 (or later).
Even worse would be a W-shaped recovery, where the economy weathers one recession only to faceplant into a second.
- “If a second downturn
were to flare up, it’s far from clear that Congress would be ready to
offer trillions more to enable businesses to survive yet another round
of months-long shutdowns,” the AP reports.
Recoveries don’t happen evenly
A recession’s full effects can take years
to ripple out. The Great Recession technically ended in June 2009, yet
bank failures peaked in 2010. And as late as 2013, state and local
governments were still slashing jobs.
81% of small businesses think COVID-19 could impact
them for 12–16 months. By some estimates, half of small businesses
could fold within six, and laid off workers could require years to find
new roles.
One worrying trend: More businesses are moving to permanent layoffs as they close factories and reduce operations.
- Manufacturing, which
never returned to pre-2008 levels, is especially vulnerable: Between
2010 and 2019, the sector added 1.4 million jobs. In April, it lost 1.3
million (including temporary layoffs).
- The Becker Friedman Institute predicts that 42% of layoffs will be permanent.
Business
closures also have upstream effects. Commercial real estate owners are
expected to swallow big losses, then pass those up to banks when they
can’t make debt payments...which could push banks into failure.
Of course, you wouldn't know any of this by looking at the stock market.
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Giphy
In a late-afternoon press release tweet yesterday, Elon Musk announced that Tesla's Fremont, CA, factory would be restarting production, defying Bay Area coronavirus-related health restrictions.
- The Tesla CEO declared
he would be on the line next to his workers. “If anyone is arrested, I
ask that it only be me” Musk wrote.
Elon’s angry. He feels like Tesla has been unfairly put in timeout, while all of its friends—Ford, GM, and Fiat-Chrysler—get to reopen their factories come Monday.
And he’s not alone
- Texas Senator Ted Cruz traveled to get his hair cut by a salon owner he felt was wrongly imprisoned for ignoring lockdown orders in early May.
- Businesses in Pennsylvania, with the support of local governments, are openly defying state-mandated lockdowns.
But...state
governors are neither powerless nor pleased. Pennsylvania Gov. Tom Wolf
lambasted county officials, saying, “they need to understand the
consequences of their cowardly act” while also threatening to pull
disaster relief funding and business licenses if they don't comply.
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It’s no secret: Countless organizations across the globe will be operating remotely for the foreseeable future.
And in this
virtual sphere, your boards and executives need to ensure sensitive
meeting materials, communications, and workflows remain private and secure.
But where do you start? Legal pads? Fax machines? Carrier pigeons? Try BoardEffect.
The leading
board management platform is helping directors and executives
effectively govern and operate—no matter where they’re working from.
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Secure Information Sharing: Manage board meeting documents, online voting, and important data in real-time.
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Integrated Virtual Meetings: Connect with your board members and leaders through seamless integrations with GoToMeeting and Zoom.
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Remote Collaboration Tools: Keep everyone in the loop, no matter the circumstances.
Every
organization—from nonprofits and credit unions to healthcare groups and
universities—can benefit from BoardEffect’s platform.
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Whether it
was the aggressive sunburns or the constant squinting, U.S. officials
finally caught on to the fact that Nevada is sunny. Yesterday, a
subsidiary of Berkshire Hathaway won approval from the Trump
administration to begin construction on what will be the biggest solar farm in the U.S. and eighth largest in the world.
The $1 billion Gemini project will power 260,000 homes, enough to cover Las Vegas's entire residential population.
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The why: Nevada plans to generate half of its energy from renewable sources by 2030.
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The other why: When it comes to
economic recovery from the pandemic, Interior Secretary David Bernhardt
hopes what happens in Vegas doesn’t stay there. The massive construction
project is “really part of our effort to foster jobs,” he explained.
Reality check: The Gemini project is a ray of sunlight in what has otherwise been a dark time for the industry—13 sizable solar projects have been scrapped in Texas alone since March due to the state's collapsing economy.
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Francis Scialabba
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Like Olympic
skeleton, bitcoin halving is a once-in-every-four-years event that
makes you say, "I'll never understand how they do that, but...it's cool,
I guess."
The halving, which took place yesterday afternoon, reduces the reward bitcoin miners can collect by 50%.
- Bitcoin is the world's largest cryptocurrency by market cap. Yesterday, 1 bitcoin was worth around $8,600.
How it works: Miners
play a crucial role in the process of generating new bitcoins, for
which they receive a healthy amount of bitcoin as a reward. But here’s
the thing: The supply of total bitcoins able to be generated is capped
at 21 million. Halving events are meant to apply the brakes slowly—if
all goes according to plan, the final halving should take place in 2140.
Why it matters: The halving will wipe out many smaller miners whose operations are now unprofitable, given the new reward structure.
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Chinese foreign direct investment in the U.S. dropped to its lowest level since the financial crisis.
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Endeavor Group, the owner of the UFC and talent agency WME, secured a $260 million loan to help it survive the crisis, per the WSJ.
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BlackRock's largest shareholder, PNC, is selling its 22% stake worth around $17 billion.
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New York will open some “low-risk” businesses this week, including gardening stores and drive-in movie theaters.
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The WHO said several countries that reopened businesses have experienced an uptick in COVID-19 cases.
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Caesars Entertainment reported “significant revenue declines” in Q1 as the coronavirus forced casino closures across the world.
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3.4 million high school students are set to take AP exams over the next few weeks, and get this—the modified tests will be 45 minutes max. Here’s a sample question from an AP Macroeconomics test to get your brain fired up for the day.
Hyperinflation is typically caused by:
- High tax rates that discourage work effort
- Continuous expansion of the money supply to finance government budget deficits
- Bad harvests that lead to widespread shortages
- A large decline in corporate profits that leads to a decrease in production
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You only need 5 more referrals to receive Morning Brew stickers.
In
the wise words of a certain Jedi master: “Sticker or no sticker, there
is no point in having a laptop if it doesn’t have a Brew sticker on it.”
Or something like that.
Hit the button below to learn more and access your rewards hub.
Click to Share
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B. We take full credit if you got it right.
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I AM A REPUBLICAN BORN AND BRED
IN AMERICA .I BELIEVE IN EQUALITY AND JUSTICE AND THE CONSTITUTION OF THE UNITED STATES.I SERVED IN THE UNITED STATES AIR FORCE
MAJORED IN GEOLOGY AND MUSIC AND WENT TO ANGELO STATE IN SAN ANGELO, TEXAS
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