Welcome to the Weekly Scan. Here’s what we’re following for the week of April 20, 2020.
Make sure to check back during the week as we update these stories.
Twenty-two million, and counting. Five million people filed for unemployment last week, pushing the number of jobless claims to 22 million in four weeks, and erasing all of the employment gains achieved over the last ten years. The economy added 21.5 million jobs starting mid-2009 until March, 2020, according to sources, during the longest period of economic expansion in U.S. history. Bloomberg.
Shake, rattle, and roll. Burger chain Shake Shack says it will return a $10 million loan it received from the Paycheck Protection Program, a small business loan program that is part of the federal $ 2.2 trillion C.A.R.E.S. Act. The $350 billion fund, which is nearly out of money due to heavy demand, is designed to help small businesses continue operating and paying their employees during the Covid-19 crisis. The fund has been criticized for doling out money to larger companies, for example big restaurant and hotel chains, as well as publicly traded companies, rather than small, local businesses. CNN and Wall Street Journal.
Why so touchy? The era of contactless payments appears to have arrived as people hope to avoid germs by using cash and credit cards during the Covid-19 epidemic. Small businesses in the U.S. have seen a nearly 30% increase in ApplePay, the mobile-based payment where users tap a phone against a reader at the point of sale. Funds are then debited from a bank account or linked credit card. Person to person payments services including Paypal, Venmo (also owned by Paypal), and Zelle are also taking off. Bloomberg.
Oil, toil, and trouble. Oil prices continued to tumble. In fact, on Monday, April 19, the price of West Texas Intermediate crude—the name for oil produced in North America–plunged for a time into negative territory. Technically, that means producers would have to pay buyers to take their oil. What’s going on? As Covid-19 has shuttered much of the global economy, demand for oil has fallen and there’s surplus capacity in many countries, including the U.S. While that may be good for consumers, who will pay less at the pump for gasoline, it’s bad for oil producers who could find it increasingly difficult to continue drilling and refining. In fact, the entire U.S. oil industry is now worth $700 billion, less than the market cap of Apple, Amazon, or Microsoft individually. NYT, Reuters, and Bespoke Investment Group.
Check out last week’s Scan for additional news here.