Welcome to the Weekly Scan. Here’s what we’re following for the week of July 6, 2020.
Make sure to check back as we update these stories.
Job gains reach records. The U.S. added 4.8 million jobs in June, 2020, the biggest gain since 1939, according to reports, bringing the unemployment rate to 11.1%. The unemployment rate has dropped from its April peak of 14.7%, but it remains significantly higher than it was before the pandemic hit. The jobless rate was 3.5% in February, 2020.
- The takeaway: Since the June jobs data was collected, the average daily reported cases of Covid-19 in the U.S. has increased to 40,000 from 25,000. With cases on the rise in many parts of the country, some states have reinstated partial shutdowns, closing down businesses, which could cause a new spike in layoffs. Some states, including Florida and Texas, have reversed course on reopening.
Federal funds for coronavirus vaccine.
The U.S. federal government has selected five biotech and pharmaceutical companies that it believes have the best chance of quickly developing a Covid-19 vaccine. Those companies are Moderna, Oxford-AstraZeneca, Johnson & Johnson, Merck, and Pfizer.
- The takeaway. It can take years to develop a successful vaccine, and the current record is about four years, according to reports. Moderna, Johnson & Johnson and Oxford-AstraZeneca have already received $2.2 billion in federal funding to continue developing their vaccines. Other countries, including China, are also rushing to develop coronavirus vaccines. Questions linger about how long vaccine-induced antibodies to Covid-19 would effectively combat illness.
Uber grabs lunch (and breakfast, and dinner). Uber will reportedly acquire food delivery company Postmates for $2.7 billion. Postmates will keep its name and merge with Uber Eats, Uber’s food delivery service. The merged companies will account for 37% of food delivery services in the U.S., compared to 45% for Doordash, and 17% for Grubhub. Grubhub was acquired by European company Just Eat Takeaway for $7.3 billion in June.
- The takeaway: With its purchase of Postmates, Uber may be shifting its focus to food delivery over ridesharing services. For the first three months of 2020, Uber lost $2.9 billion, but revenue from its food delivery business increased 53%. Uber previously considered acquiring Grubhub.
Buffett goes for the gas. Berkshire Hathaway, the business conglomerate owned by billionaire Warren Buffet, announced it will acquire natural gas company Dominion Gas in a deal worth $10 billion. Berkshire’s energy division supplies power to 20 million people globally. Virginia-based Dominion supplies energy to 7 million customers. In addition to a 100% stake in Dominion, Berkshire will take a 25% stake in natural gas concern Cove Point, based in Maryland.
- The takeaway: Buffet hasn’t bought anything in a long time, and the acquisition of Dominion is reportedly his biggest addition to the Berkshire portfolio since 2016. As opposed to the financial crisis of 2008, when Buffet loaded up on stocks he considered good values, during the most recent financial crisis, he has sold stocks, including those of the four major airlines.
Find out what we covered in last week’s Scan.