Welcome to the Weekly Scan. Here’s what we’re following for the week of August 3,  2020.

Make sure to check back as we update these stories.

Record slump. The economy, as measured by Gross Domestic Product (GDP) fell by 9.5% in the second quarter of 2020, which ended June 30. That was the biggest single-quarter drop on record, according to experts. On an annualized basis, where you essentially project the quarter’s losses for the remainder of the year, that would come out to a decrease of 33%.

  • The takeaway. The wallop to GDP is further evidence that the recovery that seemed to be underway in the late spring has stalled. There are currently more than 30 million unemployed people, and toward the end of July 1.4 million more people filed for jobless benefits, with an additional 800,0000 freelance workers filing for Pandemic Unemployment Assistance, an expanded benefit offered to contract workers during Covid-19. What’s more, a supplemental benefit of $600 per week that has kept many out of work people afloat since March expired July 31, 2020.

NYT

Microsoft, meet TikTok. Microsoft is reportedly in talks to acquire the U.S.division of the video-creation and sharing app TikTok from its owner ByteDance, based in China. The potential deal is unfolding even as President Trump has suggested he would ban the Chinese app from operating in the U.S. this weekend. Microsoft hopes to settle the deal with TikTok (which is valued at $50 billion) by September 15th. Privacy and security concerns regarding the app and its use of personal customer information have mounted recently. U.S. Secretary of State Mike Pompeo suggested just weeks ago that the Trump administration could ban several Chinese apps including TikTok and messaging app WeChat. 

  • The takeaway: Owning TikTok would represent something of a shift for Microsoft, which is better known for computer operating systems and programs, by shifting focus to the social media landscape. Microsoft acquired LinkedIn in 2016, and coding site GitHub in 2018. At the same time, experts say, TikTok could add to Microsoft’s portfolio of consumer services, which currently includes gaming service Xbox. TikTok has been downloaded about 2 billion times worldwide, including about 170 million times in the U.S. alone.

CNN and WSJ

Apple serves up slices. Apple announced a 4-for-1 stock split last week. The split will mean that investors will get three additional shares of Apples stock for every one share that they own. The share price will also drop to roughly $100 from its current price of approximately $400. The stock split will go into effect for existing investors on August 24th, 2020 and shares will start trading at the split-adjusted price on August 31st. 

  • The takeaway. This will be the fifth time Apple has split its stock. Apple last split its stock in 2014. Before the dot-com bubble of 2000, stock-splits were common for companies that reached share prices above $100. Apple’s stock-split is reportedly meant to encourage individual investors who might otherwise be unable to afford the high share price. Keep in mind that a stock-split doesn’t necessarily mean that the same growth will follow. 

WSJ and Business Insider

Splashdown for SpaceX. NASA Astronauts Doug Hurley and Bob Behnken returned to earth on Sunday in a capsule created by SpaceX, the space travel and exploration company founded by Elon Musk. The duo returned following a two-month stint on the International Space Station. They departed from Cape Canaveral, Florida in May. It’s been 45 years since NASA astronauts last splashed down in the Gulf of Mexico. 

  • The takeaway. It’s the first time a private U.S. company has sent astronauts into orbit, and also the first launch of astronauts in 10 years. In addition to SpaceX, NASA is also working with Boeing on transportation of astronauts to and from the Space Station. Musk has been on a run lately, with his electric car maker Tesla notching its fourth straight quarter of profit, and poised to join the S&P 500. With any public company, it’s important to remember that current performance does not indicate future performance.

ABC, NYT, and Bloomberg

Find out what we covered in last week’s Scan.

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