The Best Daily Financial Market Highlights - August 22nd, 2022
💎Happy Monday, Steemers!
INFLATION
- GOLD: $1,754 (-1.61%)
- AVG GAS: $3.93
- 2022 CPI: 8.5%
Inflation numbers as of August 21st
Treat Yo’self
Inflation has not put an end, or even pumped the brakes, on spoiling yourself.
As cost-of-living surges, and more people dip into their savings and fall into debt, 73% of adults admit most of their purchases are spontaneous impulse buys.
- This is an increase from 59% one year ago.
How much are they spending? Shoppers spend an average of $314 on impulse buys each month.
Respondents are putting the blame on “Buy Now Pay Later” apps, social media, and drinking while shopping. Over 60% of respondents said they have made an impulse purchase that they regret.
In related news… Credit card debt recently crept past $890 billion and is inching closer to its all-time high.
The FedEx Crisis
FedEx Ground is dealing with severe issues due to inflation.
FedEx's largest contracted (Route Consultant) said that at least one-third of its route system is on the brink of collapse.
"We've seen our fuel prices double in a year. We've seen our wage rates up and our vehicle costs up. The risk of network interruption in FedEx Ground is as high as I've ever seen it," Route Consultant's president said.
The issue: 100% of FedEx Ground drivers are contractors, not employees. Route Consultant is urging FedEx to reconsider past moves and switch the contractors’ status to franchisees. This could restore "financial balance."
STOCKS
- DOW: 33,706 (-0.86%)
- S&P: 4,228 (-1.29%)
- NASDAQ: 12,705 (-2.01%)
Stock numbers as of market close on August 19th
Reinstating the Dividend
Good news for General Motors (GM) investors - it's reinstating its dividend.
- GM's board of directors authorized a dividend on the company’s common stock at a rate of $0.9 per share.
Definition: A dividend is money that's typically paid quarterly by a company to its shareholders out of its profits or reserves. In this case, GM investors will see 9 cents per every share of GM they have.
Flashback: GM, like many companies at the time, suspended its dividend at the beginning of the pandemic. Businesses cut or halted their dividend to preserve cash.
- Back in April 2020, GM's dividend was $0.38 per share.
That's All Folks!
Cineworld (CNWGY -45.38%) tanked on Friday after reports it is planning to file for bankruptcy.
The British cinema chain failed to get moviegoers back into its seats after closing for many months during the pandemic.
- Cineworld operates 9,000 theaters in 10 countries.
- Ticket sales were down 30% compared to 2019.
End of the theater? Since the pandemic, there have been 30% fewer movies released in theaters.
It's more expensive for theaters to own disruption rights and production companies are releasing movies directly to streaming platforms.
MIND BREAK
Random Fact of the Day: A car that shifts manually gets 2 miles more per gallon of gas than a car with an automatic shift.
REAL ESTATE
- 15-year: 4.98%
- 30-year: 6.25%
Mortgage rates via Quicken Loans as of 5:00 pm EST.
🔓 Commitment Issues
Warning to sellers: Homebuyers are backing out of deals at record-high rates.
Last month, 63,000 home-purchase contracts were scrapped.
This adds up to 16.1% of all the homes that went under a written agreement.
What’s the reason? Lack of competition. Usually, buyers wrap up their purchase ASAP so someone else doesn’t come along and make a better offer.
But, with less competition on the market, buyers can take their time, check out other options, and let the seller squirm before actually buying, or backing out.
Mortgage rates aren’t helping either. Over the last few months, rates have gone from 3% to well over 5%. Buyers who started shopping around at the beginning of summer may not be able to afford the same property as before.
CRYPTO
- BTC: $21,459 (+1.42%)
- ETH: $1,622 (+0.89%)
- SOL: $36.35 (+1.28%)
Crypto numbers as of 5:00 pm EST on August 21st
Swept Under the Rug
Crypto.com is trying to be sneaky so investors don't panic.
In June, the crypto app announced it was laying off 5% of its workforce due to a widespread turnaround of the market.
In the past month, reports indicate that Crypto.com has continued to lay people off - and these new layoffs haven't been publicized.
What was Crypto.com's response? "I want you to understand that this is a private company, and we don’t have to follow the public U.S. company playbook."
Why does it matter? It IS public knowledge that the crypto market is struggling in 2022. Brokerages and crypto platforms are doing everything in their power to minimize losses and come out on the other side. We will likely keep seeing layoffs as smaller brokerages get lost in the fray.
More Leaky Stats
FTX is another popular crypto brokerage with something to hide.
Recently, its 2020 - 2021 numbers leaked and revealed some massive figures.
- FTX's revenue shot up +1,000% during the crypto craze.
Its revenue went from below $90 million in 2020 to more than $1 billion last year as cryptocurrencies hit an all-time high.
GLOBAL SCOOP
- VIX: (+5.32%)
- WHEAT: (+0.01%)
- CORN: (+1.29%)
Global Scoop numbers as of market close on August 19th
More Supply Chain Issues
Two major trade lanes for U.S. shippers are under pressure this peak season.
- Shanghai factories have suspended production due to power rationing.
- Sichuan is also closed due to government power rationing.
Sichuan, China is home to large lithium producers - think chips.
What's halting production? A record heatwave in China has shut down key manufacturing. The government is trying to ration its power to deal with extreme temperatures. The growing backlog of imports is expected to continue into the first quarter of 2023.
Hey, That Logo Looks Familiar!
Starbucks, err we mean Star Coffee, reopened in Russia.
- Back in February, the coffee chain banned Russia from using its logo and closed its stores. Many companies banned business in Russia shortly after its invasion of Ukraine.
The Moscow rapper Timati and businessman Anton Pinskiy rebranded the company with a new(ish) logo and opened up its doors to the public last week.
"People's perceptions may be different," said Pinskiy. "But if you compare directly, apart from the circle, you won't find anything in common."
