This Week in 30 Minutes

by: Diego Ibazeta Lucero, Mabel Kim Taveras, and Hugues Duron

August 22nd, 2020

Hi there! We are two economists-to-be sharing + one Business & Law major sharing with you, every Saturday, what we believe are the most relevant and interesting news of the week. The newsletter will be divided between all of our LinkedIn profiles. Please share, like, and comment all your thoughts and suggestions. Enjoy!

1.For Global News and Politics click here;

2. For Start-ups & Tech news click here.

Chile Lithium Maker SQM Eyes Output Boost Despite Environment Fears

Chile’s largest lithium producer SQM is looking to ramp up its output to meet demand for electric cars, despite growing concerns about the environmental impact on one of the world’s driest deserts. The New York-listed company, which has faced opposition from indigenous communities over its water use, said Chile could more than triple its lithium production by boosting the efficiency of extraction beneath the vast salt flats of the Atacama Desert. Read more here. 

US Stocks Inch Closer to Record High

US stocks edged higher on Monday, lifting the S&P 500 to within a few points of its record high, hours after Chinese equities rallied on fresh stimulus measures in the world’s second-largest economy. The S&P 500 was up 0.3 per cent by Wall Street’s closing bell, with the benchmark once again just failing to surpass its February peak of 3,386. The tech-heavy Nasdaq Composite, which has been hitting highs for the past two months, added 1 per cent for another record on Monday. Read more here. 

Oracle Enters Race to Buy TikTok’s US Operations

Oracle has entered the race to acquire TikTok, the popular Chinese-owned short video app that President Donald Trump has vowed to shut down unless it is taken over by a US company by mid-November, people briefed about the matter have said. The tech company co-founded by Larry Ellison had held preliminary talks with TikTok’s Chinese owner, ByteDance, and was seriously considering purchasing the app’s operations in the US, Canada, Australia and New Zealand, the people said. Oracle was working with a group of US investors that already own a stake in ByteDance, including General Atlantic and Sequoia Capital, the people added. Read more here. 

US Stocks Set Record after Powerful Rebound from March Low

Wall Street’s benchmark stock index struck an all-time high on Tuesday, having rallied more than 50 per cent from the darkest days of the coronavirus crisis, despite persistent investor unease about the US economy. The S&P 500 index touched an intraday high of 3,395, eclipsing its previous record hit in February — a month before coronavirus fears sparked a crash in global markets. By ending up 0.2 per cent on the day, it also set a closing record of 3,389.78. The sharp rebound in US stocks over the past five months has rekindled fears about the disconnect between Wall Street and Main Street, given the huge economic damage inflicted by the pandemic, which has hurt the value of the dollar. Read more here.

Airbnb Files for Initial Public Offering

Airbnb, the accommodation booking company, said it had filed with regulators for an initial public offering, marking a swift reversal from earlier this year when the coronavirus pandemic had appeared to put those plans on hold. The San Francisco-based company said it had filed a confidential draft registration statement with the US Securities and Exchange Commission. It did not provide further details about the size or timing of the planned offering. Airbnb’s listing would probably be one of the largest this year. The company had previously considered a direct listing, in which no new shares are sold, but indicated on Wednesday that it would pursue a traditional IPO. Read more here.

ECB Fears Recovery is at Risk from a Delayed Surge in Unemployment

The eurozone is likely to suffer a sharp increase in unemployment this autumn even as the economic recovery from the coronavirus pandemic takes hold, the European Central Bank has warned. Top ECB policymakers voiced fears that the labour market was lagging behind the rest of the economy at their monetary policy meeting last month, according to minutes published on Thursday. ECB chief economist Philip Lane told the meeting that “surveys suggested that employment was lagging output, with actual and expected declines in employment and income, amid precautionary household saving, weighing on consumer spending”, the minutes said. Read more here.

US Share Buybacks Almost Cut in Half by Pandemic

Stock buybacks by US companies nearly halved in the second quarter to the lowest level in eight years as businesses grappled with a sharp rise in uncertainty and a swift decline in profits. Provisional figures show the total spent on buybacks by companies in the S&P 500 was about $89.7bn, according to S&P Dow Jones Indices, down 46 per cent from the same quarter last year. The data is based on results from 95 per cent of the companies in the index. If the estimate holds true, it would mark the lowest quarterly total for buybacks since the first quarter of 2012. Read more here.

When Stocks and the Economy Don't Connect

The percentage of Americans who own stock, either directly or through retirement or mutual funds, is falling. It most recently stood at about 55%, according to an April Gallup poll, down from a high of 67% in 2002. The S&P 500, the benchmark U.S. stock index, has surged more than 50% since bottoming in March and is back at record levels, largely thanks to the unprecedented stimulus programs enacted by the Federal Reserve and Congress. “What’s going on on Wall Street is so far removed from what’s going on on Main Street, it doesn’t matter,” Ms. Biesecker said. Read more here.

1.For Global News and Politics click here;

2. For Start-ups & Tech news click here.

See you next week!