Monday Market Recap: April 27, 2020
Market Recap
Highlights
Oil futures hit negative $40 for the first time in history as demand drops amidst lack of storage capacity
Over 26 Million people have filed for unemployment, bringing the unemployment rate to over 20%
Congress passes bill for an additional $485b toward stimulus for businesses and hospitals
For the first time in history any person could be paid to hold onto 1000 barrels of oil in your backyard for the month of May. Interesting times indeed. As a result of a continued global shutdown, oil demand is at the low end while supply remains high. The largest oil producers had only recently agreed to cut production to about 3-4 million barrels a day, but this came after talks had already broken down a month prior amid requests for cuts among OPEC participating countries. With the stockpile growing, storage tankers have quickly filled up, to the point where futures contracts are struggling to find enough holding tanks to accept delivery.
Congress has given businesses a second opportunity to take advantage of its stimulus package after its first $350B had been fully tapped just days after its full release. With banks already overwhelmed with demand, this second wave has been no different as reports have indicated that government websites and bank application sites have crashed within the first 10 minutes of opening. Many are expecting a “V shaped recovery” however I expect this to be a prolonged period of trepidation than previously estimated. For every day the shutdown continues, another business goes under and there may not be this overflow of jobs to come back to that many economists are hoping for. There is till more to be done with levels of national testing and it will be unlikely that any large gatherings will be permitted through the year until then.
What I’m Reading – Dune – Frank Herbert
A science fiction novel set in the future, this is a timeless reflection of the human condition and its moral dilemmas. Many of which are even more important today. Here is one of my favorite quotes from the opening chapter:
“I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when it has gone past I will turn the inner eye to see its path. Where the fear has gone there will be nothing. Only I will remain.”
What I’m Drinking - Four Sigmatic Mushroom Coffee with Lions Mane
I am largely a non-coffee drinker however I have found the one cup that I can tolerate without the jitters or increased heart rate throughout the day. Four Sigmatic uses mushroom as the base and contains half the amount of caffeine than a regular cup. This results in a slower burn and allows for nice energy boost in the morning without the crash or an additional fix that is usually needed by the afternoon. I recommend adding Stevia for an additional sweetener.
What I’m Listening To – How Your Business Can Succeed During a Pandemic
In the last few weeks, COVID-19 has changed just about every business in the country. Investors everywhere are scrambling to help their companies survive the pandemic. In this episode, investors Elizabeth Yin and Charles Hudson take calls from listeners. They take live cases and advise founders on how to pivot to a remote-friendly model, how to survive the losses in the hospitality industry, and how to navigate the new investment landscape. Every business should be adjusting their metrics and changing the perspective of how they conduct their business going forward and this is a great start for some ideas.
Quick Take – Reduce Your Fixed Expenses
While many Americans are looking for additional cash elsewhere, here are 5 expenses that can save you thousands of dollars with just one phone call.
Car Insurance – While many mutual insurance carriers are offering discounts, don’t wait for them to call. Take initiative and request a discount from your car insurance provider.
Negotiate Your Rent – I’ve just successfully renegotiated my office lease for 20% less than what I am currently paying. Call your landlord and you can do the same for your office or residential properties as well.
Lower Your Interest – Many banks are waiving late fees, deferring credit card payments, and are even offering credit cards with lower interest rates. This is an easy way to lower your debt payments for years to come.
Keep Paying Student Loans – For those who still have students, the federal government has delayed repayments through at least July. If it is possible to continue making payments, this will shorten the payback period and reduce the principal, which will decrease the amount of interest paid overall.
Don’t Settle For Vouchers – If you were due for a trip this year, do not settle for a voucher with the airline. They will never mention this but you are actually entitled for a full refund no questions asked. This has saved me over $800 so far this year.
Quote of The Week
"Done is better than perfect."