Browsing: Markets

Markets
Chinese oil demand has reportedly almost rebounded to pre-pandemic levels

Reuters/Stringer (CHINA) CHINA OUT
Oil demand in China has almost recovered to pre-pandemic levels, Bloomberg reported. 
Consumption has rebounded to about 13 million barrels per day, compared to 13.7 million barrels in December.
Gasoline and diesel are leading the recovery, while jet-fuel demand remains weak, Bloomberg said. 
China’s independent refiners, called “teapots,” have boosted their crude processing to 75% of capacity, up from 60% a year ago. 
Track the price of oil live on Markets Insider. 
Visit Business Insider’s homepage for more stories.

Oil demand in China has almost returned to its level before the coronavirus pandemic spurred the government to impose lockdowns and shut down industries, Bloomberg reported Monday.
Consumption has rebounded to about 13 million barrels per day, Bloomberg said, citing Chinese energy officials who weren’t authorized to speak publicly on the matter. That isn’t far off the 13.4 million barrels consumed in May, and the 13.7 million in December.
Gasoline and diesel are leading the recovery as manufacturing gears up and commuters opt to drive rather than use public transport, Bloomberg said. Diesel demand is also benefiting from the Chinese government encouraging farmers to plant more to keep the nation fed.

There are also signs of recovery among China’s independent refiners called “teapots,” which account for about a quarter of the country’s total refining capacity. They are processing crude at 75% of capacity, compared to 60% a year ago, Bloomberg said.
On the other hand, demand for jet fuel remains weak as travel restrictions and transmission fears continue to weigh on the airline industry.
Still, the oil industry is likely to welcome the recovery, especially as BP CEO Bernard Looney warned last week that oil demand may never fully return to pre-pandemic levels. 
Read more: GOLDMAN SACHS: Buy these 21 cheap under-the-radar stocks that offer market-beating growth potential right now.
The demand rally in China is helping to shore up global oil prices, which tumbled to record lows last month as the coronavirus pandemic hit fuel usage and the bitter oil-price war between Saudi Arabia and Russia resulted in a supply glut.

Indeed, crude prices in the US briefly turned negative due to limited storage, particularly at a key hub in Cushing, Oklahoma.
Oil has rallied strongly since then. West Texas Intermediate, the US crude benchmark, was up 0.3% at $31.80 at the time of writing, while Brent crude was almost flat at $34.80.
Read more: Small companies are the biggest post-coronavirus battleground on Wall Street. 4 of the world’s best fund managers share their strategies for the space – and the single stocks they love.

Markets
Moderna's vaccine results added more than $5 billion to the 'big 4' airlines' market values

The Late Late Show with James Corden
Fresh hopes for a coronavirus vaccine boosted the combined market value of the “big four” US airlines by more than $5 billion on Monday.
Drugmaker Moderna said that it safely tested an experimental vaccine on eight people and found it stimulated a promising immune response.
The good news sent American Airlines stock up 9%, Delta Air Lines and Southwest Airlines stock up about 13%, and United Airlines stock up 21%.
However, the stock prices of all four carriers are still down more than 50% this year as the pandemic continues to hammer the airline industry.
Visit Business Insider’s homepage for more stories.

Investors celebrated Moderna’s progress towards creating a coronavirus vaccine by adding more than $5 billion to the market capitalizations of the “big four” US airlines on Monday.
The drugmaker reported on Monday that it safely administered the vaccine to eight healthy people in a trial, and all eight showed a promising immune response.
The news fueled hopes that the US economy will open up sooner than expected, sending American Airlines stock up 9%, Delta Air Lines and Southwest Airlines stock up about 13%, and United Airlines stock up 21%. As a result, their combined market caps rose by about 14% to $41 billion.

Despite those gains, Southwest stock is still down just over 50% since the start of the year, American and Delta are down about 63% and 66% respectively, and United is down more than 73%.
Those declines reflect the devastating impact of the coronavirus pandemic on the airline industry. Travel restrictions and transmission fears have almost eliminated demand for flights, sending passenger numbers down more than 90%, and forcing carriers to cut routes and leave more than half of the country’s passenger planes sitting idle.
Southwest CEO Gary Kelly said this month that the airline burned nearly $1 billion in cash in April, and warned it would have to “dramatically downsize” unless conditions improve. Boeing CEO David Calhoun said it was “most likely” that a major carrier would fail later this year.
Warren Buffett struck a similar tone at Berkshire Hathaway’s annual meeting this month. He revealed the conglomerate dumped its stakes in all the “big four” carriers in April, as he wasn’t confident that passenger numbers would rebound in the coming years and feared operators would be lumped with “too many planes.”
“The world has changed for the airlines,” he said. “The future is much less clear to me.”

Markets
SmileDirectClub just sued NBC for $2.8 billion, claiming reports about its teeth-straightening products were defamatory

Reuters
SmileDirectClub is suing Comcast’s NBCUniversal for roughly $2.8 billion, claiming its reports about the company’s teeth-straightening products were defamatory, The Wall Street Journal reported Monday.
The lawsuit alleges that reporting earlier this year by NBC News describing customers’ complaints was “willfully and knowingly” false and misleading, according to a press release.
SmileDirectClub said its value plummeted by $950 million following the reports.
“We stand by our reporting and believe this is a meritless claim,” NBC News told The Wall Street Journal.
Visit Business Insider’s homepage for more stories.
Teeth-straightening startup SmileDirectClub filed a lawsuit Monday against NBC Universal Media for approximately $2.8 billion over news reports it says were defamatory, as first reported by The Wall Street Journal.
SmileDirectClub claims that NBC, which is owned by Comcast, intentionally made inaccurate claims about the company’s products in stories earlier this year that described customers’ complaints about its products and featured an orthodontics professor warning about teledentistry.
NBC “willfully and knowingly published dozens of false and misleading statements about SDC,” the suit alleges, claiming NBC knew “that their actions would cause significant economic and reputational harm to the company.”

SmileDirectClub claimed its public valuation dropped by $950 million following the NBC reports.
“SDC brought this lawsuit for its employees and officers, for its affiliated doctors, for its shareholders, and to recover from the damage NBC caused to its business and reputation,” SmileDirectClub attorney J. Erik Connolly told Business Insider in a statement.
“SDC respects the role that the media play in our society, but expects truthful accounts. NBC’s reports were defamatory, not truthful, and the facts show that NBC knew it was not telling the truth,” Connolly said.
“We stand by our reporting and believe this is a meritless claim,” NBC News told The Wall Street Journal.
SmileDirectClub sells clear teeth aligners directly to consumers as well as through dentists and orthodontists, and had been a highly touted startup that was privately valued as high as $8.9 billion, according to PitchBook, before tanking when it went public in September 2019.

The company has continued to struggle financially this year, missing analyst expectations last quarter due to back-office expenses and inefficient manufacturing operations.

Markets
3 days after Qatar Airways announced a new unlimited change policy it added a 14-day waiting period and the sub-$500 fares are gone

Thomas Pallini/Business Insider
Qatar Airways is changing aspects of its new flexible booking policy that allows unlimited changes.
Only announced on Thursday, the airline is now implementing a waiting period before the first change is made and requiring the same fare class be available when rebooking.
The sub-$500 fares from the US to Central Asian cities at the crossroads of Europe and Asia are also gone with the cheapest fares from the US on the airline now at around $700. 
Visit Business Insider’s homepage for more stories.
Less than 72 hours following its initial too-good-to-be-true announcement, Qatar Airways is starting to roll back some of the freedoms of its new flexible booking policy that allows unlimited and fare difference-free changes to bookings made before September 30, 2020.
The original terms of the offer stated that once a booking was made, passengers could immediately change their destination to any city served by Qatar Airways within 5,000 miles of the original endpoint, as well as change the origin city as long as it was in the same country. Even the dates could also be changed with no change fee or fare difference being levied whatsoever. 
This meant that a ticket from Washington, DC to Yerevan, Armenia could be changed to Los Angeles to Singapore as soon as it was ticketed with no penalty, as long as the trip was completed before the end of 2020. As of Saturday afternoon, round-trip tickets between Washington and Yerevan were selling for $494, one of the cheapest of any Qatar Airways routing from the US, according to Google Flights.

As of Saturday evening, however, Qatar Airways began removing the cheaper fares from its system, making the new cheapest itinerary from the US at the time of writing a $694 round-trip between New York and Sofia, Bulgaria. Unlike Yerevan, however, the Eastern Europe city is more than 5,000 miles from popular Asian destinations including Tokyo, Hong Kong, and Singapore. 
The airline also implemented a few additional clauses into the policy over the weekend after the original announcement, listed on its website and reported by The Points Guy, to make it somewhat more restrictive. New customers must now wait 14 days after ticketing to make their first change and their desired new itineraries must have the same booking class available for it to be free of any fare differences. 
The carrier’s website now states: “Rerouting for voluntary purposes (i.e. where there has been no flight disruption) is possible 14 (fourteen) days after making the booking. New flights must be booked in the same booking class (RBD), be operated by Qatar Airways, and can be changed within the same country of origin and/or within a 5,000 (five thousand) mile radius from the original destination booking. If the same booking class is not available, a fare and taxes difference may apply.”
Qatar Airways didn’t respond to a request for comment by Business Insider about the policy change or how many new bookings they received since the start of the promotion.
Thrifty travelers also hoping to book cheap Qatar Airways fifth freedom flights, where flights operate between two points not within Qatar including between Sao Paulo, Brazil, and Buenos Aires, Argentina, cannot participate in the new booking scheme. 

No other changes were implemented and, for the most part, the policy is one of the most generous to be offered by an airline but only if new customers are willing to the pay the higher prices, wait the 14 days, and be willing to be flexible in case their new desired itineraries do not have availability in their fare class. 

Markets
The first fast-food franchisee to advise Trump on reopening restaurants has donated more than $400,000 to the president's reelection — including $200,000 in March

Susan Walsh/AP
A roundtable with restaurant industry leaders and President Trump on Monday will be the first time a fast-food franchisee participates in discussing the White House’s plans to help the restaurant industry recover from the pandemic. 
James Bodenstedt is the CEO of MUY Company, a Wendy’s, Taco Bell, and Pizza Hut franchisee. 
Bodenstedt has donated more than $440,000 to President Trump’s reelection campaign, including $200,000 in March. 
Tilman Fertitta, the CEO of Landry’s, is also speaking on the roundtable, and donated $35,000 to the Trump Victory PAC in February. 
“While it’s nice that these business owners want to help the government fight coronavirus, it confirms that cronyism is at the root of practically every decision President Trump makes,” Donald Sherman, deputy director of Citizens for Responsibility and Ethics in Washington, told Insider in April. 
Visit Business Insider’s homepage for more stories.
The first fast-food franchisee to publicly advise the White House on reopening restaurants across America has donated more than $440,000 to President Trump’s reelection campaign. 
On Monday afternoon, Trump is set to participate in a roundtable discussion with restaurant industry leaders on the industry’s recovery from the coronavirus pandemic. Leaders include Panera CEO Niren Chaudhary, Burger King and Popeyes’ parent company Restaurant Brands International CEO Jose Cil, fine dining restaurateur Thomas Keller, and MUY Company CEO James Bodenstedt. 
Bodenstedt is the first fast-food franchisee to take a seat among restaurant industry leaders advising President Trump on the industry’s struggles during the coronavirus pandemic.

While experts have said independent restaurants will suffer most during the pandemic, the most prominent White House advisors have been chain CEOs and leaders of fine dining empires. (Will Guidara, the former co-owner of a restaurant empire that includes upscale New York City restaurants Eleven Madison Park and The NoMad, will appear on the roundtable as a representative for the Independent Restaurant Coalition.)
MUY Company is a Wendy’s, Taco Bell, and Pizza Hut franchisee. While some franchisees only operate a handful of stores, fast-food chains are increasingly relying on independent owner-operators that control dozens of locations. MUY Company is one of these larger franchisees, with hundreds of fast-food locations around the US. 
Bodenstedt has made significant donations to Trump’s reelection campaign, according to FEC filings.
Since early 2018, the MUY Company CEO has donated more than $440,000 to the president’s reelection. His most recent donation was on March 12, when Bodenstedt donated $200,000 to the Trump Victory PAC. MUY Company did not immediately respond to Business Insider’s request for comment. 
Billionaire Tilman Fertitta, the CEO of Landry’s — which owns restaurant brands including Bubba Gump’s, Del Frisco’s, and Joe’s Crab Shack — is also speaking on the roundtable. Fertitta donated $35,000 to the Trump Victory PAC in February. 

‘Cronyism is at the root of practically every decision President Trump makes’
REUTERS/Carlos Barria
Insider’s Eliza Relman reported in April that Trump has given executives who are friendly to his presidency a platform during at his coronavirus press briefings, bringing some on as advisors as the White House develops plans for economic recovery. 
Ray Washburne, CEO of M Crowd Restaurant, joined the restaurant industry’s “Great American Economic Revival Industry Group” in April. Washburne was the vice-chair for the Trump Victory Committee and has donated thousands of dollars to Trump and the Republican party. 
Republican donors including MyPillow CEO Michael Lindell and Jockey International CEO Debra Waller have made appearances during coronavirus briefings. 
“While it’s nice that these business owners want to help the government fight coronavirus, it confirms that cronyism is at the root of practically every decision President Trump makes,” Donald Sherman, deputy director of Citizens for Responsibility and Ethics in Washington, told Insider in April. 

He added, “It’s loyalty or patronage to Trump that gets you at the top of the list, whether it’s a place on the White House lawn to promote your business, input in the coronavirus response, ambassadorships, and even IG positions.” 
The White House has also been criticized by some in the restaurant industry for overlooking people of color, women, and small business owners as it seeks out advisors. Monday’s restaurant industry roundtable is predominantly white and does not feature any women. 

Markets
8 ways US workers expect their offices to change for the better after the lockdowns end

South_agency/Getty Images
Brunswick, a strategic advisory firm focused on critical issues, is running a weekly survey asking Americans questions about their attitudes on returning to work and the novel coronavirus pandemic.
Nearly half of the respondents who are expecting significant changes to how employees work together at their companies believe these changes will be positive.
Some of the positive changes those workers expect include more sanitary practices in the office and more opportunities to work from home.
Visit Business Insider’s homepage for more stories.
As workers look ahead to returning to their offices, many Americans are expecting to see permanent changes to the workplace, including more practices to assure a clean work environment and more opportunities to work from home.
In an exclusive partnership with Business Insider, Brunswick, a strategic advisory firm focused on critical issues, is conducting a weekly survey to a sample of American workers about their attitudes and their employers’ attitudes regarding the novel coronavirus pandemic.
One of the questions in their ninth week of polling asked respondents about the changes, if any, they expect to see in their workplace once workers can return.  

In the beginning of April, more respondents believed there would be little change to how employees work together at their companies than thought there would be significant changes.
However, the share of people who believe there will be significant changes has gradually increased. Last week, 49% of respondents reported they believe there will be significant changes, slightly higher than the 45% share who said  there will be little change.
Of those who expect changes, nearly half believe that these changes will be positive, 36% are unsure, and 16% believe they will be negative.  
Among workers who believe these changes will be positive, 63% believe there will be an increase in hygienic practices, such as more frequent office cleanings, and 55% believe there will be more opportunities to work remotely. 
There were differences among respondents based on their type of workplace, among other measures. For instance, around 52% of people who are in manual labor jobs expect better communication, while only around 40% of those who work in an office setting expect the same.

The following chart highlights the kinds of permanent changes workers expect in their workplace, among those who believe there will be positive changes:
Business Insider/Madison Hoff, data from Brunswick

Markets
SoftBank CEO Masayoshi Son says he was 'foolish' to invest $18.5 billion in WeWork

Kurita Kaku/Gamma-Rapho/Getty Images
SoftBank CEO Masayoshi Son feels “foolish” for investing in WeWork, he said during an earnings call Monday.
Under Son’s leadership, the Japanese conglomerate reportedly poured $18.5 billion into WeWork, which has seen its valuation plummet following its failed IPO in September. 
SoftBank gave WeWork a valuation of $2.9 billion as of March, down from $7.3 billion in December.
Visit Business Insider’s homepage for more stories.
SoftBank CEO Masayoshi Son derided his previous decision to invest in WeWork as “foolish” during an earnings call Monday.
“It was foolish of me to invest in WeWork. I was wrong,” Son said.
The remarks came as Son announced that SoftBank gave WeWork a $2.9 billion valuation as of March 31, down from $7.3 billion in December. The Tokyo-based conglomerate has reportedly invested at least $18.5 billion in WeWork, which has plummeted in value following its failed IPO attempt in September.

Now, the COVID-19 pandemic could continue to devastate SoftBank’s biggest bets. SoftBank-backed companies including Oyo, Uber, Zume, and WeWork have laid off more than 8,000 people since January in total.
SoftBank reported an $8.9 billion net loss for the fiscal year ending in March, attributing much of the losses to the COVID-19 pandemic. Son laid out a grim path forward for the Tokyo-based conglomerate during Monday’s earnings call, repeating his prediction that 15 of SoftBank’s 88 companies could go bankrupt.
“Going forward, no one knows what will happen,” Son said. “We cannot promise that there will not be additional valuation loss.”

Markets
Mark Cuban explains how entrepreneurs can build 'America 2.0' using a strategy from his early startup days

Brandon Wade/AP
As many old ways of doing business appear unlikely to return, Mark Cuban says the business leaders of tomorrow should ask themselves what they want the world to look like after the crisis ends. Cuban is certainly aware of the struggles facing business owners around the country, but he is optimistic about the potential to start world-changing businesses during this time. In an interview with LinkedIn’s Daniel Roth for Roth’s This is Working podcast, Cuban shared how entrepreneurs can start the businesses that will build the economy and society of the future. Visit BI Prime for more stories. Few entrepreneurs are so plugged in to the struggles facing small business owners across the US as Mark Cuban, but the billionaire investor remains stubbornly optimistic.
In an interview with LinkedIn’s Daniel Roth for Roth’s This is Working podcast, Cuban shared what he sees are major opportunities for the country on the other side of this brutally challenging period.
“Five years from now we’re gonna look back and point to five, ten, 20 companies that were created during the pandemic of 2020 that just turned out turned out to be world changers,” he said.
Here are three tips Cuban recommended for starting the businesses that will build the economy and society of the future.

“We get to do America 2.0,” he said. “We get to go through a unique reset that would never ever present itself, had we not gone through this.”
Dream big, but make a plan
As many old ways of doing things appear unlikely to return, Cuban says the business leaders of tomorrow should ask themselves what they want the world to look like after the crisis ends.
“If you have a vision that you think you can implement that is of enough value and is compelling enough that people will become part of that movement, go for it. Do it,” he said.
Big dreams don’t count for much without a detailed plan, and now is an important time to put that work in, especially if you find yourself with more time on your hands as a result of the pandemic.
“Now’s the time to be planning, now’s the time to also have a execution plan so that you can start,” he said.

Rely on sweat equity over financing
Raising money for your business is not easy even in normal times, but Cuban says you shouldn’t let that stop you.
A major part of your planning effort should be focused on conceptualizing a product or service that you can execute with the social and financial resources you already have available.
Don’t make it about, “Well I need to go raise money — if only I had X millions of dollars,” he said. “Make it so that you can do it. Sweat equity is the best equity.”
Cuban also recommended reaching out to your social networks to see who else is looking for an opportunity and might be interested in joining you on your entrepreneurial journey. A lot of people have extra time these days.
Invite them to “create our future,” he said. “That’s what we really need more than anything.”

Share ownership with your team
For cash-strapped founders, Cuban offered a page from his 30-year-old playbook from his startup days with Microsolutions and broadcast.com: offer ownership equity shares to your employees.
“Give them stock in a meaningful way,” he said. “You’re going to need them to grow your company. We all are going to need them to grow this country in a world back to where it was economically.”
As Cuban sees it, the only way the nation will recover is if everyone is brought along, and everyone has an incentive to put in effort beyond what most employers can pay with wages alone.
“You will get more from your employees, and they will be more committed if you share equity immediately in a meaningful way, so that everybody rises up,” he said. “No entrepreneur can do this alone. You need every single employee committed to helping you get through this, so recognize that. Reward them for it.”

Markets
Saudi Arabia plowed billions into US stocks including Boeing, Disney, and Facebook last quarter

Andrew Francis Wallace/Toronto Star via Getty Images
Saudi Arabia’s sovereign-wealth fund more than quadrupled the value of its US stock portfolio to $9.8 billion last quarter, a financial filing revealed on Friday.
The $300 billion Public Investment Fund revealed stakes valued at over $500 million in Boeing, Cisco, Disney, Facebook, and other US companies.
It also invested smaller amounts in Warren Buffett’s Berkshire Hathaway, Starbucks, and other big names.
Visit Business Insider’s homepage for more stories.

Saudi Arabia’s sovereign-wealth fund plowed billions of dollars into US stocks such as Boeing, Disney, and Facebook last quarter.
The kingdom’s Public Investment Fund grew its US stock portfolio from about $2.2 billion at the end of December to $9.8 billion at the end of March, according to a Securities and Exchange Commission filing last week.
The $300 billion fund, which aims to diversify Saudi Arabia’s economy away from oil, likely capitalized on the coronavirus sell-off to purchase the stocks at bargain prices. However, its aggressive spending is surprising as depressed oil prices have hammered the kingdom’s finances in recent months.

The PIF’s largest new holdings included a $714 million stake in Boeing, $522 million stakes in both Citigroup and Facebook, and a $514 million stake in Marriott. It also revealed stakes worth between $480 million and $500 million in Disney, Cisco, and Suncor Energy.
The fund also made a range of smaller bets. It ended the period with stakes worth between $75 million and $80 million in Warren Buffett’s Berkshire Hathaway, Booking.com, IBM, Pfizer, Qualcomm, and Starbucks.
The PIF’s wagers on Carnival and Live Nation, which it revealed in April filings, were valued at $457 million and $416 million respectively at the end of March.
The latest filing also confirmed reports that the fund invested in a range of European oil companies last quarter. It showed an $828 million stake in BP, a $484 million stake in Royal Dutch Shell, and a $222 million stake in Total.
Here’s a chart showing the PIF’s US stock portfolio at the end of March:

SEC

1 109 110 111 112 113 130