Some highlights of this past week’s news in business
The Dow Jones fell nearly 314 points (1.50%) this week, breaking a 109-day streak of not falling more than 1% on Tuesday close. The Dow was dragged down by financials as investors anxiously await the potential tax cuts to be delivered by the Trump Administration. On Thursday close, the Dow slid marginally lower as Congress elected to postpone their vote on the healthcare bill, the first policy test of U.S. President Donald Trump.
These continued halts in legislation between parties and within the Republican Party could create doubts of the potential to pass further pieces of legislation including the infrastructure stimulus and tax cuts. Congress will have until Easter recess to vote on the proposed healthcare bill.
Weekly jobless claims unexpectedly rose by 15,000 to 258,000 for the week ending March 18th. This was the highest level since the reported level for the week ending January 28th. This increase in unemployment further questions the ability of the Trump Administration to pass high economic growth bills.
Instagram, the photo-sharing subsidiary of Facebook, announced that the company has more than 1 million monthly advertisers. This rise in marketers can be attributed to Instagram’s focus on catering to small business, which make up a large majority of Instagram’s total advertisers. Instagram currently tallies up 600 million monthly users to go along with its 1 million monthly advertisers creating a large market-place between companies and consumers, especially the highly sought after millennials. The photo sharing app is expected to generate $3.64 Billion in global advertising revenue this year while its parent company generated $8.81 Billion in revenue in Q416 alone.
Oil & Gas
Brent crude oil fell below $50 to $49.71 a barrel for the first time this year as U.S. oil production climbed by 5 Million barrels for the week ending March 17th. This latest increase in U.S. shale oil production and the creation of new U.S. oil rigs has dismantled all gains OPEC has created since establishing oil cuts for the 13-member oil cartel. If U.S. oil production continues to undermine OPEC’s efforts to curb oil prices, then this may force the cartel to either increase cuts or to involve non-OPEC member countries such as Iran in future oil cuts.
OPEC’s next meeting is in May. Therefore, investors should expect a consistent steady fall in crude oil prices until May’s meeting. Investors may also expect OPEC to revisit the commitment of other non-OPEC member countries such as Russia who have failed to comply with their agreed level of cuts. (This may be a good time to continue shorting oil.)
Independent Business Blogger