Biggest Industry Losers During COVID-19

 The corona virus has been life changing for everyone across the globe. Thousand of people have lost their jobs and plenty of people have had their business collapse. While there have been companies that have happened to perform really well during the pandemic such as Amazon and Zoom, I thought it would be interesting to discuss industries/companies that have been completely screwed over. The first industry I would like to discuss is the Oil and Gas production industry. This industry has done so poorly during the pandemic because of the fact that people are not traveling anymore. A large majority of people have been approved to work from home while others may just not feel safe enough to go back to work or school. When you really start to think about all the travel that has been halted by this pandemic, you can really get a good idea about how much less oil and gas is in demand. This is exactly why this industry is performing so terribly. Company examples include Halliburton, Noble Energy and Apache.

Another industry that has performed quite bad during the pandemic is the Hotels, Resorts and Cruise Lines industry. This industry has had an underwhelming performance due to the fact that most people don't feel safe traveling and being around large groups of people. The CDC announced early into the pandemic that social distancing and mask wearing would be vital in keeping yourself and others safe from the virus. There has also been the banning of indoor restaurants and many types of business that revolve around people being in close confinement. All of these restrictions make Hotels, Resorts and Cruise Lines very unappealing to the consumer. Company examples include Carnival and Norwegian Cruise Line.

https://www.tradestation.com/insights/2020/03/19/19-biggest-losers-of-covid-19/

Psychological Scars and Growth

 Article: "Razing Hopes," The Economist, August 29th 2020

If the above link is behind a paywall, I have copied and pasted the article into a Google Doc here (don't tell). 

As indicated by the article, post-pandemic growth will be determined by far more than a return to "normal" economic activity. Today, consumers and investors are reluctant to spend, as they worry about future economic performance. But their worries are not easily assuaged by standard macroeconomic indicators such as rising GDP or falling unemployment. Fear of future economic shocks, pandemics, or other unexpected disasters (e.g., those from climate change) increase saving and reduce aggregate demand. 

What is needed to recover, then, is not simply low interest rates and a large money supply, but fiscal policy which will help alter people's beliefs about the future. The opportunities range from the prosaic (government spending on infrastructure or pandemic-preparedness, for instance) to the radical (universal basic income or a dramatically expanded social safety net). Whatever policies are ultimately enacted, they should be developed with the psychological scars of the pandemic in mind. Otherwise, economic growth will almost certainly be hampered by a lack of confidence in the future, no matter how close we begin to approximate "normal." 

Facebook Starts Planning for Permanent Remote Workers

     The Covid-19 pandemic has opened a lot of new ideas for many companies to save their expenditures and therefore increase their wealth. One of these companies is Facebook who have already implemented in making their employees work remotely in order to reduce the spread of the virus and still carry on business as usual. Facebook realized that employees do not even need to come to offices for their normal business to work. This has caused Mark Zuckerberg, Facebook's chief executive to let employees permanently work from home which in turn would mean that there would be no need for offices. This means that Facebook would not need to spend any more of its wealth towards building offices, hence increasing their wealth by a substantial amount. Mark also states that "remote work is going to be a growing trend" and also expects more than 48,000 of its employees to permanently work from home within a decade. Allowing remote work will allow Facebook to broaden its recruitment, retain valuable employees, reduce the climate impact caused by commutes and even expand the diversity of its workforce. This means that labor would increase causing capital to remain fixed or even decreased if Facebook decides to sell its office buildings to other companies. I truly believe that doing this would allow Facebook to help increase GDP as more work would be done with lesser resources primarily because the company is mainly based on software-engineers rather than hardware-engineers. The only catch to this would be that employees may not be able to keep their big Silicon Valley salaries in more affordable parts of the country.

Conger, K. (2020, May 21). Facebook Starts Planning for Permanent Remote Workers. Retrieved September 04, 2020, from https://www.nytimes.com/2020/05/21/technology/facebook-remote-work-coronavirus.html

COVID's Impact on U.S. Trade

 Recently, the United States' annual trade statistics have been released for the first portion of 2020. This detailed data gives us a snapshot of coronavirus' impact and the recession on U.S. trade. COVID caused our trade deficit to contract as the recession is having a bit more of an impact on imports than exports. Whilst it sounds serious, this accounts for only three percent of our GDP. Contrastingly, exports in the first half of the year were down sixteen percent as per David Dollar, an economist who runs the "Dollars and Sense" podcast (2020). These are both typical effects of a recession. Similarly, the exporting of services has taken a large hit due to the pandemic. The U.S. is a large exporter of services which include things like tourist attractions and international travel. The pandemic decreased the exporting of services by fifty percent which isn't surprising (2020). Two of the United States' largest exports, aircraft and automobile parts, reduced by thirty to forty percent due to many airline companies are cutting back on their expansion plans.

Dollar, David, and Anna Newby. “How Is COVID-19 Affecting US Trade?” Brookings, Brookings, 10 Aug. 2020, www.brookings.edu/podcast-episode/how-is-covid-19-affecting-us-trade/. 

COVID-19: U.S. Stock Market

    COVID-19: U.S. Stock Market

     Due to recent pandemic COVID-19, the US Stock market has undergone one of its worst quarters ever. Businesses everywhere have been shutdown or put on suspension due to the immense outbreak of positive tests. The Dow Jones Index recently had its worst first quarter in history. It's easy to say that the economy has taken a massive blow from the pandemic. The IMF believes that 170 countries or more will witness a decrease in their per capita income this year. Although the stock market is looking rough right now, economists have discovered a v-shaped recovery coming for 2021. If the economy does indeed sky rocket in 2021, it will create a huge support boost for the next president and should get the US back to normality. If the economy doesn't undergo a jurassic improvement during the early parts of 2021, should we be worried about another recession?

Mohit Oberoi, C. (2020, April 13). COVID-19 Impacts US Stock Markets and Economy. Retrieved September 04, 2020, from https://marketrealist.com/2020/04/covid19s-impact-on-us-stock-markets-economy/

Sweden GDP fares worst in Scandinavia despite lax lockdowns

 Source: https://www.businessinsider.com/coronavirus-sweden-gdp-falls-8pc-in-q2-worse-nordic-neighbors-2020-8

Despite having some of the most relaxed lock-down measures out of many major European countries, Sweden has seen a fall in its GDP by 8.6% in Q2. Comparing to its other neighbors of Denmark at -7.4%, Finland at -3.2%, and Norway -7.1% from a timeframe one month earlier. 

Sweden famously did not pursue a nationwide lock-down, and as a result was hit quite hard by the virus and now is facing more deaths as well than its neighbors. Sweden's chief epidemiologist Anders Tegnell did state that the reason for avoiding the lock-down was out of hopes to create a society in which was able to adapt to a more long term plan to remain healthy, and not to boost economic activity. Now facing both a high death toll and a hurting market, Sweden is looking for answers. There are fingers being pointed at less foot traffic in stores and outside their homes, others that income from tourism and exports are falling. At this point, Sweden will continue their more relaxed Covid measures, putting it on the common sense of their people to help fight the virus. 

What is your opinion on this strategy to both fight the virus and hopefully maintain economic activity?

The Economic Impact of No College Football

If there is no college football season this fall, not only will the student-athletes suffer, but the economy as a whole will. Universities, TV networks, the hospitality industry(which includes restaurants and bars) will all take big financial hits. Football is one of two sports that is actually profitable at the collegiate level, the other being basketball. USA TODAY Sports reported that the "50-plus public schools in the Power Five conferences have at least $4.1 billion in fiscal-year revenue tied to football -- which is more than 60% of their athletics departments' combined total annual operating revenues." Many schools are already struggling financially due to the COVID-19 pandemic, so if there is no college football played this fall, we could see many college athletic programs shut down due to a lack of funds. Tv networks also profit significantly from the college football season and pay huge fees for the rights to broadcast the games. Lastly, the Restaurant industry is one that has suffered greatly from the pandemic and can't afford more big losses this fall. If there are no football games on tv, customers will be less likely to go out. This is both a national and local economic issue that is tough to resolve. Fans and players desperately want to have a college football season, but it needs to be conducted safe manner. 

COVID 19 Winners

 COVID-19 and the state lock-downs have hurt many businesses, but not all. Some companies have managed to do quite well while COVID-19 has spread throughout the country. These companies who came out winners are the big boys, like Amazon, Walmart, and Target. They have actually seen growth due to the pandemic and the following lock-downs. People do not feel safe to go out and purchase things, so they rely on online retail. That is where these mega corporations have been raking in the profits. Not only are they raking in the profits, they are raking in new hires. Amazon announced that they wanted to hire 175,000 new employees, even while unemployment numbers are through the roof.  But not every winner is winning equally. Although Amazon is doing well, they have had some issues with their supply chain. They have been having issues keeping things in stock and delivering Prime items within two days. This has led to Target and Walmart to regain some lost ground in the online retail market-share. So, in conclusion, COVID-19 has made some businesses losers, some winners, and some bigger winners. Not every one has been hit equally during this pandemic and recession.

Falling GDP and Consumer Confidence

 The United States GDP has decreased at an alarming rate due to COVID-19. There has been extreme job loss and decreasing consumer confidence as the pandemic continues to remain a problem. GDP has decreased by 9.5% from the last quarter, which is cause for concern. The United State’s attempt to rebound has plateaued as unemployment claims continue to pass one million for over 19 week in a row due to Coronavirus. This is concerning because many hoped that this pandemic would be over by the summer; but it is continuously fueling consumer unease. If the government had not issued trillions of dollars in aid, the economy could have been in a substantially worse position. Government aid has helped many individuals and businesses push through these tough times and remain afloat. However, hesitation from congress to extend benefits could cause the U.S. to backtrack; spending and consumer confidence may be lost to reduced aid. These events come at an interesting time with the looming presidential election and I am curious to see how it affect voters. If there is a change in party, it will be interesting to see what changes happen in order to combat the rescission and enease of the country. 

https://www.nytimes.com/2020/07/30/business/economy/q2-gdp-coronavirus-economy.html