đ¤ Do You Trust Your Companyâs Retirement Fund? đ¸
Whether youâre watching the NFL draft, the NBA playoffs, Avengers movie or mimosa-hopping this weekend, be sure to stay up on all the finance & business news you need to sweet talk your boss to a new raise. đ¤
Never Put Your Retirement Hopes In A Companyâs Stock
General Electricâs downward spiral has wiped out roughly $140bn in stock-market wealth in the past year, including retirement hopes of former employees who, like many investors, believed the company was invincible. Similar to the downfall impact of Enron, Lehman Brothers, General Motors, GE has lost $480bn in value since 2000.
For the company â whose stock is 43% owned non-institutional investors like you and me, is now looking to make a late turnaround to strengthen its books and future outlook, has already caused economic turmoil for its retired employees, some of whom are now looking for new employment after 40 years at GE, due to a sharp decline in their pension value as a result of the companyâs stock demise. With more than 600,000 people dependent on GEâs pension and 71.4% of assets needed to cover its pension liabilities, GE is one of the worst-funded large corporate pension plans in the U.S., according to a recent report by Milliman Inc.
Companies mentioned: GE -20% YTD, GM -7% YTD
The Numbers Behind WeWorkâs Growing Empire
WeWork, which is seeking $500 million to finance yet more growth, boasted 220,000 members as of March 1, up from 7,000 four years ago. Those members have access to 251,000 desks in 234 locations worldwide. As revenues have risen to roughly $800 million, costs are rising faster, resulting in a total net loss of $934 million last year.
According to its bonds documents, WeWork needs at least 60 percent occupancy to cover each locationâs costs. Last year, it filled 81 percent of desks, up 5% from a year earlier. WeWork now has members from about 22 percent of the Fortune 500. With $5bn in rent due by 2022, WeWork now looks to purchase and own its buildings to reduce its costs of renting buildings it operates in.
How Does a 3% Yield for the 10-Yr Treasury Affect You
The yield on the 10-year Treasury note reached 3% this week (climbing from a low of 1.36% in July 2016), so what does it mean for you? For home buyers or refinancing, the rate on a 30-year mortgage tends to move in relation to the 10-year yield, therefore, as the 10-year yield goes up to 3%, so will your mortgage interest rate. According to Freddie Mac, the average rate on a 30-year, fixed-rate mortgage is 4.47%, up from 3.99% at the end of last year. âFor example, a 3.5% rate on a $500,000 loan would create a monthly payment of $2,245, according to LendingTree. At 4.5%, the monthly payment would be $2,533, excluding taxes and insurance.â
However, the yield increase should have minimal effect, if any, on your bank deposits, stock portfolios, your taxes, or the economy â as the unemployment rate is expected to drop lower to 3.8% by December. on the bright side, higher treasury yields often translate to a stronger dollar, and a stronger dollar makes it cheaper to enjoy your vacation if youâre traveling abroad.
Companies mentioned: FMCC -43% YTD
Surviving The Retail Apocalypse: The Technologies And Trends That Can Make Brick-And-Mortar Thrive Again
As e-commerce grows YoY, more physical retailers are forced to shut down their physical locations, and some have drifted into the sunken place called bankruptcy. In 2017, about 7000 retail stores closed its doors, and since February, Foot Locker announced its closing 110 stores, Abercrombie & Fitch is closing 60 stores, and Toys Râ Us has shut down completely. CB Insights explores the technologies and trends, from supply chain software to in-store AR technology, that is helping todayâs brick-and-mortar retailers stay competitive as e-commerce continues to grow.
With this changing trend in consumer shopping behavior, an entire ecosystem comprised of hundreds of tech startups has emerged to help brick-and-mortar retailers adapt, working across categories from inventory management, operational efficiency to shelf monitoring. Companies like Ikea and BestBuy look inside their customerâs homes as a way to strengthen its relationship and customer loyalty, while Costco struggles to hold on to its crown as the âking of wholesaleâ as Amazon and Walmart rapidly gain traction for its e-commerce innovations. Kohl taps inspiration from Zara to improve its operational efficiency model by shrinking store sizes and reducing its production turnaround time for its fashion brands.
Companies mentioned: AMZN +25% YTD, DLTR -10% YTD, TGT -9% YTD, DG -5% YTD, FL -10% YTD, WMT -12% YTD, COST +4% YTD, BBY +9% YTD, KSS +11% YTD
Chart of the week
đ¤´đžFoâ da Culture đ đž
When Youâre Black, Every Place Is A Starbucks
Last week, two black men were arrested while waiting in a Philadelphia Starbucks. And whatâs most jarring to me about the reaction is that something so commonplace to black men is still news to whole swathes of this country. Stay Woke âMurica!
DreamChasers â The Sixers Moment is Now â www.theringer.com
Joel Embiid returns from injury, Philly dispatched Miami, and Meek Mill returns home. This article is an analysis of the current 76ers roster and how they fare through the remainder of the NBA playoffs.
What Else Iâm Currently Reading
How to apply the âWarren Buffett Edgeâ â act like an oracle
Facebook beats Q1 earnings. See investor report & slides
The breakfast club interviews Senator Kamala Harris on the need to vote now, changing gun legislature, and HBCU
The race to disrupt every consumer retail vertical with the âWarby parker-cut-the-middleman-modelâ
My book read for May: â23 Things They Donât Tell You About Capitalismâ by Ha-Joon Chang. Iâll write up a brief summary of this book by end of May.
KOD by J. Cole on Spotify â open.spotify.com
This weekâs stories were curated while listening to KOD, an album by J. Cole on Spotify. My favorite tracks: 1985, ATM, Bracket. Enjoy!
Thank you for reading through this weekend round-up! Hope you found a couple interesting articles to spark your next happy hour or office water-cooler conversation.
Which article did you find most interesting this week?
Cheers,
Valentine
