Why are we getting pumped at the pumps? ⛽
Need an extra reason to switch from your crude oil-lovin’ ute to an electric vehicle this year? Surging oil prices might be enough to entice you to make the splurge. Oil prices have exploded 21% this year, shooting past US$90 per barrel, hitting their highest level since 2014… you know - the year we worried deadly contagion Ebola could become a global pandemic. These prices are not helping inflation, and are siphoning more from our depleting wallets, which are taking an extra pummeling at the pump this summer, even if we’re not paying Auckland pump prices.
Rising prices are causing hefty problems for businesses with bigger tanks to fill - and they’re shipping bricks. 😬 Like cruise ship Crystal Symphony, which dined ‘n’ dashed on their multi-million dollar fuel bill, changing course mid-journey to avoid being seized in the US. That’s one problem bajillionaire Jeff Bezos is unlikely to face when he takes delivery of his new US$485 million luxury super yacht. This is not because of his galactic wealth, but because with three masts, the 127m monster will have to delay its maiden voyage until engineers dismantle historic Dutch bridges that obstruct its path to the ocean. #richpeopleproblems
Why the oil deluge now? Demand for oil has come up gushing as economies get back to business. Yet trickling oil production has been slow to keep pace with increasing demand. Thanks a lot OPEC. The situation has been made worse by fears that Russia might invade Ukraine, with big US banks predicting oil prices could keep flowing up, forecasting US$100 per barrel later in 2022. Someone hold me! 😵
The prospect of higher oil prices has sent the share price of volatile oil stocks flying. The Vanguard Energy Index Fund ETF (VDE) has jumped up 19% so far this year, while some big US producers have gone even further. The Exxon Mobil (XOM) share price has rocketed up 28% in 2022, while ConocoPhillips (COP) is up 24%. ⛽
Female CEOs shakin’ it up
They’re not just slaying in movies, real life heroines are kicking ass in business too. But while females tally 49.5% of the global population, they’re still bringing up the rear in nabbing seats at the big kids’ table. Women comprise 11.8% of the world’s billionaires, with just 6.2% of female CEOs leading S&P 500 companies and 8.2% heading up Fortune 500 companies. And BIPOC female representation is still as rare as seeing rainbows be born. 🌈 While women might clean the glass ceiling, they’re far from shattering it.
But the tide is turning, with the Covid pandemic reinforcing the benefits of female leadership. Women just might be crushing it as CEOs; according to a 2019 study, female CEOs outperformed their male counterparts by an average of 20%. Female CEOs across fashion, healthcare and chocolate include Gap’s (GAP) Sonia Syngal, CVS’ (CVS) Karen S. Lynch, Vertex’s (VRTX) Reshma Kewalramani, Clorox’s (CLX) Linda Rendle, and Hershey’s (HSY) Michele Buck, among others. And they’re storming through male-dominated industries too - from defence, device and vehicle manufacturing, to agribusiness and tech. 👩💻 Why? Interviews with 57 female CEOs found women were driven by having purpose.
Looks like trailblazing female CEOs of the S&P 500 on target to #breakthebias are also driven by purpose. Advanced Micro Devices’ (AMD) Lisa Su is attributed to saying ‘gaming brings people together’, General Motors’ (GM) Mary T Barra has a company mission ‘to save lives’, Match’s (MTCH) Shar Dubey leads the mission to ‘create meaningful human connection’, chemical co. Celanese’s (CE) Lori J Ryerkerk, is driven by ‘a passion for business’, and defence CEOs, General Dynamics’ (GD) Phebe N Novakovic - creator of the M1 tank - says ‘never, never, never give up’, and Northrop Grumman’s (NOC) Kathy J Warden, maintains that ‘people are the source of innovation’, and O’Lakes Fortune 500 CEO Beth Ford, believes elevating people is her ‘top priority’.
In tech, Meta (FB) COO Sheryl Sandberg lent in to become one of Silicon Valley’s most influential people, and techpreneur, Bumble CEO Whitney Wolfe Herd - who rang the Nasdaq bell with baby son, Bo, on her hip - became the world’s youngest self-made billionaire aged just 31. That’s all. ✋
What the FAANG is going on?
Up… down… up… down… keeping track of tech company earnings results has been a rollercoaster and not in a good way. 🎢 What the FAANG is going on? Here’s your sub-60 second recap of the winners, the losers and the ‘meh’ of tech’s earnings season.
The Winners 🥇
Alphabet (GOOGL) bolted strongly out of the gate with their earnings report, announcing a 41% jump in annual revenue, which cracked US$200 billion in 2021. The company also announced they’ll undertake a 20-for-1 share split - just shy of turning shares into a full Alphabet soup. Amazon’s (AMZN) giant revenue jungle also appeared to get lush in 2021. They reported full year revenue growth of 22% as well as a US$33 billion profit, which revved up thanks to their profitable investment in electric truck company Rivian (RIVN) - for now - which went public last year in the 2021 IPO-palooza.
The Losers 🍋
Meanwhile, shares in Facebook owner Meta (FB) took a faceplant after the company reported that daily active users (DAUs) dropped for the first time in its 18-year history indicating slowing advertising revenue in the year ahead. Their share price nosedived 26% in response to potential headwinds, shaving US$31 billion off Zuck’s net worth - the annual GDP of Estonia. In fact, the word ‘headwind’ was mentioned 34 times in Meta’s earnings call. ‘Metaverse’, by comparison, was only mentioned 15 times! (Did they also mention that Kiwis had already invented the metaverse?) Shares in Spotify (SPOT) and PayPal (PYPL) also hit a bum note, dropping 13% and 17% respectively after investors fretted about slowing growth. It was a tough week all round for Spotify, but we won’t talk about Joe-Ro, no, no. 🎵
The Meh 🤷♀️
And while there were plenty of hits for Electronic Arts (EA), like having the number 1 highest selling video game in the western world with FIFA 22 and adding 28 million new players to Apex Legends, there was also a mighty miss with the release of their blockbuster game Battlefield 2042, which failed to fire after a delayed launch, bugs and poor reviews. 🐞