S&P plunges, Small business jobs unfilled, Apple app fight
The S&P 500 saw the biggest one day drop since January 3 while Apple gears up for a law suit and small businesses face a challenge in the current labor market. How could these stories affect the markets? Read on to get the details.
The Tight U.S. Labor Market is a Challenge for Small Businesses – The United States is more than 10 years into an economic expansion, and recent surges in job growth have pulled the unemployment rate down to a near record low of 3.6%. Finding highly skilled labor in the country is difficult for just about every type of corporation, but small businesses seem to be having the biggest challenge in the current environment. According to a survey conducted by Moody’s, job growth at small U.S. businesses (with fewer than 20 employees) has fallen to its lowest levels since 2011. Compared to the 3.5% increase in new hires at businesses with between 500 to 999 employees, it’s clear that very small businesses are having issues attracting talent. This quandary for small businesses makes sense – competing with the benefits, salaries, and perks offered by large corporations is difficult in any environment, but it can be particularly challenging in a very tight labor market. Even still, the tight labor market is posing challenges for businesses of all sizes. According to the Bureau of Labor Statistics, there were 7.5 million unfilled jobs as of March 29.1
While you cannot predict exactly how these stories will pan out or how they could affect the market, you can try to prepare for what’s to come. And, knowing your net worth is a great place to start as it is critical to your financial well-being and can help you prepare for what’s ahead.
If you have $500,000 or more to invest and want to understand how to measure your net worth, download our guide Measuring Your Net Worth.2 Simply click on the link below to get your copy today!
Stocks Knee-Jerk React to Trade Impasse – The S&P 500 sharply declined -2.4% early in the week, as fears that trade talks between the U.S. and China were breaking down. Market watchers noted that this marked the biggest one day drop since January 3, with 90% of stocks participating in the decline. Meanwhile, the Cboe Volatility Index,3 commonly referred to as the VIX, rose nearly 30% on the same day – indicating a ‘fear spike.’ The news that likely sparked the declines came when the trade dispute escalated, with President Trump detailing $300 billion of new Chinese imports slated for 25% tariffs, and with China retaliating with tariffs on $60 billion of U.S. imports. 4 Investors are now left wondering what impact the trade impasse may have on future earnings, and whether a deal is actually much further away from being inked than previously thought.
Apple Inc. Gears Up for a Big Fight – in a significant ruling this week, the Supreme Court decided that consumers have standing to sue Apple for forcing them (consumers) to purchase apps exclusively through the App Store. The thrust of the lawsuit would allege that consumers are overpaying for apps, given they could technically purchase them cheaper if bought directly from the developers. Since all apps pass through the App Store, Apple gains revenues from selling them, even though developers are the ones setting the prices. Billions of dollars are at stake in potential lawsuits, which comes at a time that Apple is dealing with iPhone sales issues.5
Wal-Mart Poised to Compete with Amazon on Deliveries – in an effort to stay in the fight for online consumers, Wal-Mart is rolling out a next-day delivery service on approximately 200,000 products for shoppers in Phoenix, Las Vegas, and Southern California. Amazon currently offers this service for Prime customers who pay $119 annually, and Wal-Mart plans to offer it for orders of at least $35 in their test rollout. As consumers continue to shift shopping online with on-demand purchases, Wal-Mart seems to understand that this could be a critical moment for securing market share. For its part, Amazon is doubling down in its efforts to vertically integrate its business to handle shipping, by offering its employees three months of salary and $10,000 to quit and start their own package-delivery businesses. Currently, Amazon relies on the U.S. postal service to handle many of its deliveries.6
While we may not know how all these stories will pan out, or how they could affect the market in the long-term, knowing your net worth can be critical to your financial well-being and can help you prepare for what’s ahead.
Calculating your net worth may give you a better idea of where you stand in terms of your long-term investment goals. If you do not currently know your net worth, then now may be a great time to calculate it.
If you have $500,000 or more to invest and want to understand how to measure your net worth, download our guide Measuring Your Net Worth.7 Simply click on the link below to get your copy today!
1 The Wall Street Journal, May 12, 2019. https://www.wsj.com/articles/tight-u-s-job-market-squeezes-smallest-businesses-the-most-11557658804?mod=djem10point
2 ZIM may amend or rescind the “Measuring Your Net Worth” guide for any reason and at ZIM’s discretion.
3 The CBOE Volatility Index is a real time market index that represents the expected volatility in financial markets in the subsequent thirty days. The VIX Index is based on prices of options on the S&P 500 Index. An investor cannot invest directly in an index. The volatility of this benchmark may be materially different from the individual performance obtained by a specific investor.
4 The Wall Street Journal, May 13, 2019. https://www.wsj.com/articles/global-stocks-stumble-on-renewed-trade-anxiety-11557734434?mod=djem10point
5 The New York Times, May 13, 2019. https://www.nytimes.com/2019/05/13/us/politics/supreme-court-antitrust-apple.html
6 The Wall Street Journal, May 13, 2019. https://www.wsj.com/articles/amazon-to-help-employees-start-their-own-delivery-business-11557747201?mod=djem10point
7 ZIM may amend or rescind the “Measuring Your Net Worth” guide for any reason and at ZIM’s discretion.
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