What You Need To Know This Week — March 14th, 2020
What You Need To Know This Week
A weekly recap to keep you informed on the most important events this week impacting markets, business, tech and the global economy.
GLOBAL EQUITIES PLUNGE INTO BEAR MARKET AS THE WHO DECLARES CORONAVIRUS A PANDEMIC
Major equity indices, including the S&P 500, the MSCI All Country World Index and the TSX Composite, have fallen more than -20% recently as the coronavirus panic worsens and the WHO declared the outbreak a pandemic. Airlines, energy and cruise companies led the market downward, as the travel industry is hardest hit from the virus-led global slowdown.
CRUDE OIL PLUMMETS AS A PRICE WAR BREAKS OUT BETWEEN SAUDI ARABIA AND RUSSIA
Saudi Arabia announced an aggressive oil production increase to punish Russia for not agreeing to an oil production cut to counterbalance reduced demand due to the coronavirus. Exasperating the selling pressure on oil, government-implemented travel restrictions are further decreasing demand. Oil fell from $41 to $30 per barrel on the news, one of the commodity’s biggest daily price change on record.
AON ANNOUNCES FRIENDLY ACQUISITION OF RIVAL WILLIS TOWERS WATSON IN $30 BILLION DEAL
Despite the market crash, it’s business as usual in M&A as Aon PLC announced that it would buy Willis Towers Watson PLC for nearly $30 billion. The deal would create the largest insurance broker globally. The pro forma entity would be valued at $80 billion, making it larger than market leader Marsh & McLennan.
Recommended Articles, Podcasts, Books and Tweets
Listen to internationally recognized expert in infectious disease epidemiology, Michael Osterholm, discuss viral outbreaks on the Joe Rogan Experience.
Entrepreneur Russell Weiner built Rockstar Energy Drinks from scratch using $50,000 from a mortgage on his condo. He just sold the company to Pepsi for $3.85 billion.
On average, it takes 136 days to go from bull market peak to onset of the bear market. This one occurred in just 19 trading sessions, indicative of the panic and fear in the market.
According to venture capitalists, Softbank’s $100 billion Vision fund has been “an unmitigated disaster for Silicon Valley companies”. Some of the reasons for the ill will include walking away from proposed deals and exercising a heavy hand with portfolio companies.
What does it take to be one of the greatest investors of all time? To buy aggressively when everyone else is panic selling. Carl Icahn has been buying Occidental shares as the stock price plummets. He now owns 10% of the company, up from a recently disclosed 2.5%.
More than 35% of the companies listed on the NYSE and NASDAQ are unprofitable. Over the past five years, the shares of unprofitable companies have vastly underperformed those of profitable companies. The median share price return of profitable companies was 16% annualized compared with 4.2% for unprofitable firms.
Twitter settled with activist investor Elliott Management, agreeing to add two independent board members and execute a $2 billion share repurchase program. Co-founder Jack Dorsey remains as CEO.
Apple has reopened all of its stores in China as the country makes a ferocious comeback from its recent coronavirus-related shutdown.
Due to the pandemic, Berkshire Hathaway will hold its annual meeting without shareholders.
NBA star Shaquille O’Neal has built a profile as a successful angel investor with early-stage investments in Google, Lyft and Ring.
