🚕🚨 Lyft Needs a Lift. Badly.
Happy Superbowl Sunday,
I do love watching certain sports (Golf, Football, and Basketball are probably my favorites) but I do not find myself that excited to watch the big game today… perhaps because I feel no attachment to either team and I also feel like from a social standpoint, it’s an obligated watch rather than a “I’m choosing to watch this” type of game. That’s because for a lot of North America - it’s an event that you don’t want to miss. Because if you DO miss it - you’re going to feel left out of the commentary about the commercials, the game itself, and the halftime show for the rest of the week.
It sounds like I’m complaining. Which I am. I realize that these are very small problems to be complaining about 🤣 I will still enjoy the afternoon and eat copious amounts of game-day food.
Hopefully, you enjoy the day regardless if you watch or do not watch the Superbowl, and enjoy this week’s Sunday Primer. The most anticipated reading this week comes out which is the CPI report for the past month. That comes out on Tuesday. We’ll be sure to break it down on the Wednesday edition, so keep an eye out.
— Humphrey, Tim & Rickie
Market Report
Russia announced a plan to cut its oil output by 500,000 barrels a day in March in retaliation against western energy sanctions. The move could renew turmoil in the oil market and tighten the supply constraints from OPEC+.
OPEC+ has already signaled that they won't take any action to fill in the gap created by Russia. Deputy Prime Minister Alexander Novak stated that the price cap on Russian oil and petroleum products is an intervention in market relations and an extension of the destructive energy policies of the west.
Analysts believe the cuts are unlikely to affect global oil prices in the longer term as the reduction has only been announced for March, and Russia's output could rebound.
A recent Fed survey found market conditions have not improved as lending standards have tightened for all categories of loans, including commercial and industrial loans to large and small companies, commercial real estate loans, residential mortgage loans, and consumer loans.
The demand for residential mortgage loans has hit the weakest number in the history of the survey, with a net 89% of banks reporting weaker demand, while the pandemic and remote working conditions continue to impact commercial real estate, with a net 60% of banks reporting less demand.
So far this earnings season, 58 companies have issued a negative profit outlook for the first quarter, according to FactSet. Just 13 have issued a forecast that topped analyst expectations. About 70% of S&P 500 companies have reported results.
Lyft Inc. saw its shares drop by 36% on Friday, the biggest decline since its IPO in 2019, after forecasting lower profits than expected and announcing that it will cut prices to attract and retain customers. The company projected adjusted EBITDA to be between $5 million to $15 million next quarter, missing the average estimate of $83.6 million.
The company has struggled to maintain its customer base and bring its ridership back to pre-pandemic levels, in contrast to Uber, which saw a 31% increase in ride bookings in the fourth quarter of 2022. Lyft reduced its base prices for a ride in January to compete with Uber and has also eliminated 13% of its workforce in an effort to reduce costs.
Forecast Ahead
Big Number
According to data released by the New York Federal Reserve, the median annual pay for Americans with a bachelor's degree was $52,000 in 2022, representing a 7.4% decline in inflation-adjusted terms, which is the steepest drop since 2004 and erasing nearly all pandemic-era gains. The decline was most significant for those earning the most.
On the other hand, wages accelerated 6% to $34,320 for those with only a high-school diploma, marking the largest gain in over two decades. The data highlights the increasing demand for service-sector workers and those in fields where technical skills are more important than a college degree, as well as the decreasing value of a bachelor's degree as more Americans obtain one and competition in that sector of the labor market increases.