For f*ck’s sake, shop local
Shop ‘Til Your Wi-Fi Drops…
…Just kidding, we plan to #shoplocal, Btches.
This year, we’ve seen a ton of unpredictability, including lockdown measures forcing stores to close and orders for people to stay home. But, where there’s a will, there’s a way, and this year’s chaos has certainly not stopped people from spending their money.
This Black Friday, in-person retail spending decreased, while online shopping hit a new record, surging 22% – which has major implications for the future of large and small businesses. Many large stores have invested in e-commerce, allowing people to purchase from stores that were previously in-store only. However, small, locally-owned businesses have struggled, as most have not been able to pivot to online. This has led to large box stores doing tremendously well, while small businesses struggle.
Lockdown measures in several places across the country have hastened this trend by allowing large retail stores like Costco and the Bay to stay open because they sell some essential goods, but forcing the shutdown of small businesses. This has led to people purchasing clothes from the Bay, but not the trendy local boutique down the street.
Black Friday had an impact on the markets too. While the Dow hit a record this past week, Nasdaq and S&P, which both have more retail and represent more industries than the Dow, also saw a thrilling week. The S&P 500 reached a new closing high and the Nasdaq jumped 111.44 points. For some context, the Dow rose 0.13%, the S&P 0.24% and the Nasdaq a record-breaking 0.92%! Good news all around!
Hey Siri, who is the Dow Jones..?
The Dow Jones Industrial Average, AKA ‘the Dow’, measures 30 blue chip (nationally recognized, well established, financially sound) companies that are publicly traded on the New York Stock Exchange. The Dow is frequently used as a health indicator for the US economy. Companies can be added and removed from the Dow as their financial and market positions change. As a price weighted index, companies with high stock prices are given greater weight, and changes in these higher priced stocks have a bigger impact on the final value as well.
Some notable companies in the Dow include:
So, what’s the big deal?
The big deal is that when the global pandemic took hold in March, the Dow dropped… A LOT. For context, it went below 18,600 points, compared to Friday’s close of 29,900. The means not only is the Dow reaching record highs, it also climbed out of a massive hole by increasing over 60% since March.
The main contributing factors for the Dow’s record heights:
1. Formal transition proceedings have begun for President Elect Joe Biden
2. Janet Yellen (former Federal Reserve Chair and all-around boss – remember Wells Fargo?) was appointed to Treasury secretary by Biden
3. Coronavirus vaccines continue to make positive headway
4. Very low short-term interest rates
And some of the main companies contributing to the climb:
– Apple: stock price reached $500 in August but a stock split later in the month lulled the effect on the Dow more recently
– Honeywell: The stock price for the multinational conglomerate producing everything from thermostats to aircrafts shot up 16% since January after a large drop in March
No News is (Not) Good News
The news is in trouble. The COVID-19 pandemic has seen smaller newspapers permanently close and layoffs at larger publications.
News Media Canada, a lobby group for Canada’s newspapers and magazines, has asked MPs to enact rules to support its members to negotiate compensation from social media giants, like Facebook and Google, that post content the traditional media produces.
News Media Canada’s CEO, John Hinds, painted a grim future for Canadian newsrooms without help from the federal government. MPs from the House of Commons’ Heritage Committee heard from Hinds last Friday. This committee was created specifically to study challenges the pandemic has created for media and culture groups.
Allowing the news industry and digital monopolies to negotiate fair terms for compensation could be the potential solution to support Canada’s ailing newsrooms. Hinds argued that it wouldn’t raise taxes or require government intervention in the marketplace. Rather, it would allow for a fair market interaction between the platforms and newspapers.
However, Peter Menzies, former Canadian Radio-Television and Telecommunications vice-chair, has criticized this proposal. Menzies points to Australia, where similar legislation was implemented. Facebook noted that free delivery of news to its audiences totaled $200 million dollars a year, and that news only constitutes 4% of its content. Facebook then announced it simply wouldn’t allow news articles to be posted on Australian Facebook sites.
Regardless, COVID-19 has ramped up the pressure on an ailing news industry that was already struggling to survive.