Hi Newsletterest, here's what you need to know for May 11th in 3:09 minutes.

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Today's big stories

The US released its worst monthly jobs report since before World War II
Our analysts explore why one investment manager is turning to bitcoin to protect his $40 billion hedge fund – Read Now
Shares of ride-hailing rivals Uber and Lyft rose, despite both announcing coronavirus-hit quarterly updates

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Friends With Benefits

What’s Going On Here?

The US has a lot going on right now and just can’t commit to its workers: data out on Friday showed the number of jobs in the US fell by more than 20 million last month.

What Does This Mean?

Roughly a decade’s worth of new jobs was wiped out in April, or to put it the way Bloomberg did: as many jobs were lost last month as were lost in every economic downturn since the ‘70s combined. Coronavirus, of course, was mostly to blame, which is clear from the industries that laid off the most workers: the shuttered leisure and hospitality sector, for one, accounted for 40% of the jobs lost in the private sector.

The US unemployment rate was reported at 14.7% in April overall, but the government acknowledged that mistakes in the data brought the real rate closer to 19% – the highest since 1948 (tweet this). And that’s without the job losses incurred in the last few weeks: since this data only covers the jobs that were lost before April 12th, May’s likely to bring even more bad news.

Why Should I Care?

The bigger picture: That was V optimistic.
Economists who’ve been predicting a rapid return to growth when economies reopen – i.e. a V-shaped recovery – might now be tempering their expectations. 70% of the American economy is made up of consumer spending, and with so many jobs having been lost, there won’t be nearly as many people able to splash their economy-boosting cash.

For markets: Maximum unemployment.
Half the Federal Reserve’s “dual mandate” is to create maximum employment, so some investors reckon the historic level of unemployment might spur the US central bank into further action. In fact, traders are now betting US interest rates will become negative for the first time ever by the end of this year. That cheaper borrowing might encourage businesses to rehire more quickly, sure, but it’ll also hurt banks – themselves major employers – as lower rates drive lower earnings.

Take action: How you can respond to – and benefit from – negative rates.

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2/3 Premium

Bitcoin’s Back, Baby

What’s Going On Here?

It was all quiet on the bitcoin front following a drastic price drop in March – until late last week, that is, when the world’s largest cryptocurrency won the backing of a $40 billion hedge fund manager.

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Uber Eats Cash

What’s Going On Here?

Ride-hailing rivals Uber and Lyft reported first-quarter updates late last week – and despite coronavirus-flavored losses from both, investors gobbled up their shares.

What Does This Mean?

Lyft revved up first with higher quarterly revenue than expected. That was thanks to 3% more riders than the same time last year, even with the current pandemic. And that makes sense given that Lyft operates mainly in the US, which was one of the last major countries to lock down.

Arch-nemesis Uber operates all over the world, so it couldn’t help but report 5% fewer riders last quarter than a year ago. Thankfully for its investors, though, its food business grew by more than 50% delivering takeout to hangry homebound customers.

Why Should I Care?

For markets: Eyes on the prize.
Uber says the worst is over, and that its ride-hailing business has started picking up again. But that hasn’t stopped the company from cutting 14% of its workers and slashing its marketing budget to help trim costs by $1 billion. Lyft, not to be outgunned, announced major cuts of its own – including 17% of its staff. So much for Uber’s ambition of becoming profitable by the end of 2020 then: it now thinks it’ll be profitable months later than promised – but probably before Lyft still, if all goes to plan.

The bigger picture: Uber Black and Lyft Lux for early birds only.
Hot initial public offerings (IPOs) – like those of both ride-hailers last year – captured the interest of new and experienced investors alike. After all, who wouldn’t want to buy a new share of a company they’ve happily experienced first hand? But buyer beware: even if shares have a first-day “pop”, 60% of IPO stocks will be trading below their initial price five years down the line. Or sooner, in the cases of loss-making Uber and Lyft – even if their earliest backers likely pocketed a hefty profit.

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💬 Quote of the day

“Meaning is not something you stumble across, like the answer to a riddle or the prize in a treasure hunt. Meaning is something you build into your life.”

– John Gardner (an American novelist, essayist, literary critic, and university professor)

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🤔 Q&A · RE: Culture Shock

“How does a growing economy help a government pay interest on its debt and reduce the amount of debt it has, relative to its economy’s size?”

– Ricardo in Quito, Ecuador

“In two main ways, Ricardo. First, a government’s revenue – by way of taxes – tends to rise in line with an economy’s growth. That’s money the government can then use to pay interest owed on its debt. The second is that the comparison of a country’s debt to its economy’s size – that is, its debt-to-GDP ratio – is measured as a fraction. So if the debt remains stable, a growing economy increases the size of the denominator, and therefore decreases the debt ratio.”

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📚 What we're reading

So what time should you be exercising, anyway? (Time)
Gone are the days of writing “80085” (Gizmodo)
The indigenous tribes fighting erasure (Mother Jones)

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Finimize - 🤮 20 million jobs lost

Today's big stories

Friends With Benefits

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Bitcoin’s Back, Baby

Uber Eats Cash

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Older messages

🤭 The biggest recession ever

⚠️ UBS says don’t sell

📈 Whoa, Microsoft and Facebook

📉 Google's 4 billion dollar void

🤖 Big tech saves stocks

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