IEA: Global Energy Crisis May Get Worse; Small Business Optimism Lowest in 48 Years | NTD Business

Coming up this evening, live from New York City. Warning about the global energy crisis. The International Energy Agency says the worst is yet to come, especially for Europe. Optimism for the economy is at a record low among small businesses. What could this mean for the US economy? Billionaire investor Bill Ackman shutting down the largest special purpose acquisition company of all time. He says he couldn't find a suitable company to acquire. That and much more coming up on NTD Business. Great to have you with us. Chenny Wu here for NTD Business. The global energy crisis hasn't hit its peak yet and will likely worsen in the months to come. That's the warning from the head of the International Energy Agency, Fatih Birol. Here he is at a global energy forum in Sydney today. The world has never witnessed such a major energy crisis in terms of its depth and its complexity. We might not have seen the worst of it yet. This is affecting the entire world. He says many factors are contributing to the crisis, including the Russia-Ukraine war. Oil, natural gas, coal and electricity prices have all gone up a lot. The oil prices did come down a bit lately. They're under $100 a barrel today, but still pretty high. Birol says Europe will have a very difficult winter this year and that may have significant implications for the global economy. President Biden will visit Saudi Arabia this week and will likely urge OPEC oil producers to increase production. Republicans have said that Biden's policies targeting the oil industry have led to spikes in gas prices. Small business optimism for the economy to improve is at the lowest it's been in the last 48 years. That's according to the latest survey by the National Federation of Independent Business. Small businesses' plans to increase employment is also down by 7% compared to last month. Sentiment to expand is down 3%. And expectations for sales to increase is down 13%. The survey says these are indicators that make a very strong case for an upcoming decline in economic activity. It says the only questions now are how long and how severe the downturn will be. And here to talk to NTD's Don Ma about the report is the New York State Director from the organization. And here with us is Ashley Ranslow. She's the New York State Director for the NFIB. Thanks for coming on, Ashley. Thank you for having me. Now, everything down across the board for small business optimism. Now, what is going on here, Ashley? Break it down for us. Yeah, so we released our small business economic trends report just recently. And it's really, it's what the report shows overall is it's really a difficult, tough time for small business owners. Like all of us, they're feeling the pain from inflation, labor shortages, supply chain disruptions. And that's really impacting how they see the future. And we're seeing record levels of very low expectations for business conditions moving forward. The lowest level we've seen in the 48-year history of this report. So it's really tough times for small business owners right now. An economist at Indiana University told Fortune that historically, when demand falls, small businesses don't have the cushion to survive. Now, if we do go into an economic downturn, is there a concern that the first thing that will happen is that small businesses will go out of business? Certainly. I mean, anytime you have an economic downturn, small businesses certainly feel the brunt of it. We certainly saw business closures during the last economic downturn. We saw business closures when the COVID pandemic was at its height in 2020, right? Businesses just could not sustain being closed and not getting revenue for that period of time. So certainly, you know, you could see business closures. You could see layoffs. You could see a reduction in benefits or a reduction in employee compensation to just make sure that they can survive and keep their doors open. What's the most important thing that small businesses should do? I mean, right now, you know, it's a very difficult time for small businesses, right, with all of these economic challenges, these economic headwinds that are facing them. You know, but here in New York State, where we're located, there are things that the state can do to help alleviate some of the economic pressures on small businesses that they haven't done. So, for example, unemployment insurance taxes are the highest they could possibly be here at New York State. New York has the ability to address that issue. They just haven't. So for small business owners, you know, they certainly have to plan and have to be prepared. But we also have to make sure that we're holding our elected officials accountable and make sure that we are encouraging them and advocating for them to be more small business friendly, to make sure that we are doing all that we can to lower the cost of doing business, to not have the highest possible taxes, to not have increased regulations. We need to make sure we're creating a better business environment so small businesses don't have to make those difficult choices should an economic downturn happen. Now, just one last thing, Ashley. What should be the main takeaway from this report? I think that it is a warning to everyone, right? The economy is very fragile right now. Small businesses are in a very precarious position. But small businesses are so important to the state and local economy. We have to make sure that they not just survive, but can thrive. That's what helps fuel our economy. So any sort of public policy decisions going forward here in New York state, we need to be mindful that small businesses are not going to bear the economic brunt. We cannot raise taxes. We cannot increase regulations. We have to find ways to provide relief to small businesses. And that is going to help us make sure that the economy can move forward and that small businesses can thrive well into the future. Ashley Ranslow, New York State Director and FIB. Thanks for coming on. Thank you so much for having me. Peloton, the company known for its workout bikes, is hoping a new plan to save cash works out as it struggles to stay afloat. The company decided to stop making its own equipment to cut costs. So its factories will be shut down, which means about 600 people will lose their jobs, according to Bloomberg News. And a company in Taiwan will pick up production, specifically Peloton's bikes and treadmills. Touchscreens in an upcoming rowing machine will also be outsourced. It's a huge shift from the boom the company saw during the pandemic. Among the factors hurting sales, product recalls, and competition from upstarts selling much cheaper bikes, Peloton's stock is down about 95 percent from the all-time high it reached in late 2020. Peloton's stock gained four percent today. Maybe the cost-cutting plan is giving investors some hope. In another sign of a possible housing market slowdown, mortgage giant Lone Depot is cutting thousands of jobs. It's the nation's third-largest mortgage originator, meaning they help future borrowers to get the right mortgage. Lone Depot is based in California. It has cut 2,800 jobs. And it's cutting 2,000 more by year-end. The company employs about 8,500 people, so it's cutting about half of its workers. Lone Depot is trying to reduce costs, saying the move will save it about $400 million. It's the latest company in the housing sector to cut jobs. Last month, real estate brokers Compass and Redfin also announced layoff plans. Homebuying demand seems to be cooling off. A new Redfin report says homebuyers are cancelling deals at the highest rate since the start of the pandemic. Lone Depot expects mortgage demand to fall by roughly half this year from 2021. And they expect the challenging conditions to continue through next year. Lone Depot's stock jumped 16 percent today. We're just about halfway into this year's Amazon Prime Day event, where shoppers can get some of the lowest-priced items on the internet. But is there a catch? NTT's Phil Zou dives deeper into this year's mega sales event. Amazon's Prime Day sales event is happening right now. Discounts on items like jeans, cameras, Playstations to the biggest big-screen TVs. We know that there are going to be some great deals, so we are pretty avid Prime shoppers. Prime Day started in 2015, right around Amazon's 20th birthday. I always say I'm a grandma on the platform because not many sellers have been around much longer than that. Leslie Hensel has been an Amazon seller for over a decade. So Prime Day has been a great chance for sellers to jumpstart some of their products that aren't selling as much to have some revenue come in the door, and a lot of sellers then flip that revenue into buying inventory for the holiday season. But it takes a lot of effort to qualify as a seller on Prime Day. According to Dallin Hatch, head of communications at e-commerce data firm Pattern. We want to discount a given product at least 25% below the lowest price over the last 30 to 90 days. So it has to be a pretty deep discount. But Prime Day is not for everyone. Small business owner of around 30 years, Mitch Goldstone, hates Prime Day. He calls it a marketing gimmick. You have to pay for play. You can't participate in Amazon's Prime Day unless you put up $139 up front to join Prime. So that means you're spending $139 before saving a penny. The first ever Prime Day in 2015 was a one-day event only, selling over 34 million items. That translates to 400 items sold per second. We've been Prime members probably since Prime started. As a matter of fact, I received an Amazon Prime package delivery just this morning. Laura Pepping and her husband are Seattle residents living right by Amazon's headquarters. They've been Prime members since the beginning in 2005. Always buying big on Prime Day. This year is going to be different. We really don't want to get caught up in the hype, which is something that marketers really appreciate. She's adopted a new mindset since the pandemic. The bottom line is we've adopted this Marie Kondo mindset, which is purchasing for joy or if you really need it, not if it's something that you already own. Prime Day lasts until the end of July 13th, Wednesday, and is available in around 20 countries. Phil Zou, NTD News. The market for chips and similar electronics has been slowing down. But as a result, these components are becoming more available. NTD's Sean Marshall has more. The computer chip, graphics card and tablet industries have been seeing a downturn. Hoarding of chips during supply chain bottlenecks and inflation belt tightening added to it. Computer makers such as HP and Dell have been warning that consumer appetite for computers was calming down, particularly for lower cost devices. Like nervous shoppers raiding supermarket aisles for toilet paper ahead of a COVID-19 lockdown. Manufacturers stockpiled computer chips during the pandemic. Inventory buildup is hitting the industries. Crypto miners had made graphics cards nearly impossible to find. But Bitcoin's price drop has freed up cards for purchase. Now miners selling off secondhand cards is interfering with retail sales. In China and the United States, GPU retail prices are down 15 to 30%. Now might be a good time to hit up Amazon Prime Day deals or their competitors deals. Sean Marshall, NTD News. On Wall Street, stocks fell today. The Dow lost 193 points or six-tenths of a percent. The S&P dropped 36 points or nine-tenths of a percent. And the Nasdaq fell 108 points or 1%. It looks like billionaire investor Warren Buffett may have given up on China's largest electric car maker, BYD. Chatter about it sent shares of the company down 12% today in Hong Kong. It's because Citibank's stake in BYD recently increased by 225 million shares. That's the same exact number of shares Buffett's Berkshire Hathaway owned at the end of last year, according to Refinitiv data. Hong Kong's central clearing and settlement system recorded the jump in Citibank's BYD shareholding. We couldn't independently verify whether Berkshire cut its stake. We might have to wait for its next quarterly regulatory disclosure to find out. Billionaire investor Bill Ackman is closing the largest SPAC of all, Pershing Square Tontine Holdings. He's returning $4 billion to investors. It comes at a time when special-purpose acquisition companies aren't doing well. NTD's Faye Corder has more. Bill Ackman has failed to find a suitable acquisition target for Pershing Square Tontine Holdings. Now he's returning the $4 billion he raised back to investors. Pershing Square Tontine was the biggest SPAC of all time, a special-purpose acquisition company whose sole purpose is to list itself on an exchange and then acquire a private company to take it public, bypassing the traditional IPO process. SPACs were very popular in 2021. Most of these companies were worth literally half, if that, of their original SPAC valuation. Don Coffman is the founder of Theo Trade, an online financial education service. Coffman speculates there's more going on behind the scenes. It's not so much failure to find a company to invest in as it is probably investor fears. So did he return the capital prior to the capital being pulled back? I mean, again, lots of clientele are probably trying to claw back any of the capital. Pershing Square told investors that it couldn't find a target because it couldn't compete with traditional IPOs. The poor market perception of SPACs and high redemption rates for SPACs. While there were 613 SPAC IPOs in 2021, there have only been 70 so far this year. I think this is probably the new normal as far as issuance goes. Patrick Galli is the CEO of River North Capital. Galli just launched the River North Premerger SPAC ETF, an actively managed fund that invests only in SPACs that haven't chosen acquisition targets yet. SPACs are trading at discounts to their trust value versus historically they were trading at premiums to their trust value. Last July, Ackman wanted to acquire a 10% stake in Universal Music, but stopped when the SEC objected to the deal. Ackman later bought a stake in Universal Music through his hedge fund. Faye Porter, NTD News. For the first time in two decades, the exchange rate between the euro and the US dollar is nearly the same. The two currencies are less than a cent away from parity. The euro is down nearly 15% since the start of the year. Fears of recession in Europe abound, stoked by high inflation and the energy crisis. According to analysts, a series of aggressive interest rate hikes, along with slowing economic growth, will keep pressure on the euro while sending investors toward the US dollar as a safe haven. With Boris Johnson stepping down, eight candidates are now competing to replace him, to become the United Kingdom's next prime minister. A recent poll shows that conservatives favour former finance chief Rishi Sunak. He recently quit his job because he had lost confidence in Johnson. Sunak kick-started his campaign Tuesday with the slogan Ready for Rishi on a video on Twitter. I want to lead this country in the right direction. I ran the toughest department in government during the toughest times when we faced the nightmare of COVID. My values are non-negotiable. Sunak has been backed by Transport Minister Grant Shapps and Deputy Prime Minister Dominic Raab. Still to come, NASA drops even more unseen images of deep space from the Webb telescope. And the Dodger Stadium workers authorise a strike just days before Major League Baseball's all-star game. That and more coming up on NTD Business. Welcome back. A day after a bombshell image reveal from the James Webb telescope, NASA drops several more unprecedented and unseen looks at ultra-deep space. Here's a look at the brand new images. After months of teasing, NASA finally revealed the very first full-colour image taken by the James Webb Space Telescope, and man, oh man, was it worth the wait. According to the agency, the mind-boggling infrared image is the deepest picture of the universe ever taken. The distant galaxies captured are so far away, we are seeing what they looked like 4.6 billion years ago. Not mind-blowing enough for you? Scientists also say the image represents only a mere sliver of the visible universe, comparable, they say, to the size of a grain of sand held up to the sky. But wait, now there's more. NASA just dropped the rest of the new never-before-seen high-res images captured during the telescope's first months in deep space. The amazing images highlight distant stars, otherworldly galaxies, and even a look at the atmosphere of a star-orbiting exoplanet. It's a staggering and tantalizing taste of what's to come from the most powerful space telescope ever built. The Department of Transportation is expected to enforce penalties against 10 airlines. During the pandemic, some passengers who had their flights cancelled experienced lengthy delays for refunds. Officials could fine the airlines or order them to stop a practice if it's determined to be unfair. While no airlines were named, Transportation Secretary Pete Kibutajed says the department has investigations open. If you're going to the MLB All-Star Game this year, your experience could be a bit different. Approximately 1,500 workers at Dodger Stadium have threatened to go on strike ahead of this year's game. Unite Here Local 11 represents the hourly food and concession workers at the stadium. The union said members voted Sunday to OK the strike. It said workers want to negotiate a fair new union contract. The last one lapsed in 2019. The All-Star Game is scheduled for next Tuesday. The Futures game, featuring top minor league players and a home-run derby, will be held in the days leading up to the game. Thousands of Sri Lankans are ditching their vehicles and switching to bicycles as the country faces a crippling fuel shortage. NTT's Andrew Thomas has the details. Throwing a backpack over his shoulders and a helmet over his head, Tusita Kahadua hops onto his bicycle to pedal off to work. He used to drive his car to work, but long lines for gas convinced him to finally buy a bicycle. Since then, he hasn't pumped gas in three weeks. When the gas problem came up, I tried to use WhatsApp group chats to check where gas was available, but that wasn't practical. First, it was two or three hours in a gas line. Then it was four, six and up to eight hours. About three weeks ago, I was in a gas line for three days. Economic mismanagement and the pandemic have left Sri Lanka unable to pay for fuel because of a severe dollar crunch. Sri Lanka hasn't received new fuel shipments in about two weeks. The government hasn't announced when new supplies will arrive. Bicycle shop owner Victor Pereira said that his stock of bikes is running out. The import of bicycles has now also been banned, so the shops are selling their imported stock at even higher prices. Now there are no more bicycles. The ladies' models and the standard models are no longer available. I don't think new bicycles will be available for another week. Sri Lanka will present its debt restructuring plan to the International Monetary Fund in August and is seeking a $3 billion bailout package. Andrew Thomas, NTD News. In an uncertain world with a war going on, the idea of having an underground bunker beneath an estate could bring some peace of mind. A startup company in Switzerland is offering just that. NTD's Faye Corder has the details. Swiss startup Opidum is offering the mega-rich, safe and secure NATO-grade security underneath their existing estate. The concept, called Opidum, promises a totally bespoke, super-secure, self-sufficient bunker that makes its own water, air and electricity. The technology is the heart of Opidum and it's to supply the Opidum with energy, fresh air, water and supplies for as long as necessary. It has more than several operational modes, ranging from the situation either outside or what's needed for the inhabitants. Each Opidum can provide living accommodations and leisure facilities while leaving almost no visible trace of its presence on the surface. The company claims Opidum is fully airtight and gas-tight and can be completely isolated from the outside atmosphere if required. The main area is the living area. It's basically similar to what you can find in above-ground residence and it serves for primary use in case of threat. But we have an optimistic view of the future and we want Opidum to bring added value for everyday peacetime use of the property. Opidum adds value to the owner's primary residence by offering facilities including a private art gallery, secure meeting lounge, comfortable bedroom suites, bespoke spa and other leisure amenities. The Opidum shall bring a peace of mind knowing the family is protected in whatever may arise. At the same time, there are multiple uses for everyday peacetime use that enhances the use of the primary property as the secure storage and meeting rooms. Opidum says they are targeting individuals in the US, Europe and the UAE with a net worth of more than 100 million dollars. Such a bunker costs at least 10 million dollars. The most luxurious design offers a total of 10,000 square feet. If you have any news tips or feedback for the show, send us an email at business at ntd.com. That's the latest from the NTD Business team and myself, Chenny Wu. You can follow me on Twitter. For NTD Business, that's all for today. Thanks for watching and we'll see you tomorrow.