September 28, 2023 • 20 mins
In this episode, Abdul explored the global financial landscape, where central banks from different corners of the world have hit the pause button on rate hikes. He also shined a spotlight on the energy sector, where oil supply shortages have been making headlines. Tune in for updates on the Amazon lawsuit that has been capturing attention and updates on the Instacart IPO debut.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:02):
Good afternoon, ladies and gentlemen.Welcome back to the Investor Diary podcast,
where we help you work smarter andharder by providing weekly market updates and insights.
All right, so for today,we have some interest rate news from
both the US and the United KingdomCentral banks, and update on the instacot
IPO, a story we covered lastweek, global old supply shortages, and
(00:25):
the recent Amazon lawsuit. So let'sjump into the most exciting story we have
today, which is the Amazon lawsuit. So here we have the US Federal
Trade Commission or the FTC, alongwith seventeen other states, taking legal action
against Amazon. So what is allthe fuss about? While the lawsuit alleges
(00:45):
at Amazon, the one point threetrillion dollar company, has been flexing its
monophy muscles, It's accused of overchargingconsumers, crypting competitors, and exploiting sellers
on its marketplace. To understand andthe economic implications here, think about how
a company's monopoly can impact and market. Monopolies can really stop innovation totally and
(01:08):
lead to higher prices, potentially harmingconsumers Amazon Amazon's practices have raised questions about
whether such dominance should be allowed intoday's digital age. One of the key
claims is that Amazon has been increasingfees to sellers on its platform, effectively
taking nearly half of every doll theyearn. And now this can make it
(01:32):
very tough for many small businesses tryingto make a profit in their ecosystem.
But it doesn't stop there. TheFTC also led is that Amazon plays hardball
with the sellers who heavily discount theirproducts, and in doing so, Amazon
can make these cells effectively invisible inits search results. It's a move them
not only effects sellers, but alsoinfluences what products we see as consumers.
(01:57):
Now, Amazon's control over searchers raisesa lot of questions about consumer choice.
If the company can maniplate what yousee, it can shape your buying decisions.
This is a concern not only forregulators, but also for people like
me and you, hopefully that valuea competitive marketplace, and in my opinion,
this case could be a turning pointfor online retail. This lawsuit is
(02:22):
significant because it's part of a moreaggressive stance by the FTC against big tech.
The abency's chair Alina Hahn, whomade her name by advocating for the
breakup of Amazon, is leading thischarge. Khan believes that tech giants have
escape regulation for far too long,not as clear that this case could reshape
the digital landscape. With the powerof big tech under scrutiny, we might
(02:46):
see a shift towards fairer competition andmore transparency in the industry, and in
my view, is a pivotal momentin the ongoing debate about how to regulate
tech giants. Now, let's lookat Amazon's response. Naturally, Amazon is
going to defend itself vigorously. DavidZapolsky, Amazon Senior vice president of Global
(03:06):
Public Policy and General Council, arguesthat the FEC's focus has the Parties fransmission
and of protecting consumers and competition,and insist that the lawsuit is wrong on
the facts and the law. Butto maintain dominance, Amazon is said to
have employed a sophistic sophisticated surveillance networkof webcrawlers. This network kept an eye
(03:30):
or keeps an eye on whether Amazonsellers we're offering lower prices on other platforms
and penalize those who did. Now, the use of web callers is common
in tech. Like other e collers, giants to use it, but when
it's used to monitor competitors and potentiallyharm their business. That's when ethical questions
(03:51):
are raised. And this case couldalso set a precedent to the ethical use
of data and surveillance in the techindustry, and in my opinion, it's
a vegle call for tech needs toreconsider their practices. So what could does
all lead to? To understand thepotential outcomes, Let's take a closer look
at a case from the past thatshares some similarities with the Adams of lawsuit,
(04:13):
which is the Microsoft anti trust battlein the nineteen nineties. Now,
little hetle background. In the latenineties, Microsoft found itself at the center
of an anti trust storm. TheUS Department of Justice the d o J
accuse Microsoft of engaging anti competitive practices. One of the key allegations was that
Microsoft was leveraging its dominant position inthe operating system market to really kill competition,
(04:40):
particularly in the web browser space.Now, how does it reach to
Amazon, Well, Justice, Amazonis accused of using its dominance in e
commerce to harm competition. Microsoft wasaccused of using its dominance in operating systems
to disadvantage competitors, particularly Netscape Communications, in the web browser market. The
Microsoft case was in a lengthy legalbattle, and eventually a settlement was reached
(05:04):
in two thousand and one, soover ten years, and among the remedies,
Microsoft had to share certain programming interfaceswith soft developers and allow PC manufacturers
to promote non Microsoft web browsers.This paved the way for more competition and
innovation in the tech industry. Nowlet's draw some parallels here. What does
(05:28):
this mean for Amazon? If historyrepeats itself, this lawsuit could lead to
similar remedies aimed at fostering competition.It could mean more transparency in Amazon's dealings
with third party sellers, but hasshe lower fees and a fair marketplace.
So win for us as consumers,when for small businesses, when for sales,
and Amazon in the whole ecosystem.A loss obviously for Amazon, but
(05:53):
but anyway, looking in the Microsoftcase, the anti trust actions did have
a lasting impact on the tech industry. It demonstrated the government's willingness to step
in and protect competition, setting aprecedent, and in my view, the
Amazon lawsuit has the same potential rightto usher in a new era of scrutiny
and regulation for big tech and reallyas this lawsuit unfolds, if not just
(06:19):
about Amazon, is really a testof the regularly the regulatory environment surrounding big
tech. It's an opportunity to ensurethat innovation and competition thrive while protecting consumers.
And we'll be keeping a close eyeon this case, and so I
guess stay tuned for updates and movingon to our next story, which is
(06:45):
about the Bank of England's recent decisionto keep interest rates at five point two
five. Now, this move ishas had significant implications for the financial landscape
of the UK right, so listeners, this decision reflects the bank's cautious approach
to the current economic landscape. It'sa signal that they're carefully balancing the need
(07:08):
for economic stability within the concerns withthe concerns of rising inflation. So for
you and I, this means asense of stability in the broader economy,
which can translate into more predictable pricesfor goods and services. Let us dive
deeper into the impacts of this change. First, let's talk about the currency
(07:31):
impact. A weaker pound can havea mixed effect on your wallet. If
you're planning on a foreign vacation,it might be more expensive due to the
exchange rate. While on the flipside, if you're an expert, if
you're an export orientated business, aweaker pound can make your products more attractive
(07:53):
to international buyers, potentially boosting yourcompany's revenues. Let's look at borrowing costs.
What does it mean for your personalfinances? Well, with interest rates
held steady, barring costs are likelyto remain stable, which is great news
if you're in the market for amortgage or considering taking out a loan.
However, it may not be sogreat if you're a saver looking for higher
(08:16):
turns on your savings, and thisdecision suggests that the bank is really in
no hurry to raise interest rates,which can impact your financial planning. But
the bank isn't alone in his decision. Let's take a broader look at global
interest rate global interest rate trends.Let's shift gears to the United States,
(08:37):
where the Federal Reserve decision to holdthis benchmark interest rate steady at a twenty
two year high between five point twofive five point five percent, which really
is intriguing because they release what's knownas the dot plot. I'm looking at
it right now, which indicates thatthey expect the federal funds rate to peak
(08:58):
between five point five five point sevenfive percent, essentially implying one more quarter
point rate increase this year, whichrecent ripples through the US financial markets,
which I'll break down for you rightnow. First, the treasury yields,
which are influenced by expectations about thefuture direction of interest rates set by the
(09:20):
Federal Reserve. The two year treasuryyield, oftenesting as the meter or the
barameter of short term interest rate expectations, served to its highest level since two
thousand and six because investors quickly adjustedtheir forecast and when the Fed indicates that
it's considering another interest rate increase,especially this year, it prompts investors to
(09:41):
demand higher yields on short term governmentdebt. So firstly, why does happened
right? Why do treasury yields rise? Well, it makes government debt more
attractive to investors relative to other investments, and so you might see what we
are seeing today is a lot ofinvestors are shifting their money into bonds,
(10:03):
particularly if they anticipate higher yields.On the flip side, if you look
at equity markets, higher interest ratescan put pressure on these equity markets.
Companies that have borrowed at lower ratesmight face increased borrowing costs in impacting their
profitability heavily to market jitters and insome cases even as stock priced the clients.
(10:24):
Another critical aspect is consumer spending.When rates rise, borrowing becomes more
expensive. This can affect consumers whohave loans types to short term rates,
like adjustable rate mortgages or car loans. As results, some households might cut
back on spending, impacting various industries. It's also important to note that markets
(10:45):
often react uncertainty. When defend hintsat our future rate hike, it introduces
an element of uncertainty. Traders andinvestors may adjust their strategies, which can
lead to some short term market volatility. And the message Powell was clear whilst
it didn't raise rates this time,it doesn't mean they've declared victory over inflation,
(11:09):
and they're watching data closely and beingready to take further steps if necessary.
And the balancing Act inflex defense concernedabout inflation whilst not harming economic growth.
So we have here is both centralbanks are navigating the delicate balance between
controlling inflation and supporting economic growth.And these decisions have implications for businesses,
(11:33):
consumers and investors alike. And it'sa reminded that the world of finance is
reconnected and central banks pay the pivotalrole is steering the course. And just
to put my two cents in here, I do feel like it is it's
possible that interest ers have reached theirpeak in the cycle. You know,
consider the impact just illustrated here earlier, but really consider the impact the higher
(11:58):
interest rates on borrowing costs for andindividuals. If raids continue to rise,
it could lead to reduce consumer spending, a slower economic growth. We could
also see more failures of bank failuresthat we saw earlier this year, and
that can really harm the economy.However, again, like J. Powell
did say, whilst didn't raise raisethis time again, the obviously means that
(12:22):
they could raise rates again. SoI guess this leaves some speculation for future
rate hikes, but time will tell. Let's move on to our next story
where we continue our exploration of theglobal oil market, something we covered a
little last week. But as priceshave served past ninety five dollars of barrel
(12:43):
amid concerns about supply, shoulders andgeopolitical tensions. Now, as oil prices
climb above ninety five dollars of barrel, it is evan that the energy landscape
is evolving rapidly. This surge,propelled by supply cuts from both Saudi Arabia
and Russia, is not just amatter of financial markets. It's a phenomenon
(13:03):
with far reaching implications that touch thelives of people around the world. Today,
we dive deeper into the complexities ofrising oil and diesel prices and what
they mean for different stakeholders. Theimplication of soaring oil prices are profound less
start with consumers. Higher oil pricestranslate into higher fuel costs for every transportation
(13:26):
I'm sure earlier this year or evennow, you see an oil prices in
your local gas station going up,which is a huge, huge expense for
a lot of families. And forindividuals and families, this really means more
expensive commutes, groceries, and heatingbills. It really squeezes our household budgets,
(13:48):
which can lead to tough choices.But it's not just about wallets.
Higher oil prices can impact the environment. When fuel costs rise, there's often
the surge in demand for fuel efficientvehicles, which is positive for reducing emissions.
However, it can slow down thetransition to cleaner energy sources as people
still cling cling onto their existing vehiclesnow assuming out Globally, rising oil prices
(14:13):
can effect international trade. For countriesheavily reliant on oil imports, it means
increase trade deficits. It can alsostrain relationships between oil exporting and oil important
nations. Geopolitical tensions can intensify andtrade agreements may come under scrutiny. Let's
(14:35):
also aren't forget developing nations who oftenstruggle with budget constraints and rely heavily on
important oil. When oil prices search, it can exacerbate inflation, widen buddet
deficits, and divert funds from criticalsocial programs. It's really a double edged
sword for these countries. Central banksare also etric spot but you know we
(14:58):
just spoken about both the central banksin the UK and the US. They're
trying to control inflation while promoting economicgrowth, but stories like this with rising
oil prices really complicate their efforts.They might need to adjust interest rates rush
in turn affect borrowing costs for businessand consumers, like like we saw earlier
(15:20):
and so as we witness old pricesurgers, it's not just about the numbers
of the stock market ticker. It'sabout how these numbers rippled through our lives,
impact on every everything from our dailyexpenses to the global geopolitical landscape.
Will continue to explore these complexities inthe episode has come because I'm pretty sure
this is a story that's not gonnalet's how we'll talk about in the future.
(15:43):
But why are Saudi Arabia and Russiareducing all supply and despite these rising
prices, this strategy has not onlyraised concerns, but has sparked some tensions
within developed economies. The International EnergyAgency warrants of substantial deficits, and we
asked what was the reasoning behind thismove? And obviously it's not just about
(16:07):
oil, it's about politics. SaudiArabia and Russia's extension of voluntary supply cuts
is a move to showcase their controlover the oil markets. This decision has
ratifications for both inflation control and globaleconomic stability. But something we can we
can look at some comparable case herein the past. Nineteen seventy three we
(16:30):
had the oil embargo, which wasa lesson and geopolitical leverage through oil,
OPEC wielded power and we're seeing asimilar narrative here. So let me give
you a little background what this oilembargo was, how played out, and
what it could mean and and fortoday's case. Right, So, during
the early nineteen seventies, the OPEC, which is the organization of the petroleum
(16:55):
exporting countries, which included major whichincludes a major oil producing countries like Iran,
Venezuela and Saidi Arabia, who alldecided to use their collective power in
the global oil market to assert controland advanced through economic and political interest.
So just as in nineteen seventy three, Saudi Arabia and Russia supply has cut
(17:19):
supplies and and and and are flexingtheir muscles again in the global oil markets,
which it's not only influencing the economies, but is ruining international relations.
And let's talk about the nineteen seventythree case. The silinarities are the silinarities
(17:40):
are are remarkable. The nineteen seventythree crisis pushed countries to diversify their energy
sources and reduce reliance on foreign oil. So we look today, look at
today's situation, and we might wemight we might hope or might see some
acceleration to the transition to renewable energysources and energy conservation efforts. And really,
(18:02):
as we were effect on history,what lessons can we draw from the
nineteen seventy three oil embargo and today'sevents and how can we navigate this energy
landscape are the big questions here,and one key lesson is the need for
energy diversification and resilience. We mustinvest in alternative energy sources and reduce our
(18:25):
vulnerability to oil fluctuations or oil pricefluctuations. Additionally, international cooperation and dilimacy
are vital in addressing enery changes.We will cover the story again as we
get more updates, but let's quicklywrap up the episode with an update of
the instacard IPO, which actually closedits first day of trading green on the
(18:48):
stock market. Instacards share, whichwas offered at thirty dollars a share,
closed at thirty three point seven onthe Nasty Exchange, wapping twelve point three
percent In the question here is youknow what field the demand? Obviously this
is coming off of the arms IPO, which which had a grant entrance in
the stock market and really give lifeto an IPO market that has been facing
(19:14):
a lot of pressure in these thelast few years. And again, of
course the twelve point three percent increaseis a success, it's essential to put
it in perspective. The company's publicmarket valuation is quite different from its peak
private valuation, and indeed, thirtydollars per share is very far from its
thirty nine billion dollars valuation in twentytwenty one, when they had investors like
(19:37):
Fidelity pouring in about three hundred milliondollars in investment, which really is a
testament to how markets can shift overtime. But something we didn't cover last
week was their IPO approach, whichis pretty intriguing. They only floated eight
percent of the stock and of coursewhy did they do this. Well,
(19:59):
the CEO not to dilute the companytoo much. They opted for a smaller
IPO to maintain control at preserve thecompany's value. Something else wanted to bring
up because it's it's you know,it's pretty it's a pretty unique approach in
today's IPO landscape. So with that, that's a wrap of this Invested Diary
podcast. We talked a lot aboutthe Amazon law student and really excited to
(20:21):
see how that unfolds, Central banksaround the world, choosing to pause rad
hikes, Global old splash Oranges,and an update on the arms. I
sorry the instacrat IPO, so thankyou very much for tuning in with us,
and on another episode of the InvestedDiary podcast. Thank you very much
and peace.
Good afternoon, ladies and gentlemen.Welcome back to the Investor Diary podcast,
where we help you work smarter andharder by providing weekly market updates and insights.
All right, so for today,we have some interest rate news from
both the US and the United KingdomCentral banks, and update on the instacot
IPO, a story we covered lastweek, global old supply shortages, and
(00:25):
the recent Amazon lawsuit. So let'sjump into the most exciting story we have
today, which is the Amazon lawsuit. So here we have the US Federal
Trade Commission or the FTC, alongwith seventeen other states, taking legal action
against Amazon. So what is allthe fuss about? While the lawsuit alleges
(00:45):
at Amazon, the one point threetrillion dollar company, has been flexing its
monophy muscles, It's accused of overchargingconsumers, crypting competitors, and exploiting sellers
on its marketplace. To understand andthe economic implications here, think about how
a company's monopoly can impact and market. Monopolies can really stop innovation totally and
(01:08):
lead to higher prices, potentially harmingconsumers Amazon Amazon's practices have raised questions about
whether such dominance should be allowed intoday's digital age. One of the key
claims is that Amazon has been increasingfees to sellers on its platform, effectively
taking nearly half of every doll theyearn. And now this can make it
(01:32):
very tough for many small businesses tryingto make a profit in their ecosystem.
But it doesn't stop there. TheFTC also led is that Amazon plays hardball
with the sellers who heavily discount theirproducts, and in doing so, Amazon
can make these cells effectively invisible inits search results. It's a move them
not only effects sellers, but alsoinfluences what products we see as consumers.
(01:57):
Now, Amazon's control over searchers raisesa lot of questions about consumer choice.
If the company can maniplate what yousee, it can shape your buying decisions.
This is a concern not only forregulators, but also for people like
me and you, hopefully that valuea competitive marketplace, and in my opinion,
this case could be a turning pointfor online retail. This lawsuit is
(02:22):
significant because it's part of a moreaggressive stance by the FTC against big tech.
The abency's chair Alina Hahn, whomade her name by advocating for the
breakup of Amazon, is leading thischarge. Khan believes that tech giants have
escape regulation for far too long,not as clear that this case could reshape
the digital landscape. With the powerof big tech under scrutiny, we might
(02:46):
see a shift towards fairer competition andmore transparency in the industry, and in
my view, is a pivotal momentin the ongoing debate about how to regulate
tech giants. Now, let's lookat Amazon's response. Naturally, Amazon is
going to defend itself vigorously. DavidZapolsky, Amazon Senior vice president of Global
(03:06):
Public Policy and General Council, arguesthat the FEC's focus has the Parties fransmission
and of protecting consumers and competition,and insist that the lawsuit is wrong on
the facts and the law. Butto maintain dominance, Amazon is said to
have employed a sophistic sophisticated surveillance networkof webcrawlers. This network kept an eye
(03:30):
or keeps an eye on whether Amazonsellers we're offering lower prices on other platforms
and penalize those who did. Now, the use of web callers is common
in tech. Like other e collers, giants to use it, but when
it's used to monitor competitors and potentiallyharm their business. That's when ethical questions
(03:51):
are raised. And this case couldalso set a precedent to the ethical use
of data and surveillance in the techindustry, and in my opinion, it's
a vegle call for tech needs toreconsider their practices. So what could does
all lead to? To understand thepotential outcomes, Let's take a closer look
at a case from the past thatshares some similarities with the Adams of lawsuit,
(04:13):
which is the Microsoft anti trust battlein the nineteen nineties. Now,
little hetle background. In the latenineties, Microsoft found itself at the center
of an anti trust storm. TheUS Department of Justice the d o J
accuse Microsoft of engaging anti competitive practices. One of the key allegations was that
Microsoft was leveraging its dominant position inthe operating system market to really kill competition,
(04:40):
particularly in the web browser space.Now, how does it reach to
Amazon, Well, Justice, Amazonis accused of using its dominance in e
commerce to harm competition. Microsoft wasaccused of using its dominance in operating systems
to disadvantage competitors, particularly Netscape Communications, in the web browser market. The
Microsoft case was in a lengthy legalbattle, and eventually a settlement was reached
(05:04):
in two thousand and one, soover ten years, and among the remedies,
Microsoft had to share certain programming interfaceswith soft developers and allow PC manufacturers
to promote non Microsoft web browsers.This paved the way for more competition and
innovation in the tech industry. Nowlet's draw some parallels here. What does
(05:28):
this mean for Amazon? If historyrepeats itself, this lawsuit could lead to
similar remedies aimed at fostering competition.It could mean more transparency in Amazon's dealings
with third party sellers, but hasshe lower fees and a fair marketplace.
So win for us as consumers,when for small businesses, when for sales,
and Amazon in the whole ecosystem.A loss obviously for Amazon, but
(05:53):
but anyway, looking in the Microsoftcase, the anti trust actions did have
a lasting impact on the tech industry. It demonstrated the government's willingness to step
in and protect competition, setting aprecedent, and in my view, the
Amazon lawsuit has the same potential rightto usher in a new era of scrutiny
and regulation for big tech and reallyas this lawsuit unfolds, if not just
(06:19):
about Amazon, is really a testof the regularly the regulatory environment surrounding big
tech. It's an opportunity to ensurethat innovation and competition thrive while protecting consumers.
And we'll be keeping a close eyeon this case, and so I
guess stay tuned for updates and movingon to our next story, which is
(06:45):
about the Bank of England's recent decisionto keep interest rates at five point two
five. Now, this move ishas had significant implications for the financial landscape
of the UK right, so listeners, this decision reflects the bank's cautious approach
to the current economic landscape. It'sa signal that they're carefully balancing the need
(07:08):
for economic stability within the concerns withthe concerns of rising inflation. So for
you and I, this means asense of stability in the broader economy,
which can translate into more predictable pricesfor goods and services. Let us dive
deeper into the impacts of this change. First, let's talk about the currency
(07:31):
impact. A weaker pound can havea mixed effect on your wallet. If
you're planning on a foreign vacation,it might be more expensive due to the
exchange rate. While on the flipside, if you're an expert, if
you're an export orientated business, aweaker pound can make your products more attractive
(07:53):
to international buyers, potentially boosting yourcompany's revenues. Let's look at borrowing costs.
What does it mean for your personalfinances? Well, with interest rates
held steady, barring costs are likelyto remain stable, which is great news
if you're in the market for amortgage or considering taking out a loan.
However, it may not be sogreat if you're a saver looking for higher
(08:16):
turns on your savings, and thisdecision suggests that the bank is really in
no hurry to raise interest rates,which can impact your financial planning. But
the bank isn't alone in his decision. Let's take a broader look at global
interest rate global interest rate trends.Let's shift gears to the United States,
(08:37):
where the Federal Reserve decision to holdthis benchmark interest rate steady at a twenty
two year high between five point twofive five point five percent, which really
is intriguing because they release what's knownas the dot plot. I'm looking at
it right now, which indicates thatthey expect the federal funds rate to peak
(08:58):
between five point five five point sevenfive percent, essentially implying one more quarter
point rate increase this year, whichrecent ripples through the US financial markets,
which I'll break down for you rightnow. First, the treasury yields,
which are influenced by expectations about thefuture direction of interest rates set by the
(09:20):
Federal Reserve. The two year treasuryyield, oftenesting as the meter or the
barameter of short term interest rate expectations, served to its highest level since two
thousand and six because investors quickly adjustedtheir forecast and when the Fed indicates that
it's considering another interest rate increase,especially this year, it prompts investors to
(09:41):
demand higher yields on short term governmentdebt. So firstly, why does happened
right? Why do treasury yields rise? Well, it makes government debt more
attractive to investors relative to other investments, and so you might see what we
are seeing today is a lot ofinvestors are shifting their money into bonds,
(10:03):
particularly if they anticipate higher yields.On the flip side, if you look
at equity markets, higher interest ratescan put pressure on these equity markets.
Companies that have borrowed at lower ratesmight face increased borrowing costs in impacting their
profitability heavily to market jitters and insome cases even as stock priced the clients.
(10:24):
Another critical aspect is consumer spending.When rates rise, borrowing becomes more
expensive. This can affect consumers whohave loans types to short term rates,
like adjustable rate mortgages or car loans. As results, some households might cut
back on spending, impacting various industries. It's also important to note that markets
(10:45):
often react uncertainty. When defend hintsat our future rate hike, it introduces
an element of uncertainty. Traders andinvestors may adjust their strategies, which can
lead to some short term market volatility. And the message Powell was clear whilst
it didn't raise rates this time,it doesn't mean they've declared victory over inflation,
(11:09):
and they're watching data closely and beingready to take further steps if necessary.
And the balancing Act inflex defense concernedabout inflation whilst not harming economic growth.
So we have here is both centralbanks are navigating the delicate balance between
controlling inflation and supporting economic growth.And these decisions have implications for businesses,
(11:33):
consumers and investors alike. And it'sa reminded that the world of finance is
reconnected and central banks pay the pivotalrole is steering the course. And just
to put my two cents in here, I do feel like it is it's
possible that interest ers have reached theirpeak in the cycle. You know,
consider the impact just illustrated here earlier, but really consider the impact the higher
(11:58):
interest rates on borrowing costs for andindividuals. If raids continue to rise,
it could lead to reduce consumer spending, a slower economic growth. We could
also see more failures of bank failuresthat we saw earlier this year, and
that can really harm the economy.However, again, like J. Powell
did say, whilst didn't raise raisethis time again, the obviously means that
(12:22):
they could raise rates again. SoI guess this leaves some speculation for future
rate hikes, but time will tell. Let's move on to our next story
where we continue our exploration of theglobal oil market, something we covered a
little last week. But as priceshave served past ninety five dollars of barrel
(12:43):
amid concerns about supply, shoulders andgeopolitical tensions. Now, as oil prices
climb above ninety five dollars of barrel, it is evan that the energy landscape
is evolving rapidly. This surge,propelled by supply cuts from both Saudi Arabia
and Russia, is not just amatter of financial markets. It's a phenomenon
(13:03):
with far reaching implications that touch thelives of people around the world. Today,
we dive deeper into the complexities ofrising oil and diesel prices and what
they mean for different stakeholders. Theimplication of soaring oil prices are profound less
start with consumers. Higher oil pricestranslate into higher fuel costs for every transportation
(13:26):
I'm sure earlier this year or evennow, you see an oil prices in
your local gas station going up,which is a huge, huge expense for
a lot of families. And forindividuals and families, this really means more
expensive commutes, groceries, and heatingbills. It really squeezes our household budgets,
(13:48):
which can lead to tough choices.But it's not just about wallets.
Higher oil prices can impact the environment. When fuel costs rise, there's often
the surge in demand for fuel efficientvehicles, which is positive for reducing emissions.
However, it can slow down thetransition to cleaner energy sources as people
still cling cling onto their existing vehiclesnow assuming out Globally, rising oil prices
(14:13):
can effect international trade. For countriesheavily reliant on oil imports, it means
increase trade deficits. It can alsostrain relationships between oil exporting and oil important
nations. Geopolitical tensions can intensify andtrade agreements may come under scrutiny. Let's
(14:35):
also aren't forget developing nations who oftenstruggle with budget constraints and rely heavily on
important oil. When oil prices search, it can exacerbate inflation, widen buddet
deficits, and divert funds from criticalsocial programs. It's really a double edged
sword for these countries. Central banksare also etric spot but you know we
(14:58):
just spoken about both the central banksin the UK and the US. They're
trying to control inflation while promoting economicgrowth, but stories like this with rising
oil prices really complicate their efforts.They might need to adjust interest rates rush
in turn affect borrowing costs for businessand consumers, like like we saw earlier
(15:20):
and so as we witness old pricesurgers, it's not just about the numbers
of the stock market ticker. It'sabout how these numbers rippled through our lives,
impact on every everything from our dailyexpenses to the global geopolitical landscape.
Will continue to explore these complexities inthe episode has come because I'm pretty sure
this is a story that's not gonnalet's how we'll talk about in the future.
(15:43):
But why are Saudi Arabia and Russiareducing all supply and despite these rising
prices, this strategy has not onlyraised concerns, but has sparked some tensions
within developed economies. The International EnergyAgency warrants of substantial deficits, and we
asked what was the reasoning behind thismove? And obviously it's not just about
(16:07):
oil, it's about politics. SaudiArabia and Russia's extension of voluntary supply cuts
is a move to showcase their controlover the oil markets. This decision has
ratifications for both inflation control and globaleconomic stability. But something we can we
can look at some comparable case herein the past. Nineteen seventy three we
(16:30):
had the oil embargo, which wasa lesson and geopolitical leverage through oil,
OPEC wielded power and we're seeing asimilar narrative here. So let me give
you a little background what this oilembargo was, how played out, and
what it could mean and and fortoday's case. Right, So, during
the early nineteen seventies, the OPEC, which is the organization of the petroleum
(16:55):
exporting countries, which included major whichincludes a major oil producing countries like Iran,
Venezuela and Saidi Arabia, who alldecided to use their collective power in
the global oil market to assert controland advanced through economic and political interest.
So just as in nineteen seventy three, Saudi Arabia and Russia supply has cut
(17:19):
supplies and and and and are flexingtheir muscles again in the global oil markets,
which it's not only influencing the economies, but is ruining international relations.
And let's talk about the nineteen seventythree case. The silinarities are the silinarities
(17:40):
are are remarkable. The nineteen seventythree crisis pushed countries to diversify their energy
sources and reduce reliance on foreign oil. So we look today, look at
today's situation, and we might wemight we might hope or might see some
acceleration to the transition to renewable energysources and energy conservation efforts. And really,
(18:02):
as we were effect on history,what lessons can we draw from the
nineteen seventy three oil embargo and today'sevents and how can we navigate this energy
landscape are the big questions here,and one key lesson is the need for
energy diversification and resilience. We mustinvest in alternative energy sources and reduce our
(18:25):
vulnerability to oil fluctuations or oil pricefluctuations. Additionally, international cooperation and dilimacy
are vital in addressing enery changes.We will cover the story again as we
get more updates, but let's quicklywrap up the episode with an update of
the instacard IPO, which actually closedits first day of trading green on the
(18:48):
stock market. Instacards share, whichwas offered at thirty dollars a share,
closed at thirty three point seven onthe Nasty Exchange, wapping twelve point three
percent In the question here is youknow what field the demand? Obviously this
is coming off of the arms IPO, which which had a grant entrance in
the stock market and really give lifeto an IPO market that has been facing
(19:14):
a lot of pressure in these thelast few years. And again, of
course the twelve point three percent increaseis a success, it's essential to put
it in perspective. The company's publicmarket valuation is quite different from its peak
private valuation, and indeed, thirtydollars per share is very far from its
thirty nine billion dollars valuation in twentytwenty one, when they had investors like
(19:37):
Fidelity pouring in about three hundred milliondollars in investment, which really is a
testament to how markets can shift overtime. But something we didn't cover last
week was their IPO approach, whichis pretty intriguing. They only floated eight
percent of the stock and of coursewhy did they do this. Well,
(19:59):
the CEO not to dilute the companytoo much. They opted for a smaller
IPO to maintain control at preserve thecompany's value. Something else wanted to bring
up because it's it's you know,it's pretty it's a pretty unique approach in
today's IPO landscape. So with that, that's a wrap of this Invested Diary
podcast. We talked a lot aboutthe Amazon law student and really excited to
(20:21):
see how that unfolds, Central banksaround the world, choosing to pause rad
hikes, Global old splash Oranges,and an update on the arms. I
sorry the instacrat IPO, so thankyou very much for tuning in with us,
and on another episode of the InvestedDiary podcast. Thank you very much
and peace.
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