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🎙“You don't have to become something you're not to be better than you were.” - See who said it and why it matters at the bottom.
Oil prices rose after news of a production cut agreement between the world's largest producers, but experts warn the move will not be enough to sustainably hold up prices or change the industry's bleak trajectory.
Driving the news: Crude futures jumped about 5% to near $25 a barrel for WTI crude after the OPEC+ alliance agreed to a 10 million barrels-per-day production cut beginning in May that ended a price war between Saudi Arabia and Russia.
Why it matters: With oil prices expected to continue their fall, a tidal wave of bankruptcies, defaults and closures of U.S. oil and gas companies is likely in the coming weeks and months that will weigh on bond and equity markets as well as the broader economy.
What's happening: Almost 40% of oil and natural gas producers face insolvency within the year if WTI crude prices remain near $30 a barrel, according to a new survey from the Kansas City Fed.
Word on the street: "I don't know of any companies that can operate profitably at [$40 per barrel]," said one respondent to the Kansas City Fed's survey.
Yes, but: "Oil majors proved resilient to extreme price volatility during the last oil price crash and they have already announced similar measures to protect their cash flows during the current crisis," Moody's Investors Service said in a recent note.
Be smart: Energy companies are the biggest issuers of junk bonds, accounting for more than 11% of the U.S. high yield market.
What to watch: Goldman Sachs analysts said they expect WTI crude prices will fall to $20 a barrel as downside risks overwhelm the near-term boost to sentiment.
Boeing has hired Lazard and Evercore to help it analyze government aid and potential funding from the private market, as the company may need to raise as much as $20 billion more this year. (WSJ)
Bookings for 2021 cruises have risen 40% compared to 2019 on CruiseCompete.com in the last 45 days. (LA Times)
As Silicon Valley startups lay off workers, tech giants like Apple, Google and Amazon are aggressively pursuing software engineers, data scientists and product designers, with Facebook expected to hire more than 10,000 people this year for critical roles product and engineering teams. (WSJ)
A lack of new funding for the coronavirus outbreak has put the U.S. Postal Service on the brink of failure and made it more vital than ever. (Bloomberg Businessweek)
U.S. consumer sentiment suffered a record decline in April, according to the latest poll from the University of Michigan, but respondents are still irrationally confident about the future, the survey's director says.
What happened: The survey's gauge of preliminary consumer sentiment sank 18 points to 71, its lowest since 2011.
What they're saying: "[A]nticipating a quick and sustained economic expansion is likely to be a failed expectation, resulting in a renewed and deeper slump in confidence," Richard Curtin, Michigan's surveys of consumers chief economist, said in a statement.
Illustration: Eniola Odetunde/Axios
America's economic crisis soon may expand to its states, cities, and towns, Axios' Stef Kight and Dan Primack report.
The big picture: State and local tax revenue are both falling, particularly in areas heavily reliant on sales taxes, while spending is up due to added unemployment and medical obligations.
Just look at Arizona, which is near the middle of the pack when it comes to sales tax as a percentage of total state revenue. It had been projecting a $1 billion surplus by the end of its fiscal year in June, but that's since flipped to a $1.1 billion deficit.
The most critical cases may be Florida and Louisiana, which both are in the top 10 for sales tax dependency and have rainy day funds that represent less than 5% of annual expenditures.
There also will be shortfalls in cities, counties, and towns — many of which haven't yet debated or approved fiscal 2021 budgets because of bylaws that didn't anticipate governance-via-Zoom. Bankruptcies are a very real possibility.
More Americans are ordering delivery as restaurants close due to the COVID-19 outbreak and shelter-in-place orders made more people reluctant to leave the house.
What's happening: The number of people ordering food from restaurants has steadily increased but is largely staying consistent among age and income groups, new data from CivicScience shows.
Why it matters: The pandemic is expected to change long-term behaviors for consumers and delivery had already become a significant revenue generator for many restaurants around the U.S.
Watch this space: Parents are one of the fastest-growing segments of people increasing their delivery orders.
Quote: “You don't have to become something you're not to be better than you were.”
Why it matters: Sidney Poitier won an Academy Award for his performance in "Lilies in the Field" (1963) on April 13, 1964, becoming the first black actor to win the Oscar for Best Actor.
Fun fact: Poitier was knighted by Queen Elizabeth II in 1974. However, because he was not a Bahamian citizen at the time, the award was honorary, meaning he is not known as "Sir Sidney Poitier."
Editor's note: The top story has been updated to reflect that a percentage of oil and gas firms are expected to fall into insolvency (not solvency).