Above the Fold

China Saves Rising Oil … Sort of

Crude oil’s 40% surge since the end of February came to an abrupt halt last week despite Russia’s continued march into Ukraine. Russian President Vladimir Putin continues his unnerving and deadly assault on his neighbor, with forces now at the Kyiv city limits, but recent events in China are also drawing attention. New COVID-19-related lockdowns in Shenzhen and Changchun have pushed oil prices back down below the $100 mark. The latest developments in the communist nation have added yet another layer of uncertainty for traders and speculators across a myriad of commodities. Now, fears of a deeper economic slowdown in China have also sent gasoline and diesel futures lower, a much-needed relief for consumers in the U.S. and abroad who are facing rising costs at nearly every turn. Unfortunately, the negative effects of a protracted China lockdown could outweigh the benefits.

And while much of the surge in energy prices has been related to crimped supply, these new COVID-19-related restrictions in China could change the demand equation. This changes market dynamics, adding uncertainty and potentially, volatility. It’s also important to mention that the lockdowns won’t drive all prices lower. Factories in locked-down areas may struggle to produce and deliver goods, adding to supply constraints and driving the cost of goods even higher. 

Three Things 

1. NFTs Coming to Instagram – As Instagram works to reinvent itself and remain relevant with the finicky younger crowd, Mark Zuckerberg sees NFTs (non-fungible tokens) as a possible redemption. During a session at South by Southwest, the Meta CEO teased the arrival of NFTs to the Meta-owned platform within “a couple of months.” Details on how NFTs will be integrated or potentially mined on Instagram are still unknown as the company works out the “details.”
2. Consumers Throttle Back Spending in the Face of Inflation – Americans seem to be adjusting their spending habits to account for rising costs in stores, online and at the pump. Retail sales rose just 0.3% in February, compared to a revised monthly increase of 4.9% in January. The less-than-expected increase came despite continued strong labor market improvements, a jump in business activity and a 36% jump in average liquid consumer assets. A surge in gasoline prices and fears of rising inflation are being blamed for restricting overall spending.
3. Saying Goodbye to Disposable Cups at Starbucks – The Seattle coffee behemoth is experimenting with a reusable cup program in an effort to phase out a large portion of its plastic and single-use cups over the next three years. While nothing is set-in-stone just yet, some solutions include the use of consumers’ own (potentially unbranded) cups and mugs, or a program Starbucks is calling “Borrow A Cup.” Under the new program, customers would get a reusable mug to drink from, then return it when finished. Washing and disinfecting the cups presents another challenge that could be both an environmental and/or logistical showstopper. Single-use cups make up 40% of the company’s packaging waste. 

Did You Know? 

The Birth of the NFT

The genesis of the NFT (non-fungible token) can be traced back to something called a “colored coin,” which was actually issued on the Bitcoin blockchain between 2012 and 2013. The colored coins are tokens that essentially represent real-life assets, but on the blockchain. Think of the colored coin as a marker of sorts that can be used to link and prove ownership of any asset. The road to present-day NFTs gets a little more twisted from there, but the first one was called “Quantum,” and was minted by Kevin McCoy on May 3, 2014.