BUSINESS NEWS FEBRUARY 29TH, 2016
ANOTHER TWIST IN THE OIL SAGA, CHINA GUEST STARS
With China’s economy slowing, the Chinese government decided to cut its reserve ratio, or the amount of money a bank is required to hold in reserves, for the fifth time in a year. Cautious investors looked at this move in hopes that the market had finally bottomed out. Wall Street also climbed up slightly amid higher oil prices. Jack Ablin, chief investment officer at BMO private bank in Chicago thinks that investors are caught trying to decide between which of the two changes to trust. It is short term growth weighed against long term credibility. The materials sector of the S&P led growth, with healthcare dragging at a loss of 0.59%.
U.S. SHALE WANTS $40 A BARREL
Historically, in order to put out more production U.S. shale needed at least $60 a barrel. However, with oil facing its worst crash, $40 has become the new target. This announcement highlights the fact that a drop in U.S. oil production would alleviate the problem of global oversupply and allow prices to climb back up. Harold Hamm, leader of Continental Resources said he would consider increase capital spending if oil prices climbed into the low to mid 40’s. Veterans of boom and bust oil cycles have said that this one is unlike anything they have ever seen. They have advised caution because crude oil is in an unpredictable stage.
ISIS THREATS CONCERN MARK ZUCKERBERG
A few days before Facebook founder Mark Zuckerberg met with CEO of German media giant Axel Springer Mathias Dopfner, ISIS released a video threatening to fight back against efforts of tech giants to stop online terrorism. Daesh, another name for the Islamic State, has said that for every account Facebook deletes, they will make another ten. Facebook’s problems stem from its size. 1.6 billion people are on its network every month, resulting in difficulties with controlling all the regional problems that pop up. On Twitter, Islamic State militants set up several accounts that follow each other, creating “swarm accounts”.