Good Evening! The JOLTS job vacancies survey, which revealed a slowdown in the labor market, and factory orders data weighed heavily on the U.S. stock market and oil prices on Tuesday.
The S&P 500 and Dow Jones both decreased by around 0.58%. The Nasdaq Composite declined by 0.52%.
CHAPTER 11
Virgin Orbit (VORB) announced that it has initiated Chapter 11 proceedings in the US Bankruptcy Court for the District of Delaware in order to sell the firm after failing to attract sufficient investment to ensure its continuation.
How did we get here? The firm unexpectedly laid off 85% of its crew, equivalent to almost 700 workers, last week after warning it has not “generated sufficient revenues to provide sufficient cash flows to enable us to finance our operations, and may not be able to raise sufficient capital to do so.” In addition, Virgin Orbit said that it lacked the capacity to provide an annual report for 2022. The company did however project a loss of $157 million for the year and had a deficit of more than $1 billion.
Moving forward… The decision to file for bankruptcy is a big setback for the UK government’s space goals, for which the company’s programs were seen as essential.
IS IT THAT TIME AGAIN...?
Expect to spend more at the pump if current oil prices persist. As a result of OPEC+’s unexpected production reduction announcement, crude futures are trading at $5 per barrel higher. Right now, AAA reports that the average price of gasoline in the United States is $3.51 a gallon.
Why is this taking place? OPEC’s unexpected production cut of 1.157 million barrels per day and Russia’s decrease of 500,000 bpd until the end of the year have caused Wall Street analysts to raise their end-of-year forecast for oil. Although higher prices are anticipated, it is doubtful that they will approach the record $5.01 per gallon set in June of last year.
Let’s examine some forecasts (of course, always take projections with a grain of salt). The experts at Goldman Sachs Commodities Research boosted their projections for Brent by $5 to $95 per barrel for December 2023 and $100 per barrel for December 2024, up from an earlier expectation of $97.