{"id":343,"date":"2021-05-19T23:21:35","date_gmt":"2021-05-20T03:21:35","guid":{"rendered":"https:\/\/blogs.dalton.org\/thebottomline\/?p=343"},"modified":"2021-05-19T23:23:10","modified_gmt":"2021-05-20T03:23:10","slug":"breaking-financial-news-2","status":"publish","type":"post","link":"https:\/\/blogs.dalton.org\/thebottomline\/2021\/05\/19\/breaking-financial-news-2\/","title":{"rendered":"Breaking Financial News"},"content":{"rendered":"\n

G.D.P Grew 1.6% in the First Quarter of Fiscal 2021<\/strong><\/p>\n\n\n\n

As the Covid-19 vaccine distribution is well underway and has led to an easing of restrictions in many parts of the country, consumer spending has grown significantly. This increase in economic activity, also supported by the government stimulus packages that were issued this past quarter, has helped to relieve the nation of some of the more long-term effects of the pandemic. In the first three months of 2021, the U.S. economy expanded 1.6 percent, as reported by The Commerce Department this past Thursday, April 29th. To serve as a comparison, the G.D.P only grew 1.1% in the final quarter of fiscal year 2020.1<\/sup> It is evident that the economy is accelerating its recovery, rebounding to almost pre-pandemic levels as the pandemic seems to be easing its effects.  <\/p>\n\n\n\n

J.P.Morgan\u2019s $2.5 Trillion Commitment to the Fight Against Climate Change <\/strong><\/p>\n\n\n\n

As ESG (Environmental, Social, and Governance) criteria are increasingly being applied as a basis for which they evaluate a company\u2019s value proposition, companies, and their management, are being forced to change their priorities. Corporations are experiencing growing pressure from their shareholders to take efforts to actively counteract climate change. And, as a result, the chief financial officers (CFOs) of these companies are taking up a new role: chief climate officer.2<\/sup> It is no longer enough to solely look at the numbers, but rather the measures being taken to tackle environmental and social issues. J.P.Morgan, an American-based investment bank and financial services holding company, has just announced that over the next decade, it will donate $2.5 trillion toward finding long-term solutions that combat climate action.3<\/sup> $1 trillion is allocated towards green projects, initiatives that work to create sustainable development. The remaining money is planned to be used to fund negotiations with the goal of promoting socio-economic progress in developing countries as well as the insertion of their economies into developed markets.4<\/sup> The CEO of J.P.Morgan, Jamie Dimon, addressed this decision, saying that, \u201cClimate change and inequality are two of the critical issues of our time, and these new efforts will help create sustainable economic development that leads to a greener planet and critical investments in underserved communities. Business, government, and policy leaders must work together to support long-term solutions that advance economic inclusion, bolster sustainable development and further the transition to a low-carbon economy. We are committed to doing our part.\u201d5<\/sup> Finance and those in it are in a unique position to make a difference, but they need to take the action to do so. As Dimon said, the realities of climate change are no longer something that can be brushed off. By first recognizing the urgency of the situation, corporations like J.P.Morgan can begin to assume their responsibility and take the necessary steps towards supporting the fight against climate change.<\/p>\n\n\n\n

House Bill Might Make $3000 Child Tax Credit Permanent<\/strong><\/p>\n\n\n\n

A bill proposed by the House of Representatives plans to make changes to the child tax credit permanent as Rep. Richard Neal, D-Mass. issued a bill that would solidify changes made by the American Rescue Plan. The American Rescue Plan makes parents with older children eligible for this tax credit as it raised the age of qualifying kids from 16 to 17. This law made it so that families with children under the age of 6 will receive $3,600 per child, while those with kids between the ages of 6 and 17 will receive $3,000 for each child annually. Additionally, this law made the credit fully refundable as before Americans could only get up to $1,400 of the credit as a tax refund. Taxpayers only received a refund if they had at least $2,500 of earned income but now there is no cap on the refund amount, something that is particularly helpful for low earners.6<\/sup> In fact, researchers have found that this specific change could reduce child poverty by nearly half \u2013 a statistic Biden repeatedly cited when advocating for the relief bill. Without any congressional action, these changes would only apply to the 2021 tax year; however, Representative Neal is developing an Economy for Families act in order to make these changes a permanent fixture of the tax code.7<\/sup> Neal’s proposal also includes universal paid family and medical leave and guaranteed access to child care, stating that, \u201cFor our economy to fully recover from this pandemic, we must finally acknowledge that workers have families, and caregiving responsibilities are real.\u201d Some Democrats argue they want to see a provision become permanent, but Biden’s second recovery proposal, also known as the \u201cAmerican Families Plan,\u201d is expected to focus specifically on extending the child tax credit until 2025. However, according to the Committee for a Responsible Federal Budget, the one-year enhancement of the child tax credit is projected to cost $110 billion. By making this tax credit permanent, the United States would have to sustain a cost upwards of $1 trillion over the next decade. Democratic Rep. Suzan DelBene of Washington, a member of the Ways and Means Committee, emphasized the issue during a meeting at the White House with Biden’s chief of staff Ron Klain, saying that \u201cThe expansion in the American Rescue Plan was so important, but [it is] not going to lift children out of poverty in just a year, which is why it’s important that we have a policy that helps families out for the long run.\u201d<\/p>\n\n\n\n

Discord Turns Down 10 Billion Dollar Microsoft Acquisition<\/strong> <\/strong><\/strong> <\/strong><\/strong><\/strong><\/p>\n\n\n\n

When there was talk about Discord having communications with Microsoft regarding a $10 billion sale, there was wide-spread concern that the situation would pan out similarly to the Redmond Skype Acquisition of 2011.8<\/sup> This communication platform started to gain popularity, especially among gamers during the pandemic, as it operates as a free online platform for chatting by text voice or video call, therefore offering people a way to safely connect with their friends and family. However, it looks like Discord may not have to face that fate as this gaming-focused chat setup has halted talks with Microsoft along with other intrigued companies. The Wall Street Journal writes that \u201caccording to people familiar with the matter,\u201d9<\/sup> Discord has ended conversation with Microsoft but is still interested in a potential public option. Nonetheless, it is important to note that a sale between the two companies is still not completely off the table as the WSJ reports that the parties could rejoin once again and \u201crekindle a deal later.\u201d Additionally, Bloomberg reported that Discord has spoken with other potential buyers, including Amazon and Epic Games, but has come to no formal agreement regarding a potential acquisition.10<\/sup> Regardless, Bloomberg claimed that Discord was the one to initially reach out to Microsoft, not vice-versa. It will be interesting to see if, and to whom, Discord is able to reach a settlement for sale.<\/p>\n\n\n\n

Amazon Surpasses Expectations As It Rides Wave of Pandemic Shopping <\/strong><\/p>\n\n\n\n

After releasing their first-quarter earnings, Amazon beat Wall Street\u2019s expectations for earnings and revenue, resulting in a 3% increase in the company\u2019s share. Generally, this is because Amazon is among the very few companies that have benefited from the pandemic-fueled surge of online shopping. In fact according to Reuters, while brick-and-mortar stores closed, Amazon has attracted more than 200 million Prime loyalty subscribers and recruited over 500,000 employees to keep up with surging demand.11<\/sup> In addition to Amazon\u2019s revenue however was its growing chain of physical stores, including Whole Foods Market and its first overseas cashier-less convenience shop, opening last month in London. Amazon also delved further into healthcare with an online doctors-visit service for employers.The first-quarter results share that the company\u2019s business continues to be lifted up by the pandemic as sales soared 44% year over year to 108.5 billion. As time goes on Amazon expects the momentum to continue as it expects to post revenue between $110 billion and $116 billion surpassing Wall Street\u2019s projection of $108.6 billion.12<\/sup> Bezos announced the results of the company’s cloud computing unit Amazon Web Services (AWS) in a press release, saying, “In just 15 years, AWS has become a $54 billion annual sales run rate business competing against the world\u2019s largest technology companies, and its growth is accelerating.”<\/p>\n\n\n\n

By: Natalie Martin and Jodany Fanord<\/sup><\/p>\n\n\n\n

1 Nelson D. Schwartz, “G.D.P. Growth Accelerated in the First Quarter.,” The NY Times<\/em>, April 29, 2021, accessed April 29, 2021, https:\/\/www.nytimes.com\/2021\/04\/29\/business\/economy\/united-states-gdp.html. <\/sup><\/p>\n\n\n\n

2 Akiko Fujita, “CFOs Are Taking on New Roles \u2013 Chief Climate Officers,” Yahoo Finance, last modified April 24, 2021, accessed April 25, 2021, https:\/\/finance.yahoo.com\/news\/climate-fight-thrusts-cf-os-into-expanding-role-113543685.html.<\/sup><\/p>\n\n\n\n

3 J.P. Morgan, ed., “About Us,” J.P. Morgan, accessed April 22, 2021, https:\/\/www.jpmorgan.com\/about.<\/sup><\/p>\n\n\n\n

4 Pippa Stevens, “JPMorgan Pledges $2.5 Trillion over the Next Decade toward Climate Change,” CNBC<\/em>, April 15, 2021, accessed April 22, 2021, https:\/\/www.cnbc.com\/2021\/04\/15\/jpmorgan-pledges-2point5-trillion-over-10-years-toward-climate-change.html.<\/sup><\/p>\n\n\n\n

5 Stevens, “JPMorgan Pledges.”<\/sup><\/p>\n\n\n\n

6 Lacurci, Greg. \u201cHouse Bill Would Make the $3,000 Child Tax Credit Permanent,\u201d April 27, 2021. https:\/\/www.cnbc.com\/2021\/04\/27\/house-bill-would-make-the-3000-child-tax-credit-permanent.html.<\/sup><\/p>\n\n\n\n

7 Diaz, D., Luhby, T., & Fox, L. (2021, April 26). House Democrats want to see Permanent child tax credit in Biden’s second recovery. Retrieved April 28, 2021, from https:\/\/www.cnn.com\/2021\/04\/26\/politics\/house-democrats-child-tax-credit-biden-recovery-plan\/index.html<\/sup><\/p>\n\n\n\n

8 Vonau, Manuel. \u201cDiscord Ends $10 Billion plus Sale Talks with Microsoft.\u201d Android Police, April 21, 2021. https:\/\/www.androidpolice.com\/2021\/04\/21\/microsoft-is-interested-in-discord-wanting-to-ruin-yet-another-communication-service\/.<\/sup><\/p>\n\n\n\n

9 Needleman, Sarah E., and Cara Lombardo. \u201cWSJ News Exclusive | Discord Ends Deal Talks With Microsoft.\u201d The Wall Street Journal. Dow Jones &amp; Company, April 20, 2021. https:\/\/www.wsj.com\/articles\/discord-ends-deal-talks-with-microsoft-11618938806.<\/sup><\/p>\n\n\n\n

10 Bass, Dina. Bloomberg.com. Bloomberg, 2021. https:\/\/www.bloomberg.com\/news\/articles\/2021-03-23\/microsoft-said-to-be-in-talks-to-buy-discord-for-more-than-10b.<\/sup><\/p>\n\n\n\n

11 Dastin, Jeffery, and Akanksha Rana. \u201cAmazon’s Sales and Profit Rise as Retailer Rides Wave of Pandemic Shopping.\u201d Reuters. Thomson Reuters, April 29, 2021. https:\/\/www.reuters.com\/technology\/amazon-first-quarter-sales-beat-expectations-2021-04-29\/<\/sup><\/p>\n\n\n\n

12 Palmer, Annie. \u201cAmazon Sales Surge 44% as It Smashes Earnings Expectations.\u201d CNBC. CNBC, April 29, 2021. https:\/\/www.cnbc.com\/2021\/04\/29\/amazon-amzn-earnings-q1-2021.html.<\/sup><\/p>\n","protected":false},"excerpt":{"rendered":"

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