Bundle of investment news: New York restaurants and Texas frost

Пачка инвестновостей: рестораны нью-йорка и морозы техаса

Low-skilled labor in the United States will soon rise in price. Texas may embrace its massive infrastructure investment plan. American homebuilders at a crossroads: I can't sell more houses, but it is necessary to develop business.

Disclaimer: when we talk about, that something has grown, we mean comparison with the same quarter a year earlier. Since all US issuers, then all results are in dollars. When creating the material, sources were used, inaccessible to users from the Russian Federation. Hopefully, you know, what to do.

The Little Victory of the Working Man is a Step Backward for All Exploiters

New York City has passed several laws, aimed at improving the situation of employees, working in the field of delivery. What awaits delivery men:

  1. Food delivery couriers will now be allowed to use restaurant toilets, when will they pick up orders.
  2. Food delivery services will be obliged to show couriers how much money they will receive for delivering an order, and also the approximate time, which will take delivery and length of the way.
  3. Delivery services will be required to inform customers, how much of the tip they left will the courier receive directly, - and the couriers of the company will be required to tell about, how many tips did the client leave, and also when and how resized them.

New York is a city, important for all delivery services due to its size - it has 8.4 million people, - and because of the example he sets: other major cities in the United States and the world will take note of the events in the "Big Apple" and, possibly, imitate the developments of this city. Because, to paraphrase Tolstoy, all major cities are the same in their misfortunes.

New York Laws Are Bad News for Many. First of all - for the delivery services themselves, and for a number of reasons: couriers will become more selective in terms of the choice of orders, which in the future will force services to pay extra for them, and all this will complicate the cooperation of services with restaurants.

Need to say, relations between them were already bad before the pandemic: services took a big commission, - and the pandemic has exacerbated these contradictions to the maximum: service fees have grown, while the margin in public catering has dropped dramatically. Can, sure, laugh at that, that "an army of couriers will lead to a toilet collapse in restaurants", but the inconvenience for restaurants will be significant: in New York, there is an army of food delivery couriers - 80 thousand people. So the load on the infrastructure of restaurants will be significant and will make catering even more angry.. maybe, this will encourage many restaurants with a sufficient volume of orders to create their own food delivery applications, which will compete with major services like Uber.

For the restaurants themselves and, in principle, for all employers, relying on cheap labor of low-skilled workers, this New York initiative will mean a direct and indirect increase in labor costs - after all, working conditions in delivery will improve, what can attract waiters there. All this is happening against the background of, how major US retail and logistics companies are implementing a bulk recruitment program ahead of New Year's Eve: Amazon, Walmart, UPS and FedEx are going to hire 335 thousand new employees in these few months.

clear, that these companies will have more resources, than restaurants and food delivery services, - and this will already contribute to the growth of wages in the labor market. But this discussed improvement in courier working conditions will force the large companies listed above, possibly, improve your proposal too - with understandable poor results for your reporting. Actually, FedEx's operating costs have skyrocketed this season - scary to think, what awaits her and other large companies in the next quarter.

Severe Texas frosts

maybe, do you remember, how this year the state of Texas was covered with frost. In the homeland of Matthew McConaughey, then oil refineries and oil production enterprises stopped, and also out of order gas and electricity supply systems. Not even a year has passed, how industry experts shared their views on what happened: NPO "North American Power Supply Reliability Corporation" (NERC) presented a critical analysis of the Texas frost situation.

The report is interesting for recommendations for strengthening the state's energy infrastructure. Although there are no figures yet on the cost of such a project, already "by eye" can be said, that only on the Texas scale we are talking about many billions of dollars of investment and even, most likely, many tens of billions of dollars. In similar circumstances PG&E in California plans to spend $ 40 billion to strengthen its energy infrastructure, to protect her from natural disasters.

Sure, NERC recommendations may well be ignored by companies. But, Considering, that the recommendations mentioned came in the context of a discussion of large-scale infrastructure investments by the US government, here it is quite possible at least partial implementation of the program to strengthen the energy infrastructure of Texas. And this will give a strong impetus to the development of engineering and infrastructure issuers in the United States..

Houses of horror

The past week was mixed for homebuilding companies. One side, sales of new houses and their prices are growing. But there is one caveat. The problem is, that the construction companies themselves are unhappy with the current circumstances, which neutralize the positive effect of the above news.

D. R. Horton, eg, gave a forecast for this quarter worse than expected: sales will amount to 6.9 billion dollars against the expected 7.1 billion. AND, which is much more important, the company has cut its sales forecast for the next quarter: from 8.15 billion and 23.75 thousand homes to 7.8 billion and 21.5 thousand homes. At the end of 2021, the company expects revenue in the region of 27.5 billion - below the previously expected 27.85 billion. The reason for this is the lack of materials and components., from wood and copper to windows and doors. A similar situation is with their competitors from KB Home (NYSE: KBH) и Lennar (NYSE: LEN).

At the same time, all these companies have noticeably increased the gross margin of their business - precisely due to the opportunity to raise prices. Therefore, one can expect, that these companies will now begin to invest in the modernization of their business and its digitalization, in order to squeeze the most out of the available resources. This will be a big plus for companies., making software in the construction industry, like Procore (NYSE: PCOR).

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