Bitcoin Drops Below $50,000 After Elon Musk Says Tesla Will No Longer Accept The Crypto As Payment

Plus, the Colonial Pipeline restarted late Wednesday, Amazon is hiring 75,000 warehouse and transportation workers, and Walmart is buying virtual fitting room startup Zeekit.

Stocks were higher at the open on Thursday with the Dow adding 37 points, or 0.1%. The S&P 500 rose 0.3%, while the Nasdaq gained 0.9%.

Hundreds of billions of dollars have been wiped off the cryptocurrency market after Tesla CEO Elon Musk said the electric vehicle maker had “suspended vehicle purchases using Bitcoin” out of concern over “rapidly increasing use of fossil fuels for Bitcoin mining and transactions.” The about-face by one of the crypto market’s loudest proponents took investors by surprise, sending prices tumbling across the board. Bitcoin dropped below $50,000 for the first time since March, Ethereum is down more than 10% at the time of writing, and Dogecoin has fallen nearly 13% to $0.41. Musk added in a tweet, “Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment. Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy. We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction.”

Prices paid to U.S. producers rose by more than forecast in April, adding to signs of a growing wave of inflationary pressure that’s extending to American consumers. The Labor Department reported the Producer Price Index for final demand rose 0.6% from the prior month after a 1% gain in March. Excluding volatile food and energy components, the core PPI advanced 0.7%. “There is more inflation coming,” said Luca Zaramella, chief financial officer at Mondelez International. “The higher inflation will require some additional pricing and some additional productivities to offset the impact.” In other economic news, initial jobless claims fell to a fresh pandemic low last week. The Labor Department said claims fell to 473,000 in the week ended May 8, while economists expected a reading of 490,000 claims.

The Colonial Pipeline was restarted late yesterday after a ransomware attack last week forced the entire system offline last Friday. “Following this restart it will take several days for the product delivery supply chain to return to normal,” Colonial said in a statement. “Some markets served by Colonial Pipeline may experience, or continue to experience, intermittent service interruptions during the start-up period. Colonial will move as much gasoline, diesel, and jet fuel as is safely possible and will continue to do so until markets return to normal.” Colonial Pipeline reportedly paid nearly $5 million in cryptocurrency to Eastern European hackers on Friday, contradicting earlier reports that the company had had no intention of paying an extortion fee to help restore the country’s largest fuel pipeline.

Amazon announced that it is hiring 75,000 workers across its warehouse and delivery network in the U.S. and Canada in a sign that the company expects increased demand to outlast the pandemic. The e-commerce giant said it will offer an average starting pay of $17 per hour, along with a signing bonus of as much as $1,000 for some locations, and also said it will offer a $100 bonus to new warehouse and transportation hires who show proof of their COVID-19 vaccination. In other Amazon news, the company is deepening its ties with Ford in a deal that will integrate its Alexa into the entertainment system of Ford’s F-150 trucks and other models. Amazon’s digital assistant will roll out to around 700,000 Ford vehicles this year, including new and recent models of the pickup, as well as the Bronco and the electric Mustang Mach-E. “It’s very expansive,” Dave Limp, an Amazon senior vice president who leads the company’s devices and services group, said of the deal. “Ford has been working for the past couple of years to enable their cars to have this hands-free experience. We were able to take advantage of it.”

And Walmart said it is acquiring Israeli virtual fitting room start-up Zeekit, as it pushes further into fashion and caters to customers shopping for clothes online. Zeekit’s three founders—Yael Vizel, Alon Kristal, and Nir Appleboim—will join Walmart as part of the deal. Zeekit’s image-processing technology, which has been used by brands such as Levi Strauss & Co and Tommy Hilfiger, allows shoppers to see a digital rendering of themselves wearing an item of clothing. The technology could give Walmart an edge for its apparel business, which has become a focus of growth for the chain as it offers wider margins than its core grocery products. Virtual try-on is a game-changer and solves what has historically been one of the most difficult things to replicate online — understanding fit and how an item will actually look on you,” Denise Incandela, Walmart U.S.’s executive vice president of apparel and private brands, said in a blog post on the company’s site. “Zeekit will help us deliver an inclusive, immersive and personalized experience for our diverse customer base.”

Stocks We’re Watching

Barnwell Industries (OTC: BRN): Barnwell Industries shares rose as much as 42% yesterday after the company reported results for its latest quarter. “Our improved results for this quarter were due to a $2,243,000 improvement in oil and natural gas segment operating results due primarily to a prior year period impairment of $1,637,000, whereas there was no impairment in the current period, and the Company benefited from higher oil and natural gas prices which increased 46% and 65%, respectively,” Barnwell CEO Alexander Kinzler said in an earnings release. “Also, equity in earnings of affiliates increased $649,000 as compared to the quarter ended March 31, 2020 as a result of improved operating results of the Kukio Resort Development Partnerships, in part due to land sales which occurred during the six months ended March 31, 2021.”

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