| | Top News  Shutterstock The latest cyberattack on an American supply chain was felt yesterday as JBS (OTCQX:JBSAY) - the biggest meat producer in the U.S. (and the world) - reported a ransomware breach that shut down all its beef facilities. The company's meatpacking plants also experienced some level of disruption due to the hack which was attributed to a notorious criminal gang based out of Russia. JBS sells beef and pork under the Swift brand, and is also the owner of Pilgrim's Pride (PPC), the second-largest U.S. chicken producer.
Just in time for grilling season... Meat market analysts say plant closures from the JBS hack could soon lead to higher consumer prices, which have increased for many cuts this year because of high demand, labor shortages and high transportation costs. In fact, cattle-futures trading in Chicago fell on Tuesday, with the most-active contract closing down 1.9% to nearly $1.17 a pound. It also prevented the U.S. Department of Agriculture from releasing daily wholesale prices for beef and pork that are heavily relied on by agriculture markets.
Paid the ransom? JBS has made "significant progress" to resolve the cyberattack and will have the "vast majority of [its] beef, pork, poultry and prepared foods plants" operational on Wednesday. "Our systems are coming back online and we are not sparing any resources to fight this threat," the company added in a statement. According to Steiner Consulting Group, which researches the meat industry, "even one day of disruption will significantly impact the beef market and wholesale beef prices."
Go deeper: The JBS attack comes just three weeks after Colonial Pipeline Co., operator of the nation's biggest gasoline pipeline, was targeted in a ransomware attack, which crippled fuel delivery and sent prices soaring in the U.S. Southeast. It's an even bigger problem when hackers target industries dominated by one of a handful of companies (JBS, Cargill and Tyson control about two-thirds of America's beef). While the White House has advised companies in the past not to pay criminals over ransomware attacks, that stance may be changing given vulnerabilities in the supply chain and the lack of investment in robust cybersecurity. The federal government's own agencies were hacked not too long ago, in the SolarWinds (SWI) attack that penetrated thousands of organizations.    | |
| Stocks U.S. stock futures were muted again overnight following a flat session for Wall Street on Tuesday. The "sit tight" mentality is being reflected in the broader market as traders continue to ponder inflation risks, rebounding consumer demand, supply bottlenecks and red-hot manufacturing. Some other catalysts might be seen in the coming sessions, when the Labor Department releases its jobs report on Friday, before a high-profile FOMC meeting set for in mid-June.
"Yes, inflation will overshoot in the short term but the Fed is cognizant of that risk and they are looking at a dual target of full employment and inflation," said Carlos Casanova, senior Asia economist at Union Bancaire Privee in Hong Kong. "So that has made investors less concerned potentially about the pace of Fed tapering this year, focusing more on the pace of reopening this year and leaving that concern about tapering for next year or beyond."
It's not quiet everywhere... The meme trade is back in full force as the retail bros return to pumping stocks via WSB/Reddit. AMC Entertainment (NYSE:AMC) is taking big swings this time around, with the stock up another 33% premarket to nearly $43, following a 23% advance on Tuesday. The stock is even up 200% in the last week, giving some big returns to those who got in early on the swarm. Many are moving in and out of the stock at a quicker pace, like Mudrick Capital, which offloaded 8.5M shares on Tuesday just hours after it acquired them.
On the economic calendar: Investors will be eyeing the Fed's Beige Book this afternoon. The report offers a view on how businesses are faring and current industry conditions, such as an overheating economy or inflationary pressures. This book is produced roughly two weeks before the Fed meets to set monetary policy, which is the single most influential event for the markets.
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| Trending Cannabis legalization efforts continue to expand across the United States and the movement just won another big backer: Amazon (NASDAQ:AMZN). The nation's second-largest employer will no longer screen its workers for the drug (except for positions subject to regulation by the U.S. Department of Transportation) and will drop weed-testing requirements for recruitment. The news follows a lawsuit from March, in which a New York man sued Amazon over a rescinded job offer because he tested positive for marijuana (NYC banned employers from testing job applicants for cannabis in 2020).
No smoking at work: "We will continue to do impairment checks on the job and will test for all drugs and alcohol after any incident," Amazon wrote in a blog post.
The e-commerce giant is also throwing its weight behind federal legalization, with its public policy team actively supporting the Marijuana Opportunity Reinvestment and Expungement Act of 2021. Besides legalization, the MORE Act, which was reintroduced in the House last month, would expunge criminal records related to cannabis and invest in impacted communities. 17 states have so far legalized pot use for adults and over 30 states have allowed some form of medical marijuana.
Other changes: Amazon has long tracked the productivity rates among its warehouse workers, recording the number of packages they pick, pack and sort each hour. The workplace policy has been controversial due to what some say forces employees to work at a breakneck speed. As a result, Amazon is making another policy modification in response to the criticism. "Starting today, we're now averaging Time off Task over a longer period to ensure that there's more signal and less noise-reinforcing the original intent of the program," said Dave Clark, CEO, Worldwide Consumer. (27 comments) |
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