Mapped: Shanghai's Supply Chain Standstill, as Seen by Satellites
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Satellite Maps: Shanghai’s Supply Chain Standstill

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Animated GIF shows Shanghai port traffic 2019 vs 2022

Satellite Maps: Shanghai’s Supply Chain Standstill

China has mandated a strict “zero COVID” policy since the onset of the global pandemic, which has led to tight lockdowns across the country whenever cases have started to spike.

Recently, lockdown restrictions have been enacted in major cities like Shenzhen and Shanghai, as China deals with one of its worst outbreaks since Wuhan in December 2019.

These cautionary measures have had far-reaching impacts on China’s economy, especially on its supply chain and logistics operations. Shanghai’s port system, which handles about one-fifth of China’s export containers, is currently experiencing significant delays as a result of the recent government lockdown.

Chart showing Shanghai port shipment volume falling after lockdowns

Shipping volume has dipped drastically since early March this year, right after partial lockdowns began in Shanghai. By the end of March, as restrictions continued to tighten up, shipping activity dipped nearly 30% compared to pre-lockdown levels. And while activity has recently picked up, it’s still far below average shipment volumes prior to the recent lockdown.

While the port is still technically operating, shipping delays will likely cause hiccups in the global supply chain. That’s because the Shanghai port is a major hub for international trade, and one of the largest and busiest container ports in the world.

How Bad is the Back-Up?

Here’s a closer look at satellite imagery that was captured by the Sentinel-1 satellite, which shows the current congestion at Shanghai’s port as of April 14, 2022. In the image, a majority of the white dots are cargo ships, many of which have been stuck in limbo for days.

Shanghai port traffic explainer 2022

Traffic has been building up at the Shanghai terminal. As of April 19, 2022, over 470 ships are still waiting to deliver goods to China. If you’d like to check out the Shanghai ports most up-to-date traffic, this live map by MarineTraffice provides real-time updates.

The number of container vessels waiting outside of Chinese ports today is 195% higher than it was in February. – Windward

Much of these delays are due to transport issues—an estimated 90% of trucks that support import and export activities are currently offline, which is causing dwell time for containers at Shanghai marine terminals to increase drastically.

Wait times for at Shanghai marine terminals has increased nearly 75% since the lockdowns began. Delays at the Shanghai terminal have sent ships to neighboring ports in Ningbo and Yangshan, but those ports are beginning to get congested as well.

The global impacts of this current bottleneck are still pending, and depend greatly on the length of Shanghai’s lockdown. According to an article in Freight Waves, this could turn into the biggest supply chain issue since the start of the pandemic if China’s marine shipping congestion isn’t cleared up soon.

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Thematic Investing: 3 Key Trends in Cybersecurity

Cyberattacks are becoming more frequent and sophisticated. Here’s what investors need to know about the future of cybersecurity.

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Global X Cybersecurity ETF

The following content is sponsored by Global X ETFs
Global X Cybersecurity ETF

Thematic Investing: 3 Key Trends in Cybersecurity

In 2020, the global cost of cybercrime was estimated to be around $945 billion, according to McAfee.

It’s likely even higher today, as multiple sources have recorded an increase in the frequency and sophistication of cyberattacks during the pandemic.

In this infographic from Global X ETFs, we highlight three major trends that are shaping the future of the cybersecurity industry that investors need to know.

Trend 1: Increasing Costs

Research from IBM determined that the average data breach cost businesses $4.2 million in 2021, up from $3.6 million in 2017. The following table breaks this figure into four components:

Cost ComponentValue ($)
Cost of lost business$1.6M
Detection and escalation$1.2M
Post breach response$1.1M
Notification$0.3M
Total$4.2M

The greatest cost of a data breach is lost business, which results from system downtimes, reputational losses, and lost customers. Second is detection and escalation, including investigative activities, audit services, and communications to stakeholders.

Post breach response includes costs such as legal expenditures, issuing new accounts or credit cards (in the case of financial institutions), and other monitoring services. Lastly, notification refers to the cost of notifying regulators, stakeholders, and other third parties.

To stay ahead of these rising costs, businesses are placing more emphasis on cybersecurity. For example, Microsoft announced in September 2021 that it would quadruple its cybersecurity investments to $20 billion over the next five years.

Trend 2: Remote Work Opens New Vulnerabilities

According to IBM, companies that rely more on remote work experience greater losses from data breaches. For companies where 81 to 100% of employees were remote, the average cost of a data breach was $5.5 million (2021). This dropped to $3.7 million for companies that had under 10% of employees working from home.

A major reason for this gap is that work-from-home setups are typically less secure. Phishing attacks surged in 2021, taking advantage of the fact that many employees access corporate systems through their personal devices.

Type of AttackNumber of attacks in 2020Number of attacks in 2021Growth (%)
Spam phishing1.5M10.1M+573%
Credential phishing5.5M6.2M+13%

As detected by Trend Micro’s Cloud App Security.

Spam phishing refers to “fake” emails that trick users by impersonating company management. They can include malicious links that download ransomware onto the users device. Credential phishing is similar in concept, though the goal is to steal a person’s account credentials.

A tactic you may have seen before is the Amazon scam, where senders impersonate Amazon and convince users to update their payment methods. This strategy could also be used to gain access to a company’s internal systems.

Trend 3: AI Can Reduce the Cost of a Data Breach

AI-based cybersecurity can detect and respond to cyberattacks without any human intervention. When fully deployed, IBM measured a 20% reduction in the time it takes to identify and contain a breach. It also resulted in cost savings upwards of 60%.

A prominent user of AI-based cybersecurity is Google, which uses machine learning to detect phishing attacks within Gmail.

Machine learning helps Gmail block spam and phishing messages from showing up in your inbox with over 99.9% accuracy. This is huge, given that 50-70% of messages that Gmail receives are spam.
– Andy Wen, Google

As cybercrime escalates, Acumen Research and Consulting believes the market for AI-based security solutions will reach $134 billion by 2030, up from $15 billion in 2021.

Introducing the Global X Cybersecurity ETF

The Global X Cybersecurity ETF (Ticker: BUG) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Cybersecurity Index. See below for industry and country-level breakdowns, as of June 2022.

Sector (By security type)Weight
Cloud28.0%
Network25.1%
Identity17.7%
Internet15.0%
Endpoint12.8%
CountryWeight
🇺🇸 U.S.71.6%
🇮🇱 Israel13.2%
🇬🇧 UK8.2%
🇯🇵 Japan5.5%
🇰🇷 South Korea0.9%
🇨🇦 Canada0.6%

Totals may not equal 100% due to rounding.

Investors can use this passively managed solution to gain exposure to the rising adoption of cybersecurity technologies.

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Visualizing Major Layoffs At U.S. Corporations

This infographic highlights the accelerating pace of layoffs so far in 2022, as businesses cut costs ahead of a potential recession.

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Visualizing Major Layoffs at U.S. Corporations

Hiring freezes and layoffs are becoming more common in 2022, as U.S. businesses look to slash costs ahead of a possible recession.

Understandably, this has a lot of people worried. In June 2022, Insight Global found that 78% of American workers fear they will lose their job in the next recession. Additionally, 56% said they aren’t financially prepared, and 54% said they would take a pay cut to avoid being laid off.

In this infographic, we’ve visualized major layoffs announced in 2022 by publicly-traded U.S. corporations.

Note: Due to gaps in reporting, as well as the very large number of U.S. corporations, this list may not be comprehensive.

An Emerging Trend

Layoffs have surged considerably since April of this year. See the table below for high-profile instances of mass layoffs.

CompanyIndustryLayoffs (#)Month
PelotonConsumer Discretionary2,800February
FunkoConsumer Discretionary258April
RobinhoodFinancial Services~400April
Nektar TherapeuticsBiotechnology500April
CarvanaAutomotive2,500May
DomaFinancial Services310May
JP Morgan Chase & Co.Financial Services~500June
TeslaAutomotive200June
CoinbaseFinancial Services1,100June
NetflixTechnology300June
CVS HealthPharmaceutical208June
StartTekTechnology472June
FordAutomotive8,000July
RivianAutomotive840July
PelotonConsumer Discretionary2,000July
LoanDepotFinancial Services2,000July
InvitaeBiotechnology1,000July
LyftTechnology60July
MetaTechnology350July
TwitterTechnology<30July
VimeoTechnology72July
RobinhoodFinancial Services~795August

Here’s a brief rundown of these layoffs, sorted by industry.

Automotive

Ford has announced the biggest round of layoffs this year, totalling roughly 8,000 salaried employees. Many of these jobs are in Ford’s legacy combustion engine business. According to CEO Jim Farley, these cuts are necessary to fund the company’s transition to EVs.

We absolutely have too many people in some places, no doubt about it.
– Jim Farley, CEO, Ford

Speaking of EVs, Rivian laid off 840 employees in July, amounting to 6% of its total workforce. The EV startup pointed to inflation, rising interest rates, and increasing commodity prices as factors. The firm’s more established competitor, Tesla, cut 200 jobs from its autopilot division in the month prior.

Last but not least is online used car retailer, Carvana, which cut 2,500 jobs in May. The company experienced rapid growth during the pandemic, but has since fallen out of grace. Year-to-date, the company’s shares are down more than 80%.

Financial Services

Fearing an impending recession, Coinbase has shed 1,100 employees, or 18% of its total workforce. Interestingly, Coinbase does not have a physical headquarters, meaning the entire company operates remotely.

A recession could lead to another crypto winter, and could last for an extended period. In past crypto winters, trading revenue declined significantly.
Brian Armstrong, CEO, Coinbase

Around the same time, JPMorgan Chase & Co. announced it would fire hundreds of home-lending employees. While an exact number isn’t available, we’ve estimated this to be around 500 jobs, based on the original Bloomberg article. Wells Fargo, another major U.S. bank, has also cut 197 jobs from its home mortgage division.

The primary reason for these cuts is rising mortgage rates, which are negatively impacting the demand for homes.

Technology

Within tech, Meta and Twitter are two of the most high profile companies to begin making layoffs. In Meta’s case, 350 custodial staff have been let go due to reduced usage of the company’s offices.

Many more cuts are expected, however, as Facebook recently reported its first revenue decline in 10 years. CEO Mark Zuckerberg has made it clear he expects the company to do more with fewer resources, and managers have been encouraged to report “low performers” for “failing the company”.

Realistically, there are probably a bunch of people at the company who shouldn’t be here.
– Mark Zuckerberg, CEO, Meta

Also in July, Twitter laid off 30% of its talent acquisition team. An exact number was not available, but the team was estimated to have less than 100 employees. The company has also enacted a hiring freeze as it stumbles through a botched acquisition by Elon Musk.

More Layoffs to Come…

Layoffs are expected to continue throughout the rest of this year, as metrics like consumer sentiment enter a decline. Rising interest rates, which make it more expensive for businesses to borrow money, are also having a negative impact on growth.

In fact just a few days ago, trading platform Robinhood announced it was letting go 23% of its staff. After accounting for its previous layoffs in April (9% of the workforce), it’s fair to estimate that this latest round will impact nearly 800 people.

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