Yet another stockpile scramble

Coming up on the program today, a short Wall Street tutorial. We'll talk factories, and we'll talk price caps, and we will pour one out for Florida oranges. From American public media, this is Marketplace. [MUSIC PLAYING]

Sanjalis, I'm Colin Rizdoll. It is Thursday today.

This one is the 23rd of April good as it always is.

Have you long, everybody? Wall Street was in a, yeah, maybe war is not so great mood. Today, equities fell the price action as traders like to say, mostly to the downside. The bigger picture we will do at that spot in the program

where we always do the bigger picture. But we begin today with a single company, and it's roller coaster of a month. Avis shares were up sevenfold the past 30 days, and they had kept on going up until yesterday.

On this Thursday, ticker symbol car, get it? Avis car, C-A-R. Chairs down 48% the worst day Avis has had in the markets in 28 years.

The phrase, "Short Squeeze," is what you're looking for.

Marketplace is Cayley Wells has today's explainer. Short squeezes start because investors bet on a stock doing poorly, also known as taking a short position. Here's an example.

“For whatever reason I decide that I think Avis is overpriced,”

and I'm looking for a way to make money off of this. In this example, Paul Shea of Bates College will borrow a bunch of shares of Avis stock, sell them while they're overpriced, and then when the price falls, he'll buy them back up

and return them to his lender. So I've profited because the price of the stock has gone down. And this is a really popular way that you can bet against a firm a sector. Anything you think is overpriced in a financial market.

Now, Avis was right for the picking, because rental car companies have had a rough go recently, says Tyler Schipper with the University of St. Thomas. But it's still a relatively competitive industry with lots of other potential modes of transportation,

where people can now get Uber or Lyft to pretty easily and get around lots of places. But when too many investors take that short position, it drives up the demand for the stock. So the stock price climbs and climbs and climbs,

making these investors bets fail spectacularly. Because the people who lent their stock to the investors say, hey, that stocks worth a lot now. So I want you to give it back.

“But oh, no, the investor sold it, remember?”

They have to actually go into the market and buy that stock in order to return it to whoever they borrowed it from. Brett House at Columbia Business School says the short squeeze is when a whole bunch of the loners

force that to happen at the same time. Now, all those people who wanted to buy the stock back when it was cheap have no choice but to buy it when it's rising. And that pushes the price up further and that creates a spiral that is the squeeze.

Once the investors pay back all their barrow chairs, the price falls and the squeeze ends. On Geltangula, at University of Kansas, says this happened recently with AMC and GameStop. They are stock prices remained at elevated levels

for an extended period of time after this squeeze events. So even though it's been a tumultuous month for Avis, it could mean more money for the company in the long run. I'm Kaylee Wells for Marketplace.

“Live by the meme stock die by the meme stock, right?”

A little bit of labor market news before we go on.

First time claims for unemployment benefits last week, basically flat.

Low higher, low fire continues to be the buy word in the American labor market, except for this. The Wall Street Journal reports that meta told its staff today, it's going to lay off about 10% of the total workforce comes to almost 8,000 people.

It's also not going to hire for about 6,000 other positions. Why are you asking? If efficiency the company says, oh, and also, because it's going to spend more on artificial intelligence. Stocks down, oil up, bonds just market time.

We will have the details when we do the numbers. [MUSIC PLAYING] The hard economic data today came from S&P global. It's first estimate of U.S. manufacturing for this current month.

This month at the fastest rate in four years

“fueled in part by the biggest jump in new orders”

to factories since May of 2022. Good, but not as Daniel Archerman explains. When you drill down into the survey data, says Chris Williamson of S&P Global Market Intelligence, it starts to see that the pitch is not quite so rosy.

For instance, all those new orders aren't because manufacturers are seeing skyrocketing demand for their products. This is due to people building safety stocks because they're fearing supply shortages or price hikes in the coming months.

Manufacturers, meanwhile, don't know what's coming through the straight of hormones or when. So they're trying to get everything they need to fill those orders on hand now.

In other words, we're moving into sort

of a bunker mentality in manufacturing. Zach Rogers, researchers, operations and logistics at Colorado State University. He says it's not unlike last year

“when U.S. firms stocked up on imports ahead of tariffs.”

The difference now is instead of oh, it's build up the finish goods. We're in addition to that scene, but let's also build up the components that we need for manufacturing that we might not have access to

if this work continues on through the summer. Rogers says buying in bulk can also reduce how much manufacturer's spend on fuel, the price of which is way up. But it tends to be the larger manufacturers

that have enough cash to do this. The really smaller firms may not be able to afford to do those really big forward buys. And so if this ends up being really expensive, this is gonna disproportionately hurt

the smaller businesses in the economy. There is, of course, risk in hoarding months worth of materials says Jason Miller, a professor of supply chain management at Michigan State University. - If you do a lot of forward buying,

your ability to match supply with demand is now reduced. - Like if rising inflation or a sinking job market causes consumers to buy less of the stuff you make. - Lord for bed though, let's say that worst case scenario comes to pass.

You're now sitting on a lot of excess input inventory and your demand is falling. - Meaning those manufacturers could end up with a bunch of unsold goods later this year. I'm Daniel Acreman for Marketplace.

(upbeat music) (upbeat music) - If you've heard me say it once on this program, you have heard me say it, well, a lot. History matters.

Truth is though, I'm more of an armchair historian. Here's an actual one. - Meg Jacobs, I teach history of public affairs at Princeton University. - We called her to ask about something

that's on everybody's mind of late the high price of oil and what if anything governments might do to limit the economic pain that comes with it? Jacob's were in a whole book about the energy crisis of the 1970s.

- Which was perhaps the last most chaotic time in terms of uncertainty on global oil markets. - There were actually two oil shocks in that decade.

The first one triggered by the Arab oil embargo in 1973.

Richard Nixon was in the White House inflation at the start of that year, was right around eight and a half percent, then came the oil shock and slowing growth, say it with me now. Stagflation made all the worse by a series of price controls

that Nixon had put into place starting in 1971. - I have a point of view based on the past about today. I do not see any kind of price caps in our future. - A little icon 101 here. Price caps, just like it sounds,

they limit the price at which any given product can be sold below what the market price would be. It can be on one product or on all of them, which is what Nixon had done. And then the Arab oil embargo came along.

- The shortages we were suffering then were not super acute.

“Even if you don't personally remember back that far,”

your parents probably do ask him about the lines to buy gas. - But we made them more acute by our panic like behavior, by lining up for hours and hours and traveling around with much of the country's gas supply in our tanks rather than safely underground in oil storage.

- It was not great. But the fact is, today's oil shock is worse.

two years to recover.

“The key macroeconomic point here is that however much”

petroleum pain, American consumers are feeling, it is worse in the rest of the world, which is why some of them are turning to price caps. In South Korea, the government put a ceiling on fuel products about a month ago, just today they announced

they would keep them in place for another two weeks. In France, the company totaled energies, voluntarily capped the price of gas and diesel added stations through the end of April. Governments in companies are gonna do what governments

in companies are gonna do. But if you ask an economist, they will tell you price caps can lead to some real problems. - Because the price is reduced, people want to buy more. So there is more that people want to buy

than is available. - I mean, high-glaser is actually an economist and a meritist professor of it at the University of California, Irvine.

“And for producers, price caps might mean deciding”

a product isn't worth selling at all. - If the price is set very low, then it doesn't even cover my cost. So I would lose money by selling some of the goods. - You see where this could go, right?

Fewer goods, more shortages.

But in reality, price caps don't always follow theory

in part because they're often paired with other policies. - Let me give you one example, World War II, which the price controls were effective. - There were also wage controls back then. And rations on all kinds of things

that were subject to price controls, meat and dairy clothing, gas and car tires. - And if someone saw his neighbor have a four brand new tires, he would look as scant at that neighbor. How did he get it?

What connections did he have? Why is he doing that? - Meg Jacobs agrees that the social dynamic was part of why those World War II price caps worked. - People largely abided by them.

It was seen to be patriotic to relinquish your ration coupons when purchasing these scarce items. - And because of that, price caps did keep inflation overall low back then. Then is not now.

And the global economy now is more global. But the longer this oil shocked rags on, the more price caps are gonna keep popping up. (upbeat music) (upbeat music)

- Coming up, but the situation is dire. I mean, extremely dire. - Want some orange juice for breakfast? - Yeah, not so fast.

But first, sure, okay now, let's do the numbers.

(upbeat music) - Now, industrial's down 179th today, four tenths of 1% closed at 49,310. That has that dropped to 119.9%, 1024,438. This MP 500 dipped 29 points, 410%, 71 and eight.

Well, prices you ask at the end of a tension filled day in the Middle East, another tension filled day, I guess. Brent Crew, the International benchmark of 3% finished at $105 a barrel, West Texas Intermediate, also jumped 3% closed at almost 96 bucks per.

So, our company's service now tanked after a 48, 20% increase in subscription revenue of the last quarter. Catches, it could have been more, they said, if it weren't for some contracts in the Middle East, which were delayed by, you know,

what service now plunged 17 and 7/10th and 1%. Microsoft announced some upcoming job cuts today. Some 7% of US workforce at that company could be offered by aunt at about 8750 people, give or take meta, I told you about.

Microsoft gave up 4% today, meta, felt 2 and 3/10th of 1% on the day. Texas Instruments, which makes, as you know, semi-conductors and processors, feed expectations, shares flow up 19 and 4/10th of 1%

bond down, deal down the 10-year-teen out up 4.32%. Oh, yeah, right, no, let's need a marketplace. - If you're a business leader,

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That's QuickBooks.com/workforce. - This is Marketplace, I'm Kai Rizdom. The effective tariff rate in these United States as of the second of April, this is according to the Yale budget lab, was 11%.

My not sound all that high, given some of the numbers, President Trump was throwing around during his illegal tariff spree that started last April. But it is, in fact, the highest rate of import taxes we have had since 1943.

Now, though, after the spring court ruling a couple of months ago,

the administration has to give $166 billion

of that haul back. So how's that going? Marketplaces, Chris, then Schwab made some call. - On Monday morning, Sarah Wells woke up right and early.

The tariff refund portal was set to open at 8 a.m. got on at 750 in the hopes that maybe I could be first in line and I would say under two or three minutes, I had an accepted, no error approved refund submission. Wells owns Sarah Wells bags, which makes products for new moms.

She was surprised everything went so smoothly, especially after how hard it was to do the first step setting up a refund account. It's cumbersome, it's technologically kind of glitchy. There's a lot of terminology and acronyms that I had no idea

what they meant. Wells hopes to get about $20,000 back from the government, including interest in 60 to 90 days. I don't think it's going to sit in my account very long. She needs more inventory and there are still other tariffs to pay.

Ashley Acres is a partner at Holland and Night, whose clients range from small companies applying for thousands of dollars in refunds to large corporations owed millions. She says for the majority of businesses, refund applications have been drama free,

but a lot is still up in the air. It's been really crazy time. Yesterday we fielded hundreds and hundreds of questions.

“Questions like, when can I collect the rest of the refund I'm owed?”

I'm not saying a lot of clients were going to get 100%. It seems like a lot of businesses are going to get some early reprieve in this phase 1, but are certainly still going to be waiting for additional refunds. Phase 1 of the tariff refund process covers about 60% of what's owed. It means most companies will have to go through this all over again.

And US customs and border protection hasn't given a timeline for phase 2. Ann Robinson owns a specialty grocery in Greensboro, North Carolina, called Scottish gourmet USA. She sells products like whiskey, Haggis sauce and shortbread. It took a few tries to get her $23,000 claim through the system.

At around 3pm, she finally got to celebrate.

And I didn't like a touchdown move. Yay, I did it. It's done. Kind of. Robinson still has to chase down 10 grand from FedEx, DHL and UPS,

because though she paid tariffs on those shipments, the logistics companies were technically the importers, and have to file claims on her behalf. Meanwhile, she's just feeling uneasy. What if her claim is delayed, or the government appeals the tariff ruling,

“or finds a new way to make temporary tariffs in place now, permanent?”

I have to assume it's at least as much that our government, at this point in time, is going to continue to try to find ways to take out of the pockets of tens of thousands of small businesses in order to cover a huge deficit. Even with a refund on the way, Robinson feels like she's still operating her business

with the same uncertainty she did a year ago. What's going to come next? I have no way of knowing what my pricing should be for fall and Christmas. 2026. She's got to know soon.

About now is when most businesses have to decide how much to manufacture, buy and import for the holidays. I'm Kristen Schwab for Marketplace. You are more likely, I learned in an article and slate the other day,

to see an orange on the 18 million license plates printed by the state of Florida,

Florida produces every year, so complete is the collapse of citrus there.

Iconic is a big word, but it does fit with Florida and oranges. Or you stew, anyway. Alex Salmon wrote the story that I was reading, welcome to the program. Hey guys, thanks for having me. Describe for me would you the mood in the room at the 2026 Florida citrus show, the scene with which you start this piece?

Well, let me say that to begin with, agricultural optimism is a very real trait in farmers, you know, they're used to dealing with difficulty and they're used to taking it on the chin.

“And so there was some optimism somewhere, I think it wasn't non-existent,”

but the situation is dire.

I mean, extremely dire in the Florida citrus industry and there was no getting around that.

Greening we have talked about on this program and I think a lot of people know the challenges that the citrus industry down in Florida is having with, I don't know if it's a virus or a bacteria, but whatever, they're having real problems just sort of biologically. But there are other things going on. Climate change, of course, is one thing. The other thing that you point out, which was fascinating to me,

is development and what that has done to the groves and why it's happening. Yeah, it's interesting, right, because yes, there is very much a biological story to be told here about the demise of the Florida Orange, but there's also really a story of political economy, or even just a politics period to be told. The fact of the matter is the economy in Florida has changed dramatically over recent years and developers in Florida have a ton of power.

The state's growing quickly and the result of that is that there's a lot of land that has orange trees on it that could be housing and those developers have, have taken over, I think, is probably the best way of putting it. And so this area, the ridge in central Florida, the sort of famed, adenic citrus growing region is also one of the fastest growing counties by population in these higher countries. So that land is worth a lot of money as housing and right now it's not worth

a lot of money as oranges because they can't really grow them. So the interesting sort of political economy story underneath this is that the Florida Citrus industry, because it's lost in which money has lost a lot of political power and the developers have gained a ton of political power as Florida has grown and become more of a real estate state. And you sort of see that playing out in real time in the state. I alluded to this as I was setting in the center of view, but

give us a sense of scale would you of the collapse because it is, I mean, it's it's mindboggling.

“Yeah, dramatic. It's um, right. So I think the best way to put this is in 2003, 2004, the Florida”

Orange Industry produced 242 million boxes of fruit. There are 90 pound boxes. This year,

they're on pace to produce fewer than 12 million boxes. That's a collapse of more than 95 percent. A hundred percent of the trees are now infected with citrus screening, which means they're either in the process of dying or dead. And you know, every metric, it's like this. There was a representative from minute-made who I spoke to, which is, you know, owned by Coca-Cola said that three, four years ago, 80 percent of their juice was from oranges from Florida. This year,

80 percent of the juice is from oranges from Brazil. Like three or four years this happened. And so, you know, it's a total collapse. I mean, it's hard to overstate how dramatic it is. This is, I mean, it's a lot of things, right, as we've talked about. It's a, it's a climate story, it's a, it's a biological story, it's development, all of those things. It is also a cultural story. You spend a lot of time driving around with people who for generations now have done citrus

in Florida. And they're likely to be eradicated or drastically changed. It was just sad, I think, you know, definitely. Yeah, I felt in the process of reporting it. It was very affecting. You know, it's a social history, right, as well as it is as the story of a fruit tree. It's about the old Florida and the, and the class structure of old Florida, right, the citrus families, this dinastic wealth of old Florida. They've also seen a great decline in their stature.

You know, people for generations, like, you know, the, the number of names you've seen this industry that are juniors or thirds or fourths. And it's really all gone. It's really, it changed so, so quickly. And it's the story of the social history of, of citrus in in Florida. To me, it's as persuasive as compelling. Maybe even more than just this sort of economic story or the biological story of, of the tree itself. And, you know, being there with people who've seen that

change firsthand, you know, a lot of this is peg, as recently as to 2007, when the state began to deregulate some of the development standards for the housing industry and, you know, it went so quickly. And, and you really get that sense talking to people and being there.

“It is an amazing piece in slate. You should read it. Alex, Sam, and wrote it. Alex,”

sent a bunch of really appreciate your time. Yeah, thanks so much for having me.

markets thing is getting out of hand. I saw this in the Wall Street Journal today, that the

“French National Weather Service is investigating irregularities at a weather monitoring station”

at Charles the Gall Airport in Paris. It seems that anomalous temperature spikes lead to big

payoffs on polymarket. And that raised some eyebrows among local weather watchers. One trader

“it turns out made more than $21,000 on a $120 dollar bet. If we cannot trust the weather,”

what are we even doing? Our daily production team includes Livy Burdette, Andy Corbin, Maria Haunhorst, Sarah Leeson, Sean McHenry, Michaela Sia, and Sophia Terrandio. Well, story is the supervising senior producer, and I'm Kai Rizdahl, we will see you tomorrow, everybody. This is APM. As the Trump administration ramps up its crackdown on immigration, more people are making

the difficult decision to leave the United States. I'm Riemach Reyes and this week on my podcast,

“this is uncomfortable. We're asking, what does it really cost to leave the U.S. when you're undocumented?”

And what can life look like on the other side? I have to look around and remind myself that this

is not a movie this is my life. I am able to cross borders that I had never allowed myself to dream of.

Be sure to listen to this is uncomfortable wherever you get your podcasts.