September 2, 2022

Today's Topics

Hi! Whether you’re chilling or grilling this Labor Day, we’ve got some charts for you to deploy if the conversation dries up over the long weekend. Today we have data exploring:

  • Test results. The pandemic’s effect on the nation’s report card.
  • Lululemon. The athleisure outfit’s strong showing.
  • Scraping the barrels. The US oil reserve is running down.

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Ugly numbers, hard to read

The national report card isn’t looking great. Data out this week revealed that 9-year-olds’ math and reading scores took a huge hit in the last two years — a worrying early sign of the pandemic’s impact on education. Reading results are down some 5 points, the steepest decline since 1990, and math scores have declined for the first time since the National Assessment of Educational Progress began in the 1970s.

Different class

When Covid-19 shut down schools and parents began to stand in as substitute teachers, many expected that education would suffer, but the full toll is only now becoming clear.

For top-performing students the change in results in the last 2 years has been relatively modest, with scores falling just 2 and 3 points for reading and math, respectively. Sadly, however, it was the students who were already struggling most that suffered the worst drops following the pivot to at-home education. The bottom 10% of reading students saw their scores drop 10 points on average over the two-year assessment window, whilst the lowest-performing math students suffered a 12 point drop in the same period.

The widening chasm between the highest and lowest-performing students will be a major concern for parents and policymakers — particularly in the context of severe teacher shortages in certain areas.

Lululemon reported another set of impressive sales numbers yesterday, as the company best known for its yoga-pants continues to successfully stretch itself into new markets — sending shares up 10% at the time of writing.

The company has been reaping the rewards of a number of new ventures. Its nascent menswear division grew by some 27% in the recent quarter and their latest endeavor — getting into the shoe market — is likely to add to sales in coming months, as is the at-home fitness product, Mirror, which it acquired for $500m in 2020.

LULU like Nike

With slick marketing and a sometimes cult-like customer base, Lululemon regularly squeezes out some of the best operating margins in the industry — even matching branding giant Nike in recent years.

And that's not where the similarity ends.

Lululemon, like Nike and many other retailers, has increasingly gone after a direct relationship with consumers. The DTC division, which includes online sales, got a significant boost during the pandemic and has held up ever since. Over the last 12 months, Lululemon's DTC revenue has matched the company's store-based sales. With no expensive overheads, those direct sales are much, much more lucrative for LULU.

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Scraping the barrels

America’s crude oil stockpile has fallen below 450 million barrels, marking its lowest level since 1984, as the Biden administration continues to use the Strategic Petroleum Reserve (SPR) to alleviate the premium that Americans are paying at the pumps.

First introduced by President Ford in 1975 as a means of mitigating oil supply disruptions in the states, the SPR has functioned more recently as an American price-control tool following the Russian invasion of Ukraine.

Drying up

Washington pledged to release an average of 1 million barrels of oil a day from the SPR over 6 months, in a plan to tackle rising gas prices which reached over $5-per-gallon earlier this year. Whilst multi-million barrel drawdowns aren’t uncommon — previous presidents have used the SPR as an emergency response to the Gulf War and Hurricane Katrina, for example — the stockpile is starting to strain under the weight of this cost-addressing roll out.

Critics argue that Biden’s bumper barrel release is a short-term fix for a wider structural issue, while others point to recently falling gas prices as proof that the drawdown was necessary.

More Data

Pakistan has already experienced 3 times as much rain as it does in an average year, these charts explore the downpour and its deadly impact.

• Mortgage rates rose again to 5.66% this week. That has left median monthly mortgage payments now more than 40% higher than rents (WSJ chart).

• Blue Monday? Explore how 450 people with synesthesia see days, months and numbers (through bright, colorful charts, obviously.)

Poland has estimated that WW2 losses caused by Germany did $1.3 trillion of damage — now the country might seek reparations.

Ally Robotics has developed a low-cost robotic arm, that can learn by watching humans work, with the potential to disrupt a $114bn addressable market. Learn more about investing in Ally Robotics today.**

• An AI-generated piece of artwork has taken a top prize at the Colorado State Fair fine arts contest.

• The first episodes of the new Lord of the Rings TV show are out. Between the rights and production costs the series has reportedly cost some $715m — making it the most expensive TV show in history (by a lot).

• Where do your favorite memes come from? A study from Know Your Meme.

**This is sponsored content.

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