“[Trump] doesn’t respect [Dimon]. [Dimon] was never under consideration” — A source, on the condition of anonymity, speaking to NBC News. If it’s true, it looks like you can cross the JPMorgan Chase CEO off Trump’s Secretary of the Treasury list. Maybe next time.
Market Snapshot
- U.S. markets accomplished a rare feat yesterday: each major index closed at an all-time high for the first time since ‘99, boosted by gains in the materials and energy sectors
- Speaking of energy, oil prices jumped to three-week highs after OPEC’s most argumentative members, Iraq and Iran, agreed to back a production cut proposal, leading to a bullish call from Goldman Sachs for the first time in four years
It’s a Double Whammy of Suck
…For Tyson Foods (-14.54%). America’s largest meat processor had a brutal day: first, it reported earnings that came in below expectations, including weaker profit forecasts for 2017. Sales actually fell in the quarter to $9.7 billion in a classic Econ 101 case of consumers demanding less chicken and beef just as beef prices were falling 15%. And as if all that wasn’t bad enough, CEO Donnie Smith announced his resignation—which some are calling suspicious timing given the company’s struggles…and the fact that it’s still embroiled in a class action lawsuit. Might the Brew recommend eating the pain away?
Oracle Buys Out Dyn
…So our favorite websites never get shut down again. Flashback: in October, Dyn—which helps direct traffic across the internet—was hacked by some internet trolls. The result? Some of Dyn’s high-profile clients, such as Netflix and Twitter, were shut down for hours. For an estimated price tag of $600 million, Oracle (+0.08%) will now be able to provide internet performance data to its clients to help them juice added revenue off their websites. Amazon happens to also have a foothold in this industry (what industry isn’t it in?), so let’s see how these tech titans duke it out going forward.
Get Some, Snapchat
…Instagram brings it with its own version of live video. Instagram loyalists, your day in the sun has finally arrived. The Facebook-owned app rolled out two new features: like Facebook Live, Instagram Live (we know it’s a very creative name) lets you broadcast in real-time to all of your followers. But here’s the twist: Instagram Live videos can only be watched while you’re streaming—there are no replays. Think that’s pretty radical? Here’s something that’s not: in its second new feature unveiled yesterday, Instagram will also allow users to send friends direct messages that can only be watched twice before they disappear. We guess that’s different?
What Can’t You Get from Amazon Prime?
…Trick question: pretty much nothing. But, that’s not stopping Amazon (+2.61%) from continuing to expand its Prime offerings. This time, it has its sights set on sports streaming. The company has reportedly been in talks with the NBA, MLB, NFL and MLS about possible live streaming partnerships. The only problem? Most major sports leagues are already tied down by deals lasting well into the next decade, meaning Amazon may be locked out of the sports streaming market for now. How refreshing, there’s at least one market Amazon can’t just up and conquer. That said, we wouldn’t bet against Jeff Bezos—and Amazon loves a challenge.
Other Stories
- Dave Chappelle headed to Netflix with three stand-up specials
- Citi and JPMorgan top list of globally systemic banks
- Apple abandons development of wireless routers
- NBCUniversal invests $200 million more in BuzzFeed
Economic Calendar
- Monday: Tyson Foods (-) Earnings
- Tuesday: HP Inc., Hewlett Packard Enterprise, Dollar Tree, Campbell Soup, Urban Outfitters, Cracker Barrel, Barnes and Noble Earnings; Existing Home Sales
- Wednesday: Deere Earnings; Durable Goods Orders; Weekly Jobless Claims; PMI Manufacturing Index; New Home Sales; Consumer Sentiment
- Thursday: Thanksgiving Day (Markets Closed)
- Friday: International Trade; Markets Close Early
Size Matters
Despite what many analysts predicted, the stock market has surged since the election two weeks ago. The main reasons for the rally: investors are gambling that Trump will invest in infrastructure and cut regulations and taxes. But there’s more: small cap stocks have vastly outperformed large cap stocks during the rally. What’s got the little guys feeling so good? Let’s do the math:
- Quick refresher: a company’s market cap is its stock price multiplied by its number of shares outstanding. The average market cap for stocks in the Russell 2000 (an index of small cap stocks) is $1.8 billion, compared to $40 billion for the big fellas in the S&P 500.
- How about performance? The Russell 2000 has increased 10% since the election. Not bad. Compare that to 2% growth in the S&P 500 and it looks even better.
- This isn’t an everyday feat for the Russell 2000—it’s hot off of 12 straight days of gains, its longest streak since 2003. Watch your back, DiMaggio.
- So why are smaller stocks doing better? Small companies tend to spend a higher proportion of their revenue on taxes and regulatory costs, so they actually stand to benefit more from lower taxes and regulation. Also, tougher trade policies help smaller businesses become more competitive in the marketplace. If you didn’t know, now ya know.
Interview Question of the Day
What does the American Dream mean to different generations? (Answer)
Video of the Day
In yesterday’s Brew, we featured Amazon’s holiday commercial, starring a priest and an imam. Today, we feature Apple’s holiday commercial, which strikes a similar conciliatory tone. Check it out.
Food for Thought
After Kanye West’s rant at his Sunday Sacramento show (which was cut short), West has canceled the remaining stops on the Saint Pablo Tour. This cancellation could cost West over $10 million in potential earnings, not including lucrative merchandise sales. The worst part? West has since checked himself into a hospital. Details are few and far between—stay tuned.
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