Life

‘Hamilton’ Has Been Making A Profit Of Over $500,000 PER WEEK, Plus China Drops GDP Numbers

#Morning Brew
by Last Updated

“Hugely unusual…very imaginative” — The National Obesity Forum. Mars Food, maker of Dolmio and Uncle Ben’s sauces, plans to update its website to reflect that some of its products should be eaten once a week as opposed to everyday. To those of you who eat pasta every day—prepare to be shocked.

MARKET SNAPSHOT
Big Picture

  • As investors await more earnings reports, U.S. stocks closed the week slightly lower, but still managed to post their biggest gains since mid-March

Alternatives to Watch

  • Talks on a global oil production freeze fell through this weekend when Iran refused to show up (more on that later), leading to oil futures dropping roughly 6%

Market Movers

  • Even the almighty Apple isn’t immune to rough patches. Shares dropped Friday thanks to a report revealing lagging demand for the iPhone 6S and iPhone 6S Plus. And there’s plenty more Apple juice from this weekend (stay tuned)

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WORLD MACRO

China Drops GDP Numbers

On Friday, we got an updated look at China’s economic growth (or lack thereof). The verdict? Q1 GDP increased by 6.7%. While this figure fell within with the government’s target range, it still marks the slowest growth since the first quarter of 2009. Many analysts point to a massive lending effort by the Chinese central bank, particularly in the month of March, as instrumental in keeping growth afloat. The $211.3 billion in loans in the month of March was nearly double that of February, and credit growth in Q1 doubled that of the previous quarter. In any case, the lending effort is a short-term solution—increasing national debt isn’t a sustainable long-term solution, after all.

Iran Not Fond of the Rules

A true loyal Brewer would know that oil has been rallying lately. And for all you foul weather Brewers who didn’t know—oil has been rallying lately. 18 of the world’s largest oil exporters met in Doha yesterday with the hopes of freezing crude production—and keeping the rally in full gear. What could possibly go wrong? Well, Iran didn’t show up for starters because it won’t even consider the idea of curbing production. Iran’s last-second absence then prompted Saudi Arabia to vow not to halt oil production until Iran does the same. All told, and the meeting ended without any agreement to freeze production—you can probably take off your rally caps after this one, folks.

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CORPORATE PRIMER

Apple vs. DOJ Goes into OT

It ain’t over yet. The now-timeless privacy vs. security debate between Apple and the FBI is still raging. Even though the FBI successfully unlocked the San Bernardino shooter’s iPhone without Apple’s help, the Department of Justice isn’t satisfied. It’s pushing forward with an appeal in another, similar case—but the general outline is the same: the government wants Apple’s help unlocking an iPhone. Apple’s response? You already have the ability to hack the phones, so you don’t need our help. Maybe the government doesn’t need Apple’s help, but that’s not what this case is about. If the DoJ wins the appeal, it will set a very important precedent in the war between privacy and security. Savage move? You decide.

Buckle Up…

…More recalls. If you’re a proud owner of a Chevrolet Silverado or GMC Sierra, you might want to double check your seatbelts, as GM has recalled over a million cars after warranty data showed that the steel cable that connects the seat belt to the car can separate due to normal wear and tear. We’re not engineers here, but we’d wager a guess that ideally, this shouldn’t happen. With car recalls all over the news as of late (and a solid chunk of them from GM), this is the last thing it needs. Buckle up, Brewers—assuming your seatbelts work, that is.

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OTHER STORIES

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ECONOMIC CALENDAR

  • Monday: Netflix, Pepsi, IBM, Morgan Stanley, Hasbro Earnings; Housing Market Index
  • Tuesday: Johnson & Johnson, Intel, Goldman Sachs, Yahoo, Philip Morris, UnitedHealth, Harley-Davidson, Comerica Earnings; Housing Starts
  • Wednesday: Coca-Cola, Qualcomm, American Express, Las Vegas Sands, Yum! Brands, Mattel Earnings; Existing Home Sales
  • Thursday: Alphabet, Microsoft, Verizon, Visa, Starbucks, Schlumberger, General Motors, Under Armour, Southwest Airlines, D.R. Horton, Novartis Earnings; Weekly Jobless Claims
  • Friday: General Electric, McDonald’s, Honeywell, Kimberly-Clark, Caterpillar, American Airlines Earnings; PMI Manufacturing Index

WHAT TO DO WITH ALL THIS MONEY

Broadway show “Hamilton” has blown away audiences, with the average ticket going for over $1,000. Think the cast is rolling in money? Well, yes, they probably are, but not quite their fair share—until just recently, thanks to a breakthrough deal that gives actors who’ve helped create a show receive a cut of the profits. It’s not final yet, so here’s a sneak preview:

  • ”Hamilton” has been running with a profit of over $500,000 per week, a staggering amount compared to the average Broadway actor’s weekly salary of $1,900. To sum up, in one week, “Hamilton” could pay the salaries of five Broadway actors…and still come out in the green.
  • It only makes sense that some of this dough should be shared. As it happens, profit-sharing isn’t a new idea in showbiz: some shows share 1% of profits, divided amongst performers. Plus, one common contract guarantees actors $631 a week, with rights to royalties for up to 18 years.
  • Another Broadway hit, “The Book of Mormon,” shares profits with its original cast even to this day—with some still getting several thousand dollars a month. We’ll take that deal any day.

INTERVIEW QUESTION OF THE DAY

100 soldiers are standing in a circle in order from one to 100. Number one has a sword. He kills the next person (i.e. number 2) and gives the sword to the next person (i.e. number 3). All the soldiers do the same until only one survives. Which number will survive at the end? (Answer)

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BUSINESS TERM OF THE DAY

Debt-Service Coverage Ratio — In corporate finance, the Debt-Service Coverage Ratio (DSCR) is a measure of the cash flow available to pay current debt obligations. The ratio states net operating income as a multiple of debt obligations due within one year, including interest, principal, sinking-fund and lease payments. In government finance, it is the amount of export earnings needed to meet annual interest and principal payments on a country’s external debts. In personal finance, it is a ratio used by bank loan officers to determine income property loans.

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FOOD FOR THOUGHT

According to the White House, the Obamas paid $81,472 in federal taxes—an effective income tax rate of 18.7%—and donated 14.7% of their adjusted gross income to organizations like the Fisher House Foundation.

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