“I don’t like bonds; I don’t like most stocks; I don’t like private equity”— Bill Gross, the co-founder of PIMCO and current Janus Capital portfolio manager, in a letter to investors. Well that’s comforting.
MARKET SNAPSHOT
Big Picture
- U.S. markets finished higher as the Dow broke its seven-day losing streak and oil rebounded from its recent lows led by slightly positive economic data
Alternatives to Watch
- Bitcoin started Wednesday with a 15% plunge only to recover most of its losses throughout the day, as investors continue to react to hackers stealing $65 million of the digital currency
Market Movers
- Shares of Square, the mobile payment company, rose 4% yesterday after the company raised revenue guidance a few million dollars higher than what analysts had estimated
CORPORATE PRIMER
Next Express Stop
…The moon. Moon Express is officially the first private company to get permission to travel outside of Earth’s orbit. In 2017, the company will be sending individuals to the moon with the intention of mining it for valuable natural resources. The government’s decision doesn’t necessarily mean that other private space companies have the green light, as the U.S. is going to take requests for space travel on a case-by-case basis. It looks like Moon Express is the guinea pig, then. Prepare for takeoff.
Time Warner Gets Hip
…and invests in Hulu. Time Warner finally purchased a 10% stake in Hulu for $583 million yesterday. Time Warner joins rivals Comcast, 21st Century Fox and Disney (each with 30% shares) at the ownership table. Ironically, Time Warner is investing in a company that aims to replace traditional cable TV. The entertainment conglomerate will offer its TBS, CNN and TNT shows to Hulu’s live streaming services, and in return, it hopes to diversify its services. The real winner? How ‘bout Hulu, which is now valued at close to $6 billion.
Musk May Be Sleeping at the Factory
…Tesla misses earnings and revenue estimates—again. The electric car company released second quarter earnings yesterday, and Wall Street wasn’t too pleased. While revenue grew 33%, the company that recently opened a Gigafactory still managed to post a loss of $293.2 million thanks to a variety of spending programs. On the bright side, Tesla significantly improved its production capacity—a problem that has plagued Musk and Co. for years. Now what? Tesla expects to deliver 50,000 vehicles in the latter half of this year. Bold.
WORLD MACRO
When New Taxes Are Actually Good
…India’s tax system gets a makeover. India’s upper house passed a sweepingnational goods and services tax (GST), which seeks to centralize and streamline the tax laws for the nation of 1.25 billion. The legislation, described as the most significant reform to the Indian economy in 25 years, hopes to create a single market and eliminate tax disparities between states. Prime Minister Modi looks to keep up India’s growth rate by making capital goods cheaper and India more attractive to foreign investors. The lower house must re-approve the bill, but it is expected to pass with flying colors.
OTHER STORIES
- Walmart in talks to buy web retailer Jet.com
- Goldman Sachs fined $36 million by Fed over leaked documents
- Nike halting golf equipment business
- Uber faces ban in Taiwan
ECONOMIC CALENDAR
- Monday: AMC (-), Carmike Cinemas (-) Earnings
- Tuesday: Ferrari (+), Fitbit (+), Pfizer (+), Procter & Gamble (+) Earnings;Motor Vehicle Sales (+); Personal Income and Outlays (+)
- Wednesday: Square (+), Tesla Earnings (-); ADP Employment Report (+)
- Thursday: Kellogg, LinkedIn, Kraft Heinz Earnings; Weekly Jobless Claims; Factory Orders
- Friday: Employment Situation; International Trade
NO MILLIONAIRE MILLENNIALS?
Millennials might be dubbed the “me generation,” but apparently they don’t expect a lot of money in their savings accounts. According to a new study from Wells Fargo, most millennials doubt they will ever be millionaires. Let’s see what’s going on here:
- 64% of working millennials don’t think they will ever amass $1 million in savings over their lifetimes. Psh, they’re probably just being humble.
- Despite the pessimism, 59% of those surveyed said they have already started saving for retirement. How responsible!
- The main reason for the negativity? Debt. 34% of millennials have student-loan debt with a median amount of $19,978.
- Unsurprisingly, the major difference between the 32% who said they will be millionaires and the 64% who said they won’t be is their current income. The median annual income of those who expect to be millionaires is $53,000, while the income for those who don’t think they’ll join the two comma club is $27,900.
INTERVIEW QUESTION OF THE DAY
Say the months of the year in alphabetical order.
(Answer)
BUSINESS TERM OF THE DAY
Pac-Man — A high-risk hostile takeover defense in which the target firm tries to take over the company that has made the hostile bid by purchasing large amounts of the would-be acquirer’s stock. The Pac-Man defense is supposed to scare off the would-be acquirer, which doesn’t want to be taken over itself.
FOOD FOR THOUGHT
While many industries are shrinking nowadays, one is trying to grow fast and that would be the bison industry. Demand for bison burgers and steaks is rising rapidly throughout the U.S.—increasing 22% over the past five years. Yum?
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