Mario And Luigi Are Coming To Universal Studios In Japan, Plus Viacom-CBS Merger Halts

By 12.13.16

morning-brew-new
QUOTE OF THE DAY

“[The] cost is out of control. Billions of dollars can and will be saved on military (and other) purchases after January 20th” — President-elect Trump, tweeting his disapproval over Lockheed Martin’s (-2.47%) $400 billion F-35 Joint Strike Fighter program. Looks like it’s not just Boeing (+0.43%) and its Air Force One program that are taking the heat.

Market Snapshot

  • U.S. markets finished mixed (but the Dow hit another all-time high!), with banking stocks hit particularly hard and only the energy sector and utilities finishing positive, as investors look towards the Federal Reserve policy meeting later this week

Say Goodbye to Big Bills

…A landmark experiment. A month ago, India Prime Minister Narendra Modi shocked the world and even his own cabinet by eliminating India’s two largest currency bills…overnight. For reference, that’s 90% of its total currency. Why? India’s largely informal economy is full of loopholes that made dodging taxes easy—and widespread. The de-circulation is an unprecedented attack on corruption that immediately jeopardized tax-dodging Indians sitting on piles of black money. But they’re not the only ones who were hit hard: the lack of cash circulation has stunned the nation—factories closing, enormous ATM lines and catastrophe for much of India’s poor, many of whom are paid with the now-banned bills. Modi apologized, but emphasized that India’s poor will benefit most, ultimately siding with a demographic he says has been looted for years by the rich and corrupt. Turning back doesn’t seem like an option.

One Head is Better than Two?

…Chipotle (+3.37%) abandons its dual-CEO model. Yep, the burrito chain had been riding with two chief executives, Steve Ells and Monty Moran, before the latter stepped down yesterday. Adiós, Monty. Now Mr. Ells will be the sole CEO as the company continues to recover from the fallout of its massive E. coli outbreak, which ravaged dozens of Chipotle stores last year…as if you needed to be reminded of that. Last week didn’t help Chipotle’s cause either, considering its leaders admitted that they’re nervous about hitting full-year guidance. Yikes. Nevertheless, Chipotle hopes that its spicy leadership shake-up, coupled with potential changes to its board, will be the recipe for success.

Viacom-CBS Merger Halts

…As the Redstones flip flop. That’s right, Viacom (-9.40%) (think Nickelodeon, Comedy Central, MTV, etc.) and CBS (-0.61%) won’t join forces after all. Why? Because the Redstones told them to. The Redstones? Yep, the Redstones, a pesky shareholder family that controls 80% of the voting power in both companies. Sumner and Shari Redstone informed the boards of both companies yesterday that they should stop pursuing a merger, just three months after asking them to do the opposite. A possible reason? Viacom finally has a permanent CEO. The Redstones seem infatuated with the direction Viacom’s once-interim—and now permanent—CEO, Robert Bakish, is headed. So the merger is on hold, but keep an eye out in the future, because it sounds like both companies need more leverage against Comcast and AT&T.

Mama Mia

…Mario and Luigi are coming to a theme park near you. Ever wanted to be inside a Nintendo game? Well, now you might have that chance: Nintendo (-2.72%) and Universal Studios are partnering up to bring Super Nintendo World to Universal’s Japan location by summer 2020, featuring Nintendo-themed rides and attractions. While the companies have the plans well under wraps right now, the $434 million price tag promises quite the finished product. Plus, Super Nintendo World plans are also in the works for Orlando and Hollywood. We’ll meet you in Bowser’s castle.

Other Stories

Economic Calendar

  • Monday: Treasury Budget
  • Tuesday: Fed Meeting Begins
  • Wednesday: Fed Meeting Announcement; Retail Sales; Producer Price Index; Industrial Production
  • Thursday: Oracle, Adobe Earnings; Weekly Jobless Claims; Consumer Price Index
  • Friday: Housing Starts

Augmented Reality Glasses Hit the Factory Floor

First, a quick definition: augmented reality glasses add digital content like holograms onto the user’s view of the real world. Not quite VR, not quite real world, they’re something in between. Although AR products like Google Glass have yet to really catch on with the average consumer, they seem to have found their place at companies like AGCO Corp. Factory workers at AGCO wear the glasses so they can receive real-time instructions while performing various tasks. Here are the results:

  • Wearing Google Glass makes logging quality checks up to 20% faster, according to Peggy Gulick, director of business process improvement. Next up, using 3D images to guide workers as they weld chemical sprayers to 30-foot beams. Snazzy.
  • AGCO isn’t the only company to hop on the Google Glass hype train: Forrester Research estimates that 14.4 million U.S. workers will use smart glasses in 2025, up from 400,000 in 2016.
  • Are these smart glasses worth it? Well, companies think they are. Forrester also projects that large companies will spend $3.6 billion on the technology in the next decade, up from $6 million this year. If anyone’s counting, that’s a 600-fold increase.

Interview Question of the Day

How might a company’s contingent liabilities affect its share price? (Answer)

Startup of the Day

Valued at $1.6 billion, Florida startup JetSmarter is flying with good company: rapper Jay-Z and the Saudi royal family have backed it. JetSmarter’s hope is to bring private aviation to everyone. How? The company purchases empty seats from private-jet operators and makes them available through its app. That’s right, skip the TSA line and fly in style—for only $15,000.

Food for Thought

In what universe would Mozart—yes, the dead 18th-century composer—outsell the latest and hottest Drake album? Apparently this one. In celebration of the 225th anniversary of Mozart’s passing, Mozart 225 is the classical compilation everyone wants, and it sold 1.25 million CDs in November alone. Does this mean CDs are having a comeback? Nope: each box set contains a whopping 200 discs.


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