QUOTE OF THE DAY
“We’re moving into a very strong period called the Santa Claus rally” — TradingAnalysis.com analyst Todd Gordon, who believes that small cap stocks will continue surging in December. Even stocks can get into the holiday spirit.
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Market Snapshot
- Global markets rallied yesterday, and specifically in Italy, where shares dipped but then quickly rebounded heavily following Prime Minister Matteo Renzi’s resignation, which investors seem to be shrugging off
- Oil prices initially rose but then reversed later as investors began losing confidence in the OPEC supply cut. The action comes after last week saw the largest one-week oil rally since 2011
“Just Walk Out”
…Did Amazon (+2.57%) just invent the grocery store of the future? In its latest play to get into groceries, Jeff Bezos’ ever-expanding company is creeping further into the brick-and-mortar realm with its latest launch: Amazon Go. What is it? Pretty much the coolest grocery shopping experience we’ve ever heard of. To start, shoppers enter the store (yes, a physical store) by scanning the Amazon Go app. Here’s where things get crazy: as you shop, the app tracks items via a virtual shopping cart, and when you’re done, you “just walk out” of the store and the items are automatically charged to your Amazon Prime account. Grocery shopping doesn’t get any easier than that. The downside? The only Amazon Go location is in Seattle and doesn’t open to the public until next year.
Let’s Forget This Whole Thing
…Will 800 million pounds do the trick? RBS is trying its best to sweep its troubles under the rug. Long story short, the Royal Bank of Scotland (+2.28%) scrambled to raise 12 billion pounds by selling rights (the ability to purchase additional shares) to shareholders…just weeks before RBS went under and was bailed out. That was 2008. Yesterday, RBS announced it had reached a deal to satisfy at least 77% of the claims against it, and is willing to shell out up to 800 million pounds to put this whole bloody thing behind it. One catch though—RBS doesn’t have to admit to any wrongdoing. Hmmmm.
Going…Going…
…A home run for Under Armour (+1.33%)? The sports clothing company officially signed a 10-year uniform deal with Major League Baseball yesterday, marking the company’s first ever league apparel deal. But don’t get all riled up just yet. While the Under Armour logo will be on the front of all MLB uniforms starting in 2020, most of the revenue from jersey sales will actually go to online apparel retailer Fanatics Inc. How does that work? Under Armour will manufacture the jerseys worn by the professionals, while Fanatics will make and sell the jerseys sold to consumers. It’s a bigger win for Fanatics, but certainly not a strikeout for Under Armour.
Uber, Meet Volkswagen
…The German automaker is coming for you. Yesterday, Volkswagen revealed Moia (don’t ask us how to pronounce it). It’s the company’s 13th brand, but it’s unlike the others: in fact, think of Moia like an in-house startup, focused on developing “new mobility solutions“—we’re talking things like ride-hailing (Uber says hello), autonomous driving (hi again Uber) and electric cars (alright, this one’s mostly Tesla, but Uber’s doing it too). The ultimate goal? It might be the same goal that other auto companies and Uber have in mind: a self-driving car fleet that can be ordered by customers on-demand. Volkswagen may be an old-school auto company, but it’s trying to keep up with the times.
And Speaking of Uber
…The ride-hailing company is doing a whole more than ride-hailing these days. Need another example? Yesterday, Uber launched its own AI research lab, and it’ll be staffed by members of the startup Geometric Intelligence, which Uber just acquired. The lab will work on all sorts of futuristic artificial intelligence fun, like optimizing your food delivery route and—surprise!—self-driving car tech. We’re sensing a trend here.
Other Stories
- Google’s new “Trusted Contacts” app lets you keep tabs on family
- Facebook, Twitter, Microsoft and YouTube will share terror content info
- Apple Watch sales plunge as Fitbit continues to rule wearables
- Consolidated Communications to buy FairPoint in $1.5 billion deal
Economic Calendar
- Monday: ISM Non-Manufacturing Index (+)
- Tuesday: Bank of Montreal, Dave & Buster’s Earnings; International Trade
- Wednesday: Costco, Lululemon, H&R Block Earnings; Job Openings and Labor Turnover Survey
- Thursday: Broadcom Earnings; Weekly Jobless Claims
- Friday: Consumer Sentiment
Keeping Up with the Joneses
Ultra-high net worth individuals may seem like regular people…but ultra, ultra-high net worth people? That’s a tougher sell. AIG Private Client Group looked at its clients who pay more than $250,000 in annual personal insurance premiums. Here’s what they found:
- These absurdly rich individuals owned, on average, nine overseas homes. Yes, that’s overseas only. Over 50% of their homes were located in the Americas, with 14% located in Mexico. The rest of the top five hot spots are the Bahamas (13%), England, the Caribbean and France (each 9%). Goodness.
- These homes need big driveways: the ridiculously rich own an average of 19 regular-use vehicles in total. Surprisingly, that’s only two per house.
- Don’t forget about decorations. The ultra-rich have an average of $19.6 million in insured fine art and $1.7 million in insured jewelry. There you have it: they’re not so different after all.
Interview Question of the Day
If a company with a low P/E acquires a company with a high P/E in an all stock deal, will the deal likely be accretive or dilutive? (Answer)
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Business Term of the Day
Italian Prime Minister Matteo Renzi’s resignation comes after voters overwhelmingly rejected his proposed constitutional changes. Ouch. Now that Renzi’s out, Italeave is up in the air as Renzi’s opposition pushes a separate referendum on Italy potentially exiting the European Union. Hello Brexit, my old friend.
Food for Thought
Tyson Foods, which produces 20% of all U.S. chicken, beef and pork, has launched a venture capital fund. No joke. The meat giant plans to put its money where its mouth is by investing in “high-tech” products and services to refresh its meat products. This includes startups that are experimenting with lab-developed meats and insect-based proteins. Who’s hungry?