QUOTE OF THE DAY
“We need more companies with the ability to compete with Apple, Google, Microsoft, Amazon and Facebook” — Mark Cuban, billionaire owner of the Dallas Mavericks, commenting on how the Time Warner/AT&T merger might actually be a great thing for consumers.
Market Snapshot
- Choo-choo, the train keeps rolling on: U.S. stocks recorded their largest single-day rally since the election, as the Dow and S&P 500 reached record closing highs yet again. Not even a drop in oil prices could ruin the party
Pfizer is Shattering Records
…But not in a good way. Yesterday, a British antitrust regulator hit Pfizer (-1.17%) with a record $107 million fine for the drug company’s role in raising the price of an epilepsy drug by as much as 2,600% (no, that’s not a typo). The regulator found that in 2012, Pfizer intentionally de-branded the drug to raise its price—a seriously big no-no. Drug prices are a hot issue on both sides of the pond, as you might recall Turing Pharmaceuticals and its notorious founder Martin Shkreli, who raised the price of a lifesaving drug by 5,000%. Or pharma giant Mylan and its EpiPen pricing scandal (speaking of, yesterday Mylan announced it would be cutting around 10% of its workforce—tough days for pharma). Oh, and the president-elect himself voiced his disapproval yesterday, saying he aims to “bring down drug prices,” sending biotech and pharma stocks plunging. Watch out.
Yoga Pants: Still a Thing
…Keep it up, Lululemon (+14.07% after hours). The OG athleisure company posted better-than-expected third quarter earnings and announced a $100 million stock buyback to boot. But wait, there’s more: Lululemon also reported higher-than-expected margins and sales. Wins all around. Interestingly, the trendy retailer isn’t getting slammed by e-commerce like so many others, as third quarter sales both online and in stores rose 7%, higher than expected on both counts. The yoga pants sector has been tough to navigate lately, with Lululemon facing fierce competition from Nike (+3.03%) and Under Armour (+6.38%) in the war for athleisure dominance. But it seems there could be room for everybody.
‘Bux Looking Forward
…After releasing a five-year growth plan yesterday. Starbucks (+2.30%) has set some lofty goals: by 2021, it aims to add 12,000 stores around the world, hoping to achieve same-store sales growth in the mid-single digits and profit growth of about 15% per year. The coffee behemoth is betting on its higher-end coffee “bars,” like Reserve, to drive growth and elevate its brand—and it’s relying on its legendary captain to get it there. Remember when former CEO Howard Schultz announced last week that he would step down to focus on Starbucks’ high-end coffee shops? He’s up to something.
Elon Musk on Earth for the Holidays
…SpaceX gets some down time. After cancelling twice, SpaceX will no longer reach for space this calendar year, pushing back its next rocket launch to early January 2017. You may recall the September explosion of a SpaceX rocket at Cape Canaveral, which destroyed a Facebook satellite. If you don’t remember, that happened—and it turns out the crash, estimated to cost SpaceX over $250 million, still hasn’t been fully investigated. Plus, NASA, the FAA and the U.S. Air Force will need to throw in their two cents, casting doubt over whether even a January launch date seems realistic. But don’t worry too much—if we know Musk (and we think we do), he’s got something up his sleeve.
Other Stories
- Slack expands Google partnership with new Google Drive integrations
- Pokémon Go is adding 10.5K gym and pokéstop locations at Sprint stores
- EU fines JPMorgan, Credit Agricole, HSBC for manipulating euro-related benchmarks
- T-Mobile announces Digits: one phone number for all your devices
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
Expensive Carpentry
President-elect Donald Trump isn’t even halfway done picking his cabinet, but its combined net worth so far is more than 30 times greater than that of George W. Bush’s. At $11 billion so far, that’s the most expensive cabinet we’ve ever seen. Currently, President Obama has one billionaire on his cabinet—Commerce Secretary Penny Pritzker, with a net worth of $2.5 billion. So how rich are Trump’s cabinet members, and where’d they get their money? Here’s the lineup:
- Todd Ricketts—Deputy Secretary of Commerce, worth $5.3 billion. Ricketts is the co-owner of the Chicago Cubs (2016 World Series champions—yes, that still sounds weird to us), and his family founded Ameritrade, an American online broker.
- Betsy DeVos—Secretary of Education, worth $5.1 billion. DeVos’s father-in-law founded marketing company Amway, and her brother founded government services firm Blackwater.
- Wilbur Ross—Secretary of Commerce, worth $2.9 billion. Ross specialized in using leveraged buyouts to restructure failed companies, leading to his title as the “king of bankruptcy.”
- And the rest—boring old millionaires: Steven Mnuchin (Secretary of Treasury, $46 million), Ben Carson (Secretary of Housing and Urban Development, $26 million), Elaine Chao (Secretary of Transportation, $16.9 million), Jeff Sessions (Attorney General, $15.8 million) and Tom Price (Secretary of Health and Human Services, $13.6 million).
Interview Question of the Day
There’s a 100-pound watermelon laying out in the sun. 89% of the watermelon’s weight is water. After laying out for a few hours, 88% of the watermelon’s weight is water. How much water evaporated? (Answer)
Business Person of the Day
Masayoshi Son is a billionaire telecom mogul who controls Sprint. And he made his fortune with Japanese telecom giant SoftBank (which is now the majority owner of Sprint). Here’s a head-scratcher: this week, Son pledged to invest $50 billion in the U.S. and create 50,000 new jobs…all after meeting with president-elect Donald Trump for a mere 45 minutes.
Food for Thought
November set an all-time record for Apple App Store sales, according to Phil Schiller, SVP of worldwide marketing. Yes, there’s always money in the banana stand—err, we mean app store: global mobile app revenues are expected to hit $50 billion this year, and $101 billion by 2020.
[protected-iframe id=”cf83698fd562c54ecd7c3f3b9864da36-97886205-61771510″ info=”//s3.amazonaws.com/downloads.mailchimp.com/js/mc-validate.js” ]