“Working on Top Secret Tesla Masterplan, Part 2. Hoping to publish later this week.” — Elon Musk, the visionary and outspoken CEO of Tesla, in a tweet yesterday. What could Musk possibly have in store for us next?
MARKET SNAPSHOT
Big Picture
- U.S. markets finished the week on a positive note after a stellar jobs report which left the S&P within 5 points of its record high of 2,134, which was reached last May
Alternatives to Watch
- Despite the optimistic employment data, 10-year treasury bond yields fell to all-time lows which could signal that some investors still aren’t convinced of a recovery
Market Movers
- As many of you may have heard the app Pokémon Go is on the up and up and so too was Nintendo’s stock, as the creator of the popular app shifts to mobile gaming
CORPORATE PRIMER
Here’s a Secret
…Facebook wants Messenger to be your go-to messaging app. Facebook Messenger will begin offering an end-to-end encryption feature meaning that when enabled, messages will only be visible to the sender and the reader. Not even Facebook itself can read your chats. The “secret conversations” will also let Messenger’s nearly one billion users set an expiration date for a message so it will eventually vanish. The new feature comes at a time when big names in tech are looking to reassure users that their conversations are secure. Well played, Zuck.
In Cold Blood
…Theranos takes another hit. Over the weekend, federal regulators banned Theranos CEO Elizabeth Holmes from operating or owning a medical lab for two years. We’re not venture capitalists but that’s not good for a Silicon Valley unicorn, which specializes in blood testing. The punishment comes amid questions about the effectiveness of Theranos’ technology and how it operates its labs. This is not the first time the startup has been on the ropes. Theranos was under investigation for inaccurate blood tests, and Walgreens pulled out of their partnership last month. For Theranos, it looks like bad things do come in threes.
Attention, Your Honor
…Univision and Charter Communications are headed to court. Univision is suing Charter, as it is accusing the cable company of breaching a contract by paying under-market rates for the rights to carry Univision’s channels. Looks like the second-largest U.S. cable company is feeling pretty feisty, especially since it bought Time Warner Cable for $60 billion last year. This will be an important case, as a ruling against Charter may prompt other mistreated channel providers to enter the legal arena as well. Lawyer up.
U.S. MACRO
Making Gains
…U.S. June jobs report does some work. On Friday, the Labor Department reported that the economy had added 287,000 jobs last month, blowing predictions of 175,000 out of the water. The surge in jobs is welcome news following Brexit, and helps alleviate fears that the U.S. economy is faltering. The best news? Wage growth. Wage growth posted an annual rate of 2.6%, well above earlier this year. But hold your horses. The report is unlikely to give the Fed enough reason to raise interest rates at its meeting later this month. Maybe next time.
OTHER STORIES
- Pokémon Go will eventually allow players to trade Pokémon
- Twitter in talks to add NBA and MLS streams to its sports coverage
- Senate approves national GMO labeling bill
- Microsoft bolsters Skype bots with new features
ECONOMIC CALENDAR
- Monday: Labor Market Conditions Index
- Tuesday: Wholesale Trade
- Wednesday: Yum! Brands Earnings; Import and Export Prices; Treasury Budget
- Thursday: BlackRock, Delta, JPMorgan Chase Earnings; Weekly Jobless Claims
- Friday: Citi, Wells Fargo Earnings; Consumer Price Index; Retail Sales
AND THE GLOVES ARE OFF
Wimbledon, Euro Cup, summer baseball, NBA Draft. With all these sporting events going on you might have missed the Ultimate Fighting Championship 200. Last Saturday, one of the biggest UFC fight cards in history was broadcasted from Las Vegas to a pay-per-view audience. Just how big is UFC? These numbers will hit you with a hook:
- The rise of UFC 200 goes back to 2001, when two casino moguls bought UFC for just $2 million. Its value now? The company is getting bids for over $4 billion. Yes, that’s with a “b.”
- So what’s all the fuss? UFC 200 makes money off of pay-per-view fees and ticket revenue, but the biggest asset is its supposed $700 million television deal with Fox Sports.
- UFC doesn’t normally publicize its pay-per-view sales, but UFC 196 saw an estimated 1.5 million buys last year. At around 60 bucks a pop, that’s a lot of dough.
- UFC 200 took place in a massive 20,000 arena in Vegas, and featured some pretty big stars—including heavyweights Brock Lesnar and Anderson Silva.
INTERVIEW QUESTION OF THE DAY
What is the importance of consumer spending? (Answer)
BUSINESS TERM OF THE DAY
Hedge — It is an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security, such as a futures contract. A perfect hedge is one that eliminates all risk in a position or portfolio. In other words, the hedge is 100% inversely correlated to the vulnerable asset.
FOOD FOR THOUGHT
Chick-fil-A has designated tomorrow “Cow Appreciation Day.” Anyone wearing anything cowlike will receive a free entrée on Tuesday. There will even be a snapchat filter so customers can share their experiences with the world.
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