Enjoy your March 2nd hand-crafted Brew!
QUOTE OF THE DAY
“…I need leadership help and I intend to get it” — Uber CEO Travis Kalanick, pledging to change his ways after a dashcam video was released showing him arguing with an Uber driver. If we had a nickel for every recent Uber scandal…
Market Snapshot
- U.S. stocks bounced back in a big way on Wednesday, led by gains in the financial and energy sectors as newfound optimism from President Trump’s speech propelled the Dow above 21,000. What’s more? Inflation and personal income both picked up in January, reinforcing the Fed’s case for a March rate hike
- The prospect of higher U.S. interest rates rippled across Europe: led by financials, Europe’s benchmark stock index closed up 1.4%
Ring that Bell, Snapchat
…The day has finally come. Today, Snapchat goes public in the biggest tech IPO since Alibaba, and the most valuable one since Facebook. At $17 a share, parent Snap, Inc. is being valued at $24 billion. Yup, disappearing pics are powerful. But so are the risks for that matter—it’s a lofty valuation for a company that’s yet to strike a profit. Even scarier, Snapchat’s once rampant user growth started to slow last year. While Snap blames tech glitches, others are pointing to Facebook’s Instagram, which has been steadily rolling out Snapchat-like features since late 2016…and growing at a rapid pace to boot.
…And some more Snap vision for ya. Remember, Snapchat changed its name to Snap and is calling itself a camera company. First, it unveiled Spectacles. Now, a Snap drone is rumored to be in the works. Not only would it add a complementary feature to Snap’s growing ecosystem, but it’ll send over tons of visual data.
Rock N’ Roll McDonald’s
…Golden Arches launches mobile ordering and will expand delivery. Your wildest dreams have finally come true: you’ll soon be able to order McDonald’s (+1.10%) from the comfort of your own home. Hallelujah. In addition to expanding delivery, the Big Mac maker will also soon allow customers to order and pay by mobile phone and pick up their meals curbside. It seems that McDonald’s is amidst some much needed self-reflection, as the company has seen store visits fall by 500 million since 2012 and faces tougher competition from rivals like Shake Shack, KFC and Taco Bell. The ball’s in your court, burger lovers.
Bridge Over Troubled Water?
…Ray Dalio is stepping down from management at Bridgewater—the world’s biggest hedge fund firm—amidst a company shakeup. It’s no shock that Bridgewater’s company culture is intense (think heavy scrutiny, ultra-honest transparency…), a big reason why nearly 30% of employees leave within their first two years. While good ‘ol Ray is stepping down as co-CEO, he’ll stay on as co-CIO. And with this announcement comes another: Dalio’s star hire, Jon Rubinstein (one of the creators of the iPod), will leave after just 10 months as co-CEO. Troubled waters indeed.
Remember Crocs?
…The hugely popular colorful plastic shoes that incite…polarizing feelings around the world? Crocs reported Q4 earnings that were in line with expectations but still not great, with revenue dropping 10% year-over-year. Don’t worry, Crocs (+0.75%) has a plan. The current CEO is stepping down in favor of new talent, and the company has pledged to close about 30% of its retail stores over two years. The once-thriving company has been hit pretty hard by a combination of changing consumer tastes and a weakening brick and mortar retail landscape. We believe in you, Crocs.
Other Stories
- Facebook drops cost of Oculus VR headset by $100
- Yahoo CEO Marissa Mayer forgoes annual bonus in wake of data breaches
- Grocery-delivery startup Instacart in talks to raise about $400 million
- Lyft reportedly trying to raise $500 million at up to $7 billion valuation
Economic Calendar
- Monday: Hertz (-), Priceline Earnings (+); Durable Goods Orders (+); Pending Home Sales (-)
- Tuesday: Domino’s (+), Salesforce (+/-), SeaWorld (-), Target Earnings (-); Case-Shiller Home Price Index (+); Consumer Confidence (+); U.S. Q4 GDP (2nd Estimate) (-)
- Wednesday: American Eagle (-), Best Buy (-), Crocs (-), Office Depot (+) Earnings; Beige Book (+/-); ISM Manufacturing Index (+); Auto Sales (+/-)
- Thursday: Abercrombie & Fitch, Sears Holding Earnings; Weekly Jobless Claims
- Friday: Staples Earnings; ISM Non-Manufacturing Index
The Billionaire from Across the Border
Carlos Slim is the sixth-richest billionaire in the world, but he used to be number one. In addition to having an awesome name, the Mexican telecom icon owns America Movil, the largest phone operator in the Americas. He used to be worth $67 billion…until Donald Trump started out on the campaign trail for the presidency. Yup, Trump’s ascension is truly affecting everybody:
- Trump’s rhetoric on Mexico has helped to sink the peso, hurting the dollar-based value of Slim’s Mexican assets. The 77-year-old has also criticized Trump’s proposed wall on the U.S.-Mexico border.
- With that said, after a mysterious visit to Mar-A-Lago, Slim poetically claimed, “Trump is not the Terminator.” What happens behind billionaires’ closed doors stays there.
- The most entertaining turn of this saga? Slim’s popularity is rising in Mexico even as his wealth decreases. Slim says he’ll never run for office, but a recent poll considered him to be the best-suited Mexican to face Trump.
- Finally, a few fun facts about C. Slim:
- In 2009, he gave the New York Times a $250 million loan
- He’s obsessed with baseball and loves the Yankees
- He built a $70 million museum in honor of his late wife, Soumaya
Interview Question of the Day
What is the purpose of the Federal Reserve? (Answer)
Business Term of the Day
Price-weighted Index – In honor of #Dow21K, let’s dig into exactly how indices like the DJIA actually work. A price-weighted index (i.e. the Dow) is an index in which each stock influences the measure in proportion to its price per share. Stocks with a higher price will carry more weight, so for example, if Stock A is $100 per share and Stock B is $10 per share, Stock A will make up 10x more of the index than B.
Food for Thought
The late Michael Jackson’s “Neverland Ranch” is back on the market, albeit for $33 million less than its original asking price of $100 million in 2015. The 2700-acre property became iconic for its array of eccentric features: a train station, amusement park and a stage with trap doors to name a few.
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