Brexit Is Real, Plus VW To Pay Out $10 BILLION For Cheating Emission Standards Testing

by 2 years ago

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“I call it a sea of dudes” — Meg Mitchell, researcher at Microsoft, addressing the male-dominated world of AI research. Mitchell estimates that she’s worked with an underwhelming ten or so women compared to hundreds of men. A sea of dudes, indeed.

WORLD MACRO

Wait, Macro Comes First?

…On days like today, how couldn’t it? Folks, after months of speculation and heated campaigning, the U.K. has, incredibly, voted to leave the European Union. Aka Brexit is very much a go. Polls from just yesterday had the Remain side winning by a hair, but with this historic decision, the U.K. begins negotiations to exit the EU. Before we get too crazy, remember that the U.K. doesn’t leave first thing today: it has two years to negotiate the terms of its exit. But let’s now get crazy: this is a major freaking deal. Investors, well let’s just they were freaking out all night.

Starting with the U.K’s currency, the Pound took an insane hit—we’re talking a 10% dive to 31-year lows, while London’s stock market was down 9% and European banks recorded their biggest losses in history. In the States (which knows a thing or two about breaking off from establishments), U.S. stock market futures imply theDow will open down 700 points, Gold is up as investors flock to safe havens and U.S. 10-year yields are down sharply. In overseas markets, Japan was down 8% and Hong Kong down 3.5%.Bloomberg terminals everywhere are expressing their alarm.

The fallout has already begun: Prime Minister David Cameron (who was against a Brexit) has already announced his resignation. The economic, political, financial and societal effects are numerous. All this uncertainty over the future of the U.K. and the once-impenetrable EU have investors everywhere shaking in their all-nighter boots. We at the Brew must admit we are surprised, if not shocked, and we will of course have much more on this story in the weeks and months come. Hang tight.

CORPORATE PRIMER

If You Don’t Set Ambitious Goals

…You’ll never fail. That’s the motto for Blackberry, at least. The phone manufacturer released its Q1 earnings report yesterday, beating analyst estimates by posting a smaller-than-expected loss. How small? Only $670 million. Psh, that’s nothing. Shares actually jumped 4% on the news. CEO John Chan expressed optimism for the firm, planning for higher software revenues and a profitable hardware business by the end of the year—an ambitious goal for a firm that has been burning through cash faster than a house fire at Pablo Escobar’s placeBottom line: it’s been a pretty terrible year for Blackberry (a terrible decade, for that matter), with shares still down 24% in 2016.

Macy’s Needs a New Plan

…And fast. Unless you live under a rock, you probably know that department stores (like Macy’s) are not doing too hot. These days, consumers are preferring Amazon and fast-fashion stores like H&M. However, Macy’s has some big changes on the horizon. Current CEO Terry Lundgren will hand off the baton to current President Jeff Gennette—but not until 2017. It’s a ways off, but for Macy’s, all change is good change. Amid tons of store closings and layoffs, Mr. Gennette will have his work cut out for him—no pressure or anything.

VW Finally Settles Things

…With an easy $10 billion. Yes, $10 billion: Volkswagen made history with the largest court settlement in the auto industry—ever. After cheating emission standards testing, VW will shell out the massive sum to repair the resulting environmental damages and promote zero-emissions vehicles. But that’s not all. Every affected owner (nearly 500,000) can receive compensation for the full-value of their car and an average of $5,000 on top of the original price. Yes, you read that correctly.

OTHER STORIES

ECONOMIC CALENDAR

WELCOME TO MY HOUSE

Is it time to buy? Should I just rent? Move back home? Live off the land somewhere off the grid? The ever-volatile housing market can be a bit confusing. The latest?New single-family home sales in the U.S. dropped in May to an annual rate of 551,000 units from April’s eight-year high of 586,000 units. Let’s take a closer look:

  • New home sales were up in April by more than 8.7% from what they were a year ago, but economists think this might be meaningless. New single-family home sales are notorious for fluctuating like nobody’s business, and economists believe April’s rise in sales was pretty unstable as is.
  • Back to present-day: In the South, new family homes sales dropped just under 1% in May, while they plummeted 33.3% in the Northeast. Sales in the West were hit, but certainly not as hard, dropping 15.6% from the previous month.
  • On the bright side, single-family home sales in the Midwest grew 12.9%. We see you, Cleveland.
  • Despite this drop, the housing market is growing overall. The median price for new homes has risen 1% from what it was a year ago, now resting at a little over $290,000. Time to buy? Hey, we just cover the news.

INTERVIEW QUESTION OF THE DAY

What is considered a good turnover ratio for a mutual fund? (Answer)

HISTORY-MAKING STATISTIC

How fast is fast enough? A team of 30 students have built “the fastest-accelerating electric car in the world” with a 0-60 miles per hour time of 1.513 seconds—and they’ve given it the lovely name Grimsel. If you thought a Tesla’s 0-60 was ludicrous, Grimsel is more than half a second faster.

FOOD FOR THOUGHT

Wall Street analysts are having commitment issues. Goldman will no longer conduct first-round interviews for summer positions on campus at elite schools due to students leaving after just two years, especially students from schools like Harvard. Looks like the best and brightest just doesn’t cut it anymore.


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