Yahoo Considering Selling Off Their Main Business, Plus U.S. Auto Sales Are Soaring

by 3 years ago

morning-brew
“The first word that comes to mind is: wow.” — Bill and Melinda Gates , in a press release yesterday announcing Mark Zuckerberg’s pledge to donate 99% of his Facebook shares (about $45 billion) towards philanthropic work during his lifetime.

 

MARKET SNAPSHOT

Investors Bond Over Going Green

* U.S. stocks had a blowout Tuesday, with the S&P 500 closing above the psychologically-relevant level of 2,100 for the first time in almost a month. Investors seemed to be focused on high expectations for Friday’s jobs report, while ignoring yesterday’s weak manufacturing data. And by weak, we really mean weak: it was the worst since June… of 2009.

* On the other side, European markets dipped, completely ignoring positive unemployment figures showing progress in the still-recovering euro zone economy. Also on tap later this week: OPEC discussing its oil outlook and the European Central Bank announcing its next monetary policy move on Friday.

* As the world meets to discuss climate change this week, the bond market for “green” companies has exploded, hitting a record high. November marked the strongest month ever for global green-bond issuances, topping over $7 billion, as banks and institutional investors ramp up their efforts to go green.

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WORLD MACRO

Brazil’s Woes Continue

Yesterday, Brazil’s government announced that its economy contracted 1.7% in the third quarter of 2015. If you’re thinking that’s not good, you’re right: it’s Brazil’s third consecutive quarter of negative GDP, marking the country’s longest recession since the 1930s. Brazil’s struggles are mainly due to lower commodities prices, as well as its reliance on trading with a faltering China. The recession has hit the job market hard, with unemployment now at 8.9%. Additionally, Brazil’s currency (the real) has lost 31% of its value against the dollar so far this year. Think it couldn’t get worse? Think again: Brazil is also dealing with a massive corruption scandal surrounding Petrobras, a major state-owned energy corporation.

 

Puerto Rico Pays Its Debts

Puerto Rico surprised everyone yesterday when it met its debt payment deadline and paid up $354 million . What’s the big deal? Remember, the territory’s governor declared in June that its municipal debts were unpayable, and then it defaulted on a payment in August. So yesterday’s payment gave Puerto Ricans a chance to breathe a sigh of relief. Unfortunately for them, it’s too soon to be relieved—the territory is still buried under $72 billion of debt. With another deadline looming on January 1st (a nice New Year’s welcome) and extremely constrained cash flows, Puerto Rico has quite the uphill battle ahead.

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CORPORATE PRIMER

U.S. Auto Sales Soar

Americans are spending big bucks on cars. Big name companies like Fiat Chrysler, General Motors, Ford, Nissan and Toyota kept their recent momentum going with major sales increases in November, reflecting a surge in consumer car purchases fueled by cheaper gas prices , low interest rates and improved job growth. All told, 2015 could reach an all-time U.S. annual record of more than 18 million vehicles sold, breaking the previous record set in 2000 (no thanks to Volkswagen of course, whose sales plunged 25%).

 

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TODAY IN TECH

VTech Breached

The year of the data breach continues: yesterday, a cyberattack unleashed on digital toymaker VTech exposed data on 6.4 million children, including names, genders and birthdates. Security analysts believe an attack of this scale on children’s information will prompt governments to beef up security standards. You might be wondering: why do these hackers do it? It’s all about the money: the stolen information is priced anywhere from $1-$4 per record in underground markets.

 

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OTHER STORIES

* Yahoo’s board weighs selling off core online business

* UnitedHealth CEO defends possible exit of Obamacare exchanges

* Schlumberger to cut more jobs as drilling downturn bites

* Starbucks recalls turkey paninis over E. Coli scare

 

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ECONOMIC CALENDAR

* Monday: Existing Home Sales; China Manufacturing Index

* Tuesday: ISM Manufacturing Index; Construction Spending; Motor Vehicle Sales

* Wednesday: Aeropostale, American Eagle, Avago Earnings

* Thursday: Barnes & Noble, Dollar General, Kroger, Sears Holdings Earnings; Weekly Jobless Claims

* Friday: November Employment Report; U.S. Trade Deficit; European Union GDP

 

IT’S GETTING HOT IN HERE

Billionaires and heads of state sure seem to think so. Everyone is talking about the Paris Climate Summit this week, and the importance of taking action against global warming. So why don’t we all just switch to electric cars and call it a day? It all comes down to financing:

* Billions of dollars are being promised to develop new green technology to help developing countries like India decrease their carbon emissions.

* Wealthy countries have pledged to contribute $100 billion per year towards the green technology cause starting in 2020—and build defenses against some oncoming problems like droughts and rising sea levels.

* Heads of state aren’t the only ones promising financing: Bill Gates has taken center stage during the conference, stressing the importance of competitive pricing for green technology.

* Who really cares? Islanders, like the small island nations of Canberra, Australia , whose 300,000 square miles and roughly 10 million people could be underwater by 2090.

 

INTERVIEW QUESTION OF THE DAY

How would you calculate beta for a company? (Answer #5)

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BUSINESS TERM OF THE DAY

 

Tactical Trading (http://www.investopedia.com/terms/t/tactical-trading.asp) — A style of investing for the relatively short term based on anticipated market trends. Tactical trading involves taking long or short positions in a range of markets, from equities and fixed income to commodities and currencies.

 

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FOOD FOR THOUGHT

7: the number of counts former New York Assembly Speaker Sheldon Silver, who was accused of receiving $4 million in kickbacks, was found guilty of on Monday.

 

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Congratulations to Brian K., an undergraduate business student at Tulane University, for winning the Brew survey prize! We received a tremendous amount of feedback and look forward to continue making the Brew the best it can be.

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