An Update On Apple Vs. U.S., Plus Bombardier’s Good, Bad And Ugly

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“So we’ve killed OPEC. It’s gone.” — Texas Congressman Joe Barton, who believes that U.S. oil producers can counter any decision the big oil cartel OPEC makes by simply boosting production and continuing to export oil.

MARKET SNAPSHOT
Big Picture

  • Following a third straight day in the green, U.S. stocks have logged their biggest three-day gain since August, thanks to a combination of the Federal Reserve dashing hopes of future interest rate hikes, positive economic data in the industrial sector and stabilizing oil prices

Alternatives to Watch

  • A surprise interest rate hike from Mexico’s central bank strengthened the peso to its highest level against the dollar since ‘08

Market Movers

  • British commodities giant Glencore rose 15% yesterday after refinancing its debt, which was under a microscope from investors after lagging commodities prices caused bankruptcy rumors to circulate

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WORLD MACRO

Iran vs. World

In case you haven’t heard, many oil-producing nations have been dumping excessive amounts of oil into the markets, leading to massive oversupply. In an effort to get oil supply back down to a reasonable level, Saudi Arabia and Russia (aka the two largest oil producers) agreed on Tuesday to freeze their oil output—on one condition: everyone else has to be on board too. Most countries agreed to comply, but Iran, hot on the heels of its re-entry into the oil market after economic sanctions were lifted, isn’t playing nice. Despite publicly stating that it supports the output freeze, Iran stopped short of taking action—in fact, it seems poised to ramp up oil production even further. In order to keep this deal going, certain members of OPEC are planning on traveling to Iran to resolve the situation. Iran, it’s up to you.

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CORPORATE PRIMER
Apple vs U.S.
Apple and the U.S. government are facing off in court in a showdown between security and privacy. The case revolves around the San Bernardino shooting in December, after which the FBI asked Apple to disable the PIN lock on the shooter’s iPhone. Despite a judge’s order, Apple is refusing to comply, stating that disabling the feature would threaten the security of every iPhone. Both sides are fired up, from senators claiming that “Apple chose to protect a terrorist’s privacy” to Google’s Sundar Pichai warning that allowing the circumvention would set a dangerous precedent.

Don’t Sleep On T-Mobile

Yesterday, telecom giant T-Mobile reported quarterly profits that tripled, adding over two million subscribers in the process. Indeed, T-Mobile quietly took care of business last quarter and has stolen market share from key rivals like AT&T and Verizon. Outspoken CEO John Legere can thank T-Mobile’s “binge on” feature, data rollover and lower-priced phone leasing plans.

Bombardier’s Good, Bad and Ugly

The good? Montreal-based aerospace giant Bombardier received its first order for CSeries Jets in 16 months, worth a cool $3.8 billion dollars, sending shares soaring 30%. The bad? Bombardier also announced 7,000 job cuts as financial pressures from its CSeries development has put a serious drain on cash. It gets uglier—almost all of these job cuts consist of highly specialized workers who face the difficult task of finding other employment with their highly specific skillset.

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OTHER STORIES

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ECONOMIC CALENDAR

AH, TO BE RICH, YOUNG AND CHINESE

It might seem as if the Kardashians flaunt their wealth, but there’s a whole new generation of Chinese immigrants giving them a run for their money. They’re called the “fuerdai”—the children of the uber-wealthy Chinese—and they’re moving west. Here’s the breakdown:

  • The Bank of China found that 60% of China’s rich (worth at least $1.5 million) are either in the process of moving abroad or thinking about it.
  • Currently, money is being transferred out of China at a rate of $450 billion a year, mostly moving into real estate.
  • Much of this is because being wealthy in China is risky—making it to the Forbes list also means that you might be subject to a corruption investigation.
  • So what does this have to do with the fuerdai, the children of the aforementioned wealthy Chinese? Well, many of them move west—to America, but also to Vancouver, where the fuerdai live in extreme luxury before reaching adulthood.

INTERVIEW QUESTION OF THE DAY

What is goodwill and how is it calculated? (Answer)

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STARTUP OF THE DAY

MindMaze is a tech startup that develops virtual reality focused on the “human”—yes, we’re talking VR that’s all about the mind. Yesterday was a big day for MindMaze: it raised $100 million, valuing the company at a mind-numbing $1 billion. MindMaze’s CEO hopes its technology can be leveraged into other VR platforms, and sees applications ranging from neuroscience to gaming.

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FOOD FOR THOUGHT
Did you know that last year, millennials alone accounted for roughly 42% of domestic wine consumption? That’s a staggering two cases per millennial. Drink up.

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