Apple Fulfills One Of Steve Jobs’ Final Projects, Plus Google Is Coming After Uber

morning brew

Enjoy your February 23rd hand-crafted Brew!

QUOTE OF THE DAY
“Steve’s vision for Apple stretched far beyond his time with us” — Apple CEO Tim Cook announcing the April opening of Apple’s new corporate campus, which will have the main auditorium bearing the late Steve Jobs’ name.

Market Snapshot

  • Although the record-setting streak continued for the Dow, the broader U.S. market buckled Wednesday as Fed minutes suggested a rate hike could occur in the near future
  • Shares of energy companies in the S&P 500 fell nearly 1.6%, reflecting a steep drop in the price of crude as investors express concern that growing U.S. stockpiles and rising domestic shale production will offset efforts by OPEC to curb output
  • U.S. home sales increased 3.3% in January to reach their highest level since 2007, despite increasing mortgage rates and dwindling supply driving up prices

Watch Your Back, Uber

…Alphabet’s (-0.11%) ride-sharing platform is ready to expand. Believe it or not, the Google parent has a ride-sharing service of its own, and it may sound familiar. Yep. Alphabet owns Waze, and it’s going after Uber. Unlike Uber and Lyft, Waze requires regular drivers to use its navigation app and pick up people who are going in the same direction. While it is often cheaper than competitors, Waze requires that rides be booked further in advance. As of right now, the carpool service can only be used in the Bay Area and Tel Aviv, but Alphabet announced yesterday that Waze is expected to launch in several U.S. cities over the next few months.

Warning

…Fed rate hikes are closer than they appear. Think back to January and the first Fed meeting under Trump and his new policies. It was then that members proposed an increase in the benchmark rate “fairly soon” if the economy continued to grow…which is exactly what it appears to be doing. Rumor has it that some members believe “raising rates at an upcoming meeting” would allow the Fed greater flexibility when responding to future economic growth. Looks like the door is wide open for a March interest rate hike.

L Brands Not Looking So Sexy

…Despite posting not-too-shabby Q4 results. The fashion retailer, whose flagship brands include Victoria’s Secret and Bath & Body Works, beat earnings expectations and slightly missed revenue expectations for Q4, which doesn’t sound so bad. That’s not the whole story, though. L Brands (-12.44% after-hours) also announced lowered guidance for this upcoming year, expecting full-year earnings short of Wall Street expectations. Ouch. The reason? Victoria’s Secret has been under serious business pressure as it makes some changes, like discontinuing swimwear and eliminating print catalogs.

The Skies: Warren Buffett Edition

…The Oracle of Omaha never fails to fascinate us. In the last two quarters, Warren Buffett has spread nearly $10 billion in investments across the four major U.S. airlines. The big question now—will he take over an airline like he did with the railroads? Industry consolidation since 2000 has merged many into just four: Southwest, Delta, American and United. And a bit of food for thought: remember that this is the same Warren Buffett who in 2013 said that US airlines are a “deathtrap for investors.”

Tesla Falls Short of Expectations

…Which means it is right on track by Elon Musk standards. The sustainable energy company, best known for its automotive business but also for its batteries and solar panels, posted mixed Q4 earnings. Tesla missed earnings expectations, but beat on revenue expectations. In other news, Tesla (+1.52% after-hours) unveiled some juicy details regarding the much-anticipated Model 3 release. It plans to begin production in July and, in typical Musk fashion, plans to ramp up quickly to 5,000 vehicles per week. Vroom.

Other Stories

  • Square up 8% after strong quarterly report
  • Fitbit earnings reveal terrible holiday quarter
  • Swiss engineering group, ABB, charged $100 million for criminal scheme
  • McDonald’s to slash soda and coffee prices

Economic Calendar


Water Cooler

Apple Fulfills One of Steve Jobs’ Final Projects

Riding great recent stock performance and a strong outlook for 2017, Apple announced yesterday that it will open Apple Park, its new campus, in April. The 175-acre compound will bring together over 12,000 employees that are currently located at the nearby 1 Infinite Loop campus. Here’s the scoop on Apple Park:

  • The campus is located in Cupertino, California on land once used as a Hewlett-Packard campus. In 2010, Apple bought the land when Steve Jobs felt the company needed more space where more employees could be together under one roof.
  • Apple honored its late co-founder by naming the 1,000 seat auditorium on the campus the Steve Jobs theater. The theater includes a carbon-fiber roof and a 20-foot glass cylinder in the entrance.
  • Not unlike everything else Apple, the project was not cheap. Apple didn’t disclose the cost, but some reports estimate it weighing in somewhere between three and five billion dollars.
  • The centerpiece of the campus is a 2.8 million square-foot ring-shaped building covered completely in curved glass. The futuristic flagship building will house 12,000 Apple employees that will move in over a six-month period beginning in April. Get pumped.

The Breakroom

Interview Question of the Day

A certain street contains 100 buildings. They are numbered from one to 100. How many nines are used in these numbers? (Answer)

Video of the Day

Sure, Amazon has tested drone delivery, but UPS is experimenting with combining its extensive truck fleet with drone delivery. UPS’s drone, referred to as the Workhorse Horsefly, can fly up to 30 minutes and carry packages weighing up to ten pounds. The drone launches from the top of a UPS truck and it looks pretty cool, to say the least.

Food for Thought

Guess which country has the fastest mobile internet speed.

If you’re thinking the United States, think again. In fact, at 12.5 mbps, the U.S. sits well below the global average LTE connection of 17.4 mbps.

So, who takes the cake for fastest mobile internet? South Korea at an astounding 37.5 mbps.

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