Enjoy your February 28th hand-crafted Brew!
QUOTE OF THE DAY
“One of the chips in our shoes in the next 30 years will be smarter than our brain. We will be less than our shoes. And we are stepping on them” — Masayoshi Son, CEO of Japan’s Softbank Group, at a tech conference in Barcelona yesterday. Welcome to the world of AI.
Market Snapshot
- U.S. markets rallied again, led by gains in both energy and financial stocks as the Dow chalked up its 12th straight session of consecutive gains, the longest streak in 30 years. If you’re counting, it’s now just one more green day away from the 120-year-old record as the Trump administration began detailing its spending plans
- Shares of defense contractors closed higher after Trump’s budget called for a 10% increase in military spending
Hotline Bling
…AT&T rolls out new, cheaper unlimited plan. Less than two weeks after opening up unlimited plans to all subscribers and then immediately seeing Verizon (-1.32%) resurrect its own all-you-can-eat plan, AT&T (-1.27%) announced that its unlimited plan will now cost $90/month—good for $10 off the original cost. The move comes as smaller rivals like T-Mobile (-0.06%) and Sprint (-0.34%) continue to try to woo customers by scrapping data caps and lowering prices. Speaking of T-Mobile, shortly after AT&T’s announcement, the company announced that it will be offering an additional line for free for accounts with two or more lines. Looks like a game of “anything you can do, I can do better.”
The Oracle of Omaha Takes on a Massive Stake
…In none other than the world’s largest company. That’s right folks, renowned investor Warren Buffett has officially become a top 10 shareholder of Apple (+0.20%) with a position worth $18 billion, creating a “Big 7” at Berkshire of positions worth over $10 billion. He isn’t doing too shabby either: Berkshire’s position in Apple has grown by over $1.6 billion. If it ain’t broke, don’t fix it.
Quite The Day
…For Elon Musk. First, the good news. SpaceX is planning to fly two lucky space tourists (that have already put down deposits) on a private trip around the moon in 2018. They now just have to undergo fitness tests and space training later this year. SpaceX is also following an aggressive timeline, as it hopes to use a rocket and spacecraft for this mission—both of which have not been flown yet. Nothing like human lives at stake to give testing a kick in the pants.
…The bad news? Musk’s other toy, Tesla (-4.19%), dropped yesterday, bringing its decline to 11% since its quarterly report last week sparked worries. Why the plunge? Concerns that the Model 3 production may be delayed, as well as uncertainty over whether Tesla’s integration of SolarCity could hinder Tesla’s financial resources. Quite the day for Elon.
Just Some Politics and Business
…Boy, we’ve got lots to cover. First, Wilbur Ross was confirmed as U.S. Commerce secretary in a decisive 72-27 Senate vote yesterday. Ross, known as the “King of Debt,” has previously invested in offshore manufacturing, but this time the new administration is counting on him to reverse its effects. Mr. Ross’ first big gig? Renegotiating NAFTA. And speaking of NAFTA, Mexico’s economy minister warned the country will exit negotiations if the U.S. proposes any import tariffs on Mexican products. Good times between friends.
…Plus, there’s lots of substance ahead at Tuesday’s joint Congress hearing.President Trump is set to request a 10% increase in the U.S. defense budget, bringing it to a whopping $54 billion. He’ll also build his case for replacing the Affordable Care Act. So what’s on the other side? Sharp spending cuts in the Environmental Protection Agency are expected to offset the defense spike. Not everything’s on the chopping block though: Social Security and Medicare are safe for now.
Other Stories
- AIG directors are discussing CEO’s future following poor earnings
- United expands domestic offering with 22 new routes
- Mozilla acquires time-saving content app, Pocket
- $29bn merger between London Stock Exchange and Deutsche Boerse appears to be in jeopardy
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, 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 Oscars’ Best Picture Blunder
So who’s to blame for Sunday’s late night Oscar goof? An aging Warren Beatty or PwC, the accounting firm that’s sealed Oscar envelopes since 1934? While it’s true that PwC gave the presenters the wrong envelope, maybe Beatty’s blind trust is to blame, as the writing on the envelope in no way said “Best Picture.” Here’s more:
- PwC has a longstanding relationship with the Academy Awards, overseeing the voting process every year. In PwC’s words: “The reason we were even asked to take on this role was because of the reputation PwC has in the marketplace for being a firm of integrity, of accuracy and confidentiality.” Whoops.
- This isn’t the first time an erroneous winner has been announced at the Academy Awards. Back in 1964, Sammy Davis Jr. announced the incorrect winner for best music score. He corrected himself before a mistaken winner took the stage though, a courtesy not extended to the La La Land crew.
- Luckily for PwC, this year’s Oscars drew the lowest ratings since 2008. Unluckily for PwC, most people didn’t have to tune in last night to learn of the mix up on the internet this morning.
Interview Question of the Day
What is an absolute rate? (Hint: think about interest rate swaps)
Career Tip of the Day
Brew readers are no strangers to hard work, and we’d wager that many of you are pretty familiar with long working hours as well. Career coach Bruce Kasanoff says to work smarter instead of longer and to sell your talent, not your time. When you get paid for your time, there’s a monitoring dynamic between you and the client. When you get paid for results, you can “constantly push yourself to aim higher,” allowing others to focus on the value you deliver. This doesn’t mean you wouldn’t be working hard; you’d be working smarter.
Food for Thought
More than 10 years ago, YouTube launched. Now, it’s threatening to surpass total U.S. television viewership. YouTube viewers across the globe are now fueling more than 1 billion hours of video watched per day. Are all those hours translating to some sweet profits? Not yet. As YouTube CEO Susan Wojcicki says, “growth is the priority.”
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