“…It has the potential to be a dangerous moment” — Goldman Sachs CEO Lloyd Blankfein on Bernie Sanders’ recent success. It’s no secret that Bernie and Wall Street don’t exactly get along.
MARKET SNAPSHOT
Big Picture
- It was a mixed day for U.S. stocks, which started down big but staged a huge comeback driven by a big-time oil rally—which was itself driven by…
Alternatives to Watch
- The dollar, which went haywire and posted its largest drop in over two months yesterday. Investors believe future interest rate hikes are out of the question after the retail sector showed its slowest growth in two years
- Oil moved inversely to the dollar in typical fashion (a weaker dollar makes it cheaper to export global oil into the U.S.), causing its price to shoot up 8%
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CORPORATE PRIMER
GM Sells Those Cars
General Motors reported $5.2 billion in earnings this quarter, up a cool 472% since just last year. What’s the magic recipe? Mix in some beneficial international accounting rules, sales gains in China and a strong revenue base from the good ol’ red, white and blue. Winners? GM’s union workers, who will be awarded up to $11,000 each in profit-sharing checks. Losers? Investors, who despite the good news continued the sell-off in shares amid worries of a broadly deteriorating auto industry outlook.
More Bad News for GoPro
As the action-camera market becomes saturated, competitive pressures continue to take a serious toll on GoPro, whose shares fell 9% after hours after it posted a $35 million loss for the year. If that number’s not big enough for you, how about a 31% year-over-year drop in revenue for its main business line? GoPro has gone to serious lengths to solve its mammoth problem: cutting 7% of its workforce and instituting 50% price cuts. It’s not all negative though—GoPro’s still got some big plans, including developing a video drone and becoming a full-blown media company through content licensing.
Microsoft Knows What You’re Going To Say
Yesterday, Microsoft acquired artificial intelligence firm SwiftKey, maker of the popular keyboard app that’s inexplicably good at predicting which words you want to type. SwiftKey technology already exists on over 300 million devices, including Android and iOS phones, and SwiftKey hopes that teaming up with Microsoft will take it to the next level. Both companies believe that the acquisition will enhance interactions between people and technology and make communication more efficient—an admirable goal.
ChemChina Buys the Farm
Yesterday, China National Chemical (owned by China, of course) balled out and dropped a $43 billion all-cash offer on Syngenta’s desk (agri-business just got cool, huh?). Even Syngenta’s CEO called the deal “difficult to beat,” as it will give the pesticide-and-seed maker access to China’s agriculture market, utilize synergies to shield itself from falling commodities prices and shrink the market for other competitors to consolidate. That’s what we call a win-win-win.
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OTHER STORIES
- ESPN and Tencent team up to cover sports in China
- Home Depot hiring 80,000 seasonal workers
- Wells Fargo to pay $1.2 billion over bad government-backed mortgages
- Ex-drug executive Shkreli takes $40 million trading loss
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ECONOMIC CALENDAR
- Monday: Alphabet (+), Aflac (+) Earnings; ISM Manufacturing Index (-); Personal Income and Outlays (+/-)
- Tuesday: Chipotle (-), Yahoo (-), BP (-), Dow Chemical (+), Exxon (-), Ferrari (-), Gilead (+), Match Group (-), Michael Kors (+), Pfizer (+/-) Earnings; Motor Vehicle Sales (+)
- Wednesday: General Motors (+), GoPro (-), Yum Brands (+/-), Buffalo Wild Wings (-), Comcast (+) Earnings; Private Employment Report (+/-); ISM Non-Manufacturing Index (-)
- Thursday: LinkedIn, Lions Gate Entertainment, Phillip Morris, Ralph Lauren, News Corp, Cigna, Clorox, ConocoPhillips, Deckers, Dunkin’ Brands Earnings; Weekly Jobless Claims
- Friday: January Jobs Report; Tyson Foods Earnings
THE MILLION DOLLAR DONATIONS CLUB
How much are you willing to bet your favorite presidential candidate wins the nomination? Well, if you’re a billionaire that number might well be in the millions—if your favorite candidate is fairly traditional, that is. Here are some notable donations:
- Big-time hedge fund managers Paul Singer and Ken Griffin donated $5 million in total to a Super PAC for Marco Rubio.
- Hillary Clinton has raised $17 million from the investment community—compare this to the $34 million Jeb Bush has received.
- One of Hillary’s backers is billionaire investor George Soros, who contributed $6 million.
- Compare all that to Bernie Sanders, who raised $33 million in the fourth quarter, all from smaller individual donors—but at the end of the day, money is money, regardless of where it came from.
INTERVIEW QUESTION OF THE DAY
What is the sum of the numbers from one to 100? (Hint: using a calculator is not advisable) (Answer)
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BUSINESS PERSON OF THE DAY
Sumner Redstone is the 92-year-old media mogul, majority shareholder and chairman of CBS who announced yesterday that he would step down from his position. Replacing him: Leslie Moonves, a CBS executive famous for negotiating the Mayweather-Pacquiao mega-fight last year.
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FOOD FOR THOUGHT
First case: the first reported Zika transmission in the U.S. was discovered in Texas earlier this week. Unfortunately, it gets worse: the virus was transmitted sexually, meaning it doesn’t need mosquitoes to spread.