Enjoy your February 9th hand-crafted Brew!
QUOTE OF THE DAY
“My daughter Ivanka has been treated so unfairly by @Nordstrom” — President Trump, tweeting his discontent with Nordstrom after the department store cut Ivanka Trump’s clothing line, citing declining sales. Hey, business is business.
- U.S. stocks closed mostly positive as the Nasdaq crept to a new record high. Losses in the financial sector held the Dow in the red, while utilities and real estate stocks led gains
- Oil ticked higher despite data depicting a massive buildup in U.S. crude inventories. Confused? You should be—investors speculate that a drop in gasoline stockpiles is offsetting the rise in oil supplies to give prices positive momentum
Off to the Desert
…Intel announces a $7 billion dollar investment in an Arizona chip factory. Yesterday, Intel CEO Brian Krzanich revealed from the Oval Office that Intel
(+0.08%) will be making a big investment in a manufacturing plant, which—oddly enough—was completed several years ago but then left vacant. Who was especially ecstatic? President Trump, of course. Political move, much? Intel announced that the plant will employ 3,000 people in high-wage jobs and indirectly create more than 10,000 jobs in the Arizona area. No complaints there. It’s no secret that the PC industry has been struggling as of late, leading Intel to shift its focus to its global data center business and the “Internet of Things.” We’ll see if the investment pays off.
Music to Our Ears
…Thanks to The New York Times’s deal with Spotify
(+1.02%). You read that right: the news giant and music service have teamed up to offer a two-for-one deal to all new NYT subscribers. Fine print? You bet! This too-good-to-be-true offer is only valid for NYT subscribers who sign up for a one-year all-access digital subscription. The Times has been literally trying to keep up with the times, as print advertising sales plummet while digital advertising sales (slowly) increase. This comes coupled with an industry-wide shift towards digital journalism rather than good ‘ol fashioned black-and-white print. We like the sound of this.
Anthem Gets Shut Down
…A federal judge has blocked the $54 billion Anthem-Cigna merger that has been pending regulatory approval since 2015. This ruling comes on the heels of last month’s block of Aetna’s $33 billion acquisition of Humana, sending a clear message to acquisition-hungry health insurance giants: no go. Why no go? There are only a handful of large national U.S. insurers, so the government successfully argued that both mergers would hurt the competitive environment and lead to higher insurance prices for Americans. If the ruling holds, Anthem will have to pay Cigna a whopping $1.85 billion break-up fee. That’s no fun, but neither is expensive health insurance. We’ll take it.
- Pokemon GO looks for love with Valentine’s Day celebration
- Flipboard redesigns app with an eye to identifying passions
- Chelsea Clinton’s husband closes his hedge fund
- Boutique bank Moelis wins advisory role for mammoth Saudi Aramco IPO
- Monday: Twenty-First Century Fox (+), Tyson Foods (+/-), Hasbro (+) Earnings
- Tuesday: Walt Disney (+/-), BP (-), Michael Kors (-), General Motors (+), Zillow (-), Panera (+), Buffalo Wild Wings (-) Earnings; Job Openings and Labor Turnover Survey (+)
- Wednesday: Sanofi (+), Allergan (+), Time Warner (+), Whole Foods (-), GrubHub (-) Earnings
- Thursday: Coca-Cola, Yum! Brands, Twitter, CVS, NVIDIA, Activision Blizzard, Kellogg, Viacom, Dunkin’ Brands, Yelp, Pandora, Zynga Earnings; Weekly Jobless Claims
- Friday: Import/Export Prices; Consumer Sentiment
The Next Major Organized Crime Problem
….Not gangs, but shoplifters. Yep, it might be hard to feel bad for major corporate retailers like Walmart and Target when they lose a couple bucks from petty theft, but sophisticated shoplifting is becoming a huge problem with far-reaching consequences. Organized Retail Crime (ORC) is defined by the National Retail Federation as large-scale theft with the intent to resell the items. Here are the facts:
- ORC takes roughly $30 billion from U.S. retailers each year. These crimes affect 97% of retailers and nearly 80% say that it’s getting worse.
- One of the major ORC tactics is return fraud. The thieves produce fake receipts and return the stolen goods for cash or store credit. These scams cost major retailers $1.9 billion in 2014 during the holiday season alone.
- So how does this affect you and me? Losses from shoplifting drive up prices for paying customers, and approximately $1.6 billion is lost in sales tax revenue in the U.S. each year due to stolen goods.
- Despite these alarming numbers, government and law enforcement’s responses haven’t been very strong. The FBI doesn’t look at ORC cases of under $150,000, and jail sentences for those who get caught are shorter than you might think. One man who stole over $200 million in a credit card scam got a mere five-year sentence in 2016.
According to data from S&P Global, U.S. companies refinanced $100 billion of loans in January, the largest monthly total in at least a decade. Why? Companies want to take advantage of low interest rates, as they’re expected to rise in the coming year. Borrowers in recent months have saved more than $1 billion in annual interest costs by renegotiating terms with their lenders.
Food for Thought
Investors mistakenly sent shares of a little-known startup called SNAP Interactive Inc., ticker STVI, surging 164% in the four days since Snap Inc. filed for a $3 billion initial public offering. The $69 million SNAP Interactive makes mobile dating apps. Oh, Snap.