Enjoy your January 25th hand-crafted Brew!
QUOTE OF THE DAY
“The United States being cut off from trade would be like trying to breathe without oxygen” — FedEx CEO Fred Smith, commenting on the Trump administration’s decision to pull the U.S. out of the Trans-Pacific Partnership trade deal. Strong words, Mr. Smith. Fingers crossed that he doesn’t get caught in any political crossfire…or tweets.
- U.S. markets erupted on Tuesday, surging the most in three weeks to send the S&P and Nasdaq to new all-time highs. The mining and materials industries reaped the rewards of executive actions passed yesterday (more on this later…)
…For Target (+0.88%). Yesterday, the retailer announced plans to launch a mobile payment service in the U.S. this year. Where does it fit in with Target’s existing ecosystem? It could be an addition to Target’s current CartWheel App, which is already used by 27 million shoppers, or possibly part of the overarching Target app already in existence. Though there’s been no confirmation yet, what we do know is that Tar-jay will offer this service to REDcard holders (think Amazon Prime, but for Target). This development comes as other retail giants like Kohl’s (+0.37%) and Walmart (+1.13%) have announced similar mobile payment initiatives. The point of it all? Brand loyalty + seamless purchases = a bit more competition in the battle against Amazon.
Update From the Oval Office
…President Trump revives the Keystone and Dakota pipelines. Refresher: these are the two oil pipeline projects halted by the Obama administration over environmental concerns and protests from the Standing Rock Sioux tribe. Now, they’re back on. If completed, the TransCanada-backed (+3.54%) Keystone pipeline would transfer as many as 830,000 barrels of oil a day. Yet the effect the pipelines could have on the U.S. economy remain unclear. But wait, there’s more. Trump also met with America’s biggest automakers yesterday, and the message was pretty clear: increase production in the U.S. and add jobs. Seems simple enough. Perhaps coincidently, Toyota (-0.55%) announced yesterday that it will add 400 jobs at its Indiana assembly plant. Talk about good timing.
After a String of L’s
…Samsung (+1.78%) finally pulls out a W during #EarningsSzn. Despite taking a massive $5 billion loss on that big exploding Note 7 recall debacle, Samsung still managed to pull off an explosive (in a good way) fourth quarter, as operating profits surged 50%. The real unsung hero for Samsung was its memory chip and display panel division, which accounted for almost 70% of its total profit. Diversification at its best. Don’t call it a comeback yet though—Samsung is still sitting in the hot seat after its political scandal earlier this month. Speaking of strong earnings, Alibaba (+3.07%)—known around these parts as the Chinese Amazon—had its own perfect recipe: growing earnings 54%, raising guidance, increasing active users and continuing a strategic shift into the cloud business. It’s hard to say that the growth in earnings was shocking, especially since Alibaba sold over $17 billion in goods in one day on Singles Day. Online impulse shopping for the win, folks.
You Can’t Win ‘Em All
…America’s existing home sales hot streak just came to an end. Home resales fell 2.8% in December, snapping three straight months of increases. Is this cause for concern? Probably not, considering the supply of houses on the market hit a low not seen since 1999. Since you can’t sell houses if there are literally no houses left to sell, much of the drop in resales can be explained by lack of supply. On top of that, mortgage rates and home prices are both on the rise, meaning some potential homebuyers may be gun shy. Long story short, we can likely chalk up December to merely a bump in the road in what has been an otherwise strengthening housing market. NBD.
- Mark Zuckerberg says he’s not running for president
- Wal-Mart to cut 200 e-commerce jobs in California
- Amazon offers to scrap e-book clauses to settle EU antitrust probe
- Goldman Sachs files $1 billion countersuit against Indonesian businessman
- Monday: McDonald’s (+), Yahoo (+), Halliburton (+/-) Earnings
- Tuesday: Johnson & Johnson (+/-), Verizon (-), Alibaba (+), Alcoa (+/-) Earnings; Existing Home Sales (-); PMI Manufacturing Index (+)
- Wednesday: AT&T, Qualcomm, Boeing Earnings
- Thursday: Alphabet, Microsoft, Intel, Comcast, Starbucks, PayPal, Ford, Southwest Airlines Earnings; New Home Sales; Weekly Jobless Claims
- Friday: Chevron, American Airlines Earnings; Durable Goods Orders; U.S. Q4 GDP (1st Estimate), Durable Goods Orders, Consumer Sentiment
Attack of the Norovirus
Did you wash your hands? Don’t you know how many people read this newsletter? Seriously. Go back to the sink, use soap and hot water, lather and rinse. If you’re on a college campus, or know anyone who is, you’ve probably caught wind of the stomach bug that’s going around universities like Michigan and Penn. Known officially as norovirus, it’s one of the most contagious of all viruses, with 19 to 21 million cases each year. So make sure to cough into your sleeve, don’t pick your nose and sanitize them hands. Here’s more:
- According to the CDC, 61% of norovirus cases are spread through contaminated surfaces and direct contact. Pro tip: limit high fives and shared drinks for the next few weeks. Adult tip: feel free to cut out shared drinks entirely.
- Globally, the CDC has somehow put a price tag on norovirus, estimating a global economic cost of $6 billion annually. We’re definitely feeling it back in the states, with a high school in Chicago closing for days because 800 of its 2500 students called in sick.
- Norovirus symptoms only last for a few days, but those infected tend to shed the virus for days and even weeks later. While there are some clinical trials for vaccines in the works, they probably won’t be ready until you’ve healed…and passed on the virus to someone else. Fun.
Interview Question of the Day
John has been hired to paint the numbers one through 100 on 100 apartments. How many times will he have to paint the number eight? (Answer)
Startup of the Day
We’re not going meta here: Meta is a startup focusing on artificial intelligence and data analytics technology in the healthcare industry. The Chan Zuckerberg Initiative, founded by Facebook CEO Mark Zuckerberg and his wife Priscilla Chan in 2015, purchased Meta this week. First, Zuckerberg’s new AI creation and friend: Jarvis. And now Meta. Pretty savvy, Zuck.
Food for Thought
We here at the Brew were all pretty stunned at the latest research from Oxfam. Apparently, eight billionaires from around the globe have as much money as the 3.6 billion people who make up the poorest half of the world’s population. However, we were even more surprised to hear that the world may just have its first trillionaire in the next 25 years. Bill Gates would be 86 by then. Keep it up, Bill!
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