Enjoy your January 6th hand-crafted Brew!
QUOTE OF THE DAY
“It may make sense from a scale standpoint to consider the coming together of T-Mobile and Sprint” — T-Mobile CEO John Legere, addressing rumors at CES 2017 while announcing the carrier’s move to sell T-Mobile One as its only plan (an unlimited data one at that), scrapping six other options.
Market Snapshot
- Though the Nasdaq soared to a record high on Thursday, significant losses in the retail and financial sectors dragged down the broader market
- Not for the faint of heart: bitcoin plummeted as much as 23% after reaching an all-time high on Wednesday, likely due to a strong rally in the Chinese yuan
- Shares of Time Warner (-1.68%) and AT&T (-0.28%) dropped after President-elect Trump reiterated his opposition to the media mega merger
So Sue Me
…It was a “sue me” kind of day for some big companies. Let’s tackle them bullet-style:
- First off, Google (+0.65%) was sued by the U.S. Department of Labor, which has requested Google’s compensation data as part of a routine compliance evaluation. Google thinks the U.S. is asking for super-sensitive employee info, but if it doesn’t comply, the tech giant is at risk of having all its contracts with the government canceled (granted, they’re not worth much).
- Next up on the stand: Snapchat, which was sued by an ex-employee, alleging the company misled him and investors by inflating key growth metrics to drive up its IPO. Snap replied that the accusation is fabricated by a disgruntled employee and “has no merit.”
- For the cherry on top, Coca-Cola (+0.24%) (and its trade group, the American Beverage Association) is being sued for allegedly misleading the public about health problems posed by sugary drinks, claiming that Coca-Cola’s advertising shifts the blame from the company to poor exercise habits. Make sure to have a soda after your workout, though.
App Store Remains Steady
…But China isn’t pleased. Apple’s (+0.51%) App Store posted solid 2016 results, with total sales amounting to a record $28.5 billion (of which Apple gets 30%), a big ol’ 40% increase from last year—and that’s despite a decline in iPhone sales last year. The main driver: a 90% surge in China app sales. This China growth comes despite resistance from Chinese authorities. Need an example? Apple took down the New York Times app from the Chinese App Store on Wednesday after being told it violated local regulations. The Chinese government has a long history of crashing the party by banning sites it believes are spreading rumors or damaging national security, but that won’t bring down Apple’s spirits today.
A Bloodbath For Retail
…It’s worse than we thought. After disappointing holiday sales, retail stocks got hammered across the board Thursday, with double digit hits to Kohl’s (-19.04%) and Macy’s (-13.87%) leading the way. For its part, Macy’s is set to cut 68 more stores this year along with 10,000+ jobs. Not to be outdone, battered and beaten-down retailer Sears (+0.29%) is closing 100 stores too. Goodness. The strangest bit? Data actually points to a strong retail season, with sales growth of 4%. But traditional retailers weren’t the winners. You guessed it—e-commerce was where it was at. Surprise, surprise: while nearly all major retail stocks were smacked around yesterday, Amazon (+3.07%) finished in the green. Macy’s will be using the cost savings from closing stores to up its e-commerce game. A wise move.
Amazon Takes a Bite
…Out of the Big Apple. While traditional retailers were busy getting pantsed by Amazon, Jeff Bezos and Co. has its sights set on what may seem a strange new target: brick and mortar bookstores like Barnes & Noble (-6.17%). Several days ago, a sign went up at the Time Warner Center in Manhattan saying “Amazon Books” would be opening soon. And the New York installment of “Amazon Books” won’t even be the first—Amazon already has stores in Portland, San Diego and Seattle. You might be wondering why Amazon is getting into the game that it was founded on disrupting. Turns out, it could be a real estate play: Amazon is entering the retail property market at a great time. Asking prices for rent are low, and vacancies are increasing. Unfortunately for those traditional retailers, Amazon Books could be the nail in the coffin.
Other Stories
- Goldman confronts protesters inside New York headquarters
- New app alerts users when Trump tweets about stocks they own
- Morgan Stanley said to cut equities traders’ bonus pool up to 4%
- Girl Scout cookies mark 100 years with two new flavors
Economic Calendar
- Monday: Markets Closed (New Year’s Day Observed)
- Tuesday: ISM Manufacturing Index (+); Construction Spending (+)
- Wednesday: Auto Sales (+); Fed Meeting Minutes
- Thursday: Walgreens (+), Monsanto (+), Ruby Tuesday (-) Earnings; ISM Non-Manufacturing Index (+); Weekly Jobless Claims (+); Private Employment Report (+)
- Friday: December Jobs Report; International Trade
Tech Gone Wild
The second day of CES 2017 revealed some truly far-out products. From home appliances to TVs, concept cars and everything in between, many new technologies have consumers thinking “why?”…but also “why not?” Here’s a rundown of some new debuts at the legendary Vegas conference:
- LG’s new TV is thinner than an iPhone and has a transparent display. Yep. If that’s not enough, LG also stepped out with a new high-tech fridge. Sporting a 29-inch touchscreen and equipped with Amazon Alexa, life does seem good with LG.
- On a more obscure note, AIRE was introduced. Long story short, it’s a device that tracks the amount of gas someone has in his or her body, aka a breathalyzer turned fart tracker.
- Lastly, spice up your composting with Alchema, the product that ferments old fruit into alcohol. Sadly, what happens in Vegas stays there for now: many of these potentially life-changing products aren’t on the market yet.
Interview Question of the Day
Two fathers and two sons walk into a candy store. They each buy something for $0.50 but they only spent $1.50. How is that possible? (Answer)
Personal Finance Tip of the Day
Perhaps you’ve heard of it: JPMorgan Chase’s Sapphire Reserve credit card, or the closest thing we’ve got to a “viral credit card”—thanks to its insane signup bonuses. But now that too many people have caught on, the bank is cutting the bonus in half next week. In other words, sign up now. And if you find yourself overwhelmed by credit cards, you’re not alone. Learn more by taking this credit card quiz.
Food for Thought
The NFL was kind of freaking out. During the first half of the season (aka election season), viewership of NFL games averaged only 15.5 million, down 14% from the previous season. The good news: after the election, NFL viewership was basically flat. Unfortunately, at the end of the day, full NFL season viewership fell 8%. So is it the election’s fault, or do those darned millennials just not appreciate the glory of football? Maybe a bit of both.
Community
Last month, we asked you to send us a picture of you Brewing. We got some awesome images, and we’ll be featuring as many of them as we can over the next few weeks. Why? Because you’re all awesome, that’s why. First off, say hello to Fiona Riley:
And here’s a quick Q&A:
If you had to describe the Brew as a person, who would it be? I think if the Brew was a person it would be the guy who dressed well for an 8 AM class. You know that guy is prepared.
What business story/headline do you find most interesting right now and why? I think it’s been interesting watching everything that is changing for retail businesses. I feel like some businesses are having to re-invent the wheel to stay relevant. I also like to keep up to date with defense contracts because a lot of new technologies come out of them.
What is the most important lesson that the National Guard has taught you? The most important thing the National Guard has taught me is to lead by example and continually challenge yourself. Also Red Bull is a necessity.
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