“[Y]ou just delivered a pitch on structured leveraged loans to someone who lives in the middle of the desert with his camels” — Internal email between Goldman Sachs executives, poking fun at the unsophistication of Libyan sovereign wealth fund managers. The investment bank is being investigated for taking advantage of the Libyan fund.
MARKET SNAPSHOT
Big Picture
- U.S. markets closed negative a second day as Brexit fears continued to mount after a different poll, this time by The Guardian, showed even more support for the U.K. exiting the European Union
Alternatives to Watch
- The VIX, or investors’ go-to measure of volatility in the financial markets, jumped 23% yesterday, its biggest increase since December
- The value of Bitcoin rose to two-year highs yesterday after the cryptocurrency received a new rule that will tighten its supply. The currency has jumped 51% over the last month as it shifts towards becoming a safe-haven asset amid global worries
Market Movers
- Gun shares soared on Monday as demand spiked following the tragic mass shooting in Orlando, which brought the gun control debate back to the forefront of political debate
CORPORATE PRIMER
LinkedIn’s Biggest Endorsement Yet
Microsoft has officially invited LinkedIn to connect—yep, the tech giant acquired the professional social network for $26.2 billion. It’s Microsoft’s biggest acquisition ever, and it’s at a massive 50% premium to LinkedIn’s Friday closing price. Microsoft has been in full-on turnaround mode over the past few years under CEO Satya Nadella, who has focused on transitioning away from Microsoft Windows bread and butter towards higher-growth areas like cloud services. Through this acquisition, Nadella believes Microsoft’s business-process segment can grow to $315 billion up from $200 billion without LinkedIn. Don’t break out the endorsements yet, though—Microsoft has a mixed track record when it comes to acquisitions, to say the least (remember Yammer and Nokia?).
Snapvertising
Just when you thought ads couldn’t get more annoying, yesterday Snapchat announced a new marketing expansion that will run video ads in between your friends’ stories. In the social media company’s latest effort to monetize its app, companies will be able to get their ads in front of impressionable millennial eyes much faster, using Snapchat’s all-new third party source. To the users who promised to quit Snapchat if more advertising was added: looks like Snapchat just called your bluff.
McDonald’s Is In The Loop
Chicago is hot right now, and McDonald’s wants in. The fast food chain’s headquarters are only a hop, skip and a jump away in the nearby suburbs, but executives believe moving downtown will make a world of difference. Sales growth, proximity to customers and the young workforce are the core reasons for the move—and McD’s is not alone: the appeal of youth has driven many Fortune 500 companies to downtown metropolises in search of new talent. If you build it, they will come.
WORLD MACRO
China Grinds to a Halt
Yesterday, news broke that fixed-asset investment in China reached its lowest point since 2000. As if that’s not scary enough, private investment (aka 60% of total investment in China) is slowing down too. What does all of this mean? Basically, China’s at risk of missing its annual economic growth target unless the government spends more…but that means more debt, and everyone’s already worried about China’s growing debt burden. Hang in there, China.
OTHER STORIES
- FAA proposes fining Amazon $350,000 for hazardous package
- Walgreens cuts ties with blood-test company Theranos
- Daily fantasy sports firms FanDuel, DraftKings in merger talks
- Supreme Court denies Puerto Rico debt relief
ECONOMIC CALENDAR
- Monday: N/A
- Tuesday: Retail Sales; Import/Export Prices; Business Inventories
- Wednesday: Fed Meeting Announcement; Producer Price Index; Industrial Production
- Thursday: Oracle, Kroger, Rite Aid, Smith & Wesson Earnings; Consumer Price Index; Weekly Jobless Claims; Housing Market Index
- Friday: Housing Starts
WWAD: WHAT WOULD APPLE DO?
Software developers, rejoice: Yesterday was Apple’s WWDC 2016 in San Francisco. With great hype comes great responsibility, especially since Apple’s hardware sales have slowed and the company’s perfect, bug-free reputation has slipped somewhat. Did the big Apple deliver? See for yourself:
- On the computer side, OS X is receiving a rebrand—now to be called MacOS. The new operating systems for Apple Watch and Apple TV were given similarly creative names: WatchOS and tvOS, respectively. Groundbreaking stuff.
- Apple Pay will be expanded to the web—but authentication on a Mac will still require using your fingerprint on an iPhone.
- Siri’s getting a major upgrade (and we’re sure it’s just a coincidence that this comes on the heels of Google releasing Allo, its Siri competitor). What’s new? For one, app developers will finally be able to tap into voice control—such as using Siri to send a message through Whatsapp instead of iMessage.
- Apple is taking on Facebook Messenger: the emoji is tripling in size, and every developer that uses iOS can interact with Messages (think: ordering an Uber).
- Apple Music? Eh. It may have 15 million users, but it has faced complaints over design flaws since its debut. You guessed it: a redesign is in the works.
INTERVIEW QUESTION OF THE DAY
At a company, 20% of the men and 40% of the women attended the annual company picnic. If 35% of all employees are men, what percent of all employees went to the picnic? (Answer #12)
BUSINESS TERM OF THE DAY
Actuaries — Employed by insurance companies and pension providers to calculate factors such as life expectancy, accident rates and likely payouts by using complex mathematical formulas that the Brew dares not try to explain.
FOOD FOR THOUGHT
A former Delta Airlines fuel trader was fined $300,000 by the CME Group and banned from trading after he made more than $2.8 million in personal profits by front-running trades he placed for the airline. Looks like it’s economy class from here on out.
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