In case you missed yesterday’s big news: we’re launching an all-new weekend edition of the Brew called Light Roast, covering the latest in business, fashion, tech, food and much more. How do you gain access? It’s simple: share the Brew with five people, which you can do by forwarding any Brew issue and having them subscribe using the “Subscribe here” link at the bottom, or by using your very own unique sharing link:
“The truth is that I knew nothing” — Lionel Messi, the highest paid soccer player in the world, claiming he was unaware of an alleged tax evasion scheme, and that he was actually duped by his father. Just in time for the Copa America soccer tournament that kicks off tonight!
MARKET SNAPSHOT
Big Picture
- After starting out negative, U.S. stocks finished strong, boosted by a jump in oil after data showed yet another decline in U.S. crude inventories
Market Movers
- Shares of Oracle fell nearly 4% after a senior manager sued the company, claiming she was fired for pointing out wrongdoings in the company’s accounting practices
- Oracle has nothing on Sarepta Therapeutics, which plummeted 27% after the FDA issued guidelines that could drastically impact profits on one of the company’s new drugs
CORPORATE PRIMER
Soarin’, Flyin’
We’ve all heard plenty of talk about how drones are the future of retail, but that’s about it—talk. Newest to the conversation? Walmart. Here’s the story: first off, Walmart’s got drones in development, and they’ll be put to work in distribution centers in as soon as six months. Before its shareholders meeting yesterday, a demonstration was given, showing how the little flying chunks of technology canfinish scanning a whole warehouse for misplaced products in an hour—a job that normally takes two employees a month to do. Okay, we’ll give it to Walmart—that sounds pretty promising. Delivering goods to customers’ homes is the long-term goal, but first, Walmart needs to learn how to fly.
No More Tears
Johnson and Johnson seriously upped its shampoo game this week: we’re talking $3.3 billion of the good stuff, thanks to its purchase yesterday of Vogue International. Vogue’s wildly popular shampoos, styling products and body care items will give J&J’s consumer products division a new shine after past product recalls deflated sales. Even though J&J’s best-selling product categories are drugs and medical devices, Vogue’s high-flying sales (growing a massive 25% annually) should accelerate the consumer products business by complementing the current portfolio with fancy-sounding hair and body care products. Moroccan argan oil shampoo anyone?
Tribune’s Identity Crisis
Tribune Publishing is trying its darndest to fight off a takeover bid from Gannett, the publisher of USA Today. Last night, Tribune went so far as to nominate a new, anti-Gannett board—but not without a fair number of obstacles. A large number of Tribune’s shareholders (around 39%) opted to withhold their support for the nominees. Gannett also urged investors to withhold support (duh), hoping that this may allow the firm to take Tribune over at some point. Meanwhile, Tribune changed its name to Tronc, or Tribune Online Content, to reflect its digital ambitions. Yep, it’s a mess. The Brew is still awaiting a buyout offer from Gannett—we promise we won’t put up as much of a fight as Tribune.
WORLD MACRO
OPEC Says “Keep Pumping”
The Organization of Petroleum Exporting Countries (there’s a mouthful) shocked the world at its Vienna meeting yesterday. Just kidding. As many predicted, the oil cartelfailed to reach an agreement on a production ceiling that would have provided a boost to oil prices. Here we go again: OPEC has had meetings for the past 18 months without much to say for it. That said, we understand: rising demand by consumers and falling production in the U.S. makes being lazy a little easier. It also doesn’t hurt that oil prices have risen around 80% over the past few months. OPEC was at least able to name a new secretary-general. Congrats?
OTHER STORIES
- Snapchat passes Twitter in daily users
- United Airlines to revamp business class
- Goldman Sachs cuts price target on Apple
- Exelon to shut two nuclear plants
ECONOMIC CALENDAR
- Monday: U.S. Markets Closed (Memorial Day)
- Tuesday: Personal Income and Outlays (+); Consumer Confidence (-); S&P Case-Shiller Home Price Index (+)
- Wednesday: Michael Kors (+), Box (-), Cracker Barrel (+) Earnings; ISM Manufacturing Index (+); May Auto Sales (-); Construction Spending (-); Beige Book (+/-)
- Thursday: Weekly Jobless Claims (-)
- Friday: May Employment Report; ISM Non-Manufacturing Index; Factory Orders; International Trade
2015: A BAD YEAR FOR THE CIRCLE OF LIFE
What goes up must come down—the age-old adage certainly applies to stocks, but this time it’s not about business—and it’s not even about gravity. It’s about babies. The CDC revealed in a report yesterday that the U.S. birthrate fell, while the death rate rose last year. That doesn’t sound good, and it’s not:
- The data shows 3.98 million births in the U.S. in 2015, which is down 0.3% from 2014. That might not sound like much, but that’s still 11,975 fewer adorable little American cherubs out there.
- Who isn’t pulling their weight? Teen moms have laid off the gas, for one. Teen births fell by 8%, with women between the ages of 15-19 seeing a birth rate of 22.3 births per 1,000 women. That’s 64% below its most recent peak in 1991, which is long before these teens were even born.
- Now for the other side of the coin: the CDC found that the death rate rose for the first time in over 10 years. The mortality rate was 729.5 deaths per 100,000 people last year, up from 723.2 in 2014. Sorry for being morbid.
INTERVIEW QUESTION OF THE DAY
In M&A, how does an all-stock or all-cash deal affect the equity of the buying company? (Answer)
BUSINESS PERSON OF THE DAY
Roger Enrico — The former PepsiCo CEO died Wednesday at the age of 71. Enrico was the man responsible for “nearly toppling Coke’s supremacy” in the 1980s. Striking mega-deals with superstars like Michael Jackson and quickly correcting Coke’s failed experiment—”New Coke”—Enrico elevated the Pepsi brand to new heights during his tenure.
FOOD FOR THOUGHT
With every breakthrough and new therapy in the fight against cancer, the spending behind it keeps growing. And, according to IMS Health Holdings, worldwide spending on cancer medicines will exceed $150 billion by 2020, an annual growth rate of up to 10.5%.
[protected-iframe id=”d54386390b81ee1fc329d832a447f2bd-97886205-61771510″ info=”//s3.amazonaws.com/downloads.mailchimp.com/js/mc-validate.js” ]