Facebook Is Attacking Snapchat From All Angles, Plus Wal-Mart Bets Big On Brazil

by 1 year ago

morning brew

 Enjoy your March 13th hand-crafted Brew!


“I wish the NCAA would truly recognize the first two days of March Madness for what it is: the biggest days of socially acceptable office hooky on the calendar” — Jason Gay of the Wall Street Journal, exposing millions of employees for their bracketology-driven workplace shenanigans.

Market Snapshot

  • U.S. stocks closed higher on Friday, led by the industrials and utilities sectors. Employment data exceeded expectations, all but solidifying the announcement of an interest rate hike this week
  • Oil settled down 1.6% to cap off a 9.1% loss on the week after data showed no end in sight to rising U.S. inventories. The drop in the price of oil has spurred losses across the energy sector

Facebook Attacks Snapchat From All Angles

…And introduces a Stories clone called Messenger Day. In case you haven’t been keeping count, that’s the second time Facebook (+0.40%) has taken from Snapchat’s playbook (looking at you, Instagram Stories). The whole idea behind Day is to broadcast what you’ll be doing to help friends make plans together, instead of just showcasing what you’ve already done. With over a billion users, Facebook is betting big that you don’t need to reinvent the wheel.

Speaking of Facebook Making Moves

…It’s now streaming soccer…for free. Over the weekend, Facebook signed a deal with the MLS and Univision Deportes to stream over 22 live matches for all Facebook users, available on the desktop or mobile device nearest to you. This isn’t the first time a social media company has tried the live streaming sports idea (looking at you, NFL on Twitter), but then again, Facebook’s bread and butter isn’t originality, it’s scale. Sound familiar?

Uncle Sam is Doing Work

…The U.S. economy beats expectations in a stellar February jobs report. In the first full month of President Trump’s term, the U.S. created 235,000 jobs, handily beating expectations of 190,000. Well done. And bonus: the unemployment rate ticked down a tenth of a percentage point to 4.7%, which is close to what the Fed considers full employment. Speaking of the Fed, the jobs report was the last major data release before its policy meeting this week. You can bet your bottom dollar that the positive report only boosts the case for raising rates. All eyes on you, Yellen.

It’s About Time

…Time Inc. is selling itself off, and a new investor group comprised of Jahm Najafi and Pamplona Capital has entered the ring. Now things are starting to get interesting. Najafi tried and failed to buy bookstore Borders in 2011. But why is Time (-1.05% after hours) trying to sell anyway? Time Warner spun Time off as its own company in 2014, and it’s been facing the same challenges as other publishers (such as lower ad revenue and print circulation issues). The hope is that Time’s assets, which include magazines like People and Sports Illustrated, could be better utilized by a strategic or financial buyer. It’s game time.

Wal-Mart Bets Big on Brazil

…But will it pay off? The big box retailer (+0.31%) has plans to invest $320 million to revamp its Brazil business over the next few years. What could go wrong? A lot, considering Wal-Mart’s sales in Brazil have already been struggling. Most of Wal-Mart’s “hypermarkets” are outside of Brazil’s major cities, making them inconvenient for customers compared to the inner-city stores of competitors. Because of that, it seems like pouring millions into the same old strategy may prove to be a risky move for Wal-Mart. Fingers crossed.

Other Stories

  • Microsoft co-founder, Paul Allen, gives $50 million to University of Washington Computer Science school
  • Bolt Threads debuts $314 tie made from spiderwebs
  • Elon Musk vows to fix Australia’s electricity deficit problem within 100 days
  • HSBC CEO announces 2018 retirement

Economic Calendar

  • Monday: N/A
  • Tuesday: Rosetta Stone, Volkswagen Earnings; FOMC Meeting Begins, Small Business Optimism Index
  • Wednesday: Audi, Oracle, Samsonite Earnings; CPI, Retail Sales, FOMC Rate Announcement
  • Thursday: Adobe, Lufthansa, Dollar General, Swatch Earnings; Jobless Claims, Housing Starts
  • Friday: Progressive, Tiffany&Co Earnings; Consumer Sentiment, Industrial Production

The Most Wonderful Time of the Year

March Madness, baby. Last night, the 68 team field for the NCAA Men’s Basketball Tournament was revealed. The remarkable ending to last year’s tournament is a tough act to follow—let’s hope this year’s stands up to the test. Here’s some food for thought as you fill out your bracket:

  • The lost productivity from employees filling out their brackets could cost U.S. companies upwards of $2.1 billion, assuming that 81.5 million workers will spend at least an hour working on their brackets instead of their jobs. The total loss jumps to $6.3 billion if you also assume that workers spend an extra two hours streaming the games.
  • Warren Buffett doesn’t seem to be worried about his employees. In fact, he’s offering anyone at his company who can predict a perfect bracket through the Sweet 16 a prize of $1 million a year for life. Anyone who gets a perfect first round also gets $1 million.
  • The bad news? His offer of $1 billion for anyone with a completely perfect bracket is no longer on the table.
  • So what are the odds of a perfect bracket? Estimates are all over the place: Forbes puts the odds at 1 in 9.2 quintillion, a DePaul professor says it’s 1 in 128 billion and FiveThirtyEight says the odds are 1 in 1.6 billion.

Interview Question of the Day

Do banks have working capital? (Answer)

Business Term of the Day

Perhaps you’ve heard, but your credit score could be getting a boost. Not a joke: this boost is a result of the three major credit-reporting firms moving to omit some credit report blemishes. Nice. Unfortunately, this also effectively raises credit risk. Credit risk is the risk that a borrower may not repay a loan. With this move by the three major credit-reporting firms, economic activity may get a boost, but someone with poor credit could look better than they should.

Food for Thought

Who said computers aren’t creative? Apparel company Stitch Fix uses artificial intelligence to create “hybrid designs,” taking popular elements from existing outfits to create fresh ones. Still, human designers are essential to the creative process…for now.

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