“Adhesive vehicle front end for mitigation of secondary pedestrian impact” — The official description of Google’s latest patent, aka a “human flypaper.” Essentially, Google has patented a…unique solution that would involve a human literally sticking to a car in case of a collision. Props for the creativity.
- U.S. stocks finished lower as fears of a summer rate hike continued to scare investors. Positive economic data, including a falling number of Americans applying for unemployment benefits, only raise the odds of a return to more normal interest rates
- European stocks also finished lower, with the travel and leisure sectors being hit particularly hard after a flight disappeared on its way to Cairo from Paris
Alternatives to Watch
- All the speculation following Wednesday’s Fed meeting caused a variety of market movements yesterday: gold dipped to three-week lows, the dollar strengthened against most other currencies and treasury bonds saw yields fall as more investors shifted into safe haven assets
- Shares of seed and pesticide company Monsanto rose 3.5% yesterday after receiving an acquisition bid from health and agricultural giant Bayer
Shine On You Crazy Retailer
In a quarter that’s seen Target, Nordstrom, Macy’s and many other traditional retailers report dismal earnings, Walmart shined through yesterday, especially in the broken-down brick-and-mortar zone. Customers complained that Walmart stores were grimy and not well-stocked, and apparently Walmart heard the cries and adjusted. The retailer also continued to strive for better efficiency through cost-cutting, now focused on making the generic drug area more lean. Analysts and investors were more than satisfied by the good news, with the stock up a healthy 9%.
Dick’s Has the Yips
With major competitor Sports Authority filing for bankruptcy, one would think that Dick’s Sporting Goods would be soaking up the extra business. Well, after yesterday’s earnings report, that might take longer than expected: profit expectations for the rest of 2016 actually fell. A faster growing inventory versus sales didn’t help the cause, but Dick’s executives are already focused on next year. The sports retailer plans to roll out an in-store e-commerce plan within 12 months, teeing itself up nicely to crush the (reduced) competition in 2017.
Uber’s First Self-Driving Car Takes to the Streets
Uber’s first self-driving car hit the road in Pittsburgh yesterday. Before you get all upset that it debuted in Pittsburgh of all places, slow your roll…it was just a test, and a safety driver was present in case something went wrong. There’s also another kinda important Pittsburgh connection here: last year, Uber highway-robbery poached a whopping 40 robotics employees from Carnegie Mellon University…which, of course, is located in Pittsburgh. We digress: this is still a pretty big step for Uber and for the ridesharing industry in general, and Uber joins a long list of companies taking aim at self-driving cars (including Uber’s competitor, Lyft). Pittsburgh, here we come.
Not So Rico
Puerto Rico has been in a recession for ten years. Ten years. Not to mention, the commonwealth has defaulted three times on its debt, and still owes a literally impossible $2 billion in July. But there’s finally a glimmer of hope. Congress agreed on a deal yesterday to allow Puerto Rico to restructure its entire $70 billion of debt. The plan, which will hopefully (for Puerto Rico) pass both chambers before the July 4 recess and has already pulled off the incredible feat of uniting both political parties, aims to reduce Puerto Rico’s debt burden and prevent what could be an ugly legal brawl between creditors (who want their money) and Puerto Rico (which just doesn’t have it). Puerto Rico just wants to become, well, rico again.
- Apple will open India office to develop its maps feature
- Samsung to partner with Alibaba on mobile payments in China
- Gambling debt, stock tip lead to $1 million settlement but no charges for Phil Mickelson
- Billionaire Steve Cohen wins dismissal of ex-wife’s fraud case
- Monday: Housing Market Index (+/-)
- Tuesday: Home Depot (+), TJ Maxx (+), Red Robin (-) Earnings; Consumer Price Index (+); Housing Starts (+); Industrial Production (+)
- Wednesday: Cisco (+), Lowe’s (+), Target (-), L Brands (+), Salesforce (+), Staples (+), American Eagle (+) Earnings; Fed Meeting Minutes
- Thursday: Walmart (+), Ross Stores (-), Gap (+/-), Dick’s Sporting Goods (+) Earnings; Weekly Jobless Claims
- Friday: Deere, Foot Locker, Campbell Soup Earnings; Existing Home Sales
SAN FRANCISCO IS JUST ABSURD
Looking to buy yourself a nice house soon? Better make it snappy, because things are getting expensive. Believe it or not, the number of million dollar homes nationwide has doubled to 2.2 million from May 2012 to May 2016. Yes, doubled. In just four years, the million-dollar club has become a lot less exclusive. Don’t believe us? In San Francisco, they have their own word for million-dollar listings…they just call them “listings.”
- 10 metropolitan areas make up two-thirds of the total increase in million-dollar homes. We already gave one away, but can you guess the other nine?
- 19 of the top 20 neighborhoods in the country, ranked by percentage-point change in the share of million dollar homes, are in San Francisco. Why? Oh right, the tech boom.
- Speaking of San Francisco, the median home price there increased 67% from March 2012 to March 2016, according to estimates from Zillow, rising to just over $806,000. Yes, that’s the median home price. Homes worth $1 million or more represent a shocking 57% of the city’s housing stock. Time to move to Oakland.
INTERVIEW QUESTION OF THE DAY
There are 100 prisoners in solitary cells. There’s a room with one light bulb that is initially off. No prisoner can see the light bulb from their own cell. Every day, the warden picks a prisoner equally at random, and that prisoner visits the living room. While there, the prisoner can toggle the bulb. Also, the prisoner can assert that all 100 prisoners have been to the living room by now. If this assertion is false, all 100 prisoners are shot. However, if it is true, all prisoners are set free. The prisoners are allowed to get together one night to discuss a plan. What plan should they agree on to ensure that someone will make a correct assertion? (Answer)
BUSINESS TERM OF THE DAY
Unlevered Beta — Unlevered beta compares the risk of an unlevered company to the risk of the market to get at the beta of a company without any debt. In other words, it’s a tool that removes the financial effects from leverage. This statistic gives investors a better idea of how much risk is being taken on when buying stock. Also, it provides a measure of the systematic risk of a firm’s equity to compare to the market.
FOOD FOR THOUGHT
In the first quarter of 2016, the total value of auto loans topped $1 trillion for the first time ever. Also of note: as sales continue to rise, the amount of money being borrowed by people with subprime credit has risen a bit, although delinquencies remain low…for now.[protected-iframe id=”d54386390b81ee1fc329d832a447f2bd-97886205-61771510″ info=”//s3.amazonaws.com/downloads.mailchimp.com/js/mc-validate.js” ]