Here’s your hand-crafted Brew for May 24th.
QUOTE OF THE DAY“Fair enough if you believe in tooth fairies and ludicrous supply-side economics.” — Former Treasury Secretary Larry Summers on President Trump’s proposed budget, which was released yesterday.
Market Snapshot
- Stocks closed out a fourth day of gains on Tuesday, with banks cashing in. Economic data was mixed, with new home sales falling 11% last month.
- The dollar rose after three days in the red, while the pound and euro both fell after Monday’s terrorist attack in Britain.
Protesters Crash Amazon’s Party
Mobs converged outside of Amazon’s (+0.09%) shareholder meeting in Seattle on Tuesday.
They weren’t there because of AMZN’s stock (that’s up 29% this year) or because a two-day Prime order took––dare we say––THREE WHOLE DAYS.
They had their own bone(s) to pick, including: issues like discriminatory background checks, Amazon ads on Breitbart and jobs lost to automation.
But activists aside, there’s another group that the company and its shareholders might want to pay close attention to…
Pilots are pissed
The pilots of its newly formed Prime Air service, that is.
Shipping costs ate up $11.5 billion of Amazon’s revenue last year, so it wants to cut out the middlemen—UPS and FedEx—and enter the airline freight business directly.
Last year Amazon leased 40 planes from other cargo companies and built a brand spankin’ new $1.5 billion cargo hub in Kentucky as a headquarters.
The only problem? Amazon isn’t paying pilots what they could be netting at other airlines—and now they’re bringing in reinforcements: pilot unions.
And FYI, you gotta have pilots to fly
What happens when pilots are paid 50-60% below industry standards? They quit.
That may seem obvious, but so far 92 pilots have left Atlas Air (one of the companies Amazon contracted planes from) since the start of the year, double last year’s amount.
Now, the remaining pilots have gathered together to demand Amazon raises its wages. If not, you can kiss any chance of those 200 flights per day goodbye.
But hey, there’s always drones…
Target Learns a Lesson
Target’s (-1.75%) legal imbroglio (no, not a wheel-shaped pasta) stemming from a 2013 data breach that opened the floodgates to 41 million customers’ credit and debit card info finally coming to an end.
The Minneapolis-based chain will pay $18.5 million to 47 states and D.C (as well as implement better security like 2-factor authentication), in the largest settlement ever of its kind.
Between this settlement, $10 million for personal claims in 2015 and other breach-related expenses, Target says it’s coughed up a total of $292 million.
Insurance may have covered only $90 million of that, but considering Target’s 1,802 stores raked in $69.5 billion in revenue last year, these claims won’t be breaking the bank.
Speaking of Settlements…
Fiat Chrysler (-4.09%) could be facing its own, too. The DOJ filed a suit against the Italian company on Tuesday, saying it installed ‘defeat devices’ on 104,000 vehicles sold in the U.S.
These devices cause an engine to produce less emissions during a test than it would on the highway.
Fiat Chrysler is adamant that the claims are untrue. Of course it is.
Volkswagen (-0.25%) has been facing similar suits for rigging hundreds of thousands of diesel engines to cheat the tests. It’s already paid $16 billion with more coming.
Snapchat Discovers More Ammo
Carpool Karaoke may be going to Apple Music, but late night host James Corden—along with CBS—is headed to Snapchat for a new show.
It’s a critical get for Snap (-0.25%) as it tries to draw those precious millennial eyeballs to the Discover page—while fending off Facebook’s pesky copycat––Instagram. But, that’s where things get tricky.
Snapchat and Instagram both released updates to their eerily-similar stories yesterday. Snapchat’s custom stories let any group of friends add to a communal story. In other words, your best friend Seth’s 25th birthday party will have a whole lot of tech and a whole lot of awkward.
Not to be outdone, Instagram rolled out location and hashtag searching for its own stories. May the best stories win.
What Else Is Happening…
- Citigroup
(+1.06%)will pay $97.4 million in a money laundering settlement - Uber is repaying New York drivers for miscalculations totalling near $45 million
- Apple
(-0.12%)has hired its first VP of diversity, she will report directly to CEO Tim Cook - Google’s game-playing algorithm has finally beat a human Go player
Economic Calendar
- Monday: Booz Allen Hamilton (+) Earnings; National Activity Index (+)
- Tuesday: Autozone (-/+), Toll Brothers (+), DSW (+), Container Store (+) Earnings; New Home Sales (-), Manufacturing Index (-)
- Wednesday: Lowe’s, Tiffany & Co., Advance Auto Parts, Williams-Sonoma Earnings; FOMC Minutes
- Thursday: Best Buy, Abercrombie & Fitch, TD Bank, Gamestop, Nutanix Earnings; Weekly Jobless Claims, Consumer Comfort, Fed Balance Sheet, Money Supply
- Friday: Big Lots Earnings; GDP, Consumer Sentiment
Mission Impossible
Facebook (-0.11%) has almost 2 billion users on every corner of the globe. Making sure that every single one, from your bratty teenage sibling to your 65-year-old grandma, has a safe experience ain’t easy.
Hundreds of leaked internal training manuals shed light on how the world’s largest social network is training its 3,000 new moderators for the ultimate task of deciding what’s kosher, what’s just ‘disturbing’ and what should be deleted. Good luck, Zuck.
- Facebook reviews 6.5 million reports of fake accounts every single week; these are called FNRP (fake, not real person).
- Violent threats must target a “vulnerable person” in order to be considered credible. This includes heads of state, activists, journalists and more. “Kill Donald Trump” is an instant deletion, but “kick a person with red hair” can stay.
- Violence against animals is also allowed, but it should be marked as disturbing. The logic here is that this can actually help curb the problem by raising awareness.
- Nudity is where things get tricky. Last year Facebook caught flack for deleting a Pulitzer Prize-winning photo from the Vietnam War of a girl who had been hit with napalm. After the incident, Facebook added a “newsworthy exception” option.
Interview Question of the Day
An apple costs 40 cents, a banana costs 60 cents and a grapefruit costs 80 cents. How much does a pear cost?
(Answer)
Newsletter of the Day
Coming in hot! Time for another great read to redefine your morning routine. Need2Know is to all news (politics, sports, you name it) as the Brew is to business news. Time to get in the know and give the Know a spin.
Startup of the Day
Plenty of companies monitor social media for “trends.” It’s how Facebook serves up the (sometimes fake) news next to your feed and how Hostess decides you’re a Twinkies target on Twitter.
Dataminr wants to tap into this same firehose of information for the first signs of news or the first reports of an emergency to better aid first responders. It’s something no one has done before, so it’ll have to learn to sniff out fakes first.
Stat of the Day
1.7 million — that’s how many free bananas Amazon has given out at two stands across its campus in Seattle. Employees love it, but other local fruit vendors are feeling the crunch. Maybe there’s not always money in the banana stand?
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