America’s Jobless Claims Hit An Eight-Month High, Plus The Term Knuckle Buster Doesn’t Mean What I Want It To Mean

by 3 years ago

morning-brew

“lol” — Turing Pharmaceuticals CEO Martin Shkreli, in a tweet to Hillary Clinton and U.S. senator Elizabeth Burke. What’s so funny? Clinton and Burke were informing Shkreli about a bipartisan committee investigation into Turing’s shady business practices—namely jacking up the price of one of its drugs by 5,000%. Doesn’t sound funny to us here at the Brew.

MARKET SNAPSHOT 

Japan’s Big Day

  • U.S. markets closed negative yesterday with investors hotly anticipating today’s jobs report set. A lagging energy sector made matters worse, but there’s a light at the end of the tunnel: social media powerhouse Facebook hit a record high after releasing outstanding earnings showing. This marks a 40% price leap since January and 186% since the company’s IPO in 2012—see yesterday’s Brew for more details.
  • On the other end of the spectrum, Valeant Pharmaceuticals hit a two-year low following news that bipartisan investigations will be launched against the company for alleged price gouging. It’s been an incredibly rough journey, but hedge fund investor Bill Ackman is stubbornly sticking by Valeant—despite a current paper loss of $2 billion. To each his own.
  • All the drama surrounding the Federal Reserve possibly raising rates in December has led to two things: gold breaking a seven-week low and the dollar hitting a three-month high. With the chances of a late 2015 rate hike growing by the day, the dollar may have more room to run.
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U.S. MACRO 

Workin’ Hard or Hardly Workin’?

America’s been hard at work. How do we know? Employee output per hour went above and beyond expectations to increase 1.6% over last year. Then again, the number of hours worked from July to September dropped to the lowest level in six years. If not hard working, at least Americans are productive…or not: jobless claims for the week unexpectedly hit an eight-month high, at 276,000. But take heart: the number is still pretty low overall. This marks the 30th straight week that claims have been below the magic number of 300,000 that signals a growing labor market.

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CORPORATE PRIMER

Exxon’s Allegations Heating Up

Oil and gas powerhouse Exxon Mobil received a subpoena yesterday from the New York attorney general’s office. Spoiler alert: it’s bad news. Essentially, Exxon is being accused of not disclosing sufficient information to shareholders regarding climate change and how it may affect the company’s business decisions. The company has denied all allegations, but it looks like it’s on the hot seat until this all blows over—hopefully Exxon has nothing to hide.
Earnings Wrap-up
If you’re a blue-chip investor, yesterday was a good day for you. Let’s take a look at some of the hottest earnings reports:

  • Fast casual burger chain Shake Shack’s revenues jumped an eye-popping 67%, and shares traded up over 5% after hours in response. The stock’s performance has been up and down since its IPO in January, but stability may be coming as the company continues to expand.
  • Disney announced earnings of $1.20 per share, which exceeded analysts’ projections by about 5%. Many are crediting the increase to the upcoming Star Wars film (t-minus 2 months), but advertising revenues on ESPN and ABC were the focal point of growth.
  • Toyota’s net profits increased by 14%, but bad news followed when the company cut its 2016 forecasts due to lack of confidence in emerging markets, especially Asia.
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TODAY IN TECH

More Music For Everyone

Longtime music rivals Pandora and Sony/ATV made nice yesterday: under a new agreement, Pandora can license music at a constant rate, while Sony/ATV receives higher royalties for its artists, meaning it’s a win-win for both sides. Beyond the financial benefits, the deal also allows the companies to dodge outdated federal regulations on music, so Pandora could expand its offerings in years to come. After dismal Q3 earnings, this may be just what Pandora needed, as shares climbed nearly 6% on Thursday.

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OTHER STORIES

  • Goldman tries quicker promotions to keep junior bankers happy
  • Number of confirmed E. coli cases linked to Chipotle rises to 40
  • United Airlines CEO to return in early 2016 after heart attack
  • Panera Bread says it will move to cage-free eggs by 2020
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ECONOMIC CALENDAR

  • Monday: Allstate, AIG, Fitbit, Visa Earnings; ISM Manufacturing Index
  • Tuesday: Tesla, Sprint, Groupon, Herbalife, Zynga, Kellogg, Papa John’s, Denny’s Earnings
  • Wednesday: Facebook, Qualcomm, Time Warner, Twenty-First Century Fox, GoDaddy, Michael Kors, Whole Foods, Wendy’s Earnings; U.S. Trade Deficit
  • Thursday: Walt Disney, Shake Shack, Monster Beverage, TripAdvisor, NVIDIA, AMC Networks, SeaWorld, Ralph Lauren, Celgene Earnings; Weekly Jobless Claims
  • Friday: Cigna Earnings; Unemployment Report

HELLO FROM YOUR CD PLAYER

Adele’s newest album, “25,” releases on November 20, and though everyone is curious to see how her music is received (hint: listen to Hello for a sneak peak), music executives are more interested in which medium she chooses to release it on:

  • Adele’s most recent album, “21”—released in 2011—sold 30 million copies worldwide, and 11 million in the U.S.. Believe it or not, a majority of those 11 million were hard copy CDs.
  • In the last 10 years CD sales have declined over 80%, while streaming—vastly ignored until very recently—now makes up over 32% of revenue for record labels.
  • But it’s no surprise that artists are often not fairly compensated for streaming, especially those who aren’t as famous as artists such as Taylor Swift, Adele, or Beyoncé.
  • The big question is whether Adele will delay streaming rights to her new album for a week, racking up CD revenue from her more eager fans in the meantime. It may seem like a purely self-serving decision, but it may set a precedent which will impact smaller artists. Though Adele will almost certainly always make money off her music, the same is not necessarily true for her less famous counterparts.

INTERVIEW QUESTION OF THE DAY

A sundial is a timepiece that has the fewest number of moving parts. Which timepiece has the most moving parts? (Answer)

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BUSINESS TERM OF THE DAY

Knuckle-Buster — A manual credit card impression device. A knuckle-buster creates multiple copies of a credit card transaction by placing the credit card at the bottom of the device and blank carbon-paper on top, and then sliding a bar back and forth so that the embossed numbers on the credit card are copied on to the carbon-paper copies.

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FOOD FOR THOUGHT
41 cents: Cost per year per American citizen for NASA’s entire Curiosity program, which put a robot on Mars.

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