Uber Has Hit A Valuation Of $70 Billion, Plus Martin Shkreli Is Still Unapologetic for 5,000% Drug Price Hike

morning-brew

“I have plenty of energy.” — Republican presidential candidate Ben Carson, responding to criticism from fellow candidate Donald Trump that he is “super low energy.”

MARKET SNAPSHOT 

Green to Go Around

Everything came up green for global markets on Friday. Let’s run through them all:

  • U.S. stocks followed up a blowout Thursday with a strong Friday, buoyed by the Nasdaq’s 2.3 percent rally. The tech earnings trifecta of Amazon, Alphabet and Microsoft added $80 billion of market value on Friday alone. All three major indices were up at least 2 percent on the week, and the S&P 500 is back in positive territory for 2015.
  • European stocks jumped at least a percent across the board on the heels of the European Central Bank’s stimulus-heavy discussions on Thursday. One thing’s for sure: few things are as capable of boosting stocks as the prospect of sweet, sweet economic stimulus.
  • Speaking of, Asian stocks joined the fun too, thanks to another major announcement out of China…
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WORLD MACRO 

China Cuts Rates (Again)

Stop us if you’ve heard this before: in response to slowing economic growth and worries of deflation, China’s central bank is cutting its benchmark interest rate for the sixth time this year. The new rate of 4.35 percent is 0.25 percent lower than before, and comes with a lower reserve requirement for banks (meaning they can lend out more money to borrowers). China’s manufacturing and construction sectors have faltered, and China’s recent GDP measure of 6.9 percent marked another post-financial crisis low, so the government is hoping that such monetary policy might catalyze China’s economy. Also keep in mind that the U.S. Federal Reserve has their big policy meeting this week, so there’s more on the rate front to come.

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CORPORATE PRIMER

Labor Negotiations Escalate

Crisis averted…literally in the nick of time. Things were heating up between General Motors and the United Auto Workers Union, which represents GM’s 50,000+ employees—the UAW announced that they planned to terminate their contract if no labor deal was reached by Sunday night. This would have meant a strong possibility of a strike, but don’t worry, the two sides reached a new four-year agreement late last night that reportedly includes raises across the board for GM employees. This is the first new deal since 2007, i.e. before GM went through bankruptcy in 2009. GM’s on much better financial footing these days and is coming off a strong earnings beat, which surely helped UAW in its negotiations.
Uber Hits $70 Billion
Uber has refilled its ever-expanding war chest of cash again, this time pushing its valuation to an obscene $70 billion. So why does a ride-hailing company need so much money anyways? Well, Uber is trying to put a chokehold on the market by subsidizing rides in order to undercut competitors, break into new markets that have high barriers to entry and expand into delivery programs—who knows, you might be able to Uber Indian food to your house in the near future.

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TODAY IN TECH

Twitter Ads to Moments

Well, that only took a moment. Two weeks ago, Twitter publicly released Moments, its content and news-streaming feature. Starting today, advertisers can now create their own Moments, which will be clearly marked as promotions to differentiate ads from other partnerships with Twitter. But this isn’t the extent of Moments’ advertising; Twitter is exploring more ways to cash in by integrating brands into your stream. Get your thumbs ready to scroll.

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OTHER STORIES

  • Why Internet of Things security is so critical
  • Turing CEO unapologetic for 5,000 percent drug price hike
  • How Owlet is already saving lives
  • Poste Italiane valued at $9.9 billion in IPO
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ECONOMIC CALENDAR

  • Monday: Broadcom, MGM Resorts, Xerox Earnings; New Home Sales
  • Tuesday: Aflac, Alibaba, Apple, BP, Coach, Comcast, Ford, Gilead, JetBlue, Panera, Pfizer, T-Mobile, Twitter, UPS Earnings; Durable Goods Orders
  • Wednesday: GoPro, Volkswagen, Yelp Earnings; Fed FOMC Meeting Announcement
  • Thursday: Baidu, Deckers, Deutsche Bank, LinkedIn, MasterCard, Samsung, Starbucks, Time Warner Cable Earnings; U.S. Q3 GDPs
  • Friday: Chevron, CVS, Exxon Mobil, Phillips 66 Earnings; Personal Income/Spending

THE RACE FOR DONATIONS

It’s too early in the election season to really tell who’s leading the presidential race, but the race for campaign funding already has some clear-cut winners and losers. Hillary Clinton is on track for success—Jeb Bush, not so much. Here’s the Brew’s take:

  • Clinton’s Benghazi hearing seems to have benefited her pockets: donations kept coming in after her testimony, with over half of the donations on Thursday from new donors. These also aren’t the super-rich donors we’re used to: 99 percent of Clinton’s donations were under $250.
  • Jeb Bush—and Bush’s staff—hasn’t been so lucky: the once-frontrunner cut payrolls by 40 percent last week, leaving some senior-level staff as volunteers and cutting many junior-level staff.
  • The cuts keep coming: Bush’s overall campaign’s budget will also be slashed by about 45 percent and its Miami headquarters will be downsized, with the goal of saving $1 million a month.

INTERVIEW QUESTION OF THE DAY

At a party, everyone shook hands with everybody else. There were 66 handshakes. How many people were at the party? (Answer)

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BUSINESS TERM OF THE DAY

Kagi Chart — A type of chart developed by the Japanese in the 1870s that uses a series of vertical lines to illustrate general levels of supply and demand for certain assets. Thick lines are drawn when the price of the underlying asset breaks above the previous high price and is interpreted as an increase in demand for the asset. Thin lines are used to represent increased supply when the price falls below the previous low.

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FOOD FOR THOUGHT
11 cents: the FCC is cracking down on companies that rip off inmates on phone fees by capping the per-minute cost of a call at 11 cents.

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