Adidas Is Cutting Into Nike’s Market Share, Plus Housing Prices Have Gone Up 5.1% In The Last Year

“One path is to stay on Earth forever, and there will be some extinction event. The alternative is to become a multi-planetary species, which I hope you will agree is the right way to go” — SpaceX founder and all-around insane manElon Musk, talking about his plans for the company to build a city on Mars. Step one: getting rockets off the ground. You can’t fault the guy for his ambition.

Market Snapshot

  • U.S. markets finished higher following Monday’s heavily-anticipated presidential debate as the Consumer Confidence Index jumped to a 9-year high
  • Chesapeake Energy fell nearly 6% yesterday after a board member, who also happens to be the senior managing director at Icahn Capital, resigned just a week after Icahn sold off 37.7 million shares, or roughly half his holdings in the company
  • Shares of mattress maker Tempur Sealy International plummeted nearly 20%after the company announced third-quarter mattress sales below expectations

We’ve Got Another Arms Race

…No, not cyber-security, we’re talking about drones. Yesterday, Chinese drone maker DJI Technology—which controls a casual 43% of the global drone market—revealed its latest product, the Mavic Pro—a compact drone that can be controlled with an iPhone and gives users the ability to live-stream HD video. Pretty awesome stuff, unless you’re GoPro, of course. Just last week, the tech company known for its action cameras introduced its first drone, dubbed Karma. To make matters even more interesting, there’s more than just pocket change at stake here: the drone market is expected to reach over $4 billion by 2024. Plenty to go around? We’ll see about that.

Nike’s Just Not Doing It

…At least based on the earnings it released yesterday. After a particularly subpar earnings report last time around, investors were hoping for better news this quarter. Verdict? Nope. While Nike beat its profit and revenue expectations, future orders (a key metric for growth) came in below predictions, meaning demand for Nike products is slowing down. The culprit? Changing consumer tastes in clothing and footwear. Rival brand Adidas has been doing a better job of keeping up with the times, cutting into Nike’s market share.

Meals on Wheels

…Is the way to go. UberEats announced yesterday that it’s expanding its meal delivery service to Amsterdam on Thursday. The Seamless-esque Uber offshoot is already available in 27 U.S. cities and 6 countries, and Amsterdam is just the beginning of its go-big-or-go-home expansion. Yes, big. Get this: a whopping 150 new job listings for the company show that UberEats plans to enter at least 22 new countries. Before you board up your kitchen entirely, keep in mind that the app will face tough competition from local players, not to mention scrutiny over its dubious,potentially illegal hiring of independent contractors rather than actual employees (yep, it’s not just Uber proper that’s dealing with this issue). Talk about food for thought.

The Era of Roaring Housing Prices

…Is back. That’s right homeowners, housing prices have heated up 5.1% over the last year thanks to strong demand for homes and a shortage of inventory—you know, classic Econ 101 stuff. Home seekers might not be too happy though, as the national housing index (Case-Shiller) is set to be within 0.6% of its record high, set in 2006. Why does this matter? Earth to Morning Brew: is it a bit concerning that housing prices are at pre-crisis levels. Well, not necessarily, as the amount of mortgage debt is still 12% below peak levels during the ’08 crisis. Long story short: the danger of a mortgage bubble remains low…for now.

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Economic Calendar

Morning Brew Talks Brew

Tomorrow is the Brew’s favorite day of the year: yes, September 29 is National Coffee Day. It’s finally here, and we’re going to celebrate it, so brace yourself for the trite metaphors and bad puns bound to percolate through our writing later this week (bonus: the first one was right there). Before you pregame the occasion with a cup of Brew to go along with your daily Brew, we have some news for you: coffee prices are going up (Morning Brew, on the other hand, will remain totally free, because that’s how we roll). Here’s more on the phenomenon:

  • So what’s causing prices to rise? In a word: weather. The world’s largest coffee exporter is Brazil, which produces 25% of the global coffee supply.
  • And the weather situation in Brazil isn’t great. Remember El Nino? It’s hitting Brazil, and it’s leading to massive droughts. Not enough rain, not enough coffee beans, and that’s led the price of arabica beans (the stuff Starbucks uses) to rise in each of the past five months—now up 19% in 2016.
  • Not only is supply down, but demand is up: according to the International Coffee Organization, coffee consumption has risen 2% on average since 2011. And if Econ 101 has taught us one thing, it’s that when supply falls and demand rises, prices are going up. Soon, we might have to ask ourselves a very tough question: is this coffee worth it? God forbid.

Interview Question of the Day

A clock loses exactly ten minutes every hour. If the clock is set correctly at noon, what is the correct time when the clock reads 3:00 PM? (Answer)

Business Term of the Day

Captured Agency — With so much talk in Monday’s presidential debate about special interests, let’s go over some relevant vocabulary. A captured agency is a government agency (especially a regulatory agency) that’s largely under the influence of the economic interest group most directly affected by its decisions and policies—typically business firms. A captured agency shapes its regulations and policies primarily to benefit these favored client groups.

Food for Thought

Monday night’s presidential debate was the most-watched debate in American history, with around 81.4 million viewers tuning in. Compare that to the approximately 114 million viewers who watched last year’s Super Bowl, and you’re talking about some significant viewership. By the way, 30-second ads during the Super Bowl last year cost a record average of $4.5 million. If the debate wasn’t an ad-free zone, networks could’ve racked up some major bucks, too.

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