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WE HIT TURBULENCE
Go home, US markets, you’re drunk.
Yesterday major indices were more of a hot mess than David Zervos’ relationship. At one point the Dow was down as much as 600 points before closing roughly flat, and the S&P and Nasdaq saw similarly violent volatility.
Unsurprisingly, gold and government debt were a hot commodity. In fact, gold prices topped $1.5k per troy ounce for the first time in nearly six years. *Heads to local pawn shop with gold family heirloom*
The 10-year Treasury yield fell briefly below 1.6% during the rollercoaster of a day, a level not seen since 2016, before stabilizing around 1.7% as the harrowing session drew to an end.
So why is all of this happening?
Welp, it probably has something to do with the fact that the smartest guys in the room are all ¯\_(ツ)_/¯ about what to make of the most recent trade war developments. The latest provocations point towards a war of attrition with a chance of prolonged economic downturn.
FedEx is cutting ties with Amazon … kind of. On Wednesday, the shipping firm best known for stranding Tom Hanks on a desert island announced that it is ending its contract to deliver Amazon packages via its ground service.
The current contract expires at the end of August, and will not be renewed. The move comes after FedEx stopped carrying Jeffrey Commerce’s airmail back in June.
Well, FedEx doesn’t take kindly to competition, it appears. Tensions between the companies escalated as of late, especially after Amazon started expanding its own ground delivery services, leased cargo planes, and began funding local delivery drivers.
When one door closes, climb through a window
While FedEx has distanced itself from one of the largest e-retailers in the US, it’s also opened some new doors. FedEx is embracing e-comm competitors looking to take a bite out of Amazon’s US market share.
For what it’s worth, Amazon delivered 45% of its own orders in July and used UPS and the USPS for the rest of them. Did you really think Jeff Bezos didn’t have a backup plan?
On the news, FedEx shares fell 1.6%.
IT’S A MATCH
Match shares popped roughly 27% yesterday following the release of the company’s Q2 results. Earnings came in at 43 cents per share, beating estimates of 40 cents.
And unless Karen in accounting is transposing numbers again, revenue came in at $498M compared to $489M in the second quarter of last year.
Plus the company raised full-year guidance … presumably driven by the expectation that society will become completely incapable of courting partners in-person during the back half of 2019.
But the main driver behind the pop in the stock was Tinder, which reported 5.2M average subscribers searching for strange during the quarter, compared to just 1.5M a year ago.
The go-to app of ‘hot singles in your area’ also rolled out fresh new features such as Read Receipts and Super Boost, and expanded to Southeast Asia and South America via the Android app ‘Tinder lite’ … because apparently, those two regions need to ease into the “socially acceptable Backpage.”
You down with IAC?
Sell high. Rumor has it that IAC, which owns 80% of Match, is exploring a spinoff of the Netflix and chill facilitator. CEO Joey Levin remarked that it could spin off Match in the coming months.
IN OTHER NEWS
- Lyft raised its sales outlook for the remainder of the year and noted a decrease in costs as well, resulting in a smaller annual loss than anticipated. Wait, what? Shares of the stock spiked 11% after trading but settled for a 2.5% gain. Lyft cited an end to price wars with its main competitor Uber and fewer discounted rides as the driving force. Massive losses have had investors worried about the outlook of the company but a decrease in the expected loss from $1.1B to only $800M is a step in the right direction. And just think, once Elon Musk figures out autonomous vehicles, the company won’t have to pay drivers at all.
- The White House is moving forward with banning US public agencies from engaging in business with Chinese telecom company Huawei, despite the Asian powerhouse issuing an appeal in court. The Office of Management and Budget issued an interim rule outlining steps to implement the ban immediately with a full rollout by August 13th. Agencies will have a year to fully comply. The accelerated timeline probably has nothing to do with the recent trade war escalation …
- Ad-bod. New York Times’ stock took a nosedive on Wednesday after the company announced that it expects ad revenue to fall short for the upcoming quarter. Digital advertising revenue could decrease in the high single digits, according to the publisher. The news comes on the heels of a solid Q2 for the well-known publication as it has made a concerted effort to increase its online subscription base, which now sits at 4.7M. Net income for Q2 was at $25.2M, up 6.7% from the same period year-over-year.
- Subway is joining the non-meat, meat craze as the franchise home of the Five Dollar Footlong is offering a Beyond Meatball sub sandwich. The offering will be available in 685 stores in the US and Canada. Subway is the latest franchise to add a meat-less option to capitalize on “flexitarian,” eaters who really want to stop getting stuffed in lockers by meat-eaters. The Beyond sub will include parmesan cheese. Sorry for partying vegans.
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