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LOCKED AND LOADED
Need proof that the Fed will indeed cut interest rates in July? Look no further than Jay Powell’s Congressional testimony and the latest Fed Minutes, both of which dropped on Wednesday.
Cool story, bro
In a prepared testimony in front of the House Financial Services Committee, Jerome reiterated in no uncertain terms that he and the FOMC believe that current US economic data is soft as baby sh*t, that the situation abroad (read: the trade war) is screaming “downturn” and business investments have fallen off. And as such, a Fed rate cut is all but inevitable later this month.
And just in case you were having a hard time comprehending the spoken word version, the Fed also released its minutes from the June FOMC meeting, further hinting that easier money is about to be had.
The one-two punch all but assured markets that despite a strong June jobs report the good times are here to stay. News of the Fed’s confirmation sent indices to new records, including the S&P reaching 3,000 for the first time ever.
I’m not f*cking leaving!
What’s a C-SPAN broadcast without some drama? When pressed by Maxine Water as to whether he would step down if POTUS asked him to, Jerome Powell had this to say: “no.” This, of course, comes after Donny Politics hinted (multiple times) that he could dethrone Powell if he continues to meddle with the economy.
PROUD OF ME NOW, DAD?
Baby boomers, you might want to sit down for this: Toby Rice … a millennial … will take over as CEO of natural gas producer, EQT Corporation following yesterday’s annual meeting.
The 37-year-old former college baseball player replaces Robert McNally, who has held the position since August of last year after Toby and his brother Derek won a proxy battle to take control of the EQT board. Can you say “power moves?”
All twelve nominees (including seven Rice nominated directors) were elected, thanks in part to the backing from key shareholders Elliott Management, T. Rowe Price, and DE Shaw Group as well as proxy adviser Institutional Shareholder Services.
The Rice brothers aren’t just any Chads off the street … they’re filthy rich Chads. In 2007, with the help of an investment from their father (a former fund manager at Blackrock), Daniel Rice III, they founded Rice Energy and started producing natural gas from shale rock in Pennsylvania. They were so successful that they sold Rice Energy to EQT in 2017 for $6B, forming the largest natural gas producer in the US.
EQT stock has dropped roughly 50% YTD, but the Riceronis intend to turn that around. They plan to add $500M of additional free cash flow per year by implementing better technology, because they are millennials, after all, to drill wells more cheaply and efficiently. They’re also adding a chief human resources officer and chief information officer.
IN OTHER NEWS
- Gaga, oo la la (and now ‘Bad Romance’ is stuck in your head from the rest of the day). Amazon and Lady Gaga are partnering to launch a beauty line. The former online bookseller launched its own Belei beauty line in March with 12 products including a charcoal mask. Recent success of beauty lines by Rihanna and Kylie Jenner suggest that this could be a big boon for Amazon … as if they needed another revenue stream.
- Bitcoin bulls are YOLO’ing as the cryptocurrency hit its 2019 high yesterday, passing $13k. It’s been a volatile few weeks with the crypto almost dropping below $10k last week. By late last night, the currency dropped back below $12k, which reminds everyone that you better have a strong stomach to be in the game. Bitcoin is up 250% so far in 2019.
- Nintendo is releasing a new version of its handheld Switch console in an effort to recover from a rough 2018. The Japanese game maker is dropping the $199 Switch Lite on September 20, which is $100 less than the original model. A potential entry into China could also help get the Mario Bros. creator back to levels it hasn’t seen since March 2018. Analysts are a bit suspect as the company navigates a world in which Fortnite and other games suited for the eSports realm seem to be the trend.
- Cyber-security company McAfee is coming back to the public market as the company announced it plans to launch an IPO as early as this year. The company is talking with bankers this week to test the waters and estimates expect a $1B cash raise at a valuation of $5B. McAfee was brought private in 2016 when TPG, Thoma Bravo, and Intel bought 51% of the company to help establish the cybersecurity service as a standalone business. As clients and prospects increasingly focus on GDPR and cyber protection, the company is looking for a cash infusion to continue its growth.
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