Toyota Invests In Grab; Fed Hikes Rates; VW Pays Another Fine
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GRAB THE WHEEL
Toyota is investing a trunk-load of cash (read: $1B) in the ride-hailing company, Grab (who took over Uber’s Asian operations), at a $10B valuation.
This is the just the latest auto manufacturer investing in a ride-hailing company. Driverless vehicles are all the rage and Toyota, Ford, and GM are all investing as estimates indicate that 25% of all miles driven could be in shared, driver-less vehicles by 2030.
The plan is to use Toyota’s Mobility Service Platform (MSPF) to create “synergies” for Grab. The platform focuses on helping driverless car owners secure insurance (apparently it isn’t “so easy a caveman can do it”), finance the vehicles, and predict maintenance.
Grab itself is so much more than a livery service disguised as a tech platform. We’re onto you, Uber. SE Asia’s leader in drunk rides home from the karaoke bar is also rolling out mobile payment, food delivery, and dock-less bicycles. The weed delivery business isn’t going to know what hit it.
Water Cooler Talking Point: “Can we all just agree that the OG of driverless vehicles was ghost-riding the whip?”
HAWKISH ON PRESSERS
In arguably the least surprising news of the day, the Federal Open Market Committee hiked interest rates by 0.25%. The move pushed the federal funds rate target to between 1.75% and 2%.
But that doesn’t mean all 320 words of economic doctrine weren’t without intrigue. We learned that the FOMC feels economic growth is “rising at a solid rate,” an upgrade from “moderate” in May. Plus Jay and his Committee of free-market puppet masters indicated there will be a fourth interest rate hike this year. Economists expect the federal fund rate to end the year near 2.4%.
But the biggest news coming out of the meeting is … more face time. Ben Bernanke began the practice of quarterly press conferences in 2011, but in what is undoubtedly a coup to get more mass media exposure that can be parlayed into a CNBC show, Jay Powell will hold press conferences after each of the eight Fed meetings per annum.
Jay claims this is to better facilitate communication and is not a hint that more rate hikes are to come. Right.
Water Cooler Talking Point: “It’s not easy being Jerome Powell with everyone hanging on your every word and all. The only person more careful not to mince their words is a man caught in a lie whose significant other can see right through it.”
Volkswagen AutoGroup will pay a 1B euro ($1.2B USD) fine to German prosecutors stemming from their diesel-emissions scandal dating back three years. Oh, how time flies.
This new fine is a drop in the bucket compared to the 25.8B euro in provisions related to the rigged engine control software scandal that the company has already set aside. The 1B euro is in addition to the 4B euro already shelled out this year for diesel-gate.
On the bright side, VW can see the light at the end of the tunnel … NOT!
VW still faces probes from both German and foreign government entities and at least one really pissed off tree-hugger. And by a few governmental bodies, we mean there are legal proceedings either pending or ongoing in 55 countries.
Water Cooler Talking Point: “The pitfalls of working in legal at VW right now? Late nights and a general disdain for the organization which employs you. The perks of working in legal at VW? Job security and ordering Seamless on the reg.”
IN OTHER NEWS
- Comcast was starting to become that non-commital friend with benefits. But the media giant finally made it official yesterday with a $65B all-cash bid for Fox, trumping Disney’s stock offer.
- What’s worse than buying a ten-pound bag of Haribo sugarless gummy bears on Amazon while intoxicated? Buying a house on Opendoor while intoxicated. The company which uses algorithms to facilitate buying and selling homes online raised another $325M at a $2B+ valuation.
- Dutch fintech firm, Adyen, rose almost 90% in its first day of trading. Dubbed the “PayPal of Europe” (by us), the payment processor is profitable and works with Netflix, Facebook, and Spotify.
- MoviePass, whose business model is basically “paying for people’s movie tickets and hoping for the best” has passed the 3M subscriber threshold. The company estimates it will hit 5M by year end but admits that growth has slowed.
- The bad news? The US Men’s National Team did not secure a bid for the 2018 World Cup. The good news? The US beat Morocco 134-65 at FIFA Congress, securing the right to host the 2026 Cup.
- US indices were down yesterday:
- DOW: -0.47%
- S&P 500: -0.40%
- NASDAQ: –0.11%