Wells Fargo Under Fire For Bogus Car Insurance Charges, Plus Why Redfin’s IPO Soared 45%

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“It’s amazing that we can put a man on the moon, but movies like this still somehow get made.”

A Vox film critic. Turns out The Emoji Movie was a steaming pile of 💩.

Market Snapshot

  • The Dow closed at all-time high, while the S&P and Nasdaq both finished lower.
  • Oil posted its best weekly gain (+8.6%) on signs of falling supply.
  • Gold hit a six-week high on weaker-than-expected inflation.
  • Canadian GDP beat forecasts on an oil production jump.

This Feels…Familiar

Wells Fargo is getting awfully good at apologies. And on Friday, the big bank looked like a seasoned vet delivering a “We’re sorry. But hey, we swear we were gonna tell you!”

Wells Fargo may have purposefully (or inadvertently) charged over 570,000 customers for car insurance they did not need. Oh, it gets worse.

Up to 25,000 customers may have defaulted or had their cars repossessed because of the loans. In a gesture of good faith, Wells Fargo will fork over $80 million with each affected customer receiving a staggering $140 for their troubles.

Even with the once-in-a-lifetime payday, Wells Fargo is in deepwater. The bank is still playing clean up from last September’s scandal, which affected nearly 2.1 million accounts.

For now, all the bank can do is apologize and move forward. As for the 570,000 customers? They’re taking their $140 and throwing the largest “Go f*ck yourself” pizza party of all time. There might even be pepperoni.

Make Smoking Safe Again

With 480,000 related deaths per year and $300 billion in medical and productivity costs, the burden of smoking is too high to handle.

Now, the FDA is lowering nicotine levels in cigarettes to non-addictive levels. And with any luck, smokers will trend towards healthier forms of smoking, like vaping.

As expected, cigarette companies were shaken by the news. Altria fell 19% (its biggest one-day drop since 1999), British American fell 11% and Philip Morris was down 3.5%.

Regulations and taxes on cigarettes are a fabric of society in the U.S, but they haven’t harmed cigarette companies as much as you’d think.

From 2001 to 2016, the overall number of cigarettes sold in the U.S. fell by 37%, while revenue rose 32% to $93.4 billion.

As everyone keeps looking for their “fix,” it looks as though the FDA has found theirs.

Fins Up

After 13 years as a private company, Redfin put up the For Sale signs and IPO’d at $15 a share, soaring 45% on day one.

Wait a second. Redfin? Picture your run-of-the-mill online home broker (think Zillow) with an Instagram-style feed of homes for sale in your area.

Sounds cool, but that’s not why the street is raving about it. Among the many reasons, Fin prides itself on a superior level of customer service.

Unlike most real estate agents, Redfin’s brokers do not make traditional commissions. Rather, they are paid industry-beating salaries with bonuses for exceptional customer service.

It’s this client-facing strategy which offers a unique position in a day-and-age where most companies are hiding behind their screens.

With the $138.5 million raised in the IPO, Redfin has its sights set on a bigger picture: becoming the one-stop shop of all things real estate.

Which might be ambitious—once Bezos got wind he decided to buy up the whole real estate market. All of it.

Back with The Frack

With oil hovering below $50 a barrel, it might surprise you that U.S. oil companies are doing well. Just take a peek at Exxon.

Despite a share price that’s been stuck in a rut (down 12% this year), Exxon posted second quarter profits of $3.35 billion, up from $1.7 billion in Q2 last year. So, what’s been the secret sauce?

A shift toward short-term strategies like fracking and deepwater drilling. U.S. oil companies are moving from long-term, high upfront cost productions to “short cycle” operations as they prepare for a world, where oil never returns to $100 a barrel.

And with Exxon posting its strongest quarter since the 2014 price crash, it looks to be paying off.

What Else Is Happening…

  • Uber approached General Electric’s CEO, Jeff Immelt, to fill the role.
  • Stitch Fix has filed to go public at a $3-4 billion valuation.
  • Air France-KLM will purchase a 31% stake in Virgin Atlantic for $288 million.
  • Sprint proposed a merger with Charter Communications.

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Economic Calendar

  • Friday (July 28th):
  • Earnings: American Airlines, Chevron, Exxon
  • Economic Calendar: Michigan Sentiment
  • Monday:
  • Earnings: Altaba, Panasonic, Papa John’s, Pandora, Sony
  • Economic Events: Pending Home Sales
  • Tuesday:
  • Earnings: Allstate, Apple, Kate Spade, Shopify, Simon Property Group, Sprint, Steve Madden, Thomson Reuters, Under Armour, Xerox
  • Economic Events: Auto Sales, Truck Sales, Construction, Core PCE, Personal Income
  • Wednesday:
  • Earnings: 3D Systems, AIG, Cheesecake Factory, JLL, Plug Power, Square, Tesla, Time Warner, Adidas
  • Economic Events: Crude Inventories, ADP Employment Change, MBA Mortgage Applications
  • Thursday:
  • Earnings: Activision Blizzard, Aetna, Berkshire Hathaway, Duke Energy, Etsy, GrubHub, Kellogg, Kraft Heinz, Paramount, Shake Shack, Toyota, Yelp, Viacom, Yum!
  • Economic Calendar: Natural Gas Inventories, Factory Orders, Initial Claims
  • Friday:
  • Earnings: No Events Today
  • Economic C**alendar: Unemployment Rate, Nonfarm Payrolls, Trade Balance

Water Cooler

From the Crew

From Michael: Gadfly

Considering my job is to scour the internet and find the best gems to bring you each day, it’s fair to say I’ve seen a TON of different sites. One of my favorites is Bloomberg’s Gadlfy. If you’re looking for a few good reads with some even better graphs that help tell the whole story, Gadfly is the place to go. That being said…

Never stop brewing

From Austin: Red Notice

Add this to your list of must-read finance books. After building the largest hedge fund in Russia, Browder exposes government corruption and gets expelled for doing so. Red Notice details his rise to the top of the finance world and his life goal of avenging the death of the attorney, who investigated the corruption Browder discovered.

Read a review here

From Alex: Slappin’ Da Bass

Sofar is a global community (in 366 cities) of musicians, music lovers and open-minded people looking to meet other open-minded people. It curates “secret, intimate gigs in unique spaces, from living rooms and churches to hoodie shops and fancy furniture showrooms.”

Find one in your city now

Be an early backer and look like a spy all at once

From Josh: Don’t Watch That Trailer

Please silence your cell phone and enjoy the read

The Breakroom

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Question of the Day

Jack is looking at Anne, but Anne is looking at George. Jack is married, but George is not. Is a married person looking at an unmarried person?

A: Yes

B: No

C: Cannot be determined

Who Am I?

  1. I am the CEO of the largest gaming company in the world (by revenue).
  2. I developed China’s largest instant messaging app with over 938 million monthly active users.
  3. I am the second richest man in China with a net worth of $34.5 billion.
  4. Ever heard of League of Legends? I own that too.

(Any guesses?)

Stat of the Day


Twitter is offering a new service that lets businesses choose which tweets get promoted each month. After this quarter’s earnings report, it is time to start reaching into that bag of tricks.