A knight steps down

MARKETS

• U.S. markets: Despite a strong start to earnings season, investors sent stocks falling.
• Futures: Index futures fluctuated over the weekend after the U.S.' missile strike in Syria Friday and Syria's continued strikes against the country's rebel forces.

REAL ESTATE

Zillow Might Want to Buy Your House

Zillow's climbing in your window and snatching your houses up. In addition to its traditional business model, the online real estate marketplace said it'll start buying houses directly from homeowners, with the goal of flipping them within 90 days.

Think of this as an experiment: The plan is to dip a toe in two property markets to start, Phoenix and Las Vegas. This year, it'll spend between $75 and $250 million to hold between 300 and 1,000 homes for sale.

Zillow isn't the first internet company to get into house flipping

Startup Opendoor pioneered a similar model (known as "iBuyer") in 2014...and it's done pretty well for itself. It's reportedly about to close a $200 million round at a $2 billion valuation.

So, what's it like to sell your home to a tech company like Opendoor?

Step 1: Answer some questions about the condition of your house.

Step 2: An algorithm spits out (what it considers) a reasonable offer within hours.

Step 3: In less than a week, you could sell the house. Then, Outdoor will come into your home, throw all your cherished memories in a dumpster, and put it back on the market.

Yes, it sounds like a dream...but there are significant downsides. You have to pay around a 7% fee (compared to the standard ~5%), and you probably won't get the best deal for your house because there's no bidding process.

So is this a game Zillow really wants to play?

Diving directly into the real estate market is a risky move. It's a far more capital-intensive business than the ad-driven model Zillow currently relies on, which is why jittery investors dropped the stock 7% on Friday.

Who else is jittery? Brokers, who worry they'll be cut out of the transaction altogether.

Zoom out: Real estate is...how do we say this...an old-school business. There's a lot of negotiation, a lot of politics, and a lot of inefficiencies. It's an industry ripe for disruption.

MEDIA

A Major Ad Man Steps Down

On Saturday, advertising group WPP's chief exec Martin Sorrell resigned...and let's just say he's not getting much of a retirement party.

Not to say Martin Sorrell wasn't a critical part of the company. In fact, he was the company.

History lesson: In 1985, Sorrell bought control of WPP (which at the time was a shopping basket manufacturer) and built it up through acquisitions. Now, the British firm employs 200,000 people across 112 countries. That kind of track record will get you knighted by the Queen.

But recently, things took a turn for the worse

Two weeks ago, WPP hired an outside counsel to investigate Sorrell for "an allegation of personal misconduct" related to misusing company assets. And while the investigation concluded without much fanfare (or details), Sorrell said he didn't want to be a distraction for the company.

But hey, maybe he's getting out at the right time. With the traditional ad industry in all sorts of trouble, WPP's stock has dropped over 30% in the past 12 months.

FINANCE

Banks' Earnings Rise, Shares Fall

In preparation for Q1 earnings, Jamie Dimon and other big bank CEOs got out of bed, looked in the mirror, and said, 'Wow, you're really really ridiculously good looking.' But the confidence went unnoticed as banks crushed earnings, while investors sent shares falling.

JPMorgan reported the best Q1 profits of any U.S. bank. Ever. As the markets fluctuate from geopolitical risks and trade wars, the volatility presents opportunity for traders. Both JPMorgan and Citigroup traders pounced.

PNC got a nice kick from the tax cuts...like...much nicer than anyone expected. It shelled out 17% in taxes compared to 23% last year.

But all eyes were on ROE—a measurement of a firm's profitability. Citi's jumped to 9.7% from -3% in Q4, while JPMorgan's climbed from 7.5% to 15% over the same period.

‘Hey guys, wait up!'—Wells Fargo, probably. Weighed down by scandal szn (which for Wells Fargo, feels like every season), the bank's climbing profits came with an asterisk: fines from ongoing investigations could wash away gains.

LOGISTICS

Freight Shipping Industry Says All Hands on Deck

On Friday, the International Maritime Organization said to the freight shipping industry, ‘Look at me, look me...I'm the captain now.'

The UN body, consisting of 173 countries, agreed to cut carbon emissions in half by 2050. To put that goal into perspective, shipping contributes 3% of all global emissions each year. And if things don't change, that number could reach 17% by mid-century.

Here's the catch: $12 trillion worth of goods are shipped across the world each year. So how do you logistically reduce emissions without scaling back global trade?

1. "Slow steaming"—moving at a slower speed, but optimizing fuel consumption.
2. Renewable energy—ships can utilize wind power.
3. Reengineered hull and propeller designs.
4. The biggest hurdle will be cutting heavy fuel oil drastically.

The big deal: This agreement is being dubbed, "A Paris agreement for shipping." For some countries, like the Marshall Islands, carbon emissions from shipping are so harmful they fear for their "survival."

What to watch: How Maersk—the largest container shipping company in the world—adjusts to the changes.

WHAT ELSE IS BREWING

• Can't wait for Netflix earnings today? Here's a preview of what to expect.
• Ford is building out a network of driverless taxis by 2021 (Financial Times).
• Starbucks is facing backlash after two black men were arrested in a store in Philadelphia.
• Be careful what you eat. About 200 million eggs are being recalled after salmonella concerns.

WATER COOLER

A CLOSER LOOK

Having trouble staying up-to-date on the latest developments in each industry? We got your back.

Whoever TED was, he's made quite the name for himself. This year's TED conference in Vancouver featured thought leaders across AI and Big Tech. And one bold entrepreneur, Ray Kurzweil, made an even bolder claim: universal basic income (UBI) will be globally available by the late 2030s.

You've heard this prediction before: A lethal combo of AI and automation will uproot jobs faster than you can say ‘Glassdoor.' As a result, there should be a universal salary that covers most people's basic needs—a policy some tech leaders like Elon Musk endorse.

But Kurzweil went even further. He claims that AI will develop so quickly, by 2030 robots will pass the Turing Test (i.e. humans won't be able to distinguish robots from humans. Or worse, humans from robots).

His solution? Humans will have to merge with technology to stay relevant.

The Crew's take: We don't know about you, but we'd rather watch RoboCop than be RoboCop.

THE BREAKROOM

PRODUCTIVITY TIP
Color-code the apps on your phone—Okay, maybe this isn't exactly a "productivity tip," but this method has been endorsed by the famous software engineer, Tracy Chou. And that was enough for one of us (Neal) to try it. Check out his new screen and don't tell us an instant wave of tranquility doesn't wash over you.

THE WEEK AHEAD
Monday: Earnings (Netflix, Bank of America), U.S. Treasury International Capital data

Tuesday: Tax Day, Earnings (Goldman Sachs, Johnson & Johnson)

Wednesday: Earnings (American Express, Morgan Stanley)

Thursday: Earnings (Quest Diagnostics, Blackstone Group)

Friday: Earnings (GE, P&G), 420

TRIVIA
With several big banks reporting earnings last Friday, we’ve got high finance on our minds. Can you rank these banks by assets?

Citigroup, Wells Fargo, Bank of America, JPMorgan, Goldman Sachs?

(Answer located at bottom of newsletter)

Breakroom Answers