Block Party

Quote of the Day

The government has filed a lawsuit and it stretches the very reach of antitrust law beyond the breaking point.”

The DOJ is attempting to block the AT&T-Time Warner merger, and AT&T CEO Randall Stephenson is ready to take off the gloves.

Market Snapshot

U.S. indexes got a bump from financials.
European markets finished higher despite Germany failing to create a three-way coalition.
Ethereum edged closer to $400—Bitcoin jumped past $8,200.
The dollar gained after the political uncertainty in Germany.

Want Morning Brew Daily Served Fresh to Your Inbox?
Drop Your Email Below...

Keystone XL Lives Another Day

Thanksgiving small talk just got a lot more exciting: the five-member Nebraska Public Service Commission narrowly approved the final leg of the controversial Keystone XL pipeline.

The decision is a victory for President Trump, who green-lighted the project back in March, as well as TransCanada (+1.31%), the company behind the infrastructure fiasco. One caveat: the commission ruled Keystone XL will have to follow an alternative path to the one initially proposed.

As a refresher, the 1,200-mile pipeline would carry 830,000 barrels of crude per day from the oil sands of Alberta, Canada to Steele City, Nebraska, where it’ll hook up with existing oil highways heading to Gulf Coast refineries.

But what started out as just your average 36-inch diameter steel tube has become a political lightning rod...

And both sides have brought the heat

Proponents of the pipeline argue it’ll be a massive job creator and kickstart the energy industry. Opponents say it’ll help usher in an environmental apocalypse (you know, like last week’s 210,000-gallon oil spill in South Dakota).

In fact, it probably won’t accomplish either. According to a State Department analysis:

Keystone XL would create 42,000 temporary jobs over a two-year period (3,900 in construction, the rest in “indirect” roles like food service). This represents just .02% of all annual economic activity in the U.S.
It’s “unlikely to significantly affect the rate of extraction in oil sands areas,” meaning it probably won’t lead to an increase in production of harmful fossil fuels.

Even with the stamp of approval, the debate will go on...and on...

DOJ Block Party

It’s the only logical climax to this thriller: AT&T’s (+0.38%) $85 billion bid for Time Warner (-1.14%) will end up in court, courtesy of a DOJ lawsuit. We’ll grab the popcorn, you bring the Sour Patch Kids?

While we heard antitrust rumblings for weeks now, there isn’t much precedent for the DOJ to block a vertical merger like this one. Which is why the case is raising some eyebrows. Time Warner’s property, CNN, is a favorite Twitter target of President Trump (it’s not alone), and some say he’s sabotaging the deal as retribution for perceived unfair coverage.

But these rumors (true or not) obscure some real anti-competitive issues that arise when a distributor (AT&T) and a content provider (Time Warner) get together. Enter the DOJ.

Uber and Volvo Step on the Throttle

In what was another sweeping victory for mankind robots, Uber announced it’s buying 24,000 self-driving taxis from Volvo in 2019. The $1 billion deal amounts to roughly 4.5% of Volvo’s 2016 sales.

This isn’t the first time Volvo and Uber decided to go for a spin—they’ve been in self-driving cahoots since early last year, but had to pump the breaks when a vehicle flipped over in Tempe, Arizona. The first ever AI-DUI? No, it was actually due to human error—the cause of 94% of all accidents.

Still, after a quick PR breather, Volvo and Uber are back at it to beat Waymo to the punch.

Reminder: Just two weeks ago, Alphabet’s self-driving arm said it tested the first autonomous vehicle to drive on public roads without any accompanying, “if-all-else-fails” driver. In self-driving speak, that’s called Level 4 autonomy—the gold standard nowadays.

But with this deal, Uber and Volvo are keeping right in Waymo's rearview.

China Makes it Rain Renminbi

LiAngelo Ball was kind enough to bring us the latest news from China:

Tencent hits half a tril

Two weeks after grabbing a 12% stake in Snap, Tencent became the first Asian company to reach a market cap of $500 billion. And while it still follows the likes of Apple ($872 billion), Alphabet ($712 billion), Microsoft ($636 billion), Amazon ($542 billion), and Facebook ($520 billion), this is a big deal:

Just two-and-a-half years ago, Tencent passed $200 billion, and only earlier this year reached $300 billion. The online gaming guru and maker of messenger app WeChat is example No. 1 of China’s growing presence in the global tech scene.

Example No. 2?

Alibaba (market cap only $482 billion)

The Baba invested $2.87 billion for a 36% stake in grocery retailer Sun Art—China’s top grocer (8% market share).

And you better believe Walmart and Amazon aren’t happy about it.

Alibaba brings big data to a $500 billion Chinese grocery market, where it’ll take Walmart’s China business head-on. And to stay ahead of Amazon, CEO Jack Ma is executing on his plan to reinvent retail, investing $9.3 billion in brick-and-mortar. You think those cashier-free Amazon stores are a Bezos brainchild? Alibaba’s been doing that all over China.

What Else Is Happening…

From fantasy sports to virtual sports: FanDuel CEO Nigel Eccles is stepping down to start an esports company.
It’s consolidation season in the chip industry: this time, Marvell (+6.41%) will buy Cavium (+10.80%) for $6 billion.
Janet Yellen will step down from the Fed’s Board of Governors once Jerome Powell is sworn in as chairman.
Colorado fined Uber $8.9 million for allowing unqualified drivers to operate in the state.

Economic Calendar

Monday Earnings: No Events

Economic Events: Leading Indicators (+)

Tuesday Earnings: HPE, HPQ, Salesforce.com

Economic Events: Existing Home Sales

Wednesday Earnings: Deere

Economic Events: Jobless Claims

Thursday Earnings: Markets Closed

Economic Events: Markets Closed

Friday Earnings: No Events

Economic Events: PMI

By the Numbers: Thanksgiving

The year’s best holiday is just a couple days away—nothing to worry about except football, food, and family. Speaking of, here’s some ammo to help you change the topic when your second cousin starts to go on one of his rants about Nixon...

£5—Cost of passage on the Mayflower in 1620 (about $1,300 today). Seems a bit pricey without WiFi on board.

$28 million—Property damage incurred by U.S. households on Thanksgiving Day from 2011-2013. Keep an eye on those turkey fryers, folks.

$190,000—The cost of a balloon in the Macy’s parade for first-time sponsors. Every subsequent year, it costs $90,000.

28.5 million—Number of U.S. travelers expected to take to the skies this weekend. That’s a 3% increase from last year.

$49.87—Average cost of a 10-person Thanksgiving meal in 2016 with “traditional” dishes (turkey, stuffing, pumpkin pie, etc.).

The Breakroom

Question of the Day

Lester has a number of oranges that he has to put into a box. He finds that when he puts them 2 at a time, 1 remains; when he puts them 3 at a time, 2 remain; when he puts them 4 at a time, 3 remain; when he puts them 5 at a time, 4 remain; when he puts them 6 at a time, 5 remain. However when he puts them 7 at a time, none remain. Can you find the number of oranges he has?

(Answer located at the bottom of newsletter)

Business Trivia

Can you guess which companies these CEOs lead?

Indra Nooyi, Mark Parker, Bob Iger, Sundar Pichai