Buffett throws down

MARKETS

• U.S. markets: A day after reaching a record high, the tech-heavy Nasdaq sunk like a rock after Alphabet suffered its worst decline since 2012.
• Fed: President Trump asked the Fed to lower interest rates by “like one point” and consider quantitative easing. We’ll get more insight when Fed Chair Jerome Powell gives an update this afternoon.

TECH

The New-Look Facebook

Yesterday, Facebook (-0.71%) CEO Mark Zuckerberg gave the keynote speech at F8, the company’s annual developer conference. To describe the company’s new approach to online communication, he used the word “privacy” more times than GoT characters used the word “aaAuaArgh” on Sunday. Because “We don’t have the best reputation on privacy right now,” he said.

We’re guessing the WSJ’s David Pierce needs a greasy hamburger...

Zuck’s going for a refresh

The glow up: FB is redesigning its app, logo, and website to promote Groups. It’s part of a push to prioritize personal communication over the sprawling, spam-ridden News Feed—and the biggest change to the interface in five years. Maybe most shockingly, the Facebook banner will be white, not blue.

• Instagram is also getting fresh features, including a new “Create Mode” for the camera and a new tag for products so that any influencer, artist, or celebrity—not just businesses—can sell items within the app. Facebook's eyeing e-commerce $$$.

A few other announcements you should know about:

• Messenger is getting a native desktop app. Plus, Zuckerberg said he’ll roll out end-to-end encryption for Messenger (WhatsApp is already encrypted) and limit developer access to data. Priscilla’s hoping that will stop him from grumbling “Cambridge Analytica” in his sleep.
• Portal and Portal Plus video calling devices will launch in Canada and Europe this
• And there’s a headset called Quest. A new $399 standalone Oculus VR headset, called Quest, will be released on May 21 and is available for preorder now.

The one thing Zuck said more than “privacy”?

Interoperability. Zuck plans to make the transition from Instagram to WhatsApp to Messenger as seamless as the one from a long work day to Seamless.

And finally...a “Secret Crush” function for Facebook Dating. It hasn’t rolled out in the U.S. yet—but when it does, you’ll be able to notify your friends you “like like” them, but only if they've indicated they feel the same about you.

TECH

Apple's Got Its Mojo Back

You already know Apple’s struggled to boost iPhone demand in a nearly saturated smartphone market. We told you about it here, here, and here...

But don’t write off Apple’s resilience. Yesterday, its stock spiked as much as 5% after hours when the company announced quarterly sales and profit that easily topped analyst estimates, even if both measures declined YoY.

Because if there’s life beyond the iPod Nano, there may be life beyond the iPhone. Apple softened the blow of a 17% decline in iPhone sales with a 16% jump in revenue for its services to $11.5 billion last quarter.

• The services business accounted for roughly 20% of Apple’s overall revenue, up from 16% a year ago. At the same time, iPhone sales as a share of total revenue are down.

Apple’s guidance for next quarter also topped forecasts. That *could* suggest Apple’s expecting iPhone sales to stabilize while its services revenue continues to grow.

And an added bonus for investors: The company announced a 5% increase in its quarterly dividend.

ENERGY

Today's Warren Buffett Lesson...

If they’re willing to charter the corporate jet to Omaha for you, they might be worth your $10 billion.

Two days after Occidental Petroleum (-2.08%) touched down in Buffett’s hometown, his firm, Berkshire Hathaway, announced plans to inject $10 billion into Occidental to support its bid to buy Anadarko Petroleum (-0.11%).

This was a big development. Occidental’s in the middle of a bidding war with Chevron (+1.99%) over Anadarko, which apparently dominates energy execs’ dreams as much as it does the Permian Basin.

But there’s also a big if. Occidental won’t see a dime unless its bid for Anadarko succeeds. If that happens, this investment would be Buffett’s biggest in more than three years, not counting his deep love for Apple. It would also make Occidental one of Berkshire’s top 10 public company holdings.

Reminder: Berkshire’s annual shareholder meeting this weekend will almost certainly include questions about where Buffett wants to direct the company’s growing cash pile. He might now have an answer.

MEDIA

Media Mixtape: April 30

1. Cheddar got bought. Cheddar, which is as much a cheese company as Morning Brew is a coffee company, was acquired by cable operator Altice USA (-0.55%) for $200 million. Since its founding in 2016, the digital media startup has raised $54 million, including a chunk from...yep, Altice. Expect to hear more from Altice now that Cheddar founder and CEO Jon Steinberg will become president of Altice News.

2. The Obamas revealed projects. Last May, Barack and Michelle moved up in the world, going from the president and first lady to signing a multiyear production deal with Netflix (-0.35%). Yesterday, their Higher Ground production company released a slate of seven projects they’re working on. The list includes a film adaptation of a Frederick Douglass biography and a series based on a recent Michael Lewis book.

3. And you’re going to have to find something else to read before your haircut. ESPN The Magazine will print its final issue this September before going purely digital.

ECONOMY

Here Are Some Facts About the USA

USAFacts, the nonprofit started by former Microsoft CEO Steve Ballmer, released its third annual report yesterday. And...the man does not lie, there were indeed facts about the USA.

Before we get to them, let’s debrief on USAFacts. Its mission is to “present a complete picture of the U.S. through the data our government collects and publishes.”

The most interesting facts from that complete picture:

• U.S. GDP increased 15.5% between 2007 and 2017. The largest industry in terms of value added to GDP was...real estate. The two industries whose share of GDP fell over that period? Mining and construction.
• Employment is growing among elderly and non-white populations. While the elderly (65+) represented 3% of employed individuals in 1980, they represented 6.2% in 2018. And the gap in employment rates between white and black populations is the smallest ever.
• Health care spending per person is increasing (up 59% since 1999), but life expectancy fell each of the past three years.

WHAT ELSE IS BREWING

• GE (+4.63%) swung to a profit in Q1. It said cash flow won’t be pretty this quarter, but you'll take what you can get.
• Wynn Resorts (+2.45% after hours) was handed a $35 million fine from Massachusetts gambling regulators, but it'll be able to keep its license.
• President Trump sued to block Deutsche Bank (-0.48%) and Capital One (+0.49%) from abiding by congressional subpoenas targeting Trump’s finances.
• McDonald’s (+0.25%) rode tech-focused store updates and a wave of promotional deals to a Q1 earnings beat.
• The Tony Award nominations are here. Hope you’ve already seen Hadestown, because based on the number of nods it got, ticket prices are about to jump.

BREAKROOM

Guess the Logo
In honor of Facebook's redesign, put these Facebook icons in chronological order, from earliest to most recent.

Breakroom Answers

Guess the Logo
D, A, C, B