QUOTE OF THE DAY
[the allegations] take the emissions scandal into a new dimension."
The German car-tel has some explaining to do. For now, just keep on reading...
Market Snapshot
- U.S. stocks closed lower, driven by a shaky GE earnings outlook.
- The Nasdaq ended its streak of ten straight days of gains.
- The dollar dropped against the euro after Draghi’s comments.
- Oil fell the most in two weeks on reports of higher OPEC production.
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Plug It In
Nowadays two-day shipping is just too long. We want our Tide Pods and we want them yesterday.
That’s precisely why Wal-Mart and Amazon are fighting for every advantage they can get in their warehouse logistics businesses.
Need some proof? Wal-Mart is contracting Plug Power by purchasing $80 million worth of forklifts and warehouse vehicles powered by the company’s famous fuel cell technology.
Don’t think too hard on that—Plug Power’s technology simply charges warehouse vehicles faster and more efficiently.
Here is what you should think hard on
Powering forklifts can account for 25% of a warehouse’s electricity bill. Your standard lead-acid battery needs to be constantly recharged, have its battery swapped out and even needs its own changing room—so high maintenance.
The fuel cell technology presents such an improvement to these bottlenecks, both Wal-Mart and Amazon are vying for stakes in the company. But, let’s take this a step further.
Wal-Mart potentially owns 17% of Plug Power, while Amazon potentially owns 19%. In order for those ownerships to vest, each of the retailers needs to spend $600 million on Plug Power products and services.
Not a bad position to be in if you’re Plug Power...
Keep in mind, Wal-Mart and Plug Power go way back
Wal-Mart is Plug Power’s biggest customer with 5,500 warehouse vehicles across 22 warehouses. So while this tech might not be new, it is vital to compete with Amazon.
If you haven’t stepped foot into an Amazon warehouse recently just picture a symphony of perfectly orchestrated robots moving each box where it needs to be—it looks like a bunch of oversized roombas learning the nutcracker.
If Wal-Mart ever wants to get ahead in the e-commerce space, while also meeting the hefty delivery demands of Jet.com, another investment in Plug Power seems like the perfect place to start.
Let’s Take a Ride
Lyft is joining the arms race to bring autonomous driving to a street near you.
One of its recent partnerships—nuTonomy, a self-driving startup—made it clear this move was always in the cards. But, as of Friday, Lyft is building a 50,000-square-foot research facility in Silicon Valley to focus on its own technology.
Lyft isn't just doing this in a campaign against awkward small-talk. Autonomous driving must become a core part of the ride-hailing business if the Ubers and Lyfts of the world ever want to become profitable.
How so? Driverless tech companies like nuTonomy are already turning to Uber and Lyft for the immediate scale they offer (Lyft’s stat sheet: 1M daily rides and 350+ cities). Naturally, Lyft is thinking "if this tech is growing so big, why pay other people for it when we can build it ourselves."
It's a sad reality for their hundreds of thousands of employees, but if Uber and Lyft ever want to cut the losses, they might have to start cutting the drivers.
The German Car-tel
The German Cartel Office is investigating an inner-circle of Germany’s main car brands (BMW, Daimler and Volkswagen). The three have allegedly been colluding since the mid-1990’s to undercut tech standards on everything from brakes to emission regulations.
If you’re picturing a small mafia family meeting in a dimly-lit restaurant, that’s probably a good place to start.
The investigation is just getting underway, but these issues have been humming around the industry for years. Almost all carmakers in Europe pollute more in day-to-day use than in tests.
But, don’t just take our word for it. Remember Volkswagen’s whole "diesel dupe?" Two years ago, the German carmaker literally installed a mechanism in 11 million vehicles to identify when cars were in testing.
Like a light switch, emissions safety features were flicked on during the test and flicked off when the cars were back on the roads.
Steps are being taken in the right direction, though. On Friday, Audi announced it would follow Daimler and BMW’s lead by upgrading the emissions systems in 850,000 vehicles.
As for the German car-tel, well...if you mess with their family they’ll mess with you. Don’t believe us? They might've been polluting the environment for years just to cut costs.
Tell Me More…
- YCombinator is raising up to $1 billion for a new investment fund.
- Ford (-1.45%) is fighting back against the recall of 2.5 million vehicles.
- China laid out a timeline to create a $150 billion AI industry by 2020.
- Apollo is prepping for the IPO of home security company ADT.
- Bitcoin averted a split into two separate currencies after a software upgrade.
Economic Calendar
- Monday Earnings: No events today
- Tuesday Earnings: Chipotle, Domino's, JetBlue, McDonald's
- Wednesday Earnings: Anheuser Busch, Boeing, Buffalo Wild Wings, Ford, Hyundai, Whole Foods
- Thursday Earnings: Airbus, Amazon, Barclays, Deutsche Bank, Electronic Arts, Kia Motors, Xerox
- Friday Earnings: American Airlines, Chevron, Exxon
Economic Events: Existing Home Sales
Economic Events: Consumer Confidence, Case-Shiller Home Price Index
Economic Events: FOMC Rate Decision, Crude Inventories, New Home Sales
Economic Events: Natural Gas Inventories, Initial Claims
Economic Events: Michigan Sentiment
From the Crew
From Michael: Coinbase
Bitcoin doesn’t have to be some foreign idea we’re all afraid of. If you’ve ever played around with a little money on Robinhood, the free stock-trading app, think of Coinbase as the same thing. It’s an app-based marketplace where you can buy and sell three cryptocurrencies: Bitcoin, Ethereum and Litecoin. If you’re interested in getting involved but still have some questions, don’t hesitate to reach out to me this week.
For now, it’s time to start trading
From Lauren: Happy 150th, Canada!
Trying to decide on your next escape from the city? Got you covered. To celebrate its 150th birthday, Canada is offering visitors free admission to all of its national parks in 2017. In case you haven’t brushed up on your Canadian history (shame on you), here’s a list of the parks included. My first stop? Lake Louise in Alberta.
You’ve got 5 months
From Alex: The Name’s ORII
I’ve been a Kickstarter junkie for a while. Love the idea of crowdfunding and a platform driven by creativity. There’s always the risk of a campaign not working out (RIP Coin), but when it does, it’s an awesome feeling to be an early backer. A friend told me about ORII: a voice-powered smart ring that turns your finger into a smart phone. The kicker—ORII uses bone conduction to send sound along your finger and into your ear.
Be an early backer and look like a spy all at once
From Josh: Don’t Watch That Trailer
This weekend, I had an annual existential crisis with Comic Con kicking off. I'm extremely tempted to geek out on sneak peeks for Ready Player One and Westworld, BUT these trailers reveal too much and prevent me from walking into a movie without any preconceived notions. To understand where I’m coming from, check out The Ringer's take on why they cheapen your entertainment experience.
Please silence your cell phone and enjoy the read
Question of the Day
If the sum of the consecutive integers from –35 to n inclusive is 150, what is the value of n?
(Give up?)
Who Am I?
I served eight years as Chairman of the Federal Reserve.
I was a major catalyst in stimulating the U.S. economy after the financial crisis.
I used the alias Edward Quince in my email address and phone book to avoid too many emails.
I worked as a full-time tenured professor at Princeton prior to the Fed.
Stat of the Day
$1,845,000
The piece of a $10.25 million pie that golf-phenom Jordan Spieth received after winning the 146th British Open yesterday.
Jordan is the second golfer ever to win three out of four legs of the grand slam before the age of 24. The win at Royal Birkdale brings his career earnings to $34,194,397.
