Ouch, major burn

MARKETS

• U.S. markets: On Friday, more than $39 billion worth of stock was traded in less than a second thanks to the FTSE Russell rebalancing its indexes (WSJ).
• Crypto: Bitcoin bounced back after falling below $6,000.

INTERNATIONAL

The World Forgot to Relax this Weekend

Seriously, folks. Heard of the beach? The international news was flowing this weekend—here are the three stories you should know about.

1. Turkish elections
Turkish President Recep Tayyip Erdogan placed a bet and it paid off: facing a struggling economy, he moved up elections by 16 months and yesterday, he won a major victory.

Now? Erdogan will govern under new rules that hand even more power to the president (and fewer "checks and balances").

The backdrop:

• Erdogan was desperate to move up elections and secure his position. While GDP grew 7.4% last year, the economy seems heading for a hard U-turn.
• The lira has taken a nosedive, inflation has jumped (same with interest rates), and regular citizens are feeling the pinch.

2. China unleashes the banks

China injected its economy with the monetary policy equivalent of HGH, cutting the "reserve ratio" for some banks (aka the amount of cash required to stash in their rainy day fund). The move frees up about $108 billion to help restructure corporate debt and provide credit to small businesses.

The backdrop:

• You may have heard China and the U.S. aren't on the best terms, economically speaking. Well, China is hoping to prime its (already slowing) economy so it'll be in the best position to weather any turbulence from the trade war.

3. Saudi Arabia changes things up

The Saudis and other major oil producing countries agreed to lift crude output this weekend, which might help slow down surging prices.

The backdrop:

• This chart was freaking out many world leaders, including President Trump, India Prime Minister Narendra Modi, and officials in other countries who are big crude customers.

Elsewhere in Saudi Arabia: As of Sunday, women are now allowed to drive a car. According to Bloomberg, the move could add $90 billion to economic output by 2030 (by encouraging more women to enter the labor force).

TRADE

Speaking of Trade Wars, Let's Hear an Update

On Friday, President Trump threatened a 20% tariff on EU auto imports in a tweet.

It came right after the EU released retaliatory tariffs on $3.3 billion worth of U.S. products, including: Harley Davidsons, Levis, and bourbon—a true attack on our national pride.

So why did the EU take a swing at U.S. products? Because the Trump administration already placed tariffs on imported EU steel and aluminum. Like we said, trade war...

Playing both sides:

• Advocates of more tariffs (which is looking like a thin crowd these days) say, ‘The EU makes it too hard for U.S. companies to compete. They already have a 10% tariff on U.S. auto imports, so this is fair game.'
• Critics of these tariffs say, ‘Well, a 20% tariff is double the EU's and the U.S. has had a 25% tariff on EU truck and van imports since the early '60s.'

Not to mention, any additional tariffs will probably be met by another round of European retaliation. Like we said, trade war...

+ Bonus round: The administration plans on releasing new restrictions on Chinese companies' investments in American tech firms by the end of the week, per the WSJ.

ENERGY

It’s Not Looking Pretty in SolarCity

Hey Tesla, how's that $2.6 billion acquisition of SolarCity turning out? Not so great?

Not so great.

Last week, Reuters reported Tesla will close 14 SolarCity installation facilities. It's all part of Musk's plan to cut 9% of Tesla's overall workforce. But it leaves SolarCity in an (arguably) unsustainable predicament.

How's that?

• SolarCity is already losing money each quarter (it lost ~$250 million in Q3 2016).
• Tesla also just ended a contract to sell solar panels in Home Depot, which accounts for half of SolarCity's revenue.

But sometimes, throwing some weight overboard can save the whole ship.

Tesla still has SolarCity written into its long-term game plan. But in the short run, the priority has to be the mass-market Model 3 sedan. Shareholders are anxiously waiting for Tesla to meet the production target of 5,000 cars a week.

PUBLIC RELATIONS

A Walmart Story: In Three Acts

Act 1: The setup

Act 2: The plot twist

Act 3: The burn (literally)

CALENDAR

The Week Ahead

Goal: Spend some quality time outside, even if it's just lunch.

Monday (June 25): In a London courtroom, Uber will begin its fight to operate in the city
Tuesday (June 26): Walgreens officially replaces GE in the Dow

Wednesday (June 27): Senate committee holds hearing on Sprint/T-Mobile merger; Earnings (General Mills)

Thursday (June 28): GDP; EU summit begins; Earnings (Nike, Accenture, Walgreens)

Friday (June 29): Inflation data (Personal Income and Outlays); Daydreaming of July 4th plans

WHAT ELSE IS BREWING

• Netflix fired its comms chief for using the "N-word" on multiple occasions.
• GE is closing in on selling its industrial engines unit to PE firm Advent International for at least $3 billion, per the WSJ.
• A police report found that the driver in the front seat during a fatal Uber self-driving vehicle accident was streaming The Voice right before the collision.
• Apple will fix your broken MacBook and MacBook Pro keyboards for free
• Xiaomi, a Chinese smartphone maker, is planning to raise $6 billion in its IPO next month. That's down from the $10 billion it initially planned.

BREAKROOM

A Chance to Give Back
Good St.—A newsletter that lets you give 25¢ a day to charity. How does it work? Every morning, you receive an email that features two charities that are tackling a problem. Just click on one to allocate your 25¢.

And here's the really cool part: If you join today and mention Morning Brew, they'll donate $5 to one of our favorite nonprofits, NFTE—they teach entrepreneurial skills to youth in under-resourced communities. Do some good today.

Brew MD
Here's a quick little ab workout for you, courtesy of Morning Brew CEO fitness guru Alex Lieberman. Repeat this cycle 3x and good luck breathing the next day.

Trivia
Which U.S. state has the highest average cost of living? Which state has the lowest?

(Answer located at bottom of newsletter)

Breakroom Answers

Trivia
Highest—Hawaii. Lowest—Mississippi