Super Smash Bureau

Quote of the Day

Wall Street hates it like the devil hates holy water.”

Illinois Senator Dick Durbin referring to the Consumer Financial Protection Bureau (CFPB). As Richard Cordray steps down, who will step up? That’s this week’s million dollar question...

Market Snapshot

  • The S&P fell despite a push from retail on Cyber Monday.
  • European and Asian markets ended down.
  • The dollar gained ground before this week’s tax discussions.
  • Oil dropped ahead of a meeting of major oil producers.



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Walmart's Price Is Right...Behind Amazon

As the weather continues to drop, e-commerce price wars are heating up. A new study found that goods on Walmart’s (+0.01%) online store cost only 0.3% more on average than those on Amazon (+0.83%)...much tighter than the 3% gap last year.

We submit wearables (fitness trackers & smart watches) as evidence: last year, Walmart’s prices came in 12.6% above Amazon’s. This time around? They were 6.4% lower.

And it’s not a moment too soon for Walmart

As the holiday shopping season kicked into gear (right when you kicked someone to reach the last remaining 4K TV), online shoppers stuffed stockings in record numbers. Just look at this latest Black Friday: in-store shopping fell 4% from 2016 while online sales jumped 18%. Not to mention yesterday’s Cyber Monday mania, which brought in ~$6.6 billion (17% YoY growth).

Numbers like these seem to justify Walmart throwing the piggy bank at e-commerce. To compete with Amazon, the retailer acquired Jet.com for $3.3 billion, moved to two-day delivery, and spent $1 billion to slash prices. And it’s paying off: Q3 online sales grew 50%.

But don’t get the impression Walmart is even remotely close to touching Bezos’ online empire. This year, Amazon will grab 43.5% of U.S. online sales. Walmart will take only 3.6% of the pie.

And online bargain-basement prices won’t close the gap on their own

Walmart’s got a tricky balancing act on its hands. While it wants to carry its reputation as the “low price leader” to the online marketplace, it doesn’t want these low prices cannibalizing its higher-margin, brick-and-mortar stores.

Because as much as online shopping generates media buzz, physical stores still account for more than 90% of all retail sales. And with 4,700 locations in the U.S., Walmart plans to keep them busy this holiday season.

Super Smash Bureau

Richard Cordray stepped down as director of the CFPB (an independent agency regulating Wall Street), leaving deputy director, Leandra English, in charge. Apparently, President Trump wasn’t cc’d on the memo, naming budget director Mick Mulvaney as acting head as well.

As you can imagine, things got awkward.

Leandra English raised the stakes late Sunday night, filing a lawsuit against the Trump administration. Her argument? The bureau's founding documents state, “in the absence [of the current chief]” the deputy director steps in.

Mulvaney hardly batted an eye, strolling into the office Monday with the working-world’s most iconic peace offering: Boston cream. He then proceeded to tell staff to “disregard Ms. English.”

It’s a nice effort, Mulvaney...but you might need more than donuts before you start barking orders.

This is a guy who originally voted to close the CFPB for shaking down banks across Wall Street. And because of that, he could be a “wrecking ball” to an agency that’s helped refund over $12 billion to nearly 30 million consumers.

So for now, Leandra English says, “I’ll see you in court.”

Bitcoin on Cloud $9K

You got in at $3,000, right?...No? Okay, what about $6,000? Hmm...well if you didn’t, don’t sweat it all...it’s not like Bitcoin just crossed $9,500...

The cryptocurrency that’s got everyone and their grandmas in a FOMO fit jumped $1,500 over the last seven days—its fastest thousand point growth to date.

And while we have no idea what’s driving this price up, down, or sideways each day, we certainly can speculate:

Is it the (now) 13 million active accounts on Coinbase driving demand? Charles Schwab only has 10 million.

Is it Japan putting its finger on the crypto-trigger? 60% of Bitcoin is now traded in yen.

Is it hedge fund manager Mike Novogratz predicting the currency would hit $10,000 last month? He and his $500 million new crypto fund might agree.

For now, we’ll just strap in and enjoy the ride.

This Week in Tax Reform

The Senate is now a full day into the (potentially) week-long debate focused on passing the GOP’s controversial tax bill, the Tax Cuts and Jobs Act.

What could be some sticking points? Well, budget-hawks aren’t happy that the cuts will inflate the $440 billion federal deficit by $1.4 trillion over a decade. Then there’s Senator Ron Johnson, who’s prodding GOP leadership for a larger tax cut for pass-through businesses (the S corps and hedge funds of the world).

Set your DVR for C-SPAN:

  • The battle on the Hill officially begins today as the bill is scheduled for debates, amendments, and a possible vote on the Senate floor.
  • If the bill isn’t passed today, debates and voting will continue into Wednesday. During this rinse-and-repeat voting cycle, senators can submit any edits.
  • After the dust settles on Thursday and everyone is content with how much they’ve “ayed” and “nayed,” the altered bill will be voted on.

These timetables could certainly change, but we’ve hacked into Mitch McConnell's mainframe and will be monitoring for any updates.

What Else Is Happening…

  • Unilever (-0.35%) is on the M&A grind again, acquiring hair and skincare maker Sundial Brands.
  • Facebook (+0.14%) will use AI to identify potential suicide candidates.
  • A court put an end to Uber’s pilot program in Israel.
  • Teva’s (+7.01%) new CEO Kare Schultz dismissed top execs in a move to revitalize the world's largest generic drugmaker.

Economic Calendar

  • Monday     Earnings: No Events
  •                     Economic Events: New Home Sales (+)

  • Tuesday    Earnings: No Events
  •                   Economic Events: Consumer Confidence

  • Wednesday    Earnings: Tiffany & Co
  •                         Economic Events: GDP, Corporate Profits

  • Thursday   Earnings: Barnes & Noble, Express
  •                    Economic Events: Jobless Claims, Personal Income and Outlays

  • Friday       Earnings: No Events
  •                  Economic Events: Motor Vehicle Sales, PMI Manufacturing Index, ISM Manufacturing Index

By the Numbers: Buying Time

Time Inc. and all of its signature publications—including Fortune, Sports Illustrated, and, of course, Time—are being purchased by Iowa-based publishing company, Meredith Corp. No word on whether Meredith, publisher of Family Circle and Better Home & Garden, plans to make the signature New York media company any more or less folksy, but here are the pertinent numbers:

$2.8 billion—The all-cash price tag on Time Inc. Think about that the next time you’re annoyed by a cash-only bar.

2 million—Time Magazine’s current circulation (compared to Better Home & Garden’s 7.6 million). Maybe if Time had pulled the trigger on its “Duvet Cover of the Year” issue things would have turned out differently.

$650 million—How much the billionaire Koch brothers contributed to the deal.

250 million—The amount of email addresses/device IPs Meredith is adding to its database.

$4.8 billion—The combined revenue of the two companies in 2016. Meredith predicts an additional $400-500 million in cost savings over the next year.

The Breakroom

Question of the Day

Using the logical order of numbers listed below, can you guess what the next number in the sequence will be?

1, 3, -1, 2, -3, 1, -5, ??

(Answer located at the bottom of newsletter)

Caption This

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Reply to this email with the funniest caption and we'll post the best responses tomorrow.

Stat of the Day

70%—The probability of a stock market correction per Vanguard Group. That’s about 30% higher than the average over the last 60 years. But what does Vanguard know? It only manages $5 trillion in assets...

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Breakroom Answers

Question of the Day: 0

 

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