The purge

MARKETS

• U.S. market: Investors ended the week optimistically after a strong jobs report. All 11 S&P sectors finished in the black.
• Crypto: Bitcoin found its legs, making a determined charge towards $7,000 over the weekend.

ECONOMY

The First Half of the Year for the U.S. Economy Is Over—Roll the Tape

The second half of the year is just getting started for the U.S. economy. Hats off to Rihanna and Ed Sheeran for the halftime performance, but we'll take it from here...

Here are the first half highlights:

• Unemployment rate: 4%—it's hovering around 17-year lows, although it climbed in June...the first monthly increase in a year.
• Jobs: June welcomed 213,000 jobs into the economy—that's eight-straight years of monthly job gains.
• Inflation: 2%—aka the Fed's target inflation rate, aka the first time it's happened in six years, aka let's pop champagne in Fed Chair Jerome Powell's office.
• Rate hikes: The Fed's raised rates twice this year so far (and three times last year). It plans on pulling the trigger on two more. Remember: raising rates can help slow an economy that's growing too fast.

So is it growing too fast? Stocks couldn't decide.

• Stocks: As of June 29 (the last day of trading in the first half), the Dow was down 1.8% on the year, the S&P grew 1.7%, the Nasdaq jumped 8.8%, and the small-cap Russell 2000 climbed 7.1%.

And what else is playing a role?

• Tax cuts: The Trump administration instituted $1.5 trillion worth of tax cuts. Corporations cheered and big banks walked away with an extra $2.5 billion in Q1.
• Tariffs: The U.S. placed steel, aluminum, solar panel, and washing machine tariffs on countries across the world. And on Friday? It kicked off 25% tariffs on $34 billion worth of Chinese goods. There have been retaliations, and there will likely be more.

So here we are...

...rounding the corner to Q2 earnings season, which kicks into high gear next week. We'll see if a strong economy and a generous tax cut can keep the good times rolling. Or, will the economy buckle under the weight of a trade war?

We'll bring the popcorn.

HUMANITARIAN

Elon Has a Plan to Help Save the Thai Soccer Team

Like a groundhog with a Twitter account, Elon will pop out his head and comment on every major news story. This time, he offered a solution to rescue 12 Thai boys and their soccer coach from the flooded Tham Luang Nang Non caves.

What we like: Using cutting-edge innovation to help rescue these boys. Musk will utilize SpaceX and The Boring Company to build the pods.

What we don't like: Musk putting the spotlight on himself.

Where the spotlight should be: On Sunday, four boys were successfully rescued. They've been stranded since they adventured into the cave on June 23.

• Divers have a plan to get the rest of the team to safety. Although, it will require snaking each survivor through a 6-hour-long path to freedom.

Back to Musk: One Princeton University engineering professor is bullish on Elon's idea, but a director from the National Cave Rescue Commission is saying, ‘It ain't happening, buddy.'

SOCIAL MEDIA

The Purge: Twitter Edition

Twitter's revved up its campaign against trolls and bots, per a new report from the Washington Post.

What's the body count? Well, in May and June it suspended more than 70 million accounts (that's more than one million a day).

• For perspective: Twitter had 336 million monthly active users as of Q1.

Yep, this clean-up is the equivalent of a full-scale fumigation. That's because Twitter and other social media platforms are under heavy pressure to crack down on abuse after a Russian troll farm gamed their algorithms to influence the 2016 election.

• Twitter's been pretty aggressive: Back in May, Twitter said it was hiding tweets by spammy and abusive posters. That's led to 4% fewer abuse reports from the search tab.

So...Senator Mark Warner, is @jack out of the dog house? "Twitter appears to be cracking down on the use of bots and other fake accounts," he told the WaPo..."though there is still much work to do."

MUSIC

The Public Markets Are Alive...With the Sound of Music

Let's size up two upcoming IPOs in the music industry.

1. Chinese tech conglomerate Tencent will spin off its online music entertainment business through a U.S. IPO. And it's gonna be a big one. Tencent Music Entertainment (TME) is valued at more than $30 billion, per the FT.

• Fun fact: Spotify and TME are blood brothers—they swapped shares to own minority stakes in each other last year.

2. Sonos, a maker of high-end speakers, filed with the SEC to go public.

• The good: It's sold over 19 million products as of March 31.
• The bad: The company posted a net loss of $14.2 million in fiscal 2017.
• The ugly: Competition. "We are dependent on a number of technology partners for the development of our products, some of which have developed or may develop and sell voice-enabled speaker products of their own." Aka Google and Amazon could eat its lunch.

CALENDAR

The (Consequential) Week Ahead

Back to the grind.

Monday (July 9): President Trump introduces his nominee for the Supreme Court

Tuesday (July 10): JOLTS; Earnings (PepsiCo)

Wednesday (July 11): NATO Summit; World Population Day

Thursday (July 12): Inflation data (CPI); Emmy Award nominations announced

Friday (July 13): Friday the 13th; Earnings (Citigroup, JPMorgan, PNC, Wells Fargo)

SPORTS

Want to Compete in the Tour de France?

You could start by riding this bike, which is making its debut in this year's race (it started on Saturday).

Name: Specialized S-Works Venge

Price: $12,500

How Specialized made it as aerodynamic as possible: It developed its own "optimization algorithm with the help of a supercomputer." Then, it "let the supercomputer run the program for weeks, where it analyzed the aerodynamics of every tube down to the millimeter."

WHAT ELSE IS BREWING

• The UK's top Brexit negotiator, David Davis, unexpectedly resigned last night.
• China's Cosco Shipping got the green light from the U.S. to acquire Orient Overseas International Ltd. for $6.3 billion.
• "Ant-Man and the Wasp" topped the box office, bringing in $76 million in North America. It beat out the original "Ant Man" by ~33%.
• PayPal's CEO Dan Schulman said he's prepared to spend up to $3 billion a year on acquisitions.

BREAKROOM

WHAT THE CREW IS READING
Famed venture capitalist Marc Andreessen spent his July 4th the way we all did: composing a long Twitter thread of books he recommends.

TRIVIA
Rank these U.S. cities by average rent price (per a new study by Walletwyse):

Manhattan (NYC), San Francisco, Washington, DC, Boston, Los Angeles

(Answer located at bottom of newsletter)

Breakroom Answers