Tough love

MARKETS

• U.S. markets: A push from McDonald's (+4.37%) helped the Dow rally 100 points. Tech lost its momentum and the Nasdaq and S&P finished down.
• Wall Street stunner: Tech clothing company Stitch Fix blew past earnings expectations, announced Stitch Fix Kids, and watched shares pop 14% after the announcement.

GEOPOLITICS

No Summer Fridays for Trump and Other World Leaders at the G7 Summit

Canadian Prime Minister Justin Trudeau vacuumed the rug, febreezed the bathroom, and cued up the new Michael Bublé album...because you gotta clean up before the G7 summit, which he's hosting today in Quebec.

The G7 (Group of Seven), in one sentence: It's a group of seven major countries—Japan, Canada, France, Germany, the UK, Italy, and the U.S. (plus the EU)—that get together every year to compare notes on geopolitics (economic growth, clean energy, future of work).

And what's usually a non-event has become...a pretty big event

Why?

• The U.S. recently imposed steel and aluminum tariffs on its allies: Mexico, Canada, and the EU. They're really ticked off, especially because Trump invoked "national security" to justify the tariffs.
• Trudeau fired back: "The idea that we are somehow a national security threat to the United States is quite frankly insulting and unacceptable," citing how Canadian and American troops have fought alongside each other for decades.
• And there's this: Allies are also seething about the U.S. pulling out of the Iran nuclear deal.

So...yeah, expect a lot of forced smiles and cringeworthy small talk.

But some think a little tough love won't leave any bruises

Top economic advisor Larry Kudlow remained zen, calling the trade conflict a "family quarrel."

• His argument: Even if it amounts to short-term disagreements with allies, the U.S. must stick up for itself on the global stage.

And activist investor Nelson Peltz is also proud of the administration, telling CNBC Trump is "doing some very brave things" on trade.

But whatever happens at the G7 meeting...this weekend is just the appetizer. And North Korean leader Kim Jong-un is the main course. He'll be meeting with Trump next Tuesday in Singapore in a highly-anticipated summit on nuclear weapons.

MANAGEMENT

Dimon and Buffett Rail Against Short-Termism

Warren Buffett and JPMorgan CEO Jamie Dimon dipped a quill in some ink for the WSJ, arguing that public companies should stop providing quarterly earnings guidance.

Some context: It's customary for public corporations to tell the public how they think they'll perform over the next quarter. You know, for transparency.

So what's the problem?

• "Quarterly earnings guidance often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability."

Go on...

• "Companies frequently hold back on technology spending, hiring, and research and development to meet quarterly earnings forecasts that may be affected by factors outside the company's control..."

Bottom line: "Reducing or even eliminating quarterly earnings guidance won't, by itself, eliminate all short-term performance pressures that U.S. public companies currently face, but it would be a step in the right direction."

• But is this shortsighted? Here's an opposing perspective from Bloomberg Opinion.

GIG ECONOMY

MythBusters: Gig Economy Edition

It's your monthly dose of "Everything I thought I knew about the gig economy has turned out to be a lie," courtesy of the Bureau of Labor Statistics.

These data-crunchers found:

• The share of Americans working in "alternative work arrangements" (a proxy for the gig economy) has actually decreased since 2005...when gig economy powerhouses Uber, Lyft, and TaskRabbit were just PowerPoint embryos on some floppy disk.
• The Xs and Os: 10.7% of American workers held "alternative employment arrangements" in 2005. Now? 10.1%.

And that's not all...

• Gig economy workers are older than you probably think. Check this out:

Bottom line: The gig economy hasn't disrupted "traditional," full-time work like many predicted.

TECH

Amazon TV Is Catching Fire

Here's a thought: Why buy a Fire TV and an Amazon Echo, when you can have them wrapped into one? Amazon had the same thought. Introducing the $120 Fire TV Cube... (Amazon Prime members can snag it for $90 if you buy it today).

Thinking outside the Cube: Roku holds 37% of the U.S. market for streaming devices. Then comes Fire TV (24%), Google Chromecast (18%), Apple TV (15%), and other (6%).

This isn't Amazon's first play to "Wow" consumers and close the gap. It locked in a partnership with Best Buy to integrate Fire TV into more TVs in April.

+ Amazon's giving you more to watch: It just bought the rights to stream 20 Premier League soccer games in the UK next season.

TECH

ZTE Is Back in Business

After a little rock 'em sock 'em negotiation, Chinese smartphone maker ZTE will return to business as usual...after paying the U.S. a $1 billion fine.

Remember, ZTE (the fourth biggest seller of smartphones in the U.S.) violated U.S. sanctions with Iran and North Korea. Then? It lied about holding the employees responsible accountable.

• Long story short: The Trump administration cut off ZTE from its critical U.S. suppliers, forcing the company to halt operations. That inevitably brought it to the negotiating table.

To win back its suppliers, ZTE is...

• Paying the U.S. an extra $400 million (on top of the $1 billion) as collateral in case it messes up again.
• Reconfiguring its management and board based on U.S.-vetted personnel.

Some lawmakers (from both parties) argue the U.S. shouldn't cut any deals with Chinese tech companies due to national security concerns.

On the flip, the Trump administration will likely view this as a win in the larger U.S.-China trade war context—aka, hard stances do yield results.

FRIDAY FUN

Caption Contest

For context: Elon Musk as a kid.

Our caption: “Yes, I’d like a loan for my electric diaper startup please.”

Think you can do better? Post your best caption here and we'll throw the best one on our Instagram.

WHAT ELSE IS BREWING

• McDonald's is restructuring its regional offices, which means layoffs are coming.
• Jeff Bezos, Warren Buffett, and Jamie Dimon have landed on a CEO for their healthcare venture. Keep an eye out for an announcement within two weeks.
• Bryan Colangelo, the GM of the Philadelphia 76ers, resigned after a bizarre series of events in which his wife set up multiple "burner" accounts on Twitter.
• Facebook (-1.65%) informed users that a bug changed profile sharing settings on 14 million accounts to "public."

BREAKROOM

WHAT THE CREW'S READING
Frenemies: The Epic Disruption of the Advertising Industry (and Why This Matters) by Ken Auletta—For those of you trying to come to grips with the seismic changes in advertising, this is the book to read. Ken, a legendary media reporter/writer, has been thinking about the industry more than anyone else, and he's got some incredible insider stories to share. It's hot off the press.

TRIVIA
Which of these beverage companies has Coca Cola not acquired a stake in?

Fuze—Vitamin Water—Honest Tea—Tropicana—Monster

(Answer located at bottom of newsletter)

Breakroom Answers