You stay classy, Sinclair

MARKETS

• U.S. markets: For the first time in two years, the S&P closed below its 200-day moving average. Some predict the sell-off is just beginning.
• Commodities: Gold rallied as investors fled to safe havens.

MEDIA

Sinclair-Tribune Deal Returns to the Spotlight

Not every local news station has the originality of Ron Burgundy and the Channel 4 News Team. Deadspin made that clear when it released a viral video—a mash-up of local news anchors across the country repeating the same scripted segment on fake news:

"The sharing of biased and false news has become all too common on social media...Some members of the media use their platforms to push their own personal bias...This is extremely dangerous to our democracy."

How'd they all wind up reading the same prompt? A mandate from Sinclair Broadcast Group—the largest owner/operator of local news stations in the U.S. with 173 stations.

Translation: Sinclair reaches one-third of U.S. homes

So if you're in the 41% of people who trust local news, you might be putting your faith in Sinclair. Which could be good or bad, depending on your political leanings.

That's because the Maryland-based broadcaster tilts to the right with "must run" segments like:

• The "Terrorism Alert Desk"
• Commentary from Boris Epshteyn—an ex-member of the Trump administration

Partisan news isn't anything specific to Sinclair—national media outlets like Fox and MSNBC each have their own slant. But Sinclair's foothold on the U.S. local news market is verging on monopoly status.

And it could be getting bigger

Deadspin's montage didn't have the same inspirational message as Rocky's training regimen. But it did call attention to Sinclair's impending $3.9 billion acquisition of Tribune.

The deal, if completed, would give the local news empire access to 42 new stations across 33 markets. Which means, if you weren't watching a Sinclair original before, you would likely be after the merger.

The Crew's take: Individually, the anchors in the video are right—people deserve unbiased, accurate reporting. But when you pan out and watch hundreds of anchors all recite the exact same words, it's hard not to think: "This is what George Orwell must've pictured when writing 1984."

MARKETS

April Showers on the Stock Market

You know what's hurting more than your Easter/Manischewitz hangover? The Nasdaq. The tech-heavy index closed down 2.74%, erasing all gains this year. Let's survey the wreckage:

Tesla (-5.13%): Even though Elon Musk joked about bankruptcy on April Fool's Day, Tesla's problems aren't that funny. It recalled 123,000 Model S cars, revealed its semi-autonomous Autopilot was engaged during a fatal crash, isn't expected to hit Model 3 production targets...and that was just the past couple days.

Amazon (-5.21%): The president fired off another tweet Monday morning attacking Amazon's sweetheart deal with USPS (though its relationship with Amazon is actually profitable). Bezos is firmly in the doghouse.

Snap (not listed on Nasdaq but still lost 8.83%): A research firm called Snapchat's redesign a "bust" and said a focus group of students found the app "annoying" to use.

Dishonorable mentions: Alphabet (-2.36%), Netflix (-5.10%), and Facebook (-2.75%).

ECONOMY

In Trade War, China Lands a Soft but Well-Placed Punch

The brewing trade war with China is a reminder that a chunk of the U.S. economy takes place in rural America, far away from center-city skyscrapers and cubicles.

U.S. farmers might take their licks after China announced 15-25% tariffs on 128 U.S. goods, including pork, fruit, and wine ($3 billion total). That move was in response to President Trump targeting China with steel and aluminum tariffs.

All things considered...the Chinese counterpunch was pretty tame. But any policy that makes it harder to sell to China is the last thing farmers want to see:

• After Canada, China is the top customer for American agricultural exports.
• China is the third-largest market for American pork.
• Producers of many ag products have ramped up their operations banking on export growth.

What to watch: President Trump has penciled in up to $60 billion in tariffs on more Chinese products. And if those become a reality this summer, all bets on resolving this trade skirmish are off.

TECH

Apple Wants to Use Its Own Chips in Macs

Tim is Cookin' up some bad news for Intel—Bloomberg reported Apple (-0.66%) will use its own processors for Mac laptops by 2020, sending Intel's shares down more than 8% (their worst decline in two years).

But enough about Intel...what's Apple's angle here?

For starters, this move would save money and increase Mac battery life. But Apple also wants to build out its ecosystem of silicon tech for better integration across products.

It'll do so through its ARM-based processor—the chip family powering your iPhones and iPads. By having Macs run more like their iOS compadres, apps should offer a seamless experience from desktop to mobile. It could also keep data much safer.

What's the catch? Intel processors are synonymous with speed and performance, which basically means...Apple's taking a huge risk if it parts ways.

WHAT ELSE IS BREWING

• Walmart (-3.83%) is considering acquiring online pharmacy PillPack for less than $1 billion.
• Google is shuffling execs in its AI and search units.
• GE (-2.74%) is selling part of its health care business to PE shop Veritas for $1.05 billion.
• ESPN's streaming service, ESPN+, will launch April 12 at $4.99 a month.
• Gay dating app Grindr came under fire for sharing users' HIV status with third-party vendors.
• A downgrade from Morgan Stanley sent Fitbit shares falling 10%.

WATER COOLER

VENTURE THIS

We’re taking a break from the usual “Venture This” subject matter (small startups) to take a look at music streaming service Spotify (a pretty large startup, valued at more than $20 billion).

The occasion? Today's IPO.

Remember: Spotify is going public via a "direct listing," which cuts out underwriters and opens the stock up to significant risk and volatility (because a price has not been set in advance).

Why we'd buckle up for the ride

Spotify is a case study in how to convert users from free → premium: Of its 157 million global listeners, 71 million are paying subscribers.

With those numbers, Spotify can take substantial credit for the music industry's U-turn since 2015. U.S. revenues hit $8.7 billion last year, the most in a decade (streaming accounts for 65%).

Why it's a risky bet

• Spotify has never been profitable, paying almost $10 billion in royalties to publishers, artists, and labels.
• Companies with deeper pockets, Apple and Amazon, are charging fast with similar products.
• Remember 2 minutes ago when you read about plummeting tech stocks? Spotify could find itself in deep water.

Brewers, we want to hear from you. Is Spotify the future of music? Or will it be another snack for tech giants to devour? Vote here.

THE BREAKROOM

WHAT THE CREW IS LISTENING TO

Mark Zuckerberg went on Ezra Klein's (editor-at-large of Vox) podcast. There's plenty of juicy bits, including this rebuttal to a critical Tim Cook: "I find that argument, that if you're not paying that somehow we can't care about you, to be extremely glib and not at all aligned with the truth." But there's much more discussion beyond Cambridge Analytica.

SIP ON THIS

What do the CEOs of Mastercard (Ajay Banga), Microsoft (Satya Nadella), and Adobe (Shantanu Narayen) have in common? They all attended the same high school: Hyderabad Public School, Begumpet in India. We'd like to think their mascot is the Fightin’ Fiduciary.

GUESS THE LOGO

Breakroom Answer

Guess The Logo
Cisco