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MARKETS

• Economy: The number of available, unfilled U.S. jobs grew to 6.7 million in Q2, the highest quarterly level since 2001. It's a sign of an expanding economy and super-low unemployment.
• In the trade war, it's an eye for an eye: China will retaliate against the most recent round of tariffs from the U.S. by enacting its own 25% tax on $16 billion of U.S. goods.

RETAIL

Brick, Mortar, and Casper Mattresses

Direct-to-consumer mattress startup Casper is planning to open 200 brick-and-mortar stores over the next three years. Which is a pretty interesting move considering...

1. Casper is known as an online mattress seller.
2. Traditional retail is dying...right? This seems backwards.

Quick vocab break before we dive in:

• "Direct-to-consumer" (or "D2C") describes new brands that have taken control of nearly every aspect of the value chain—from design to production to marketing to shipping it straight to your doorstep.
• Some examples? We'll wait while you scroll through your Instagram feed: Warby Parker glasses, Allbirds shoes, and Glossier beauty products, to name a few.

Now back to Casper's strategy...

It's had astronomical success in cyberspace (raking in $100 million in revenue within two years of its founding). But faced with growing competition in e-commerce, it's going to try its hand in physical space. Actually, it already has...

• Last year, Casper made a few of its products available in Target...which invested $75 million in Casper's latest funding round.
• This winter, it opened its first permanent store in NYC—plus the "The Dreamery," which offers 45-minute naps for $25.

What's going on: E-commerce companies are realizing that traditional storefronts don't just help drive sales, they're also an important marketing strategy (as digital channels get more expensive). The key?

Stick to highly-visible, strategic locations

Like Soho.

• NYC's famous shopping district has become a hub for D2C brands to plant their brick-and-mortar roots. In just a few neighborhood blocks, you'll be able to shop at Bonobos, Glossier, Allbirds, Warby Parker, BirchBox, M. Gemi, and more.

Zoom out: As Mattress Firm, the U.S.' largest mattress retailer, considers filing for bankruptcy, D2C startups like Casper see opportunity in opening immersive and interactive physical locations.

As Warby Parker's co-founder told the WSJ: "I don't think retail is dead. Mediocre retail experiences are dead."

TRANSPORTATION

NYC Pins Down Ride-Hailers

For Uber CEO Dara Khosrowshahi, defeat tastes like a cold dollar slice.

Yesterday, the New York City Council voted to freeze the number of new licenses issued to ride-hailers like Uber and Lyft for one year, among other regulations (like establishing a minimum pay for drivers).

The city—Uber's largest U.S. market—will use the time to study the industry and its effects on traffic congestion in NYC's five boroughs.

Who's honking for joy:

• The yellow cab industry. It's been decimated as Uber, Lyft, and other ride-hailing services have taken over NYC streets (in 2017, more New Yorkers used Uber than yellow cabs for the first time).

Who's just honking:

• Uber: "The city's 12-month pause on new vehicle licenses will threaten one of the few reliable transportation options while doing nothing to fix the subways or ease congestion."
• Lyft: "These sweeping cuts to transportation will bring New Yorkers back to an era of struggling to get a ride..."

The question to ask yourself: Which cities will follow NYC's lead and cap ride-hailers?

INTERNATIONAL

What in the World Is Going on With Canada and Saudi Arabia?

Justin Trudeau and Mohammed Bin Salman walk into a bar...

Ok fine, we'll spare you a bad diplomacy joke. But we can't skip over what's going down between Canada and Saudi Arabia because, well, it's getting heated.

• Rewind: It started on Twitter (doesn't it always?) when Canada's Foreign Ministry expressed concern over Saudi treatment of arrested women's rights activists.

Saudi Arabia called Canada's commentary a violation of its sovereignty, then...

• Expelled Canada's ambassador to Saudi Arabia and called its own home from Canada
• Froze all new trade with Canada
• Canceled flights and recalled students

The cherry on top? The FT reported that Saudi Arabia told its overseas asset managers to offload all Canadian bonds, equities, and cash "no matter the cost."

That sunk Canada's currency as much as 0.5% yesterday...but it's an "ephemeral" effect, CIBC said, since August is such a thinly-traded month (aka everyone's gone fishing).

Zoom out: Analysts say this is a power play from a young Saudi Crown Prince trying to show he's not interested in bending the knee to the West.

ENTERTAINMENT

The Oscars Want You

The envelope snafu, Jennifer Lawrence tripping, and the 2020 Academy Awards. All will go down in Oscars history.

That's because in two years, the Oscars will be a new kind of awards show.

• What's changing: 1) It's adding a new category for outstanding achievement in popular films—tbd what that actually means 2) the telecast won't top three hours and 3) the airdate will be two weeks earlier than first announced.

So why switch things up?

This year's Oscars audience was 26.5 million...second only to the Super Bowl as the most-watched TV broadcast in the U.S. The bad news? That was the least-watched Oscars telecast since they've been keeping track.

The new strategy is to lure viewers in by promoting movies they're passionate about and debloating the telecast.

• If you're willing to pay an average of $9.38 to see a blockbuster in theaters, you're more likely to tune in to a three-hour Oscars broadcast if that really-fun-but-not-all-that-artsy movie is in the running for a major award.

And at the end of the day (no matter the art value) the Academy needs to sell TV rights to keep the lights on.

AUTO

Can Musk Pull It Off?

Everyone on Wall Street is weighing in on Elon Musk's crazier-than-crazy bid to take Tesla private (even the SEC, which is reportedly looking into his claim). And with takes this hot, analysts are clearly proud owners of The Boring Company's flamethrowers.

Baird analysts say Tesla’s current stockholders might want more for their shares than Musk first offered.

• "We think some shareholders may demand a steeper premium than the $420 mark, and we think shares could move higher as shorts cover and investors demand a higher price to go private...We view the risk/reward as extremely favorable at current levels."

RBC's middle of the road.

• "We mostly agree with Elon's sentiment that being public puts more focus on short term quarterly metrics and can distract from the long-term mission...However, being private could hamper raising new equity if ever needed."

Barclays calls it like it is.

• "This is out there, even for Tesla...Even with the Saudi fund taking a 3%-5% stake, that leaves a large funding gap. And credit markets may not be that receptive."

Meanwhile, absolutely no one seems to be able to unmask the mysterious investor(s) bankrolling Musk—if they exist it all.

So we (and apparently everyone else) need your help, Brew readers: Who do you think is funding Elon? Let us know here and we'll share the best answers in the Brew tomorrow.

+ If you want to know our theory, it's that Musk is funding himself...because he actually is anonymous bitcoin creator Satoshi Nakamoto.

WHAT ELSE IS BREWING

• Magic Leap, a hyped augmented reality startup, started shipping its first headset yesterday.
• The New York Times's digital subscriber growth and digital ad revenue slowed in Q2. Management suggested upcoming midterm elections could boost news demand.
• New York Congressman Chris Collins was arrested on insider trading charges related to an Australian biotech company.
• United Health has tentatively agreed to purchase specialty pharmacy operator Genoa Health, per Axios, in a deal rumored to be worth ~$2 billion.
• The U.S. issued new sanctions on Russia after determining the government was responsible for the March 4 nerve agent attack on a former double agent.

BREAKROOM

THE SECOND PAGE OF THE INTERNET
Reddit's a gold mine for high-quality content—but it's only as useful as the subreddits you subscribe to. Here are a few pages we think Brew readers would enjoy:

• r/dataisbeautiful for mesmerizing data visualizations.
• r/Futurology for what's next in human innovation.
• r/todayilearned for obscure facts that'll impress your friends and co-workers.

BRAIN TEASER
Father A is twice the difference in years of the ages of Father B and Son A, who is one and a half times the age of Son B. Father B is currently twice the age Son A is going to be when Son B will be double the age he is now. All of the ages are multiples of five, and they are all under 100. How old are all four people?

(Answer located at bottom of newsletter)

Breakroom Answers

Son A = 15 years old.
Son B = 10 years old.
Father B = 50 years old.
Father A = 70 years old.
(Explanation)